Core Optical Techs., LLC v. Nokia Corp.

• Docket Number: 2023-1001,2023-1002,2023-1003
• Decision Date: 21 May 2024
• Citation: 102 F.4th 1267
• Parties: CORE OPTICAL TECHNOLOGIES, LLC, Plaintiff-Appellant v. NOKIA CORPORATION, Nokia of America Corporation, Defendants-Appellees Core Optical Technologies, LLC, Plaintiff-Appellant v. ADVA Optical Networking SE, ADVA Optical Networking North America, Inc., Defendants-Appellees Core Optical Technologies, LLC, Plaintiff-Appellant v. Cisco Systems, Inc., Defendants-Appellees
• Court: U.S. Court of Appeals — Federal Circuit

102 F.4th 1267

CORE OPTICAL TECHNOLOGIES, LLC, Plaintiff-Appellant v. NOKIA CORPORATION, Nokia of America Corporation, Defendants-AppelleesCore Optical Technologies, LLC, Plaintiff-Appellant v. ADVA Optical Networking SE, ADVA Optical Networking North America, Inc., Defendants-AppelleesCore Optical Technologies, LLC, Plaintiff-Appellant v. Cisco Systems, Inc., Defendants-Appellees

2023-1001

2023-1002

2023-1003

United States Court of Appeals, Federal Circuit

Decided: May 21, 2024

Appeal from the United States District Court for the Central District of California in Nos. 8:19-cv-02190-JAK-RAO, 8:20-cv-01463-JAK-RAO, 8:20-cv-01468-JAK-AGR, Judge John A. Kronstadt.

Lawrence Milton Hadley, Glaser Weil Fink Howard Avchen & Shapiro LLP, Los Angeles, CA, argued for plaintiff-appellant. Also represented by Stephen Underwood; Jason Daniel Eisenberg, William Milliken, John Christopher Rozendaal, Sterne Kessler Goldstein & Fox PLLC, Washington, DC; Lawrence LaPorte, Lewis Brisbois Bisgaard & Smith LLP, Washington, DC.

Linda T. Coberly, Winston & Strawn LLP, Chicago, IL, argued for all defendants-appellees. Defendants-appellees ADVA Optical Networking SE, ADVA Optical Networking North America, Inc., Cisco Systems, Inc. also represented by David P. Enzminger, Los Angeles, CA; Lauren Gailey, Washington, DC; Krishnan Padmanabhan, New York, NY; Eimeric Reig-Plessis, San Francisco, CA.

John D. Haynes, Alston & Bird LLP, Atlanta, GA, for defendants-appellees Nokia Corporation, Nokia of America Corporation. Also represented by Lindsay C. Church, Sloane Sueanne Kyrazis; James Abe, Los Angeles, CA; Kirk T. Bradley, Nicholas Christopher Marais, Charlotte, NC; Thomas William Davison, Washington, DC.

Before Dyk, Mayer, and Taranto, Circuit Judges.

Dissenting opinion filed by Circuit Judge Mayer.

Taranto, Circuit Judge.

Between November 2019 and August 2020, Core Optical Technologies, LLC filed complaints in the U.S. District Court for the Central District of California alleging infringement of U.S. Patent No. 6,782,211 by three groups of defendants led by Nokia Corp., ADVA Optical Networking SE, and Cisco Systems, Inc. (collectively, Nokia). In August 2021, Nokia moved for summary judgment, arguing that Core Optical lacked standing to assert the '211 patent even though the inventor, Dr. Mark Core, had assigned the patent to Core Optical in 2011. Nokia's argument was that the 2011 assignment was ineffective because Dr. Core had already assigned the patent rights to TRW Inc., his employer at the time of invention, through an August 1990 employment-associated agreement with TRW. The district court agreed with Nokia and therefore granted Nokia summary judgment. Core Optical Technologies, LLC v. Nokia Corp., No. 19-cv-02190, 2022 WL 4596547 (C.D. Cal. Aug. 4, 2022) (Decision). Core Optical appeals. We have jurisdiction under 28 U.S.C. § 1295(a)(1). We vacate the district court's judgment and remand for further proceedings.

I

A

Dr. Core's employment at TRW began in August 1990, at which time Dr. Core signed a "TRW Invention Agreement." J.A. 3515-16, 6760-61. In the agreement, Dr. Core agreed to disclose to TRW and automatically assign to TRW all of his inventions that "relate to the business or activities of TRW" and were "conceived, developed, or reduced to practice" during his employment with TRW. J.A. 3515. But the agreement included an important exception:

9. Non-TRW Inventions. I understand that this Agreement does not require me to assign to TRW my rights to an INVENTION for which no equipment, supplies, facility, or trade secret information of TRW was used and which was developed entirely on my own time, and (a) which does not relate (1) to the business of TRW or (2) to TRW's actual or demonstrably anticipated research or development, or (b) which does not result from any work performed by me for TRW. Nevertheless, I shall disclose to TRW those INVENTIONS referred to in this paragraph 9 to enable TRW to determine if it has an interest therein.

J.A. 3515 (italicized emphasis added).

