Huster v. J2 Cloud Services, Inc. ( 2017 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
PHYLLIS A. HUSTER,
Plaintiff-Appellant
v.
J2 CLOUD SERVICES, INC., ADVANCED
MESSAGING TECHNOLOGIES, INC., UNIFIED
MESSAGING SOLUTIONS, LLC, ACACIA PATENT
ACQUISITION, LLC, CHARLES R. BOBO, II,
Defendants-Appellees
______________________
2016-1639
______________________
Appeal from the United States District Court for the
Northern District of Georgia in No. 1:14-cv-03304-ELR,
Judge Eleanor L. Ross.
______________________
Decided: March 29, 2017
______________________
PHILIP P. MANN, Mann Law Group, Seattle, WA, ar-
gued for plaintiff-appellant.
BRIAN RAY ENGLAND, Sullivan & Cromwell LLP, Los
Angeles, CA, argued for defendants-appellees j2 Cloud
Services, Inc., Advanced Messaging Technologies, Inc.,
Unified Messaging Solutions, LLC, Acacia Patent Acquisi-
tion, LLC. j2 Cloud Services, Inc., Advanced Messaging
2 HUSTER v. J2 CLOUD SERVICES, INC.
Technologies, Inc. also represented by ROBERT A. SACKS;
DAN ROBERT GRESHAM, Thomas Horstemeyer LLP, Atlan-
ta, GA.
PETER SCHOENTHALER, Schoenthaler Law Group, At-
lanta, GA, argued for defendant-appellee Charles R. Bobo,
II. Also represented by ROBERT SCOTT JOHNSON, Law
Office of Scott Johnson, PC, Atlanta, GA.
EDWARD R. NELSON, III, Nelson Bumgardner PC, Fort
Worth, TX, for defendant-appellee Unified Messaging
Solutions, LLC. Also represented by THOMAS CECIL;
TIMOTHY EDWARD GROCHOCINSKI, Orlando Park, IL.
MARC J. SCHNEIDER, Stradling Yocca Carlson &
Rauth, P.C., Newport Beach, CA, for defendant-appellee
Acacia Patent Acquisition, LLC. Also represented by
SARAH S. BROOKS, Santa Monica, CA.
______________________
Before LOURIE, O’MALLEY, and TARANTO, Circuit
Judges.
TARANTO, Circuit Judge
Phyllis Huster asserts that she is the inventor or co-
inventor of certain systems and methods claimed in nine
patents—U.S. Patent Nos. 5,675,507, 5,870,549,
6,350,066, 6,564,321, 6,857,074, 7,895,306, 7,836,141,
7,895,313, and 7,934,148. In August 2013, Ms. Huster
sued Charles R. Bobo, II, who is the sole person named as
inventor on the patents, and several alleged patent as-
signors, assignees, and licensees. She asserted a claim for
correction of inventorship, under 35 U.S.C. § 256, and
various state-law claims. The Northern District of Geor-
gia dismissed Ms. Huster’s correction-of-inventorship
claim for lack of standing and held, on summary judg-
ment, that the applicable statute of limitations barred the
state-law claims relevant here. We modify the dismissal
HUSTER v. J2 CLOUD SERVICES, INC. 3
of Ms. Huster’s correction-of-inventorship claim to be
without prejudice and affirm the judgment as modified.
I
The ’507, ’549, ’066, ’321, ’074, ’306, ’141, ’313, and
’148 patents describe and claim systems and methods for
storing, delivering, and managing electronic messages.
The patents discuss, among other things, “facsimile
messages” transmitted over “the Internet.” See, e.g., ’507
patent, col. 5, lines 15–16. The patents issued from
continuations of U.S. Patent Application No. 08/431,716,
and they all name Charles R. Bobo, II, as the inventor.
The ’716 patent application claims a filing date of April
26, 1995.
Ms. Huster alleges that before December 1994, she
“conceived the idea of transmitting and storing telefax
messages digitally, via e-mail rather than as packets via
the switched telephone network” and “built a prototype
for a system to allow voicemail and faxes to be centrally
received, stored, and then distributed . . . to facilitate one
or more people’s access to the information in those faxes
and voicemails.” See Corrected Amended Compl. ¶ 14,
Huster v. j2 Global Commc’ns, Inc., No. 1:14-cv-3304-ELR
(N.D. Ga. Feb. 12, 2015), ECF No. 128. She further
alleges that in December 1994, Mr. Bobo retained her as a
consultant and shareholder for NetOffice, Inc., which he
operated. Id. ¶ 15. According to Ms. Huster, Mr. Bobo
was “not familiar” with the technology related to the
invention. Id. ¶ 16.
