Chou v. The University of Chicago

• Decision Date: 03 July 2001
• Citation: 254 F.3d 1347,59 USPQ2d 1257
• Parties: (Fed. Cir. 2001) JOANY CHOU, Plaintiff-Appellant, v. THE UNIVERSITY OF CHICAGO and ARCH DEVELOPMENT CORPORATION, Defendants-Appellees, and BERNARD ROIZMAN, Defendant-Appellee, and AVIRON COMPANY, Defendant-Appellee. 00-1317 DECIDED:
• Court: U.S. Court of Appeals — Federal Circuit

Page 1347

254 F.3d 1347 (Fed. Cir. 2001)

JOANY CHOU, Plaintiff-Appellant, v. THE UNIVERSITY OF CHICAGO and ARCH DEVELOPMENT CORPORATION, Defendants-Appellees, and BERNARD ROIZMAN, Defendant-Appellee,

and

AVIRON COMPANY, Defendant-Appellee.

00-1317

United States Court of Appeals for the Federal Circuit

DECIDED: July 3, 2001

Appealed from: United States District Court for the Northern District of Illinois, Judge James B. Zagel

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Paul K. Vickrey, Niro, Scavone, Haller & Niro, of Chicago, Illinois, argued for plaintiff-appellant. With him on the brief was Paul C. Gibbons.

Rebecca L. Weinstein, Bartlit Beck Herman Palenchar & Scott, of Chicago, Illinois, argued for defendants-appellees Arch Development Corporation and The University of Chicago. With her on the brief was Philip S. Beck.

Timothy J. Vezeau, Katten Muchin Zavis, of Chicago, Illinois, argued for defendant-appellee Dr. Bernard Roizman. With him on the brief was Jane J. Choi. Of counsel on the brief were David W. Clough and Paul B. Stephens, Marshall, O'Toole, Gerstein Murray & Borun, of Chicago, Illinois.

Richard de Bodo, Irell & Manella LLP, of Los Angeles, California, argued for defendant-appellee Aviron Company. With him on the brief was Theodore H. Frank.

Before MAYER, Chief Judge, LOURIE and BRYSON, Circuit Judges.

LOURIE, Circuit Judge.

Joany Chou appeals from the decision of the United States District Court for the Northern District of Illinois granting Bernard Roizman and Aviron Company's motions to dismiss her claims for correction of inventorship, declaratory judgment of inventorship, fraud, breach of fiduciary duty, unjust enrichment, breach of express contract, and breach of implied contract. Chou v. Univ. of Chicago, No. 99-C4495, 2000 U.S. Dist. LEXIS 2002 (N.D. Ill. Feb. 18, 2000) ("Chou"). Chou also seeks reinstatement of those same claims against the University of Chicago ("University"). Because the district court erred in its determination that Chou did not have standing to sue for correction of inventorship under 35 U.S.C. § 256, we reverse its judgment as to that claim. We also reverse the court's dismissal of most of her state law claims against Roizman and direct the court to reinstate certain of her state law claims against the University. However, we affirm that court's dismissal of her breach of express contract claim against Roizman and of all her remaining claims against Aviron. We also affirm the court's grant of Roizman's motion to strike her allegations of academic theft and fraud. Finally, we reject Chou's attempt to have her case reassigned to another district court judge. We therefore affirm-in-part, reverse-in-part, and remand.

BACKGROUND

Dr. Chou was a graduate student and subsequently a post-doctoral research assistant for Dr. Roizman at the University of Chicago's Department of Molecular Genetics and Cell Biology from 1983 to 1996. Id. at *3. Roizman is named as the sole inventor on U.S. Patent 5,328,688 and a co-inventor on U.S. Patents 5,795,713 and 5,922,328, all of which relate to herpes simplex virus and its use in an avirulent vaccine. Id. at *5. Roizman is also listed as an inventor on three foreign applications: WO 9204050 (based on the subject matter of the '688 patent), WO 9833933 (based on the subject matter of the '713 patent), and PCT/US96/14292 (based on the subject matter of the '328 patent) (collectively, "the foreign applications"). The inventorship of those patents and applications is disputed.

Under University policy, inventors receive 25% of the gross royalties and up-front payments from licensing of the patents, as well as 25% of the stock of new companies that are based on their inventions. Chou allegedly told Roizman in February of 1991 that her discoveries should be patented, and he allegedly disagreed. Id. at *8-9. At that time, however, Roizman had already filed the '688 patent application,¹ which was allegedly directed to the same disputed invention, and had named himself as the sole inventor of that subject matter. During prosecution of that application, the United States Patent and Trademark Office ("PTO") cited two joint Chou-Roizman publications as prior art. In response, Roizman submitted a declaration stating that those publications were not available as prior art because he was the sole inventor of the work described therein and that she merely worked under his direction and supervision. Paper No. 21 at 1.