In 1993, Dr. Core was accepted into the University of California, Irvine's PhD program and, soon after, was accepted into TRW's fellowship program based on the PhD program enrollment. J.A. 6774-75, 6814. Several features of the TRW fellowship have been central in this appeal. While he was a fellow, Dr. Core continued to work as a salaried employee at TRW but with a reduction in the number of hours he would; and did work, like a non-fellow employee, on specific TRW-assigned commercial tasks; and TRW paid him wages to match the reduced number of such hours. J.A. 6770-71. TRW also paid Dr. Core, while he was a fellow, a monthly stipend and full employee benefits such as medical insurance, sick pay, and pension accrual. J.A. 6771, 6774-75. Still further, TRW paid Dr. Core's tuition and fees and generally reimbursed him for the costs of books and supplies for the PhD program. J.A. 6770, 6774. As a condition of receiving all those fellowship benefits, Dr. Core was required to pursue a degree sufficiently related to his job responsibilities; meet regularly with a TRW sponsor to discuss degree progress; and return to TRW for at least one year of full-time employment after completing his degree (or instead pay back to TRW certain degree-related costs, like the tuition and stipend). J.A. 3872, 6767-74, 9379-82.

The summary-judgment record indicates that, in the course of his PhD research, Dr. Core conceived of and reduced to practice the invention claimed in the '211 patent; indeed, Dr. Core admitted that his PhD dissertation is "essentially identical" to the provisional patent application that turned into the '211 patent. J.A. 6787-88. That research (and the '211 patent) concerned certain techniques for improving optical signaling. The resulting patent described, and claimed in various ways, using "a receiving device including a cross polarization interference canceler (XPIC)" where "the XPIC optimizes bandwidth efficiency of an optical link by enabling the reconstruction of two optical signals transmitted with generally orthogonal polarization states and routed over a single fiber optic transmission medium in the same frequency band." '211 patent, col. 3, lines 10-18. The asserted advance was to effectively increase the amount of information that can be communicated in a particular optically transmitted signal (composed of orthogonal "vertical" and "horizontal" components) by transmitting and receiving two independent but superimposed signals, one on each orthogonal component, and using an XPIC to reduce or eliminate interference between the two orthogonal components upon receipt of the signal. See J.A. 5219-20 ¶¶ 21-22; see also Core Optical Opening Br. at 7-8; Nokia Response Br. at 7-9.

The provisional patent application that issued as the '211 patent was filed on November 5, 1998. J.A. 110. Dr. Core's dissertation was approved and archived on December 21, 1998, and Dr. Core obtained his PhD on March 19, 1999. J.A. 6819. Dr. Core's employment with TRW came to an end in August 2000. J.A. 6760. In August 2011, Dr. Core executed an assignment of the '211 patent from himself to Core Optical (his company) and recorded that assignment with the U.S. Patent & Trademark Office. J.A. 6540-43.

In some respects, Core Optical and Nokia produced competing evidence related to Dr. Core's PhD research activities and to various potential ownership interests in the '211 patent. Core Optical presented evidence that Dr. Core was careful not to work on his PhD research while "on the clock"¹ at TRW and not to use TRW equipment, facilities, or supplies when working on his PhD research. See J.A. 6819; see also J.A. 5225-26 ¶¶ 42-44; J.A. 5238-39 ¶ 87; J.A. 5240-41 ¶¶ 93-96; J.A. 6528-31 ¶¶ 6-13. Nokia, while disputing the significance of that evidence, does not point us to contrary evidence on those points. See, e.g., Nokia Response Br. at 20, 24-25. The record also suggests that TRW and its successor Northop Grumman (which acquired TRW in 2002) did not assert ownership of the '211 patent for a very considerable period. Core Optical identified evidence that TRW itself did not assert such an ownership interest, whether in communications with Dr. Core or otherwise, and that Dr. Core's former project manager at TRW disclaimed any such TRW ownership interest directly to Dr. Core. J.A. 5242 ¶ 101; see also J.A. 6530 ¶ 11-12. There is also evidence that Northrop Grumman, for its part, despite knowledge of Core Optical's assertion of the '211 patent in unrelated litigation at least as of 2014, J.A. 5242-43 ¶¶ 102-03, did not assert an ownership interest in the patent at least until, around March 2016, Core Optical's attorneys communicated with Northrop Grumman's corporate counsel. J.A. 9572-73.

B

This litigation began when, between November 2019 and August 2020, Core Optical filed complaints in the Central District of California alleging infringement of the '211 patent by the defendants we call "Nokia" collectively. J.A. 37-40 (Nokia Corp. et al.); J.A. 64-67 (ADVA Optical Networking SE et al.); J.A. 89-90 (Cisco Systems, Inc.). In August 2021, Nokia moved for summary judgment, asserting that Core Optical lacked standing to sue for patent infringement because Northrop Grumman, not Core Optical, owns the '211 patent as the successor to TRW. The asserted basis for TRW's ownership was that the patent was automatically assigned to TRW under the August 1990 invention agreement between it and Dr. Core. J.A. 3444-70.

The district court agreed and granted Nokia summary judgment. Decision, at *22. The determinative issue was whether the exception stated in the above-quoted paragraph 9—to the otherwise-applicable assignment provision of the invention agreement—applied to the '211 patent's invention. The district court understood that three requirements had to be met for an invention to come within paragraph 9 and thus constitute a "Non-TRW Invention": "1) [N]o equipment, supplies, facility, or trade secret...