In January 1995, Ms. Huster and Mr. Bobo allegedly
agreed to be named as co-inventors on a patent applica-
tion for the claimed inventions (which was filed as the
’716 application). Id. ¶ 18. Ms. Huster asserts that Mr.
Bobo expressed that he was “very reluctant to file any
patent applications” because of “cost” and “time limita-
tions” and that, as a result, she arranged financing for the
application and conducted initial contacts with patent
4 HUSTER v. J2 CLOUD SERVICES, INC.
counsel. Id. ¶ 19. Shortly thereafter, Ms. Huster took
employment elsewhere in Atlanta, and later she moved
outside Georgia. Id. ¶ 20. According to Ms. Huster, Mr.
Bobo and patent counsel stopped communicating with
her, and she concluded that they had not proceeded with
the application because of Mr. Bobo’s “reluctance.” Id.
¶ 21. As indicated on the patents, the initial patent
application was filed in 1995, and the last was filed in
2006. The patents issued between 1997 and 2011. Ms.
Huster claims that she first learned of (some of) the
patents in March 2010, when she was contacted by an
attorney representing a party that had been sued for
infringement. Id. ¶ 29.
In February 2012, before filing the present case, Ms.
Huster assigned her interest in the patents to “Phyllis
Anke Technologies, LLC.” J.A. 781–85. Ms. Huster
acknowledges that “PA Technologies LLC” and “Phyllis
Anke Technologies, LLC” are the same entity. See Appel-
lant’s Reply Br. 6–8.
In August 2013, Ms. Huster brought this suit in the
Northern District of Illinois against Mr. Bobo and several
companies—j2 Cloud Services, Inc., Advanced Messaging
Technologies, Inc. (AMT), Unified Messaging Solutions,
LLC, and Acacia Patent Acquisition, LLC. The corporate
defendants are alleged assignors, assignees, or licensees
of the patents. Ms. Huster asserted a correction-of-
inventorship claim under 35 U.S.C. § 256, see Chou v.
Univ. of Chi., 254 F.3d 1347, 1357 (Fed. Cir. 2001), as
well as unenumerated claims under state law. The court
transferred the case to the Northern District of Georgia.
In February 2015, Ms. Huster amended her complaint to
state claims for fraudulent concealment, breach of fiduci-
ary duty, unjust enrichment, breach of contract, breach of
private duty, conversion, breach of duty of good faith and
fair dealing, and attorney’s fees. See Corrected Amended
Compl. ¶¶ 43–77.
HUSTER v. J2 CLOUD SERVICES, INC. 5
In March 2014, while the present case was pending, a
Washington superior court entered a default judgment for
$39,393.49 against Ms. Huster in favor of John Crossan,
her former attorney. See Default J., Crossan Intellectual
Prop. Law, LLC v. Huster, No. 14-2-05468-8 SEA (Wash.
Super. Ct. Mar. 4, 2014), Dkt. No. 11. In June 2014, the
court issued a conditional “charging order” divesting Ms.
Huster of “any right, title, and interest, whether direct or
indirect, in PA Technologies LLC” until the satisfaction of
the judgment. Order Charging Debtors’ Interest in Com-
panies 2, Crossan Intellectual Prop. Law, No. 14-2-05468-
8 SEA (Wash. Super. Ct. June 12, 2014), Dkt. No. 30
(Charging Order). 1
In November 2015, the district court in this case, act-
ing under Federal Rule of Civil Procedure 12(b), dis-
missed Ms. Huster’s correction-of-inventorship claim for
lack of Article III standing. The court also dismissed
certain state-law claims for failure to state a claim. See
Order, Huster, No. 1:14-cv-3304-ELR (N.D. Ga. Nov. 12,
2015), ECF No. 164 (Dismissal Order). With respect to
Ms. Huster’s correction-of-inventorship claim, the court
concluded that the Washington state court’s charging
order had divested Ms. Huster of any economic interest in
the patents. Id. at 8–10. The court also concluded that
Ms. Huster had not pleaded sufficient facts to establish a
concrete reputational interest. Id. at 10–11. With respect
to Ms. Huster’s state-law claims, the court dismissed all of
Ms. Huster’s claims against the corporate defendants and
her conversion and attorney’s fees claims against Mr.
