Daneshvar v. Kipke

• Decision Date: 19 July 2017
• Docket Number: Case No. 2:13–cv–13096
• Citation: 266 F.Supp.3d 1031
• Parties: Eugene DANESHVAR, Plaintiff, v. Daryl KIPKE and Neuronexus Technologies, Inc., Defendants.
• Court: U.S. District Court — Eastern District of Michigan

266 F.Supp.3d 1031

Eugene DANESHVAR, Plaintiff,

v.Daryl KIPKE and Neuronexus Technologies, Inc., Defendants.

Case No. 2:13–cv–13096

United States District Court, E.D. Michigan, Southern Division.

Signed July 19, 2017

James M. Pelland, Fausone Bohn, LLP, Northville, MI, Casey Lee Griffith, Griffith Bates Champion & Harper LLP, Dallas, TX, Steven C. Susser, Timothy J. Murphy, Carlson, Gaskey & Olds, P.C., Birmingham, MI, for Plaintiff.

James R. Muldoon, Harris Beach PLLC, Syracuse, NY, Regan K. Dahle, Butzel Long, Ann Arbor, MI, Steven P. Nonkes, Harris Beach PLLC, Pittsford, NY, for Defendants.

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT [134]

STEPHEN J. MURPHY, III, United States District Judge

The case concerns a dispute between a former student at the University of Michigan and his faculty advisor. Plaintiff Eugene Daneshvar alleges that Defendant Daryl Kipke stole and patented Daneshvar's idea for a device used to facilitate deep brain stimulation

. Neuronexus Technologies—a company founded by Kipke that researches and patents medical devices—is a co-defendant. Daneshvar brought an action for correction of inventorship and also raised three tort claims: fraud, breach of fiduciary duty, and unjust enrichment. Defendants raised a counterclaim seeking a declaratory judgment that Daneshvar is not an inventor of the disputed patent, and Kipke raised a counterclaim for defamation. Mediation was attempted and failed and Defendants now move for summary judgment. The Court will grant the motion in part and deny it in part.

BACKGROUND

I. Intellectual Property at the University of Michigan

Significant amounts of intellectual property are created at the University of Michigan and the various colleges within it. Accordingly, the University has a host of rules, policies, and institutions to determine ownership of the property and facilitate its transfer. The Board of Regents governs the University as a whole and sets its rules and policies. ECF 134–2, ¶¶ 5–6, 8. The Regents adopted or approved two documents relevant to the case: the Bylaws of the Board of Regents and the University of Michigan Standard Practice Guide ("SPG"). Id. ¶¶ 6, 8. Section 3.10 of the Bylaws governs the ownership of patents and other property and SPG Number 303.4 ("the Policy") implements Section 3.10. ECF 134–4, PgID 6518.

The University's Office of Technology Transfer ("OTT") administers the Policy and periodically updates it. Id. For instance, one version of the Policy took effect January 1, 2007, and another version was issued in 2009. ECF 134–2, ¶¶ 8–9. The Policy "is applicable to all units of the University including its colleges, schools, departments, centers, institutes, and hospitals, and to all of its Employees." ECF 134–4, PgID 6518. The Policy defines an "employee" as:

a person who receives a salary or other consideration from the University for performance of services, part-time or full time. A University employee with less than a full year (e.g., 9–month) appointment shall be considered an "Employee" for acts during a period of appointment. A student that is compensated (e.g., financially through a stipend, tuition, etc., including graduate student research assistants and graduate student instructors) is considered an Employee under this Policy.

Id. at 6522–23. A "student" is defined as "a person enrolled in University courses for credit except when that person is an Employee." Id. at 6519.

The Policy also defines "intellectual property" and "inventor." Intellectual property under the Policy means "inventions, processes, compositions, life forms, computer software, copyrighted works, mask works, research tools and data, certain defined trade and service marks, Tangible Materials, and legal rights to the same." Id. at 6523. In the patent context, an "inventor" is "an Employee who has made an inventive contribution to the Intellectual Property as defined under U.S. patent laws, meaning that an Inventor must have contributed to the conception of ideas claimed in a patent." Id.

Additionally, the Policy explains what intellectual property is owned by the University and the steps creators of intellectual property should take. On ownership, it states:

Intellectual Property made (e.g., conceived or first reduced to practice) by any person, regardless of employment status, with the direct or indirect support of funds administered by the University (regardless of the source of such funds) shall be the property of the University, except as provided by this or other University policy. Funds administered by the University include University resources, and funds for employee compensation, materials, or facilities.

