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James v. j2 Cloud Services, LLC

Rule 12 Standing Dismissal Premature Where Key Contract Could Be Interpreted to Preserve Inventor’s Rights

James v. j2 Cloud Services, LLC, __ F.3d __, 2018 WL 1882916 (Fed. Cir. Apr. 20, 2018) (Reyna, TARANTO, Hughes) (C.D. Cal.: Snyder) (2 of 5 stars)

Fed Cir reverses Rule 12(b)(1) dismissal for lack of standing. The case involved an allegation that Gregory James was the sole inventor of subject matter claimed in a patent listing others as inventors, and a request to correct inventorship. The district court properly credited, at the Rule 12 stage, Mr. James’ allegation of inventorship, but erred in holding that he had assigned, or had obligated himself to assign, his rights to a non-party company, JFAX. Such a holding was improper at the Rule 12 stage. The agreement in question was open to interpretation, and a construction was possible under which Mr. James still retained his rights as an (alleged) inventor. At the Rule 12 stage, such a construction should have been applied, thus maintaining Mr. James’ constitutional standing. The opinion also rejects the district court’s invocation of the “hired-to-invent” doctrine of Dubilier, 289 U.S. 178 (1933). The contract relied on by the district court was not between an employer and employee, but between two corporate entities (though Mr. James signed on behalf of one), and the opinion finds no precedent for applying hired-to-invent doctrine in such circumstances. To the extent there was an argument for an implied contract to invent, such would require fact-finding improper at the Rule 12 stage.

KEYWORDS: STANDING; HIRED-TO-INVENT; INVENTORSHIP; ASSIGNMENT