Tavory v. Ntp, Inc.

NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2007-1527
OREN TAVORY,
Plaintiff-Appellant,
v.
NTP, INC.,
Defendant-Appellee.
G. Donovan Conwell, Jr., Conwell Kirkpatrick, P.A., of Tampa Florida, argued for
plaintiff-appellant.
Kevin P. Anderson, Wiley Rein LLP, of Washington, DC, argued for defendant-
appellee. With him on the brief was James H. Wallace, Jr.
Appealed from: United States District Court for the Eastern District of Virginia
Chief Judge James R. Spencer
NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2007-1527
OREN TAVORY,
Plaintiff-Appellant,
v.
NTP, INC.,
Defendant-Appellee.
Appeal from the United States District Court for the Eastern District of Virginia in case
no. 3:06-CV-628, Chief Judge James R. Spencer.
__________________________
DECIDED: October 27, 2008
__________________________
Before MICHEL, Chief Judge, NEWMAN and BRYSON, Circuit Judges.
Opinion for the court filed by MICHEL, Chief Judge. Concurring opinion filed by
NEWMAN, Circuit Judge.
Plaintiff-Appellant Oren Tavory appeals from the grant of summary judgment in
favor of Defendant-Appellee NTP, Inc., on his claim for correction of inventorship of U.S.
Patent Nos. 5,436,960; 5,438,611; 5,625,670; 5,631,946; 5,819,172; 6,076,451; and
6,317,592 (collectively, "patents-in-suit"). 1 Tavory also appeals the district court's
dismissal of his state law unjust enrichment claim, and its denial of leave to amend the
complaint to add a claim for "federal equitable relief."
1
The district court also granted summary judgment on Tavory's copyright
infringement claim. Tavory does not appeal that portion of the district court's judgment.
We affirm the grant of summary judgment because Tavory failed to raise a
genuine issue of material fact as to his alleged contribution to the conception of the
inventions claimed in the patents-in-suit. We also affirm the district court's dismissal of
Tavory's unjust enrichment claim because it is preempted by 35 U.S.C. § 262. Finally,
we affirm the district court's denial of leave to amend the complaint because the court
did not abuse its discretion in holding that Tavory's "federal equitable relief" claim was
duplicative of his already-pled claims and thus futile.
I. BACKGROUND
The facts of this case are related to those in NTP, Inc. v. Research in Motion,
Ltd., 418 F.3d 1282 (Fed. Cir. 2005) ("RIM litigation"). In late 1989, Tavory was hired as
a consultant by Telefind, a small telecommunications start-up based in Florida that was
engaged in the operation of a nationwide paging network. Tavory was an experienced
computer programmer, particularly in the UNIX operating system environment. At that
time, Tom Campana was an executive at Telefind but was also the president of ESA, a
small engineering consulting firm based in Chicago. ESA had a close working
relationship with Telefind at all times relevant to this appeal.
Telefind employees used an internal e-mail system in 1990. This e-mail system
was not connected to the Internet, as it existed at the time, but operated entirely on an
internal computer network. Telefind also issued its employees pagers. Prior to 1990,
these pagers were only used to receive traditional phone number pages. In early 1990,
Telefind employees began to use a new capability wherein they could address e-mails
from their usual computer e-mail programs to pagers as well as other computers. When
such an e-mail was sent, the recipient pager would beep and receive the e-mail
2007-1527 2
automatically without any action from the user. The e-mail would be displayed serially
across the single-line display of the pager.
According to former Telefind employees, Tavory was generally considered at
Telefind to be the person who had created the computer program that provided this new
e-mail-to-pager functionality. He demonstrated the first such e-mails to colleagues at
Telefind, and the President of Telefind, Andy Andros, publicly acknowledged Tavory's
work at a Telefind staff meeting in early 1990.