Bobo. Id. at 12–22. The court converted Mr. Bobo’s
1 The corporate defendants assert that Mr. Crossan’s
interest in the state court’s charging order was subse-
quently assigned to defendant AMT. See Corporate Defs.’
Br. 9 n.6. They do not argue, however, that the asserted
assignment changes the standing analysis here.
6 HUSTER v. J2 CLOUD SERVICES, INC.
motion to dismiss Ms. Huster’s remaining claims into a
motion for summary judgment. Id. at 23–24.
In January 2016, the court, acting under Federal Rule
of Civil Procedure 56, granted summary judgment for Mr.
Bobo on the remaining state-law claims, which it conclud-
ed were barred by the statute of limitations. See Order,
No. 1:14-cv-3304-ELR (N.D. Ga. Jan. 28, 2016), ECF No.
170 (Summ. J. Order). The court determined that the
applicable limitations period was four years and that Ms.
Huster was not entitled to tolling. Ms. Huster’s 2013 suit
fell well outside the four-year period, the court held,
because Ms. Huster was aware of her causes of action as
early as 1996 and, alternatively, had not acted with
reasonable diligence in discovering her causes of action.
Id. at 6–15.
Ms. Huster appeals the district court’s dismissal of
her correction-of-inventorship claim for lack of Article III
standing and its grant of summary judgment for Mr. Bobo
on the state-law claims that were rejected based on the
statute of limitations. We have jurisdiction under 28
U.S.C. § 1295(a)(1).
II
A
We review without deference the district court’s dis-
missal for lack of standing to assert the correction-of-
inventorship claim. See Chou, 254 F.3d at 1355. We
agree with the district court’s conclusion that Ms. Huster
lacked standing to assert that claim.
To establish Article III standing, a “plaintiff must
have (1) suffered an injury in fact, (2) that is fairly trace-
able to the challenged conduct of the defendant, and (3)
that is likely to be redressed by a favorable judicial deci-
sion.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016)
(citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61
(1992)); see Chou, 254 F.3d at 1357. The benefit of the
HUSTER v. J2 CLOUD SERVICES, INC. 7
suit to the plaintiff must relate to the alleged injury, see
Vt. Agency of Nat. Res. v. United States ex rel. Stevens,
529 U.S. 765, 772–73 (2000), and the alleged injury must
consist of “‘an invasion of a legally protected interest’ that
is “‘concrete and particularized’ and ‘actual or imminent,
not conjectural or hypothetical,’” Spokeo, 136 S. Ct. at
1548 (quoting Defs. of Wildlife, 504 U.S. at 560). This
holds regardless of whether the alleged injury is tangible
or intangible. See id. at 1549; Sierra Club v. Morton, 405
U.S. 727, 738 (1972). “Where, as here, a case is at the
pleading stage, the plaintiff must ‘clearly . . . allege facts
demonstrating’ each element” of standing. Spokeo, 136 S.
Ct. at 1547 (quoting Warth v. Seldin, 422 U.S. 490, 518
(1975)). In this case, we conclude, Ms. Huster has not
satisfied that burden with respect to either of her asserted
interests.
1
In the district court, Ms. Huster did not allege suffi-
cient facts to establish an economic interest in obtaining
inventorship or co-inventorship status. The district court
found, based on the record, that Ms. Huster in August
2012 assigned her interests in the patents to Phyllis Anke
Technologies, LLC and that the June 2014 state-court
charging order then divested her of any interest in that
company. Dismissal Order 8–10. Because the record
gives no reason for us to question those findings, we
conclude that, at present, Ms. Huster has not alleged that
she has anything cognizable to be gained from being listed
as an inventor.
On appeal, Ms. Huster alleges two grounds for the as-
serted economic interest: that, in February 2012, Yahoo
agreed to pay her $25,000 for a license to the patents if
she were added as an inventor, Appellant’s Br. 30; J.A.
