E.I. Du Pont De Nemours & Co. v. Okuley

• Decision Date: 17 September 2003
• Docket Number: No. 01-3074.,01-3074.
• Citation: 344 F.3d 578
• Parties: E.I. DU PONT DE NEMOURS & COMPANY, Plaintiff-Appellee, v. Dr. John Joseph OKULEY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

344 F.3d 578

E.I. DU PONT DE NEMOURS & COMPANY, Plaintiff-Appellee, v. Dr. John Joseph OKULEY, Defendant-Appellant.

No. 01-3074.

United States Court of Appeals, Sixth Circuit.

Argued September 12, 2002.

Decided and Filed September 17, 2003.

Petition for Rehearing Denied En Banc: November 21, 2003.

Petition for Rehearing Denied En Banc: December 10, 2003. Pursuant to Sixth Circuit Rule 206

COPYRIGHT MATERIAL OMITTED

C. Craig Woods (argued and briefed), Squire, Sanders & Dempsey, Columbus, Ohio, for Plaintiff-Appellee.

Jerry K. Mueller, Jr. (briefed), Mueller & Smith, Columbus, Ohio, for Appellant. Edward A. Matto (argued and briefed), Bricker & Eckler, Columbus, Ohio, for Defendant-Appellant.

Before: BOGGS and COLE, Circuit Judges; and BELL, Chief District Judge.^*

OPINION

BOGGS, Circuit Judge.

The defendant, Dr. John Joseph Okuley, appeals the summary judgment for the plaintiff, E.I. Du Pont de Nemours and Company ("DuPont"), in a dispute involving both contract and patent elements. Okuley helped discover FAD2, one of the genes encoding the Fatty Acid Desaturase enzyme, while an employee of Washington State University ("WSU"), which had a research collaboration agreement ("RCA") with DuPont that assigned to DuPont rights to intellectual property discovered in the course of the collaboration. When Okuley ceased cooperating with the processing of DuPont's application for a patent on FAD2, DuPont filed suit in the United States District Court for the Southern District of Ohio for a declaratory judgment that it owned FAD2 and for specific enforcement of Okuley's agreement to cooperate with DuPont. Okuley counterclaimed for a declaratory judgment that he was the inventor of FAD2 and to rescind his personal assignment of patent rights to DuPont. The district court granted summary judgment to DuPont on all issues. After initially appealing the district court's decision to this court, Okuley moved to transfer the appeal to the Court of Appeals for the Federal Circuit. We take appellate jurisdiction of this matter and affirm the judgment of the district court.

I

In 1991, Okuley, a Ph.D. in molecular biology, began work at WSU on a project on plant fat metabolism, with the aim of isolating and patenting genes that could increase the ratio between beneficial fatty acids and harmful saturated fats. Under the WSU Faculty Manual ("Faculty Manual"), employees assigned to WSU any intellectual property arising out of their employment, and WSU and DuPont were operating under the RCA regarding the assignment of the intellectual property arising out of this project. In August 1992, while still employed at WSU, but while working at a borrowed laboratory at Ohio State University ("OSU"), Okuley successfully identified the FAD2 gene and immediately informed both his supervisor at WSU and DuPont of his discovery. On November 17, DuPont initiated the patent process on FAD2. After some initial disagreement about the inventorship of FAD2, the issue was resolved in May 1993 by DuPont agreeing that inventorship was shared between Okuley and another WSU scientist and Okuley agreeing to assign to DuPont his "entire right, title and interest" in FAD2 and obligating himself to "execute all applications, papers or instruments necessary or required" for DuPont to obtain the patent. In December 1994, relations under this agreement between DuPont and Okuley broke down over Okuley's refusal to sign any more of the papers necessary for the patent application, unless he received "a reasonable royalty for the use of this invention." DuPont thereafter filed a petition with the Patent and Trademark Office ("PTO") to process the FAD2 patent application without Okuley's consent. At the time briefs in this case were filed, both the petition and the application were still pending, but on April 16, 2002, the PTO issued the patent litigated here.