Id. at 6518. In regard to intellectual property created by students, the Policy also notes that, although the University "will not generally claim ownership of Intellectual Property created by Students," it "does claim ownership of Intellectual Property created by students in their capacity as Employees or with direct or indirect support of funds administered by the University." Id. at 6519. In those cases, "students shall be considered to be Employees for the purposes of this Policy." Id. Employees are directed to disclose their creations and co-inventors to OTT even when they believe the creations are not owned by the University. Id.

Finally, section IV of the Policy addresses commercialization of intellectual property. That section contemplates that the University will sometimes transfer ownership of its intellectual property and explains who makes transfer decisions. Pursuant to the Policy, OTT, "[i]n consultation with Inventors, ... [has] authority for decisions concerning the route of commercializing or transferring a particular Intellectual Property, as well as the selection and use of outside resources, including outside legal counsel, to assist in commercialization." Id. at 6520. OTT also has the "authority for those agreements that are primarily transfer of University-owned ... patent rights[.]" Id. "Responsibility for patent administration, including the retention of patent counsel, is shared by OTT and the Offices of the Vice President for Research and the General Counsel." Id.

II. Timeline

2004–2007: NeuroNexus and its Patents

Sometimes, the creation of intellectual property at the University results in spin-off companies. For example, NeuroNexus "was formed in 2004 to commercialize neural probe technologies that were developed in the College of Engineering at Michigan." ECF 134–28, PgID 6695. Prior to 2007, Kipke and others at NeuroNexus secured various patents in the neural-probe field. See generally ECF 134–16, PgID 6576–88.

NeuroNexus's patents would sometimes build on their previous work. According to Jamille Hetke, a NeuroNexus employee, in 2005 the NeuroNexus team was in the early stages of developing what it called a "Deep Brain Mapping Array" or "DBMA." ECF 134–16, ¶ 14. That work led to another idea, the "Deep Brain Stimulating Array" or "DBSA," in 2006. Id. ¶ 19. The DBSA is a "neural interface system" where the electrode sites are arranged circumferentially and axially around and along a cylindrical carrier. ECF 134–29.

On February 26, 2007, members of the NeuroNexus team filed a patent application for the DBSA concept, which was assigned number 60/891,641 (the '641 application). ECF 134–28. The '641 application would lead to the issuance of Patent No. 8,731,673 (the '673 patent) seven years later, ECF 134–29, but a great deal happened in the interim.

Summer 2007: Daneshvar Has An Idea and Shares It

In 2006 and early 2007, Eugene Daneshvar was a student pursuing a master's degree in Biomedical Engineering from the University of Michigan College of Engineering. ECF 65–10, PgID 3482; ECF 140–2, PgID 8984–85. During that time, he worked as a graduate research assistant in the Neural Engineering Lab. ECF 65–10, PgID 3477–78. Daryl Kipke was a professor in the school's Department of Engineering and was serving as Daneshvar's faculty advisor. ECF 20–1, ¶¶ 7–8. Daneshvar's degree was conferred in May of 2007, but he continued to work in the lab through September of that year. ECF 135–10, PgID 8219. During the summer of 2007, he was admitted into a Ph.D. program at the University. Id.

In June of that year, Daneshvar had an idea for a neural probe technology. He described his idea, along with some drawings, on the pages of a notebook, each dated 6/13/07. See ECF 68–2, PgID 3984–85. At the bottom of each page were the signatures of Daneshvar (indicated as the inventor) and one Duna Raoof (indicated as witness); both signatures were dated 6/13/07. Id.

The pages begin:

Novel Idea

This novel idea of incorporating conductive polymers onto neural probes, both rigid-like silicon substrates and flexible polymers substrates, for movement guidance and manipulation has occurred to me. I have not seen any application such as this before. I have seen applications of conductive polymers being used to bend substrates such as in "micromussels" work. I wish to apply this technology to neural probes in order to manipulate placement of the probes invivo.

Id. The pages then described how the idea would benefit surgeons and aid in "the quest for determining whether neurons ‘re-wire’ themselves or surrounding neurons die etc." They went on:

The idea is that when that site is stimulated it would cause the conductive polymer to excite and bend the probe at that location. Having more than one of the bands would allow more degrees of freedom.... I believe to achieve this effect we could use an ordinary probe (current probe from NeuroNexus) and develop a preliminary mask to selectively sputter metal on top. Then we could apply PEDOT coating or PPY coating to the deposited metal and actuate.

Id. Some simple diagrams illustrating the concept accompanied the descriptions. Id. Daneshvar now calls the ideas conceived on that day the "Pivot Probe" and the "Pivot Electrode." ECF 135–18, PgID 8377.

Daneshvar explained his ideas...