961; and that the state court’s charging order is based on
a debt of $39,393.49, whereas the value of her (indirect)
interest in the patents “easily eclipses” that amount,
8 HUSTER v. J2 CLOUD SERVICES, INC.
Appellant’s Reply Br. 8. Whatever the merits of those
arguments, however, Ms. Huster cannot rely on them
now. She did not present those contentions to the district
court, and unpreserved contentions generally will not be
considered for the first time on appeal. See FDIC v. Verex
Assurance, Inc., 3 F.3d 391, 395 (11th Cir. 1993) (“By well
settled convention, appellate courts generally will not
consider an issue or theory that was not raised in the
district court.”); United States ex rel. Ramseyer v. Century
Healthcare Corp., 90 F.3d 1514, 1518 n.2 (10th Cir. 1996)
(“Our duty to consider unargued obstacles to subject
matter jurisdiction does not affect our discretion to de-
cline to consider waived arguments that might have
supported such jurisdiction.”). We see no reason to disre-
gard that principle here.
Furthermore, Ms. Huster’s new appellate contentions
are, as presented, insufficient to establish the economic
interests that she asserts. Ms. Huster has not alleged or
presented evidence that her interest in the Yahoo licens-
ing agreement survived both her assignment of her patent
rights to Phyllis Anke Technologies, LLC and the subse-
quent state-court charging order. 2 By its own terms, Ms.
Huster’s assignment transferred her “entire right, title
and interest, including the right to sue for past infringe-
ment and to collect for all past, present and future dam-
ages,” in the inventions to Phyllis Anke Technologies,
2 We need not explore whether, putting aside the as-
signment and the charging order, the alleged Yahoo
promise to pay Ms. Huster based on the outcome of a
correction-of-inventorship suit would suffice for standing.
See Vt. Agency of Nat. Res., 529 U.S. at 772–73 (explain-
ing that an interest in the outcome for standing must be
related to the injury in fact that gave rise to the plaintiff’s
cause of action and not a mere bounty that the plaintiff
receives upon winning the lawsuit).
HUSTER v. J2 CLOUD SERVICES, INC. 9
LLC. J.A. 781. And the charging order is not limited to a
divestiture of interests up to a particular amount, but
instead divests Ms. Huster of “any right, title, and inter-
est” in the patents until she satisfies the judgment.
Charging Order 2.
It is true that, under the charging order, Ms. Huster
could reacquire an interest in Phyllis Anke Technolgies,
LLC by paying the judgment amount. But the charging
order eliminates any present interest she has in the
patents by eliminating her interest in Phyllis Anke Tech-
nologies, LLC. And on this record we could only speculate
whether Ms. Huster will pay the judgment amount and
recover her interests. Such a conjectural basis is insuffi-
cient to support standing. See Spokeo, 136 S. Ct. at 1548;
Defs. of Wildlife, 594 U.S. at 560, Cone Corp. v. Fla. Dep’t
of Transp., 921 F.2d 1190, 1210 (11th Cir. 1991) (“[A]
federal court should not speculate concerning the exist-
ence of standing or ‘piece together support for the plain-
tiff.’”) (quoting Anderson v. City of Alpharetta, 770 F.2d
1575, 1582 (11th Cir. 1985) (per curiam)).
2
Ms. Huster also has failed to carry her burden to es-
tablish a cognizable reputational interest in obtaining
inventorship or co-inventorship status. We have held that
a “concrete and particularized reputational injury” can
give a plaintiff standing to sue to be added as an inventor.
See Shukh v. Seagate Tech., LLC, 803 F.3d 659, 663 (Fed.
Cir. 2015). We need not explore the scope of the “concrete
and particularized” language of Shukh.
As the district court noted, Ms. Huster’s complaint
does not allege any facts relating to a reputational injury.
Dismissal Order 11. And Ms. Huster did not attempt to
introduce such facts into the record in the proceedings on
the motion to dismiss for lack of standing. In opposing
dismissal, Ms. Huster argued only that “reputational
interest alone may be enough to satisfy the requirements
10 HUSTER v. J2 CLOUD SERVICES, INC.
of Article III standing,” but did not attempt to tie that
statement of legal principle to her situation. Pl. Huster’s
Resp. Opp. Joint Mot. Dismiss, Huster, No. 1:14-cv-3304-
ELR (N.D. Ga. Apr. 6, 2015), ECF No. 149. That is not
enough to meet her pleading burden. See Spokeo, 136 S.
