Andreaggi v. Relis

• Decision Date: 13 March 1979
• Citation: 171 N.J.Super. 203,408 A.2d 455
• Parties: , 206 U.S.P.Q. 640 Joseph R. ANDREAGGI et al., Plaintiffs, v. Matthew J. RELIS, Defendant.
• Court: New Jersey Superior Court

Page 203

171 N.J.Super. 203

408 A.2d 455, 206 U.S.P.Q. 640

Joseph R. ANDREAGGI et al., Plaintiffs, v. Matthew J. RELIS, Defendant.

Superior Court of New Jersey, Chancery Division.

March 13, 1979.

Thomas L. Adams, New York City, for plaintiffs.

Howard M. Kaplan, Leaneck, and S. C. Yuter, New York City, of the New York Bar, for defendant.

DWYER, J. S. C.

Plaintiffs commenced this action to compel defendant Matthew J. Relis to assign his interests in certain patents. Relis asserts, among a myriad of defenses, that as a coinventor he has rights in alleged further developments reflected in the patent application and patents which were made solely by plaintiffs after Relis and plaintiffs were discharged by a common employer and plaintiffs acquired the employer's rights to the inventions. Since the alleged further developments were made after termination of employment and solely by plaintiffs, Relis alleges that he is under no duty to assign his interests in those alleged further developments because he has those rights individually and common employer never had any rights in them. Neither counsel nor the court has found any decision on the question. Plaintiffs deny that they made any further developments after the assignment and the sale of the equipment embodying the inventions to plaintiffs by Curtiss-Wright, the common employer; hence they assert that they have a right obtained from Curtiss-Wright to have Relis assign his interests in the patents which have issued.

While all three were employed by Curtiss-Wright the company undertook to develop a device that would simultaneously generate a document that could be read by the human eye and a machine. The initial focus was to develop a way-bill that could accompany goods in transit. The personnel handling the goods could read the document. For control and accounting purposes, a machine could read the document electronically and generate additional copies.

The concept to accomplish this result was to utilize a typewriter which was linked to an encoding device. The stock for the document was to be paper which had a magnetic backing. The operator would type the document on the front. Simultaneously the keys of the typewriter would trigger the encoding device that would record the same information on the magnetic field on the reverse side, as well as a code of instructions to the machine that was to read the document. The recording device was a head containing windings of wire which generated an electric field. To correct for errors, provision was made to erase the bits encoded on the magnetic coating without destroying or distorting the other bits so encoded, and inserting new bits when the new typed character was inserted to replace the erased visible typed character. The machine or device embodying the concept was constructed at Curtiss-Wright. For reasons hereinafter discussed, Curtiss-Wright terminated the project and transferred its rights to Joseph Andreaggi. In return for monies advanced by Robert J. Graf, Andreaggi assigned part of his rights to Graf.

Andreaggi, Graf and Relis signed application Serial No. 250,872 for letters patent for a visual and magnetic recording system in April 1972 as coinventors. It was filed on May 15, 1972 with the United States Patent and Trademark Office. At the time that plaintiffs requested Relis to sign the application their attorney also advised Relis that they would subsequently request an assignment of his interests in the patent. During 1973 certain amendments were made to the application and four divisional patents were issued on December 28, 1973. On July 9, 1974 Patent No. 3,823,405 issued on the basic application.

During 1973 and up to July 9, 1974, plaintiffs and their attorney requested Relis to assign his rights to plaintiffs.

On May 23, 1975 plaintiffs' attorney tendered a written assignment of Relis' rights in the patent to Relis for signature. This has not been executed.

The court notes that similar problems exist with the divisional patents. The court concludes that resolution of the questions concerning the basic patent will govern the issues on the other patents.

In this action plaintiffs, in addition to seeking an order compelling Relis to assign his rights, seek money damages sustained by his refusal to cooperate in connection with certain foreign patents, and money damages suffered because of his persistent refusal to assign the rights under the patents involved in this litigation with the consequence of substantial cost of this litigation and inability to market or sell licenses under the patent. Plaintiffs further seek to restrain Relis from disclosing the nonpublic portions of the contents of the invention disclosures obtained by plaintiffs from Curtiss-Wright. They base their action on the rights acquired from Curtiss-Wright and protection of their proprietary rights in such material.

