Checkpoint Systems, Inc. v. All-Tag Sec. S.A.

• Decision Date: 20 June 2005
• Docket Number: No. 04-1395.,04-1395.
• Citation: 412 F.3d 1331
• Parties: CHECKPOINT SYSTEMS, INC., Plaintiff-Appellant, v. ALL-TAG SECURITY S.A. and All-Tag Security Americas, Inc., Defendants-Appellees, and Sensormatic Electronics Corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

412 F.3d 1331

CHECKPOINT SYSTEMS, INC., Plaintiff-Appellant, v. ALL-TAG SECURITY S.A. and All-Tag Security Americas, Inc., Defendants-Appellees, and Sensormatic Electronics Corporation, Defendant-Appellee.

No. 04-1395.

United States Court of Appeals, Federal Circuit.

June 20, 2005.

COPYRIGHT MATERIAL OMITTED

Dennis R. Suplee, Schnader Harrison Segal & Lewis LLP, of Philadelphia, Pennsylvania, argued for plaintiff-appellant. With him on the brief were Nancy Winkelman, Robert A. McKinley and Thomas W. Hazlett.

Theodore A. Breiner, Breiner & Breiner, L.L.C., of Alexandria, Virginia, argued for defendants-appellees All-Tag Security S.A., et al. With him on the brief was Jennifer A. Pulsinelli.

Christopher K. Hu, Morgan & Finnegan, L.L.P., of New York, New York, argued for defendant-appellee Sensormatic Electronics Corporation. With him on the brief was Herbert Blecker. Of counsel were Richard W. Erwine and Richard Martinelli.

Before MICHEL, Chief Judge, SCHALL, and DYK, Circuit Judges.

SCHALL, Circuit Judge.

This appeal arises out of a suit for patent infringement. Checkpoint Systems, Inc. ("Checkpoint") is the owner of United States Patent No. 4,876,555 ("the '555 patent"). Checkpoint sued All-Tag Security, S.A. (Belgium) and All-Tag Security Americas, Inc. (collectively, "All-Tag"), as well as Sensormatic Electronics Corporation ("Sensormatic"), for infringement of the '555 patent. On April 22, 2004, the district court granted summary judgment in favor of All-Tag and Sensormatic on the ground that the '555 patent is invalid because it incorrectly lists Paul R. Jorgenson as the sole inventor in violation of 35 U.S.C. § 102(f). Checkpoint Sys., Inc. v. All-Tag Sec. S.A., 315 F.Supp.2d 660 (E.D.Pa.2004). In granting summary judgment in favor of All-Tag and Sensormatic, the court relied upon the 2002 declarations of Jorgenson, Franz H. Pichl, and Lukas A. Geiges stating: (i) that Jorgenson was not the sole inventor of the subject matter claimed in the '555 patent; (ii) that Jorgenson and Pichl were joint inventors; and (iii) that Pichl's name was intentionally not included on Application Serial No. 168,468 ("the '468 application"), the application which matured into the '555 patent.

Checkpoint now appeals the decision of the district court. It argues, inter alia, that the declarations of Jorgenson, Pichl, and Geiges, filed in 1988 during prosecution of the '468 application and stating that Jorgenson was the sole inventor of the subject matter claimed in the application, create a genuine issue of material fact on the issue of inventorship. As a result, Checkpoint contends, the district court erred as a matter of law in granting summary judgment of invalidity. We agree with Checkpoint that the 1988 declarations of Jorgenson, Pichl, and Gieges create a genuine issue of material fact on the issue of inventorship. Accordingly, we reverse the grant of summary judgment in favor of All-Tag and Sensormatic and remand the case to the district court for further proceedings consistent with this opinion.

BACKGROUND

I.

Checkpoint is a Pennsylvania corporation. Among other things, it manufactures and sells disposable, deactivatable resonance labels for the retail industry. A resonance label is a device that is attached to merchandise in department stores and other outlets in order to prevent theft of the merchandise. The '555 patent claims a resonance label and a method of making it. All-Tag manufactures and sells resonance labels accused of infringing the '555 patent. Sensormatic purchases accused products from All-Tag.

The events leading up to the issuance of the '555 patent are relevant to the issue before us. In the 1980s, Checkpoint contracted to supply resonance labels to a Swiss corporation called Actron.¹ At that time, Franz Pichl was a managing director and an owner of Actron. In 1985, Pichl hired Lukas Geiges to work for Actron. The supply contract between Checkpoint and Actron terminated in November of 1986.

Pichl also was a part owner of another Swiss company, Durgo AG ("Durgo"). Durgo was purportedly formed to supply resonance labels to Actron. In 1987, Durgo filed a patent application for a resonance label in the Swiss Patent Office. Subsequently, in 1988, the '468 application, that would issue as the '555 patent, was filed with the U.S. Patent and Trademark Office ("PTO"), claiming priority to the Swiss application. The '468 application was assigned to Durgo and named Paul Jorgensen as the sole inventor. Jorgensen is an independent technical consultant who has provided services to, among others, Durgo, Actron, and All-Tag.

