Gilson v. Republic of Ireland

• Decision Date: 28 June 1984
• Docket Number: Civ. A. No. 79-2647.
• Parties: James K. GILSON, Plaintiff, v. The REPUBLIC OF IRELAND, et al., Defendants.
• Court: U.S. District Court — District of Columbia

606 F. Supp. 38

James K. GILSON, Plaintiff, v. The REPUBLIC OF IRELAND, et al., Defendants.

Civ. A. No. 79-2647.

United States District Court, District of Columbia.

June 28, 1984.

COPYRIGHT MATERIAL OMITTED

Joseph H. Sharlitt, Freedman, Levy, Kroll & Simonds, Washington, D.C., for plaintiff.

J.P. Janetatos, Baker & McKenzie, Edward A. McDermott, William A. Bradford, Jr., Washington, D.C., for defendants.

MEMORANDUM OPINION

NORMA HOLLOWAY JOHNSON, District Judge.

This case is now before the Court on remand from the Court of Appeals for the District of Columbia Circuit for further proceedings and additional fact-finding on the third and fourth counts of the complaint. Gilson v. Republic of Ireland, 682 F.2d 1022 (D.C.Cir.1982) affirming in part and reversing in part 517 F.Supp. 477 (1981). After engaging in further discovery and other proceedings, defendants moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure (F.R.C.P.). Plaintiff opposes the motion of each defendant. From a careful review of the pleadings, affidavits, depositions, and the entire record, the Court finds that there are no material facts in genuine dispute and defendants are entitled to judgment on counts three and four of plaintiff's complaint as a matter of law. Accordingly, the motions of Gaeltarra Eireann (GE), Leictron Teoranta (Leictron), Industrial Development Authority (IDA), and the Republic of Ireland for summary judgment are granted.

BACKGROUND

Counts three and four of plaintiff's complaint are denominated, respectively: "Accounting by Defendant Gaeltarra Eireann for Use of Patent Rights and Proprietary Information" and "Accounting by Defendant Leictron for Unlawful Use of Patent Rights and Proprietary Information." The gravamen of these counts is that GE turned over to defendant Leictron the use of patent rights owned by plaintiff in contravention of the laws of both the United States and Ireland. Plaintiff further alleges that Leictron not only used and infringed these rights but also benefited from the usurpation of the patent rights with the active collusion of GE. Plaintiff also alleges that GE unlawfully turned over to Leictron his proprietary information regarding the growing, cutting, and finishing of quartz crystals. Plaintiff again asserts that Leictron benefited from its misappropriation of this proprietary information with the active collusion of GE. Thus, the substance of plaintiff's claims in counts three and four is that defendants GE and Leictron 1) unlawfully used and infringed his patent rights and 2) misappropriated trade secrets plaintiff allegedly possesses in the manufacturing of quartz crystal.^*

DISCUSSION

The function of a court when ruling on a motion for summary judgment is to determine whether there are any material facts in genuine dispute, and any doubt or uncertainty about the presence of triable issues of fact must be resolved against the party moving for summary judgment. See F.R. C.P. Rule 56; Abraham v. Graphic Arts International Union, 660 F.2d 811 (D.C. Cir.1981); Gray v. Greyhound Lines, East, 545 F.2d 169 (D.C.Cir.1976): United States v. General Motors Corp., 518 F.2d 420 (D.C.Cir.1975). However, where a party moving for summary judgment has met this burden, an opposing party cannot rest on the mere allegations of his pleadings. Rather, he must present contravening evidence sufficient to create a genuine dispute of a material fact. See e.g., Smith v. Saxbe, 562 F.2d 729 (D.C.Cir.1977); Merit Motors, Inc. v. Chrysler Corp., 417 F.Supp. 263 (D.D.C.1976), aff'd 569 F.2d 666 (D.C.Cir.1977). It is with these principles in mind that the Court concludes that the motions of defendants for summary judgment on Counts three and four of plaintiff's complaint should be granted.

In the chief argument of defendants GE, Leictron, and IDA for summary judgment, in which the Republic of Ireland joins, defendants do not challenge this Court's subject matter jurisdiction under the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. § 1602 et seq. (1982 ed.), and personal jurisdiction over all defendants. Rather, defendants maintain that plaintiff neither possesses any proprietary rights in the patent that is the subject of his patent claim nor any information rising to the level of a trade secret. Thus, defendants argue that plaintiff lacks standing to bring an action for unlawful use and infringement of the patent and misappropriation of trade secrets.

