Falana v. Kent State Univ.

• Decision Date: 23 January 2012
• Docket Number: No. 2011–1198.,2011–1198.
• Citation: 101 U.S.P.Q.2d 1414,669 F.3d 1349
• Parties: Olusegun FALANA, Plaintiff–Appellee, v. KENT STATE UNIVERSITY and Alexander J. Seed, Defendants–Appellants.
• Court: U.S. Court of Appeals — Federal Circuit

101 U.S.P.Q.2d 1414

669 F.3d 1349

Olusegun FALANA, Plaintiff–Appellee,

v.KENT STATE UNIVERSITY and Alexander J. Seed, Defendants–Appellants.

No. 2011–1198.

United States Court of Appeals, Federal Circuit.

Jan. 23, 2012.

Bruce H. Wilson, of Akron, OH, argued for plaintiff-appellee.

R. Eric Gaum, Hahn Loeser & Parks, LLP, of Cleveland, OH, argued for defendants-appellants. With him on the brief were Steven J. Mintz and Scott M. Oldham.

Before LINN, PROST, and REYNA, Circuit Judges.

LINN, Circuit Judge.

Dr. Olusegun Falana (“Falana”) filed a complaint with the U.S. District Court for the Northern District of Ohio against Kent State University (“Kent State”) and the inventors listed on the face of U.S. Patent No. 6,830,789 (“the '789 Patent”) seeking correction of inventorship under 35 U.S.C. § 256. Falana alleged that he was an omitted co-inventor of the '789 Patent. Following a bench trial, the district court agreed with Falana and ordered the United States Patent and Trademark Office (“USPTO”) to issue a certificate of correction adding Falana as a named inventor on the '789 Patent. The district court, without the benefit of briefing, also found the case to be exceptional under 35 U.S.C. § 285 and awarded attorney fees to Falana. Findings of Fact, Conclusions of Law, and Order, Falana v. Kent State Univ., No. 5:08–cv–720, 2010 WL 5178838 (N.D.Ohio Dec. 15, 2010) (“ Opinion ”). Kent State appeals. For the reasons explained below, this court affirms the district court's judgment as to inventorship and does not address the district court's exceptional case determination and attorney fees award, which are not properly before us.

I. Background

Kent Displays, Inc. (“KDI”) is a privately owned corporation that was established in 1993 as a spin-off technology company from Kent State. KDI designs and manufactures liquid crystal displays (“LCDs”) used in electronic devices, such as cell phones, digital cameras, and e-books. In 1997, KDI started a research program to develop chiral additives. Chiral additives are chemical compounds that can be used to improve the performance characteristics of LCDs, such as the display's color, contrast, and brightness. One of the goals of the project was to develop a proprietary chiral additive so that KDI could obtain its own patents and avoid having to obtain licenses to other patents in the field.

Dr. Joseph Doane (“Doane”), Chief Science Officer of KDI, hired Dr. Alexander Seed (“Seed”), an Associate Professor at Kent State, to work on this project for KDI. Seed was hired to synthesize and develop chiral additives for KDI. Doane and Seed sought to develop a temperature independent, high helical twisting power chiral additive. Temperature independence is an important characteristic for portable LCDs, which must be operable over a wide range of temperatures.

Due to other constraints on his time, Seed quickly found that he was personally unable to pursue the laboratory research required by the KDI project. In September 1997, Seed placed an advertisement in a trade magazine seeking a post-doctoral researcher to synthesize chiral organic molecules for the KDI research project. Seed selected Falana, who had received his Ph.D. in chemistry from Brandeis University, to start the advertised position on January 1, 1998. Both Seed and Falana were listed as “Co–Research Institution Investigators” on grant applications filed with the National Science Foundation.

Seed expected Falana to work independently and to have ideas of his own while working on the KDI project. Seed, Falana, and Doane were physically located in Kent, Ohio and regularly interacted with each other during the course of the project. Falana synthesized numerous compounds while working on the KDI project. In doing so, Falana synthesized compounds “of his own accord” and those suggested by Seed. These compounds were then tested by Dr. Asad Khan (“Khan”) at KDI to determine their helical twisting power, solubility in a commercial liquid host material, and performance over a range of temperatures. In due course, Khan reported the outcomes of these tests to Seed, Falana, and Doane and the outcomes were used to direct future experiments. Dr. Seed described the interaction between Seed, Falana, and Doane as “very much a team process.”