Ct. at 1547; Warth, 422 U.S. at 518; Cone, 921 F.2d at
1210.
On appeal, Ms. Huster points to evidence that she met
with an internet executive to discuss the invention and
held a workshop on messaging. But Ms. Huster cannot
rely on that evidence because she did not present it to the
district court in the first instance. See Verex Assurance, 3
F.3d at 395; United States ex rel. Ramseyer, 90 F.3d at
1518 n.2. And in any event, that evidence, even taken at
face value, does not establish a connection between Ms.
Huster’s reputation and her status as an inventor, much
less the kind of injury that would satisfy the requirements
for standing.
B
Ms. Huster is on firmer ground in arguing that the
district court should have made clear that the dismissal of
her correction-of-inventorship claim was without preju-
dice. Under longstanding Eleventh Circuit law, a dismis-
sal for lack of Article III standing must be without
prejudice, regardless of the circumstances. See Zelaya v.
Sec’y, Fla. Dep’t of Corr., 798 F.3d 1360, 1373 (11th Cir.
2015) (citing Boda v. United States, 698 F.2d 1174, 1177
n.4 (11th Cir. 1983)); Crotwell v. Hockman-Lewis Ltd.,
734 F.2d 767, 769 (11th Cir. 1984). In this case, dismissal
without prejudice would permit Ms. Huster to file a new
lawsuit asserting a correction-of-inventorship claim
without encountering a claim-preclusion bar to that claim.
And in that case, she could secure an assessment of
standing based on, e.g., changed circumstances, such as
her satisfaction of the judgment underlying the state-
court charging order.
HUSTER v. J2 CLOUD SERVICES, INC. 11
In this case, the district court’s judgment and dismis-
sal order do not clearly state whether the dismissal was
with or without prejudice. See Judgment 1, Huster, No.
1:13-cv-3304-ELR (N.D. Ga. Jan. 28, 2016), ECF No. 171;
Dismissal Order 24. But clarity is desirable to avoid
confusion and disputes about Ms. Huster’s right to file a
new lawsuit, about which the parties disagreed in the oral
argument before this court. Compare Oral Argument at
7:03–8:05 (Ms. Huster’s counsel) with id. at 15:08–15:54
(corporate defendants’ counsel). The evident clarification
is that dismissal must be understood as a dismissal
without prejudice: that is the interpretation consistent
with the clear background Eleventh Circuit law; and we
generally follow regional circuit law on matters not pecu-
liar to our own court’s jurisdiction, see Panduit Corp. v.
All States Plastic Mfg. Co., 744 F.2d 1564, 1572–76 (Fed.
Cir. 1984) (per curiam).
Under 28 U.S.C. § 2106, we “may affirm, modify, va-
cate, set aside or reverse any judgment, decree or order of
a court lawfully brought before” us. The clarification
needed in this case may be accomplished by our modifying
the district court judgment to state that the dismissal is
without prejudice and affirming the dismissal judgment
as so modified. The Eleventh Circuit has done just that in
a similar context. Crotwell, 734 F.2d at 769 (“Rather than
remanding the case for entry of an order without preju-
dice, we hereby modify the district court’s order by substi-
tuting the words ‘without prejudice,’ for the words ‘with
prejudice,’ and affirm the judgment of the court as modi-
fied.”). We do so here. 3
3Ms. Huster faults the district court for not giving her
leave to amend her complaint to substitute Phyllis Anke
Technologies, LLC as a plaintiff. But she did not ask for
that relief in the district court, and “[a] district court is
12 HUSTER v. J2 CLOUD SERVICES, INC.
III
We review the district court’s grant of summary
judgment on the state-law claims without deference. See
Procaps S.A. v. Patheon, Inc., 845 F.3d 1072, 1079 (11th
Cir. 2016). We agree with the district court’s conclusion
that the applicable statute of limitations barred Ms.
Huster’s state-law claims.
The parties agree that the relevant limitations period
is at most four years. See Ga. Code Ann. § 9-3-26. Ms.
