Bd. of Trs. of the Univ. of Ill. v. Micron Tech., Inc.

• Citation: 245 F.Supp.3d 1036
• Decision Date: 28 March 2017
• Docket Number: No. 2:11–cv–2288–SLD–JEH,2:11–cv–2288–SLD–JEH
• Parties: BOARD OF TRUSTEES OF the UNIVERSITY OF ILLINOIS, Plaintiff, v. MICRON TECHNOLOGY, INC., Defendant.
• Court: U.S. District Court — Central District of Illinois

245 F.Supp.3d 1036

BOARD OF TRUSTEES OF the UNIVERSITY OF ILLINOIS, Plaintiff,

v.MICRON TECHNOLOGY, INC., Defendant.

No. 2:11–cv–2288–SLD–JEH

United States District Court, C.D. Illinois, Urbana Division.

Signed March 28, 2017

Alexandria Dea Bond, George C. Summerfield, Nora Estefania Becerra, K & L Gates LLP, Rolf O. Stadheim, Steven R. Pedersen, Stadheim & Grear Ltd., Chicago, IL, for Plaintiff.

Adam Shartzer, Ruffin B. Cordell, Timothy W. Riffe, Fish & Richardson P.C., Washington, DC, Thomas H. Wilson, Heplerbroom, LLC, Thomas Schanzle–Haskins, Brown Hay & Stephens LLP, Springfield, IL, for Defendant.

ORDER

SARA DARROW, UNITED STATES DISTRICT JUDGE

Defendant Micron Technology, Inc. ("Micron") moves the Court to either reconsider its March 28, 2016 Order or certify the Order for interlocutory appeal pursuant to 28 U.S.C. 1292(b), ECF No. 97, and the Plaintiff Board of Trustees of the University of Illinois ("University") moves again for injunctive relief, ECF No. 108, and for default judgment, ECF No. 121. Before reaching these motions, the Court must first resolve Micron's Motion to Dismiss for Lack of Subject Matter Jurisdiction. ECF No. 146. For the reasons set forth below, the Court DENIES Micron's Motion to Dismiss for Lack of Subject Matter Jurisdiction, DENIES Micron's Motion for Interlocutory Appeal, and DENIES the University's Renewed Motion for Injunctive Relief.

BACKGROUND

The Court incorporates the factual background from its March 28, 2016 Order as if set forth herein and restates only the salient details. Drs. Joseph W. Lyding and Karl Hess invented a process to use "deuterium in the fabrication of semiconductor devices" that was subsequently protected by three patents. Am. Compl, ¶¶ 3, 5. The inventors assigned their interests in the patents over to the University ("University patents" or "patents"). Am. Compl. ¶ 3, ECF No. 37. In 2004, the University entered into a contract with Micron to treat Micron's wafers with its "deuterium anneal" process and then return them so Micron could study them. Am. Compl. Ex. D ("work agreement") ¶¶ 1, 2, ECF No. 37–4 at 2. The University subsequently concluded Micron had commercialized its intellectual property so on December 5, 2011, the University filed suit against Micron for infringement of its patents and breach of contract.

DISCUSSION

I. Micron's Motion to Dismiss for Lack of Subject Matter Jurisdiction

Nearly six years into the litigation, Micron asserts that the Court never had subject matter jurisdiction because the University failed to name a necessary party as a plaintiff. Specifically, Micron argues Dr. Izik Kizilyalli was a co-inventor of the University patents and according to patent standing law, he had to be named as a plaintiff at the time the University filed suit. Mem. Supp. Mot. Dismiss 1, 19, ECF No. 147. Without standing and the resulting federal subject matter jurisdiction, Micron argues the Court has no supplemental subject matter jurisdiction over the breach of contract claim. Id. ; see 28 U.S.C. § 1367. The University disputes Dr. Kizilyalli was a co-inventor, Opp. Mot. Dismiss 1–2, ECF No. 151, and argues the rationale behind prudential standing is not implicated here because the patents have been invalidated, Id. at 2.

The United States Constitution allows federal district courts to adjudicate only cases or controversies. Article III Sec. 2, cl. 1. A case or controversy exists if a plaintiff can allege an actual injury caused by the defendant that is capable of redress. Lujan v. Defenders of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). Allegations sufficient to support these elements constitute constitutional standing and permit the court to exercise jurisdiction. In a patent case, constitutional standing exists "when a party infringes a patent in violation of [another] party's exclusionary rights." Drone Techs., Inc. v. Parrot S.A. , 838 F.3d 1283, 1292 (Fed. Cir. 2016). In its complaint, the University identified Joseph W. Lyding and Karl Hess as the named inventors on the University patents, who then assigned their interests over to the Board of Trustees of the University of Illinois. "There is a presumption that [a patent's] named inventors are the true and only inventors." Drone Techs., Inc. , 838 F.3d at 1292 (quotation marks omitted). The University had constitutional standing on the day it filed suit because it was the undisputed owner by assignment of the University patents and it alleged Micron's patent infringement caused it irreparable injury.

