Kaempe v. Myers

• Decision Date: 21 May 2004
• Docket Number: No. 03-7037.,03-7037.
• Citation: 367 F.3d 958
• Parties: Staffan I. KAEMPE, Appellant, v. George C. MYERS, Jr., Individually, et al., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

367 F.3d 958

Staffan I. KAEMPE, Appellant, v. George C. MYERS, Jr., Individually, et al., Appellees.

No. 03-7037.

United States Court of Appeals, District of Columbia Circuit.

Argued March 18, 2004.

Decided May 21, 2004.

Appeal from the United States District Court for the District of Columbia (No. 01cv02636).

John R. Price argued the cause and filed the briefs for appellant. Wayne R. Hartke entered an appearance.

James P. Schaller argued the cause for appellees. With him on the brief was Benjamin R. Jacewicz.

Before: EDWARDS and HENDERSON, Circuit Judges, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge HARRY T. EDWARDS.

EDWARDS, Circuit Judge:

This case arises out of attorney George C. Myers' representation of Staffan I Kaempe in the processing of a patent application for a hydraulic pump. Kaempe sued Myers and Myers' current and former law firms, claiming that Myers converted Kaempe's interest in the patent by assigning that interest to a third party without Kaempe's consent. Kaempe further claimed that Myers committed legal malpractice by effecting the assignment in question, by failing to correct records at the U.S. Patent and Trademark Office suggesting that an assignment had been made and recorded, and by refusing to provide Kaempe with copies of certain documents related to the patent application.

The District Court dismissed the conversion count of the complaint for failure to state a claim, finding that an action for conversion of patent rights is not recognized under District of Columbia law. The court granted summary judgment to Myers on the malpractice claim on the grounds that Kaempe failed, inter alia, to provide expert testimony establishing the applicable standard of care, as required under D.C. law. Kaempe now appeals the District Court's judgments on both claims.

First, it is unclear whether D.C. law recognizes an action for conversion of patent rights, but it is unnecessary to reach this issue. Even if D.C. law did permit such an action, dismissal of the conversion claim was proper here, because the complaint and related documents make clear that Kaempe's patent rights were not, in fact, assigned or otherwise conveyed. Second, Kaempe's failure to provide expert testimony in support of his malpractice action is fatal to this claim. We therefore affirm the judgments of the District Court.

I. BACKGROUND

A. Legal Context

The U.S. Patent and Trademark Office ("PTO") is authorized by statute to grant and issue patents to inventors of "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof." 35 U.S.C. §§ 2, 101 (2000). A patent application must be filed with the PTO in the name of the inventor or joint inventors of the subject invention. See 35 U.S.C. §§ 111(a)(1), 116 (2000). While a patent application is pending, an applicant may file a continuation-in-part ("CIP") application for an invention having some subject matter in common with the original application and some new subject matter. HERBERT F. SCHWARTZ, PATENT LAW AND PRACTICE 25-26 (3d ed.2001). CIP applications are commonly made when, during the pendency of the initial "parent" application, the inventor conceives of improvements to the subject of that application. See id. at 25.

A patent gives its owner the right to exclude others from making, using, offering for sale, selling, or importing the patented invention. 35 U.S.C. §§ 154(a)(1), 271 (2000). The default rule is that the inventor or inventors own the patent rights to the subject matter of the patent. See, e.g., Banks v. Unisys Corp., 228 F.3d 1357, 1359 (Fed.Cir.2000). Joint owners — including those holding title by virtue of joint inventorship — are each vested with an undivided share of the patent rights. 5 ERNEST BAINBRIDGE LIPSCOMB III, LIPSCOMB'S WALKER ON PATENTS § 19.39, at 461-62 (3d ed.1986). Subject to certain statutorily defined exceptions, a patent has the attributes of personal property. See 35 U.S.C. § 261 (2000). A patent owner or applicant may convey his or her rights in a patent or patent application, in whole or in part, by means of an assignment executed in writing. See id. Alternatively, an owner may exempt others from the patent's exclusionary power by granting a license, which is essentially a promise by the licensor not to sue the licensee for infringement. See U.S. PATENT AND TRADEMARK

OFFICE, MANUAL OF PATENT EXAMINING PROCEDURE § 301 (8th ed. rev.2003) ("MPEP").