Huster filed her complaint in 2013, which is more than
four years after a number of potentially relevant dates,
including April 1995, when the ’716 patent application
was filed; October 1997, when the first patent issued; and
December 2006, when the last patent application was
filed. In the district court, Ms. Huster argued only that
the court should have tolled the statute of limitations
until March 2010 because that was when she allegedly
learned that Mr. Bobo had applied for and received pa-
tents. Tolling aside, she did not argue that her state-law
causes of action ripened at some date later than four
years before she sued in 2013. In this court, she adds that
the “continuing violation” doctrine precluded summary
judgment on timeliness. We reject those arguments.
not required to grant a plaintiff leave to amend his com-
plaint sua sponte when the plaintiff, who is represented
by counsel, never filed a motion to amend nor requested
leave to amend before the district court.” Wagner v.
Daewoo Heavy Indus. Am. Corp., 314 F.3d 541, 542 (11th
Cir. 2002) (en banc). Moreover, the Eleventh Circuit has
explained: “By lacking standing to bring a claim the
appellants also lack standing to amend the complaint to
consolidate with a party who may have standing.” Wright
v. Dougherty Cty., 358 F.3d 1352, 1356 (11th Cir. 2004)
(per curiam).
HUSTER v. J2 CLOUD SERVICES, INC. 13
Georgia law provides for tolling in certain circum-
stances involving fraud: “If the defendant or those under
whom he claims are guilty of a fraud by which the plain-
tiff has been debarred or deterred from bringing an ac-
tion, the period of limitation shall run only from the time
of the plaintiff’s discovery of the fraud.” Ga. Code Ann.
§ 9-3-96. To toll the statute of limitations, the plaintiff
must prove: “(1) actual fraud on the part of the defendant
involving moral turpitude, (2) which conceals the exist-
ence of a cause of action from the plaintiff, and (3) plain-
tiff’s reasonable diligence in discovering his cause of
action despite his failure to do so within the time of the
applicable statute of limitations.” Jim Walter Corp. v.
Ward, 265 S.E.2d 7, 9 (Ga. 1980).
The district court correctly concluded that Ms. Huster
did not satisfy her burden of proof with respect to the
concealment requirement. That requirement is met only
if the defendant’s fraud “conceal[s] the existence of the
cause of action from the plaintiff, thereby debarring or
deterring the knowing of the cause of action.” Charter
Peachford Behavioral Health Sys., Inc. v. Kohout, 504
S.E.2d 514, 522 (Ga. Ct. App. 1998). Here, noting that the
alleged concealment consisted of Mr. Bobo’s omissions
regarding the fact that he was prosecuting the patent
applications, the district court concluded that “there is
sufficient evidence on the record to establish as a matter
of law that [Mr. Bobo’s] omissions did not ‘debar or deter’
[Ms.] Huster from bringing suit.” J.A. 12 (footnote omit-
ted). The record supports that conclusion.
The court properly found, as a matter of law, that Ms.
Huster had actual knowledge of Mr. Bobo’s filing of appli-
cations no later than 1996 and that Mr. Bobo’s alleged
concealment did not prevent her from suing on that basis.
In making that finding, the district court relied on an
April 2014 deposition in which Ms. Huster testified that
(1) in February 1996, she was aware that “an application
for the patent” was “being processed”; (2) in 1996, she
14 HUSTER v. J2 CLOUD SERVICES, INC.
hired lawyers “to pursue Mr. Bobo,” and one of them,
Luba Czura, mentioned “the patent” to her “as an issue
that needed to be resolved”; and (3) Ms. Huster believed
that she potentially “had rights” to the patent application,
but was “afraid” to discuss the matter with Mr. Bobo.
Summ. J. Order 7–11. The court also relied on Ms. Hus-
ter’s notes regarding a June 7, 1997 letter from Ms.
Huster to Chuck Beadrot, another attorney, which
demonstrated Ms. Huster’s knowledge that a patent
application had been filed by Mr. Bobo. Id. at 12
(“[O]riginal patent filed under Charles Bobo but the
lawfirm paid by NetOffice, Inc.”). The district court added
that Ms. Huster stated in her deposition that “she
‘thought [she] had rights to the patent potentially’ but
avoided asserting those rights because she ‘was afraid of
talking about it with’” Mr. Bobo. Id. at 11. On that
evidence, principally from Ms. Huster herself, the district
court properly held as a matter of law that she knew,
more than a decade before 2010, of Mr. Bobo’s filing of
applications and was not inhibited from bringing suit by
the alleged non-disclosures of Mr. Bobo.
