Kaloyeros v. State
| Decision Date | 18 May 2021 |
| Docket Number | 135708 |
| Citation | 154 N.Y.S.3d 343,73 Misc.3d 191 |
| Parties | Alain E. KALOYEROS and Ana R. Londergan, Claimants, v. STATE of New York, Defendant. |
| Court | New York Court of Claims |
For Claimants: Steptoe & Johnson LLP, By: Michael C. Miller, Esq., New York, DerOhannesian & DerOhannesian, By: Paul DerOhannesian, II, Esq., Albany
For Defendant: Honorable Letitia James, Attorney General, By: Michael I. Getz, Esq., Assistant Attorney General
Francis T. Collins, J. Defendant moves to dismiss the claim pursuant to CPLR 3211 (a) (2), (5), (7) and (8) on the grounds it is time-barred and, in any event, alleges a cause of action for which review in the Supreme Court pursuant to CPLR article 78 is the exclusive remedy. Claimants oppose the motion and cross-move for late claim relief, if necessary.
Sometime in 2000, claimants, together with Dr. Barry C. Arkles of Gelest, Inc., allegedly invented a process for creating ultra-thin layers of cobalt to be used as a component in microchips, allowing them to be made smaller, faster, and more functional than the previous generation of microchips (defendant's Exhibit A, Claim, ¶ 1).2 At the time the invention was made, claimant, Alain Kaloyeros, was a professor of physics at the State University of New York (SUNY) at Albany and the claimant Ana R. Londergan was a Ph.D. student in Dr. Kaloyeros’ research group (id. at ¶ 9 and 10). In December, 2000, claimants assigned their entire right, title and interest in the patent to The Research Foundation of the State University of New York3 (The Research Foundation) and patent number 6,346,477 (the "477 Patent") was issued on February 12, 2002 (id. at Exhibits J and K). Claimants allege that the assignment was made pursuant to a series of "agreements" between the claimants, the defendant and The Research Foundation designed to facilitate the management and commercialization of the invention and the realization of royalties for the benefit of both the State and the claimants in the proportion set forth in the State's patent policy (id. at ¶ 1). According to the allegations in the claim, however, defendant did nothing to commercialize the 477 Patent or to protect the 477 Patent from infringement by third-parties prior to the expiration of the patent on January 9, 2021. Claimants therefore seek damages for defendant's breach of its obligation to commercialize the 477 Patent and protect it from third-party infringers.
The Research Foundation is a non-profit corporation originally chartered by the New York State Board of Regents as a non-profit educational corporation in 1951 (id. at Exhibit B, 1977 Agreement). Pursuant to a 1977 agreement, the Foundation agreed to administer SUNY sponsored research programs and technology transfer activities (id. ). With regard to the commercialization of technology resulting from academic discoveries, the duties of The Research Foundation, according to its website (see defendant's Exhibit A, Claim, Exhibit G attached thereto; see also https://www.rfsuny.org/our-work/innovation-and-partnerships/services/ information-for-inventors/), include an evaluation of the market opportunity for an invention, "the development of an intellectual property protection strategy that is implemented by your technology transfer office to ensure that your discovery is protected and secure," "[t]he identification of commercialization and development partners that will translate your discovery into a commercial product or service," "[t]he establishment of long-term relationships with commercialization and development partners," collaboration with partners in product development and, finally, the introduction of new inventions to the market thereby yielding revenues generated by sales of products and services based on the discovery (id. at Exhibit G).
Pursuant to SUNY's Patents, Inventions and Copyright Policy, codified in 8 NYCRR 335.28 (hereinafter the "Patent Policy"), inventors are required to disclose their invention to SUNY and, should it result in either a patent or patent application, assign their patent or patent application as directed by SUNY (id. at Exhibit A, former 8 NYCRR 335.28 [b]). The Research Foundation's Intellectual Property Policy incorporates SUNY's Patent Policy, among other things (id. at Exhibit C). SUNY's Patent Policy, as it existed at the time of the inventions in this case,4 stated in pertinent part the following:
(defendant's Exhibit A, Claim, Exhibit A attached thereto, former 8 NYCRR 335.28 [b]).
In consideration of the inventor's agreement to assign his or her patent or patent application to or as directed by SUNY, the Patent Policy provides for inventor compensation as follows:
"With respect to any invention obtained by or through State University or assigned to or as directed by it in accordance with the foregoing provisions, the university, in recognition of the meritorious services of the inventor and in consideration of the inventor's agreement that the invention shall belong to the university, will make provision entitling the inventor ... to a nonassignable share in any proceeds from the management and licensing of such invention to the extent of 40 percent of the gross royalty paid" (id at Exhibit A, former 8 NYCRR 335.28 [c]).
The Patent Policy also addresses SUNY's release of its intellectual property rights stating: (id. at Exhibit A, former 8 NYCRR 335.28 [f] [emphasis added]).
Pursuant to the Patent Policy, claimants assigned their invention to The Research Foundation in December, 2000 and the 477 Patent was issued to The Research Foundation as assignee on February 12, 2002 (id. at Exhibits J and K). The 477 Patent listed Alain E. Kaloyeros, Ana Londergan and Barry Arkles as inventors.
Claimants allege that in the summer of 2018, Dr. Kaloyeros and Dr. Arkles learned that microchip manufacturers were using their 477 Patent technology and that this infringing activity represented a clear opportunity to negotiate a licensing arrangement for the invention and seek damages in an action for patent infringement (id. at ¶ 51). On or about September 7, 2018, Dr. Arkles, who was allegedly acting on behalf of the claimants and his company Gelest, Inc., notified the defendant of the direct and contributory infringement by third parties and was referred to The Research Foundation. (id. at ¶ 53). The Research Foundation informed Gelest that it did not have the funds to pursue infringers of jointly owned technology and was reluctant to pursue infringers with whom defendant had or was hoping to have a collaborative relationship (id. at 54). On January 4, 2019, counsel for Gelest wrote to The Research Foundation, allegedly on claimants’ behalf, "noting that the [d]efendant had not, ‘to the inventors’ knowledge, licensed or otherwise commercialized the patent’ " throughout the entire lifetime of the patent (id. at ¶ 56). Gelest therefore asked The Research Foundation to release its rights in the invention to claimants so that they could pursue possible licensing opportunities (id. at ¶ 57). The Research Foundation declined (id. at ¶ 58). On February 27, 2019, Gelest again wrote to the Research Foundation, with a copy to SUNY, offering to purchase the entire right, title and interest in the 477 Patent for $50,000 (id. at ¶ 59). The Research Foundation declined (id. at ¶ 60) and the 477 Patent expired on January 9, 2021 (id. at ¶ 50).
Claimants allege causes of action for breach of contract and breach of fiduciary duty arising from defendant's failure to license or otherwise market the 477 Patent, and its ongoing failure to enforce the 477 Patent against third-party infringers. Claimants allege this conduct has deprived them of their share of the proceeds from the anticipated licensing of the 477 Patent in breach of the various agreements. Claimants also allege defendant failed to consult with them regarding the marketing of the invention and refused to...
To continue reading
Request your trial