Prudential standing requirements are intended to prohibit plaintiffs from raising claims on behalf of absent third parties or raising generalized grievances, or from suing if the plaintiff is outside the group intended to benefit from a particular statute. Lexmark Intern., Inc. v. Static Control Components, Inc. , ––– U.S. ––––, 134 S.Ct. 1377, 1386, 188 L.Ed.2d 392 (2014). In patent infringement cases, courts advance these policies by requiring a patent co-owner to add all other co-owners or risk dismissal of the suit. STC.UNM v. Intel Corp. , 754 F.3d 940, 944, 947 (Fed. Cir. 2014) (discussing policy concerns that "underpin the court's joinder requirement for patent owners"); Prima Tek II, L.L.C. v. A–Roo Co. , 222 F.3d 1372, 1377 (Fed. Cir. 2000) (characterizing joinder rule as "prudential rather than constitutional in nature"); Israel Bio–Eng'g Project v. Amgen, Inc. , 475 F.3d 1256, 1264–65 (Fed. Cir. 2007) ("Absent the voluntary joinder of all co-owners of a patent, a co-owner acting alone will lack standing."). Owners are the inventors of the patented process or those who have been assigned a patent owner's interest. Banks v. Unisys Corp. , 228 F.3d 1357, 1359 (Fed. Cir. 2000) ("The general rule is that an individual owns the patent rights to the subject matter of which he is an inventor ...."); 35 U.S.C. § 261 (allowing patents to be assigned).

Here, since the University was the assigned owner of the patent and was named as the plaintiff, no standing issue existed on the face of the complaint. However, a patent can be corrected to reflect co-inventorship. 35 U.S.C. § 256(b) ("The court before which [the omission of inventors] is called in question may order correction of the patent on notice and hearing of all parties concerned and the Director shall issue a certificate accordingly."); see Ethicon, Inc. v. U.S. Surgical Corp. , 135 F.3d 1456 (Fed. Cir. 1998) (adding co-inventor pursuant to a § 256 motion); Speedfit LLC v. Woodway USA, Inc. , 226 F.Supp.3d 149, 154, 157, 2016 WL 7471307, *3, 5 (E.D.N.Y. 2016) (same). When multiple inventors are listed on a patent, each co-owner "presumptively owns a pro rata undivided interest in the entire patent," Ethicon , 135 F.3d at 1460, and would have to be added to an infringement suit. STC.UNM , 754 F.3d at 944. A situation could arise where one co-inventor assigns his pro-rata share to another party who, when he seeks to sue, needs to add the co-inventors who did not assign their shares. If these co-inventors were not listed on the face of the patent, then a standing issue could exist that was not evident on the face of the pleadings. A successful § 256 motion would then have the effect of requiring joinder of the newly named co-inventor, and destroying standing if joinder was not effected.

Micron argues Dr. Kizilyalli should be added as an inventor on the University's Patents, but no § 256 motion to add Dr. Kizilyalli has been filed. Only a patentee or an inventor with constitutional standing may initiate the § 256 reclassification process.¹ To have standing to correct inventorship under § 256, a party must show that he "suffered an injury-in- fact, that the injury is traceable to the conduct complained of, and that the injury is redressable by a favorable decision." Shukh v. Seagate Technology , 803 F.3d 659 (Fed. Cir. 2015) (citing Chou v. Univ. of Chicago , 254 F.3d 1347, 1357 (Fed. Cir. 2001) ).

The Federal Circuit recently decided a factually similar case.² In Drone Technologies, Inc. v. Parrot S.A. , the infringing party moved to dismiss the complaint for lack of subject matter jurisdiction because the named inventor who assigned the patents to the plaintiff was not the true inventor and the assignee did not have standing to sue for infringement. Drone , 838 F.3d at 1288. The Federal Circuit held that the district court was not obligated to consider inventorship when it assessed whether the plaintiff had standing to sue because the "district court never granted (or even considered) a § 256 motion, so the court was not presented with a newly established inventorship when [the infringing party] moved to dismiss based on [the assignee's] alleged lack of standing." Id. at 1294. The court held that without a § 256 correction, the infringing party had not provided a persuasive reason for rejecting the "presumption that [a patent's] named inventors are the true and only inventors," id. at 1292 (quotation marks omitted), and the court was "not compel[led to] consider[ ] inventorship in determining standing." Id. at 1294.

No motion under § 256 has been filed (and even if it had been, there are no valid patents to correct), so there is no need to address Micron's inventorship challenge.³ Accordingly, the Court continues to evaluate the patents in the state they existed at the beginning of this lawsuit. The University's patents listed Drs. Lyding and Hess as the inventors, who then assigned their interests over to the University. Am. Compl. ¶¶ 4, 5. Micron has not argued the University's assignment is lacking in any way; therefore, the University had prudential and statutory standing, § 281 ("A patentee shall have remedy by civil action for infringement of his patent."), by virtue of its status as the sole patentee ( § 101(d) defines patentee to include successor in title). The Court had original jurisdiction pursuant to 28 U.S.C. § 1338 to adjudicate the University's patent infringement claim and has supplemental...