On November 3, 1997, DuPont filed a three-count complaint against Okuley in the United States District Court for the Southern District of Ohio. Subject matter jurisdiction was based on diversity, DuPont being a Delaware corporation, with its principal place of business in Delaware, and Okuley a citizen of Ohio, and the matter in controversy meeting the jurisdictional amount. The first count sought a declaratory judgment that DuPont had exclusive ownership of the FAD2 gene, at least vis-a-vis Okuley. The second count sought specific enforcement of Okuley's contractual duties to continue executing documents necessary for DuPont to pursue the FAD2 patent. The third count sought the same relief on the basis of Okuley's common law duties. Okuley counterclaimed, seeking rescission of his personal assignment of FAD2 to DuPont and a judicial declaration that Okuley was the sole owner and inventor of FAD2. On November 1, 2000, after extensive discovery, the parties filed cross-motions for summary judgment on all counts. The district court granted summary judgment to DuPont on all issues. It concluded that it had no jurisdiction to entertain Okuley's claim to inventorship, that DuPont owned the rights to FAD2 under its agreement with WSU, that Okuley was bound by the Faculty Manual to assign all interests in FAD2 to DuPont; and that Okuley's personal, written assignment to DuPont was valid, enforceable, and not subject to rescission. Okuley timely appealed the district court's judgment to this court. After filing his proof brief in this court, Okuley moved to transfer the appeal to the Court of Appeals for the Federal Circuit, on the basis that it had exclusive appellate jurisdiction in this case.

II

We first turn to the issue of proper appellate jurisdiction. This court has jurisdiction over almost all appeals from final decisions of district courts within its geographical boundaries. 28 U.S.C. § 1294. However, the Court of Appeals for the Federal Circuit has exclusive jurisdiction over appeals from final decisions of a district court, if the jurisdiction of that court was based, in whole or in part, on 28 U.S.C. § 1338(a), subject to certain exceptions not applicable here. 28 U.S.C. § 1295. District court jurisdiction under § 1338(a) extends "only to those cases in which a well-pleaded complaint establishes either that federal patent law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal patent law, in that patent law is a necessary element of one of the well-pleaded claims." Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 809, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988). The seemingly amorphous "substantial question of federal patent law" component of the test merely makes clear that a plaintiff cannot avoid federal patent jurisdiction by leaving out an element necessary to the success of his claim, any more than a plaintiff can create federal jurisdiction by including extraneous references to federal law. Ibid. Moreover, it is important to note that only inventorship, the "question of who actually invented the subject matter claimed in a patent," is a question of federal patent law. Beech Aircraft Corp. v. EDO Corp., 990 F.2d 1237, 1248 (Fed.Cir.1993). "Ownership, however, is a question of who owns legal title to the subject matter claimed in a patent, patents having the attributes of personal property" and is not a question of federal patent law. Ibid.

These principles are illustrated by Rustevader Corp. v. Cowatch, 842 F.Supp. 171 (W.D.Pa.1993). In that case, Rustevader sued its former employee, Cowatch, and Cowatch's father in state court. The defendants had jointly taken out a patent and Rustevader demanded assignment of the patent under a breach of employment contract theory. The defendants removed to federal court on the basis of federal patent jurisdiction and Rustevader asked for remand on the basis that there was no federal jurisdiction. The court reasoned that if the suit had been filed exclusively against the former employee, the court could have ordered an assignment to the employer on the basis of contract, regardless of whether the son was the inventor, and a resolution of the inventorship issue would not have been necessary. However, the plaintiff also made a claim against the father, who was not in contractual privity with the plaintiff. If the father was in fact, as the patent application claimed, an inventor of the disputed patent, Rustevader had no right to the assignment of his interest. If the son was the sole inventor and the contract assigned his rights to Rustevader, Rustevader had a right to the assignment of both father's and son's interest. Therefore, Rustevader's claim against the father required a resolution of the question of inventorship and unintentionally invoked federal patent jurisdiction.

This court has appellate jurisdiction if, and only if, DuPont's well-pleaded complaint necessarily requires resolution of the question of inventorship. The only claim in DuPont's complaint relevant to this question is the request for a declaratory judgment that DuPont had "sole title to [the FAD2] intellectual property." At first blush, to determine the validity of such a broad claim would appear to require resolution of the inventorship question, but a focus on the issues facing the court leads to the opposite conclusion. First, the district court only had the power to adjudicate the relative rights of the parties. Even if a hypothetical third party X had been the true inventor of the FAD2 gene, no judgment could have affected X's rights, as the district court never took personal jurisdiction over X. Therefore, the court needed concern itself only with the relative rights of DuPont and Okuley, regardless of the language of the complaint. The broad language of the complaint was extraneous to the resolution of the matter between the parties to the case. DuPont could not create federal patent jurisdiction by making the unnecessarily broad claim. Okuley cannot now use the overbreadth of DuPont's...