The district court further determined that Ms. Hus-
ter’s “alleged confidential relationship” with Mr. Bobo did
not alter the conclusion that she was not entitled to
tolling. Id. at 12. In doing so, the court correctly recog-
nized that, under Hunter, Maclean, Exley & Dunn, P.C. v.
Frame, 507 S.E.2d 411 (Ga. 1998), which involved a legal
malpractice claim, a confidential relationship does not toll
the statute of limitations indefinitely where “the plaintiff
was fully aware of the facts underlying his allegation of
malpractice, but merely slept on his right to bring suit.”
Id. at 415. That principle, the court properly found,
precluded Ms. Huster’s reliance on any confidential
relationship with Mr. Bobo to override the consequences,
for the purposes of her tolling assertion, of her knowledge
of Mr. Bobo’s patent-application activity. Summ. J. Order
12–13.
HUSTER v. J2 CLOUD SERVICES, INC. 15
For related reasons, the district court did not err in
concluding that the record established, as a matter of law,
that Ms. Huster failed to act with reasonable diligence.
Id. at 13–15. Although Ms. Huster argued that Mr.
Bobo’s confidential relationship with her excused her
failure to act diligently, the court recited Georgia law
establishing that the existence of any confidential rela-
tionship between Ms. Huster and Mr. Bobo only lessened,
but did not negate, her duty to act diligently. Id. at 14;
see Godwin v. Mizpah Farms, LLLP, 766 S.E.2d 497, 505–
06 (Ga. Ct. App. 2014) (A confidential relationship “affects
only the extent of . . . the plaintiff’s corresponding obliga-
tion to discover the fraud for herself.”) (quoting Hunter,
MacLean, Exley & Dunn, 507 S.E.2d at 414). Based on
that principle, the court properly concluded that Ms.
Huster “presented absolutely no evidence of diligence on
her part in discovering her cause of action, even if consid-
ered under the lessened standard” for diligence in the
presence of a confidential relationship. Summ. J. Order
14; see also Pl. Huster’s Resp. Opp. Def. Bobo’s Mot.
Dismiss, Huster, No. 1:14-cv-3304-ELR (N.D. Ga. Apr. 6,
2015) (Pl.’s Opp.), ECF No. 147.
Additionally, the court pointed to affirmative evidence
of Ms. Huster’s lack of diligence, including Ms. Huster’s
own testimony that “she previously used simple Internet
searches to research patent filings” and that “she did not
trust [Mr.] Bobo.” Summ. J. Order at 13, 14. “On these
facts,” the court concluded, Ms. Huster “certainly would
have been under an obligation to exercise some degree of
diligence in discovering her cause of action” but failed to
do so, id. at 14, even though she was “plainly aware that a
patent application was being prepared sufficient to indi-
cate that her rights may be involved,” id. at 8. We see no
error in those determinations.
Besides seeking to toll the statute of limitations, Ms.
Huster argues that the continuing-violation doctrine
precluded Mr. Bobo’s limitations defense. But she forfeit-
16 HUSTER v. J2 CLOUD SERVICES, INC.
ed that argument by not making it in the district court.
In opposing dismissal, Ms. Huster argued only that she
did not discover Mr. Bobo’s fraud until March 2010. Pl.’s
Opp. 5–8, 10. She did not mention the continuing-
violation doctrine. The district court cannot be faulted for
not addressing a contention that Ms. Huster did not
present to it. Moreover, Ms. Huster herself states that
addressing the issue at this stage would require consider-
ation of “[t]he particular policies of the statute of limita-
tions in question, as well as the nature of the wrongful
conduct and harm alleged”—here, involving five separate
state-law claims. Appellant’s Br. 42 (quoting Ocean Acres
Ltd. v. Dare Cty. Bd. of Health, 707 F.2d 103, 106 (4th
Cir. 1983)). That is not the kind of issue that may be
newly introduced into the case upon appellate review.
CONCLUSION
For the foregoing reasons, we modify the district
court’s judgment to dismiss Ms. Huster’s correction-of-
inventorship claim without prejudice. We affirm the
judgment as modified.
Costs awarded to appellees.
AFFIRMED AS MODIFIED