In March 1999, while conducting research for the KDI project, Falana developed a synthesis protocol (“Synthesis Protocol”) for making a novel class, or “genus,” of chemical compounds: naphthyl substituted TADDOLs. Naphthyl substituted TADDOLs differ from the general class of TADDOLs in that they include a substituted naphthyl aryl group, rather than a phenyl, substituted phenyl, or naphthyl aryl group. Using this protocol, Falana synthesized a compound within this genus that was designated “Compound 7.” Compound 7 was an “SS” enantiomer. “SS” and “RR” enantiomers are chemical compounds with molecular structures having mirror-image relationships to one another; RR and SS enantiomers are identical except for the direction of the molecule's helical twist. Falana's Synthesis Protocol could be used, and was used, to synthesize both RR and SS enantiomers. After testing, Compound 7 was found to exhibit substantial temperature independence between –20 and +30 degrees Celsius, but did not exhibit temperature independence outside of that range. Thus, for purposes of the research project, Compound 7 was a “great improvement” and represented “significant progress,” but did not completely satisfy the goals of the project.

In April 1999, Doane authored a letter to the Immigration and Naturalization Service in support of Falana's immigration status. In this letter, Doane described Falana as “the sole organic chemist responsible for the synthesis of the chiral materials” and stated that “his outstanding performance led to a patent we are currently preparing and a proposal we have submitted to [the National Science Foundation].” In September 1999, Falana resigned from KDI and Kent State to take another position.

In early 2000, Seed synthesized a compound designated Compound 9. Like Compound 7, Compound 9 was a naphthyl substituted TADDOL synthesized using Falana's Synthesis Protocol. Unlike Compound 7, however, Compound 9 was an RR enantiomer. Additionally, Compound 9 exhibited substantial temperature independence between –20 and +70 degrees Celsius and, therefore, satisfied the goals of the project.

On June 9, 2000, KDI and Kent State filed the provisional application that led to the '789 Patent. The inventors listed on the face of the '789 Patent include Doane, Khan, and Seed. Afterwards, Doane, Khan, Seed, and Falana jointly authored a publication entitled “High Twisting Power Chiral Materials for Cholesteric Displays” which describes the research project and includes a discussion of the Synthesis Protocol, Compound 7, and Compound 9. The '789 Patent issued on December 14, 2001. Claim 1 of the '789 Patent recites:

1. An optically active compound of the formula:

Image 1 (1.78" X 1.64") Available for Offline Print

where the R2 and R3 groups are a lower alkyl group or an aryl or biaryl unit while the R1 groups independently each are a hydroxyl, alkoxyl, aryloxy, or arylalkoxy group, the R groups each represent a group as follows:

A1—[—Z—]q—A2—

where A1 is an aromatic group, an acyclic aliphatic group, or an alicyclic group, and A1 can be a substituted or unsubstituted, Z is a group selected from —O—, —OCO—, or —S—, and the coefficient q is 0 or 1 or Z is (CH2) nO where the coefficient n is 0 to 5 and the coefficient q is 1, and A2 is a bivalent radical of a naphthalene group, and the cyclic structure of A2, or A1 if it is cyclic, can be heterocyclic.

The patent specification discloses the Synthesis Protocol developed by Falana as the protocol utilized to synthesize the claimed class of chiral compounds.

After the '789 Patent issued, Falana learned that he was not listed as an inventor and asked Doane why he was not included. After receiving an unsatisfactory response from Doane, Falana filed the present § 256 action against Kent State, KDI, Seed, Doane, and Khan to correct the inventorship of the '789 Patent. On June 23, 2008, Doane and Khan filed signed statements with the court that “[they] have no disagreement with the addition of Olusegun Falana as a named co-inventor of the ['789 Patent]” and that “this statement may be filed with the USPTO to request correction of inventorship of [the ' 789 Patent] to add Olusegun Falana as a co-inventor.” At trial, Doane and Khan explained that they signed the statement not because they thought, as scientists, that Dr. Falana actually had been a joint inventor, but instead because they wanted out of the lawsuit. Accordingly, Doane, Khan, and KDI moved to dismiss themselves from the case, and the district court granted their motion. Thus, the only remaining defendants were Kent State and Seed (collectively, “the Defendants”).

The Defendants urged the district court to construe each claim of the '789 Patent to require an RR enantiomer that provides a substantially temperature independent helical twisting power (“HTP”), wherein “substantially temperature independent HTP” is further defined as having a maximum change in peak reflection of 30 mm or less across a temperature range of +10°C to +50°C. Opinion at 34. The district court noted that, while the patent contains thirty claims, the parties only focused on claims 1 and 25. Id. While the district court construed claims 1 and 25 to require an RR enantiomer, the district court refused to read limitations into claims 1 and 25 concerning a substantially temperature independent HTP. Id. at 35–36.

After a bench trial, the district court concluded that Falana contributed to the conception of the claimed invention by, inter alia, the development of the Synthesis Protocol. Opinion at 37. Additionally, and without briefing from either party, the district court ruled the case to be exceptional and awarded attorney fees. O...