Also in 1990, Campana and others at Telefind became involved in an effort to
secure new investment from AT&T. These efforts resulted in a development project
wherein Telefind and ESA worked to create a system for AT&T to take e-mail from a
conventional e-mail system, transmit it wirelessly to a pager via the Telefind network,
and then transfer the e-mail from the pager to a laptop computer. Tavory was involved
as a programmer for this project, as were Mike Ponschke and Gary Thelen, two
programmers at ESA. The project team was able to create a working system before
November 1990 when Campana demonstrated it at a large trade show to much acclaim.
Nevertheless, Telefind ran out of funds in 1991 and began to collapse. Tavory
thus left Telefind. Meanwhile, Campana and Telefind's attorney, Donald Stout, formed
NTP in early 1991. In May 1991, Stout filed a patent application on behalf of Campana
generally claiming the system Telefind and ESA had developed during the AT&T
project. Campana, Ponschke, and Thelen were listed as co-inventors. Among other
things, Stout appended a copy of code Tavory helped write for the AT&T project to the
application. Ultimately, this patent application resulted in all of the patents at issue in
this appeal.
2007-1527 3
In November 2001, NTP filed suit against Research in Motion, Ltd. ("RIM")
accusing RIM's Blackberry systems of infringing the same patents at issue here. See
NTP, Inc., 418 F.3d at 1287, 1290 (Fed. Cir. 2005). As part of that litigation, in 2002,
Tavory was deposed as a witness for NTP. He did not make any claim of inventorship
at his deposition. NTP won a jury verdict awarding over $50 million in damages, and
the district court awarded a permanent injunction, which it stayed pending appeal. 2 On
appeal, this court affirmed-in-part, reversed-in-part, vacated-in-part, and remanded. Id.
at 1287. RIM elected to settle and agreed to take a license to resolve all past and future
infringement. The settlement paid NTP $612.5 million. Campana died prior to the
settlement.
In September 2006, less than a year after the RIM settlement, Tavory filed the
present suit claiming: (1) correction of inventorship to add Tavory as a co-inventor to
each of the patents at issue, (2) copyright infringement, and (3) unjust enrichment. NTP
moved to dismiss the copyright and unjust enrichment claims. On December 26, 2006,
the district court dismissed the state law unjust enrichment claim as preempted by both
federal patent and copyright law. Tavory soon thereafter moved for leave to amend his
complaint to add a claim for "federal equitable relief," but the district court denied leave
on March 6, 2007, on futility grounds. After the close of discovery, NTP moved for
summary judgment as to the inventorship and copyright claims. The district court
granted summary judgment, holding that (1) it lacked subject matter jurisdiction over the
copyright infringement claim because Tavory obtained his copyright registration using a
facially inadequate copy of his software, thus rendering the registration invalid; (2) in the
2
The RIM litigation was decided prior to the Supreme Court's decision in
eBay Inc. v. MercExchange L.L.C., 547 U.S. 388 (2006).
2007-1527 4
alternative, NTP was entitled to judgment on the copyright claim under the doctrines of
equitable estoppel, judicial estoppel, laches, and fair use; and (3) Tavory had failed to
present sufficient independent evidence to corroborate his inventorship allegations.
Tavory v. NTP, Inc., 495 F. Supp. 2d 531 (E.D. Va. 2007). Tavory then timely filed this
appeal. 3 We have jurisdiction under 28 U.S.C. § 1295(a)(1).
II. DISCUSSION
A. Inventorship
The district court granted summary judgment rejecting Tavory's inventorship
claim, holding that Tavory had failed to adduce sufficient independent evidence
corroborating his own testimony that he was a co-inventor of the patents-in-suit to raise
a genuine issue of material fact. We review a district court's grant of summary judgment
de novo. Teleflex, Inc. v. Ficosa N. Am. Corp., 299 F.3d 1313, 1323 (Fed. Cir. 2002).
A patent is presumed to name the correct inventors, thus a putative unnamed co-
inventor must prove his inventorship by clear and convincing evidence. Hess v. Adv.
