Baker Hughes Inc. v. Kirk
| Decision Date | 08 November 1995 |
| Docket Number | Civil Action No. 93-1571. |
| Citation | 38 USPQ 2d 1885,921 F. Supp. 801 |
| Parties | BAKER HUGHES INCORPORATED, Plaintiffs, v. Michael K. KIRK, Acting Commissioner of Patents and Trademarks, Defendant. |
| Court | U.S. District Court — District of Columbia |
Charles D. Tetrault, Alden L. Atkins, Vinson & Elkins, Washington, D.C., A.H. Evans, Peter E. Mims, Vinson & Elkins, Houston, TX (Carl A. Rowold, Baker Hughes Incorporated, Houston, Texas, of counsel), for Plaintiffs.
Teddy S. Gron, Associate Solicitor, Arlington, VA, for Defendant.
MEMORANDUM
Plaintiff, Baker Hughes Incorporated, initiated this action against Michael K. Kirk, Acting Commissioner of Patents and Trademarks. Plaintiff alleges that defendant's decision to examine a reissue application for United States Patent No. 4,928,999 (the "'999 Patent") filed by Hydril Company ("Hydril") and to hold proceedings under the reissue application to determine inventorship, without the consent of Baker Hughes, an assignee of record of the patent, exceed the Patent and Trademark Office's ("PTO") statutory authority and should be enjoined. Specifically, plaintiff argues that: defendant's actions exceed his statutory authority and are contrary to law; defendant has abused his discretion and has acted arbitrarily and capriciously and not in accordance with law; and defendant has violated Baker Hughes' due process rights under the Fifth Amendment of the United States Constitution by purporting to decide Baker Hughes' property rights in the '999 Patent in an ex parte proceeding.
On April 30, 1984, Hydril deposited a patent application for elastomeric guard seal for tubular connections in the PTO. There were three joint inventors named in the application. A declaration of inventorship was signed on April 24, 1984 by first named joint inventor L. Steven Landriault, by second named joint inventor Donald J. Ortloff, and by Landriault for third named joint inventor Charles A. Bollfrass. All three inventors had been working for Hydril at the time that they developed the subject matter of the patent application.
Bollfrass refused to sign the declaration of inventorship that was required to be attached to the application. Hydril and the other two inventors sought, pursuant to 37 C.F.R. § 1.47(a), to have the patent application allowed to proceed without Bollfrass joining in the application. Towards this end, Landriault and two Hydril attorneys filed declarations that Bollfrass was a joint inventor of the subject matter of the patent during his employment at Hydril, and that Bollfrass refused to sign the declaration of inventorship. Landriault declared that he had signed Bollfrass' name to the attached declaration pursuant to 37 C.F.R. 1.47(a).
The PTO allowed the patent application to proceed without Bollfrass' signature. The PTO informed Bollfrass that he was named as joint inventor in the application, that the application had been filed under 37 C.F.R. 1.47(a) and had been granted a filing date of April 30, 1984, and that Bollfrass had the same rights under Rule 47(a) as if he had joined in the inventor's declaration.
On April 30, 1984, the PTO recorded Landriault's and Ortloff's assignments of their interest in the patent to Hydril. On May 29, 1990 the PTO issued the '999 Patent, which listed Landriault, Ortloff, and Bollfrass as joint inventors, and Hydril as assignee. On June 18, 1992, Bollfrass assigned his interest in the '999 Patent to Baker Hughes, and the PTO recorded the assignment.
During the course of these events, there were two related judicial proceedings. In 1985, Hydril sued Bollfrass and others in Texas state court, alleging that Bollfrass had breached his employment agreement with Hydril. Part of the relief sought by Hydril was that the court order Bollfrass to assign his interest in the Resilient Seal Invention, and any patent applications based on or resulting from that invention to Hydril. Hydril Company v. Charles A. Bollfrass et al, No. 85-45-013, 295th Judicial District, District Court of Harris County, Texas. After a jury trial, a final judgment was entered on January 6, 1992 in favor of Bollfrass.
In 1990, after the '999 Patent had been issued, Hydril sued Baker Hughes and certain of its distributors alleging infringement in an action entitled Hydril Co. v. Baker Hughes, Inc., et al., Civil Action No. H-90-1994 (S.D.Texas) (the "Infringement Action"). Since September 1992, Baker Hughes' summary judgment motion and Hydril's opposition thereto have been pending.