If a patent assignment is not recorded with the PTO, it has no legal effect against any subsequent purchaser or mortgagee, provided that party gives valuable consideration to acquire an interest in the patent and has no notice of the prior assignment. See 35 U.S.C. § 261. Recordation protects an assignee against parties who later purport to acquire rights in the assigned interest. See 5 LIPSCOMB, supra, § 19.10, at 356. PTO regulations provide for recordation of assignments, as well as documents other than assignments that relate to a patent or patent application but do not transfer or change title. See 37 C.F.R. § 3.11(a) (2003); MPEP § 313. However, recordation is a purely ministerial act and does not reflect any determination as to the validity of the document filed or its effect, if any, on the title to a patent or patent application. 37 C.F.R. § 3.54 (2003); MPEP § 317.03.

B. Factual Background

In 1994, Staffan Kaempe invented a hydraulic pump (the "Cartridge Hydraulic Pump" or "pump") the components of which are held together by the fluid-output pressure generated by the pump itself, thus eliminating the need for external bolts or fasteners. Kaempe expected that this technology would permit significant reduction in the size and weight of hydraulic pumps and would ultimately replace conventional pumps altogether. Kaempe revealed his invention to Dennis Ewald, a longtime co-worker. In September 1997, Kaempe and Ewald retained attorney George C. Myers to prepare and process a U.S. patent application for the pump. Kaempe alleges that he permitted Ewald to be named as a co-inventor in the patent application in return for Ewald's agreement to pay the legal fees incurred in processing the application.

On October 23, 1997, Kaempe and Ewald executed a written agreement (the "October 1997 Agreement"), providing in relevant part:

Ewald and Kaempe agree that to cause the further development, manufacture and distribution of the Cartridge Hydraulic Pump, they shall form a corporation (hereinafter "the Corporation") and execute a non-exclusive license to the Corporation of the patent for the Cartridge Hydraulic Pump for a term of the life of the patent.

Def. Mem. Supp. Summ. J., Ex. I (hereinafter "Def. Ex. I"), reprinted in App. 9, 10. In December of that same year, Kaempe and Ewald formed a corporation under Illinois law — Cartridge Technology Hydraulics, L.L.C. ("CTH") — to manufacture, sell, and distribute the Cartridge Hydraulic Pump.

Myers filed the patent application for the pump with the PTO on January 30, 1998. In September of 1998, Kaempe and Ewald requested that Myers prepare a CIP application for a new pump, incorporating some claims of the original pump and some new claims. At some point during the following year, however, a dispute arose between Kaempe and Ewald, and in mid-January of 1999, Kaempe's employment with CTH was terminated. On January 29, 1999, Ewald — allegedly without Kaempe's authorization — forwarded to Myers a copy of the October 1997 Agreement accompanied by a letter directing Myers to "file this assignment with the U.S. Patent Office and advise me if this is not sufficient." Compl. ¶ 14. The following week, Myers prepared forms for Ewald and Kaempe to assign the patent application to CTH, but Kaempe never received or executed any such document. Around this same time, Kaempe was removed as a manager of CTH. Id. ¶ 17.

In mid-February 1999, Kaempe retained attorney Bradford Lyerla, of the law firm of Ryndak & Lyerla, to represent him. In at least two letters and numerous phone calls and emails over the course of the following months, Lyerla requested that Myers provide Kaempe with copies of documents related to the patent application, including the draft CIP application for the new pump. Myers ultimately sent part of Kaempe's file, but he never sent the draft CIP application. As a result, Kaempe did not file the CIP application before the filing deadline, and the claims in the CIP application were not made part of the patent that ultimately issued. See id. ¶¶ 20-26.

Kaempe alleges that Myers incorrectly told him that he could not turn over the draft CIP application without Ewald's approval. Id. ¶ 25. Myers, in contrast, asserted that he refused to turn over the CIP application because Kaempe and Ewald had not paid for his services in preparing the application. Myers Dep. of June 18, 2000, at 109, App. 218. The record indicates that, on April 21, 1999, Myers sent Kaempe's new attorneys a bill for services and a letter requesting that Kaempe pay half of the bill, apparently in response to Kaempe's request for the draft CIP application. See Letter from George Myers to James Ryndak, of Ryndak & Lyerla (April 21, 1999), App. 411. Just two days earlier, Kaempe petitioned the PTO to revoke Myers' power of attorney, asserting that a dispute had arisen between the inventors and that Myers had refused to provide Kaempe with information about the application without Ewald's consent. See Compl. Ex. L, App. 115.

Meanwhile, at some point in February 1999, Myers had filed for recordation with the PTO certain documents related to the patent application. On the required PTO cover sheet for the filing, Myers designated the "nature of conveyance" to be recorded as "other" (as opposed to "assignment," "security agreement," "merger," or "change of name"), and identified the documents to be recorded as "Agreement and Articles of Organization." Def. Ex. I, App. 138. In May of ...