Patent Claims

The material and uncontroverted facts in this case substantiate that plaintiff James K. Gilson is one of four inventors of U.S. Patent No. 3,183,063 covering the growing of quartz crystals by autoclave technology. Plaintiff and his co-inventors, however, assigned the patent to Western Electric Company, Inc., their employer at the time Patent No. 3,183,063 was issued. Indeed, the patent recites that plaintiff and the other three inventors are "assignors to Western Electric Company, Incorporated." Western Electric, in turn, granted plaintiff and the other inventors a royalty-exempt license to Patent No. 3,183,063. Thus, the question of law for the Court to resolve is whether plaintiff either retained or received a proprietary right in Patent No. 3,183,063 to invoke the protection of U.S. patent laws.

Plaintiff maintains that defendants are not entitled to summary judgment on the patent claims notwithstanding the assignment of the patent to Western Electric, for he still has a legal interest in the patent as a licensee, and his interest is per se subject to trade secret protection. Plaintiff appears to confuse, however, a claim for patent protection with a claim for trade secret protection. The distinctions between patent and trade secret claims are not illusory. For example, any rights plaintiff may possess in the patent are conferred and defined by the patent laws of the United States and as such, are a matter of federal law. To the contrary, a party seeking to protect a trade secret must enforce his rights under the common law principles governing trade secrets. An equally significant line of demarcation between patents and trade secrets is that once a patent is granted, a patentee's property right in a trade secret ceases prospectively and thus, neither he nor his licensee has a right of action for wrongful appropriation of a trade secret subsequent to the date the patent is issued. See e.g., Scharmer v. Carrollton Mfg. Co., 525 F.2d 95, 99 (6th Cir.1975). In short, the Court must look to U.S. patent law to determine whether plaintiff has sufficient rights in the patent to maintain an action for unlawful use and infringement.

It is a long standing principle of U.S. patent law that in the event of a complete assignment of title to a patent only the assignee or the assignee's exclusive licensee has standing to claim protection rights under the patent. Waterman v. MacKenzie, 138 U.S. 252, 256, 11 S.Ct. 334, 335, 31 L.Ed. 923 (1891); Acme Highway Products Corp. v. Maurer, 524 F.Supp. 1130, 1131 (D.D.C.1981); Von Brimer v. Whirlpool Corp., 362 F.Supp. 1182, 1193 (N.D.Cal.1973). Thus, where an inventor-employee assigns complete title to a patent to his employer, thereby divesting himself of ownership of the patent, he no longer has a proprietary right in the patent unless the employer-assignee in turn grants him an exclusive license. Id. See also, Crown Die & Tool Co. v. Nye Tool & Machine Works, 261 U.S. 24, 37, 43 S.Ct. 254, 257, 67 L.Ed. 516 (1923). It is clear from the undisputed record in this case that plaintiff and his co-inventors assigned their title to Western Electric. It is equally certain that plaintiff's royalty-exempt license in the patent is not an exclusive license as it does not "serve to exclude" Western Electric, the owner assignee of the patent, from the manufacture, use, or sale of the subject invention. See e.g., Rail-Trailer Co. v. ACF Industries, Inc., 358 F.2d 15, 16-17 (7th Cir.1966). As a result, plaintiff has no proprietary right in Patent No. 3,183,063 and therefore no standing to maintain suit with respect to this patent. Accordingly, defendants GE, Leictron, IDA, and Ireland are entitled to judgment as a matter of law on the patent claims of plaintiff embodied in counts three and four of the complaint.

Trade Secrets Claim

The essence of plaintiff's wrongful appropriation claim is that defendants GE and Leictron misappropriated trade secrets he allegedly possesses in the manufacturing of quartz crystal. The facts material to plaintiff's trade secret claim are also undisputed. Plaintiff, a mechanical engineer in sodium carbonate technology, is one of nine or ten quartz crystal growers in the United States. Of these nine or ten growers, just three individuals, in addition to plaintiff, are capable of independently developing a quartz growing process. With respect to the process of cutting grown crystals, the uncontroverted record shows that when plaintiff began the venture in Ireland, there were less than seventy-five people worldwide who could properly and successfully cut quartz crystals. None of these individuals was in Ireland at that time. Finally, based upon the undisputed evidence there were no more than one hundred quartz crystal finishing companies throughout the world and none of these companies was in Ireland in 1973. Thus, the question the Court must now address is whether plaintiff's information regarding the growing, cutting, and finishing of quartz crystal constitutes trade secrets.

In determining whether plaintiff possesses any trade secrets in the processes of quartz crystals, the Court must look to common law as there is no federal statutory or common law governing trade secrets. See e.g., Rohm and Haas Co. v. Adco Chemical Co., 689 F.2d 424, 428 (3d Cir.1982) (district court erred in applying "federal" trade secret law). Moreover, since plaintiff's claim for misappropriation of trade secrets has contact with more than one jurisdiction, it is incumbent upon ...