In addition to the defense based upon the alleged further developments, Relis asserts that he is under no duty to convey any rights because: (i) he was not employed to invent, (ii) Curtiss-Wright fired him before it asked him for an assignment and (iii) Curtiss-Wright could not assign any rights under a contract for personal services. He also asserts that the action is barred by the statute of limitations and by laches.

The court will consider the following matters in the order stated.

1. What was the relationship between Relis and Curtiss-Wright?

2. What had been accomplished on the project at Curtiss-Wright?

3. What was the effect of the contract of employment, Relis' separate assignments to Curtiss-Wright and Curtiss-Wright's assignment to plaintiffs?

4. What duties, if any, did Relis owe to plaintiffs and Curtiss-Wright thereafter?

5. Is the action barred by limitations or laches?

6. Relief.

The court will set forth its findings of facts under the separate headings rather than state them separately.

1.

Relis has a B.S. degree in electrical engineering from C.C.N.Y. and a M.S. degree in electrical communications from M.I.T. He worked at the U.S. Navy's Naval Ordinance Laboratory and at another major electronics corporation as an assistant development engineer. At the suggestion of a friend, he applied to Curtiss-Wright to be hired as the assistant manager of the Digital Computer Department.

He testified that he read and understood D-2, Agreement For Services, before he signed it on December 15, 1958. On January 21, 1959 he signed another copy of the form of agreement for the purpose of adding additional patents which he had obtained prior to starting work at Curtiss-Wright. He claimed a total of seven prior patents on these two forms.

He stated that his duties as assistant manager were to perform assignments given him by the manager of the department, supervise engineers, investigate problem areas and suggest solutions, and do design work where additional work was needed.

On December 16, 1959 he was promoted to Manager, Digital Computer Department.

D-2 is a standard form of agreement. At the top of the form appears the following:

CURTISS-WRIGHT CORPORATION ELECTRONICS DIVISION AGREEMENT FOR SERVICES

IN CONSIDERATION of my employment by the CURTISS-WRIGHT CORPORATION, ELECTRONICS DIVISION (hereinafter termed the "Corporation"), upon the terms and conditions of this agreement, I, Matthew Relis of Bayside, N.Y. agree with the Corporation as follows:

2. Without charge, to communicate promptly to the Corporation and, upon request, to assign to it all of my right, title and interest in and to any and all inventions which I may make, or with respect to which I may be a joint inventor, while in the employ of the Corporation, which relate to or are useful or may be useful in connection with business of the character carried on or contemplated by Curtiss-Wright Corporation, its subsidiaries or affiliates and all my right, title and interest in and to any and all domestic and foreign applications for patents covering said inventions, any and all patents granted for said inventions and any and all reissues and extensions of the said patents; and to do any and all acts and to execute and deliver such instruments as may be deemed by the Corporation necessary or proper to vest all of my right, title and interest in and to said inventions, applications and patents in the Corporation and to effect the obtaining of said patents reissues and/or extensions thereof. All necessary and proper expenses in connection with the foregoing shall be borne by the Corporation.

3. (e) I will regard and preserve as confidential all information pertaining to the Corporation's business that may be obtained by me from specifications, drawings, blueprints, reproductions and other source of any sort as a result of such employment and I will not without written authority from the Corporation so to do, disclose to others during my employment or thereafter, such or any other confidential information obtained by me while in the employ of the Corporation.

In 1961, as a result of discussions with Pennsylvania Railroad personnel, Curtiss-Wright undertook development work to see if it could devise a system to simultaneously generate a document that could be read by the human eye and by a machine and that would be sturdy enough to be handled by railroad personnel. Relis, Graf and Andreaggi were assigned to the project. It was called Magdop. Financing for the project was terminated in September 1963, but work continued until 1964 because of the enthusiasm of the three for the project.

The 16 invention disclosures filed with the Patent Department at Curtiss-Wright show that Relis participated actively in the inventive process. He explained his personal possession of the original of certain of the invention disclosures, without permission, on the grounds that he had a right to know what he had invented. He also retained certain engineering notebooks with notes concerning the work on Magdop, without authority. An attorney from...