During prosecution of the '468 application, Jorgensen filed a small entity declaration. A small entity declaration, see 37 C.F.R. § 1.27, entitles the assignee to qualify for reduced PTO fees, see 35 U.S.C. § 41(h). In his declaration dated March 11, 1988, Jorgenson identified himself as an independent inventor, stating:

As below named inventor, I hereby declare that I qualify as an independent inventor as defined in 37 CFR 1.9(c) for purposes of paying reduced fees under 35 USC 41(a) & (b) to the U.S. Patent Office[.]

Pichl, and Geiges, who was associated with Pichl at Durgo, filed a joint small entity declaration with the PTO in connection with the prosecution of the '468 application. In their declaration, also dated March 11, 1988, they stated as follows in connection with Durgo's rights as assignee from Jorgenson:

I hereby declare that rights under contract or law have been conveyed to and remain with the small business concern identified above with regard to the invention entitled Resonance Label by inventor Paul Richter Jorgenson[.]

Finally, the Jorgenson declaration and the Pichl and Geiges declaration both contained the following additional statement:

I hereby declare that all statements made herein of my own knowledge are true and that all statements made on information and belief are believed to be true; and further that these statements were made with knowledge that willful false statements and the like so made are punishable by fine or imprisonment, or both, under 18 USC 1001, and that such willful false statements may jeopardize the validity of the patent application, any patent issuing thereon, or any patent to which this verified statement is directed.

In January of 1989, Actron acquired Durgo. When it did so, it also acquired Durgo's rights in the '468 application. The '555 patent issued on October 24, 1989. Thereafter, in November of 1995, Checkpoint acquired Actron. It thus became the owner of the '555 patent.

In February of 1989, after Actron had acquired Durgo, Pichl ended his relationship with the company, and in 1991 he formed All-Tag. Pichl left All-Tag in 1997 and apparently no longer has an employment relationship with the company. Geiges continued to work at Actron until November of 1993. In approximately April of 1994, Checkpoint hired Geiges to manage its patent portfolio. Geiges remained with Checkpoint until 1998.

II.

In May of 2001, Checkpoint brought suit against All-Tag and Sensormatic in the Eastern District of Pennsylvania for infringement of the '555 patent. Eventually, All-Tag moved for summary judgment that the '555 patent is invalid under 35 U.S.C. § 102(f) for failure to properly list all inventors.² It argued that the patent incorrectly lists Jorgenson as the sole inventor, when in fact Jorgensen and Pichl were co-inventors. In support of the motion, All-Tag proffered declarations from Jorgensen, Pichl, and Geiges, each of which was prepared in 2002 for the litigation. In his declaration, Jorgensen stated that the resonance label that is the subject of the '555 patent "was based on the concepts and work developed by both Mr. Pichl and me." In a like vein, Pichl stated: "The resonance label disclosed in the '555 patent was based on a concept developed jointly by Paul Jorgenson and me." Pichl added that he intentionally omitted himself as a co-inventor in the U.S. patent application "to avoid any later argument by Checkpoint that it was entitled to ownership of the invention by contract, by virtue of the affiliation with [Actron] and the relationship between [Actron] and Checkpoint." Likewise, in his declaration, Geiges stated:

Contrary to the indication on the '555 patent, Mr. Jorgensen was not the sole inventor of this subject matter. We intentionally did not include Mr. Pichl's name on the [patent application] filed in the United States because of our competitive relationship with [Checkpoint]. We were concerned that [Checkpoint] might try and claim ownership in the technology based on [Actron's] and Mr. Pichl's prior supply agreement with [Checkpoint].

Checkpoint opposed the summary judgment motion on several grounds. First, it argued that, under the doctrine of assignor estoppel, All-Tag was barred from challenging the patent's validity. Second, Checkpoint argued that the evidence embodied in the 2002 Jorgenson, Pichl, and Geiges declarations was not sufficiently corroborated to meet the burden of clear and convincing evidence necessary to invalidate the patent. Third, in a supplemental response to defendants' motion, Checkpoint argued that there was a genuine issue of material fact on the inventorship issue. Checkpoint did not file any contemporaneous affidavits or declarations in response to the 2002 Jorgensen, Pichl, and Geiges declarations. However, it argued that the original PTO declarations of Jorgensen, Pichl, and Geiges contradicted their 2002 litigation declarations and created a fact issue regarding whether Jorgensen was the sole inventor.

In ruling on the motions for summary judgment, the district court first addressed whether defendants were estopped from challenging the '555 patent's validity. Determining that Sensormatic was not barred by assignor estoppel, the court granted Sensormatic's motion for summary judgment. In doing so, the district court did not address whether the contradiction between the...