Cardiovascular Sys., Inc., 106 F.3d 976, 980 (Fed. Cir. 1997). The "touchstone" of
inventorship is conception, which requires a "definite and permanent idea of the
complete and operative invention." Burroughs Wellcome Co. v. Barr Labs., Inc., 40
F.3d 1223, 1228 (Fed. Cir. 1994) (quoting Hybritech Inc. v. Monoclonal Antibodies, Inc.,
802 F.2d 1367, 1376 (Fed. Cir. 1986)). A co-inventor must prove he contributed to this
conception of the claimed invention. Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d
1456, 1460 (Fed. Cir. 1998). The contribution must be more than simply the exercise of
3
The district court subsequently awarded attorneys' fees to NTP under 17
U.S.C. § 505. Tavory v. NTP, Inc., 2007 WL 2965048 (E.D. Va. 2007). Tavory
separately appealed the fees award to this court, now pending as Appeal No. 2008-
1090.
2007-1527 5
ordinary skill in the art. Id. Simply reducing to practice that which has been conceived
by others is insufficient for co-inventorship. Id.However, a co-inventor need not contribute to the conception of every claim of a
patent; a single claim is sufficient. 35 U.S.C. § 116; Ethicon, 135 F.3d at 1460. And he
need not "make the same type or amount of contribution" as the other co-inventors. 35
U.S.C. § 116; Gemstar-TV Guide Int'l, Inc. v. Int'l Trade Comm'n, 383 F.3d 1352, 1381
(Fed. Cir. 2004). As a result, no individual co-inventor need have a "definite and
permanent idea of the complete and operative invention" so long as all of the co-
inventors collectively satisfy that requirement. See 35 U.S.C. § 116; Gemstar, 383 F.3d
at 1381; Burroughs, 40 F.3d at 1228.
A co-inventor's own statements are inadequate to prove conception as a matter
of law and thus must be corroborated by independent evidence. Ethicon, 135 F.3d at
1461. This evidence can be in the form of contemporaneous documents or the oral
testimony of an independent witness. Id.; Gemstar, 383 F.3d at 1382. The evidence
must establish that the inventor(s) made a "contemporaneous disclosure that would
enable one skilled in the art to make the invention." Burroughs, 40 F.3d at 1228. In the
co-inventor context, the contemporaneous disclosure must enable a skilled artisan to
practice the portion of the invention that the co-inventor contributed.
Here, Tavory alleges that he conceived of an "interface switch," a claim limitation
in multiple claims of each patent-in-suit. The district court construed this claim term in
the RIM litigation as "a device or system, which includes a processor, that transmits
electronic mail messages to a wireless system for delivery to a mobile processor," and
the parties here do not dispute that this is the correct construction of the term. See J.A.
2007-1527 6
at 1531. Tavory argues that he wrote the software disclosed in the patents that serves
as the interface switch. It is undisputed that the interface switch is a vital component of
the invention claimed in the patents-in-suit. The question, however, is (1) whether
conception of the interface switch was more than just the exercise of ordinary skill, and
(2) whether Tavory produced sufficient evidence to raise a triable issue as to whether
he did, in fact, conceive of the interface switch that is part of the claimed invention.
We conclude that Tavory failed to demonstrate that his activities relating to the
interface switch involved anything more than just the exercise of ordinary skill. Tavory
first argues that the combination of his interface switch with a prior art RF network and
e-mail system was the key to the claimed invention. Even assuming this is true,
however, Tavory has not established that the interface switch itself was not in the prior
art. An invention may be novel and non-obvious as a whole and yet be a combination
of elements that are all individually well-known in the prior art by skilled artisans.
Tavory does, in a single sentence, aver that "the interface switch is not prior art,"
but he relies solely on the declaration of a patent attorney who is not a person of
ordinary skill in the art. 4 See Appellant's Br. at 6 (citing J.A. at 964-66). While he
proffered the declaration of a technical expert to the district court, that expert only
discusses why the interface switch is the most important component of the claimed
invention and never states that it is novel or non-obvious Therefore, because Tavory
4
The affiant, James T. Beran of Richmond, states that he is an experienced
patent prosecutor and a former patent examiner in the area of computer software.