On August 26, 1992, Hydril filed an application with the PTO pursuant to 35 U.S.C. § 251 seeking reissue of the '999 Patent to delete Bollfrass as a named inventor.1 Baker Hughes did not join the application and has not consented to the reissue proceeding.
On September 17, 1992, the PTO mailed a "notice to file missing parts of application" to Hydril because the application did not satisfy the requirements of 35 U.S.C. § 251 for reissue because the application had not been made and sworn to by the apparent assignee of the entire interest in the original patent. According to PTO records both Hydril and Baker Hughes were assignees of interests in the patent. Hydril petitioned the Commissioner to remove the "notice to file missing parts," and to consider the reissue oath in its August 26, 1992 application a sufficient basis on which to proceed with the reissue application. Hydril contended that Bollfrass was not an inventor, and therefore Baker Hughes could have no interest in the patent and is not an assignee.
The Commissioner referred Hydril's petition to the Assistant Commissioner for Patents (the "Assistant Commissioner") for decision. On January 25, 1993, the Assistant Commissioner granted Hydril's petition and vacated the "notice to file missing parts," stating that Hydril, through its submissions, had prima facie shown that Bollfrass was not an inventor, and thus that Baker Hughes has no interest in the '999 Patent. The Assistant Commissioner wrote that his ruling was not a final decision by the PTO that Bollfrass and Baker Hughes have no interest in the '999 Patent, and that the inventorship issue would be decided by the Primary Examiner during examination of the reissue application.
On March 22, 1993, Baker Hughes petitioned the Commissioner to vacate the January 25, 1993 ruling and reinstate the "notice to file missing parts," arguing that (1) 35 U.S.C. § 251 prohibits the Commissioner from considering a reissue application filed by assignees of less than the entire interest in the patent, (2) the issue of an assignee's standing to apply for reissue is not a proper subject of a petition filed under the 37 C.F.R. § 1.182 provision dealing with questions not specifically provided for in the regulations; (3) Hydril's claim that Bollfrass had no assignable interest in the '999 Patent merged into the final judgment in the Texas Action and therefore is barred by the doctrines of res judicata and claim preclusion; (4) the Commissioner's decision to resolve Baker Hughes' ownership interest in the '999 Patent in an ex parte proceeding violated Baker Hughes' due process rights; and (5) the Commissioner's decision that Hydril had made a prima facie showing that Bollfrass was not an inventor was based on an incomplete and misleading record, and was wrong as a matter of fact and law.2 The Baker Hughes petition was referred to the Assistant Commissioner for decision. On March 22, 1993, Baker Hughes supplemented its petition to the Commissioner arguing that the "Commissioner simply has no authority or power to reissue a patent based on an application by an assignee of less than the entire interest." These petitions were referred to the Assistant Commissioner.
On July 15, 1993, the Assistant Commissioner denied Baker Hughes petition, and set out a bifurcated procedure which the PTO would follow. First, the primary examiner would resolve the issue of inventorship. Hydril and Baker Hughes would each have two months to file any supplemental evidence or arguments in support of their positions, and then one month to respond to the other's arguments. Under the Assistant Commissioner's July 15, 1993 decision it appears that Baker Hughes would be treated as a protestor pursuant to 37 C.F.R. § 1.291.3 The examiner would determine the inventorship issue based on the record. If the examiner were to determine that Bollfrass is an inventor, the reissue application would not proceed without Baker Hughes' consent. Otherwise, examination of Hydril's reissue application would continue.
On July 30, 1993, Baker Hughes instituted this suit against Michael K. Kirk, Acting Commissioner of Patents and Trademarks.
Plaintiff has moved for summary judgment, and defendant has moved this court to dismiss the complaint or for summary judgment.
Defendant asserts that Baker Hughes' claims are not ripe for review because the PTO's actions do not constitute a "final" action and Baker Hughes has not exhausted its administrative remedies. This court finds that the agency's assertion of jurisdiction over this matter is a final agency action, further exhaustion of administrative remedies is not required, and the issues presented are ripe for review.4
The purpose of exhaustion is to avoid premature interruption of the administrative process, and thus to allow the agency to apply its expertise, correct its errors, and build a factual record which will aid court review. Atlantic Richfield Co. v. United States Dept. of Energy, 769 F.2d 771, 781 (D.C.Cir.1984). Exhaustion is not an inflexible doctrine. Exhaustion is not required when it is highly unlikely that the agency will change its position. Id. at 782.
The issue in this case of whether the PTO has statutory authority to consider the reissue application, and determine inventorship pursuant to the application, is a legal issue. The court's review will not be aided by further development of the factual...
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