On July 14, 1992, Roizman assigned the '688 patent application to Institut Merieux, a French company that had supported the research. Id. at *10. Just before that assignment, however, on July 1, 1992, it appears that Aviron had received an exclusive license to the herpes simplex virus technology from ARCH Development Corporation, a wholly owned affiliate of the University established to license and commercialize the University's technology and intellectual property. Institut Merieux later assigned the patent application to ARCH, which in turn licensed Aviron. Id. Aviron also obtained rights to the '713 and '328 patents and the foreign applications by license and assignment from ARCH. Id. at *3. ARCH and Roizman each own Aviron stock and have received licensing revenue from NeuroVir, the sublicensee of Aviron's rights. Id. at *3.

Later, in 1993, Roizman and Chou signed an agreement to share royalties from "the pending patent application to exploit the properties of the herpes simplex virus 34.5 gene." Id. at *11. At the time the agreement was signed, Chou and Roizman were named inventors on a patent application relating to the subject matter of that agreement, which is not in dispute in this appeal. Id. at *12. The '688 patent application was also pending when that agreement was signed, although Chou was not then aware of its existence. Id. In 1996, Roizman asked Chou to resign, failing which he told her that he would fire her, allegedly because she would be in a stronger position to contest his inventorship if she were still conducting research at the University. Id. at *3.

In 1999, Chou sued Roizman, the University/ARCH, and Aviron (collectively, "the defendants") for correction of inventorship under 35 U.S.C. § 256, seeking to be named as the sole inventor on the '688 patent, or, in the alternative, as a co-inventor along with Roizman. She additionally sought to be listed as a co-inventor on the '713 and '328 patents. Chou also sued for a declaratory judgment that she was an inventor on the U.S. patents and their corresponding foreign applications. In addition, Chou asserted claims of fraudulent concealment, breach of fiduciary duty, unjust enrichment, breach of express and implied contract, and academic theft and fraud.

The district court determined that Chou lacked standing to seek correction of inventorship under § 256 because she could claim no ownership of the patents, having surrendered all her rights to the University under an employment agreement. Id. at *6. The court also dismissed her claim for a declaratory judgment of inventorship, finding that she had no reasonable grounds to believe that Roizman intended to file suit to settle the inventorship question.

The district court also dismissed under Fed. R. Civ. P. 12(b)(6) all of her state law claims except her count for conversion. It determined that Roizman had no duty as Chou's advisor and department chairman to inform Chou of the status of the patent applications, and that his opinion that some of Chou's work should not be patented, although perhaps an affirmative misrepresentation, was not fraudulent. Id. at *9-10. The district court dismissed her unjust enrichment claim based on Roizman's alleged arrangement of the assignment of the '688 patent application to ARCH and then to Aviron, finding instead that Roizman assigned the application to Institut Merieux, which exercised its own "free will" to assign it to ARCH, which then licensed it to Aviron. Id. at *10. The district court also dismissed her claim for breach of an express contract, finding that the contract signed by Chou and Roizman to split royalties related to a different patent application on which both were listed as inventors and was therefore not relevant to the dispute. Id. at *12. The court similarly dismissed her claim for breach of an implied contract because Chou did not allege that Roizman and Chou had established a practice of sharing royalties for all joint inventions. Id. at *12-13. The court also granted Roizman's motion to strike Chou's allegations of academic theft and fraud under Fed. R. Civ. P. 12(f).

The court dismissed all claims against Aviron because Chou did not allege that Roizman's actions came within the scope of his authority as Aviron's agent, and because "so much of what Dr. Roizman did was done before there was an Aviron that Aviron authorized none of it; it simply benefited from the acts after it was brought into existence." Id. at *16. The court dismissed all her counts against Roizman except the conversion count. Id. at *10-11. Chou then voluntarily dismissed the conversion count and stipulated to the dismissal with prejudice of all counts of her complaint against the University/ARCH to obtain a final, appealable judgment because she agreed that the reasoning of the district court's order applied with equal force to the University/ARCH. Chou v. Univ. of Chicago, No. 99-C4495 (N.D. Ill. Mar. 13, 2000) (stipulation of dismissal with prejudice of all claims except for Count V for conversion); Chou v. Univ. of Chicago, No. 99-C4495 (N.D. Ill. Apr. 5, 2000) (voluntary dismissal of Count V). We have jurisdiction to hear this appeal pursuant to 28 U.S.C. § 1295(a)(1) (1994).

DISCUSSION

Whether a putative inventor who lacks a potential ownership interest in a patent has standing to sue is a question of law that we decide de novo. See Prima Tek II L.L.C. v. A-Roo Co., 222 F.3d 1372, 1376, ...