While he does state that he has a master's degree in electrical engineering and took
coursework in computer programming, he does not claim to be a person of ordinary skill
in the art and only claims knowledge relating to patent prosecution. His opinion that the
interface switch is not in the prior art is based solely on his interpretation of the
language of the patents themselves in light of patent drafting conventions.
2007-1527 7
has not provided any competent evidence that his alleged contribution to the claimed
invention—the interface switch—was the result of anything more than the exercise of
ordinary skill in the art, he has failed to establish co-inventorship.
We also conclude that Tavory failed to provide sufficient corroborating evidence
that he conceived of the interface switch. It is undisputed that he wrote the source code
appended to the eventual patent application as an embodiment of the interface switch.
Thus, he clearly contributed significantly to the reduction of the claimed invention to
practice by reducing the interface switch to practice. However, he must prove
conception of the interface switch to be a co-inventor, and thus he must demonstrate
that he made a contemporaneous enabling disclosure. See Burroughs, 40 F.3d at
1228. He indisputably lacks any contemporaneous documents evidencing such a
disclosure and relies instead on the testimony and declarations of various witnesses.
These witnesses generally testify that in early 1990, Telefind employees
(including some of the witnesses) were able to send e-mail from their desktop
computers to their and other employees' pagers such that the pagers received the e-
mail messages automatically without any action from the pager owners. 5 They further
testified that it was generally known in the company, and the company's president,
Andrew Andros, specifically informed them, that Tavory wrote a computer program that
provided this capability. Many of them testified that their first experience with this
5
NTP insinuates that these Telefind devices were not used with "e-mail
messages" but rather a proprietary system called "MessageWriter" that translated text
into audible tones sent through a normal telephone handset. At least some of Tavory's
witnesses clearly testified, however, that the messages were "e-mail" sent from a
computer terminal (and not a telephone-based device like Message Writer). See, e.g.,
J.A. at 816, 825. In any event, for the purpose of summary judgment, we cannot accept
NTP's view of these facts.
2007-1527 8
capability was at a luncheon where Tavory's pager automatically received an
alphanumeric message that he claimed came from Telefind's e-mail system. Some
witnesses testified that Tavory earlier told them of his intention to create such a
program. Ponschke and Thelen of ESA testified that Tavory and Telefind were
responsible for creating a program to send e-mail messages from the e-mail system to
the Telefind pager network.
However, no witness saw Tavory creating the program, and none testified as to
any technical details either learned from Tavory or seen first-hand. No one testified
about ever seeing Tavory's code, and no contemporaneous copy of the code or
documentary evidence of the program is in the record. Moreover, no testimony or any
other record evidence indicates whether the contemporaneous information testified to
by Tavory's witnesses would enable a person of ordinary skill in the art to create a
program like the one Tavory allegedly created. Thus, the testimony Tavory relies on
fails to raise a genuine issue of material fact because they do not bear on conception
and do not indicate Tavory ever made a contemporaneous enabling disclosure.
Tavory argues that he need not establish an enabling disclosure because he
established that he "reduced to practice" his interface switch. He relies on Pfaff v. Wells
Electronics, Inc. for the rule that reduction to practice, if proven, also establishes
conception. 525 U.S. 55, 66 (1998). That and other comparable cases, however,
involve reduction to practice of the entire invention. As noted earlier, components of an
invention may themselves be entirely in the prior art so reducing such a component to
practice is not evidence of any inventive conception. And in the context of an alleged
unnamed co-inventor, the requirement that his contribution be more than the exercise of
2007-1527 9
ordinary skill means that he cannot prove such a contribution by only showing activities
amounting to reduction to practice because reduction to practice by definition is merely
the exercise of ordinary skill. See Burroughs, 40 F.3d at 1228 ("Conception is complete
only when the idea is so clearly defined in the inventor's mind that only ordinary skill
would be necessary to reduce the invention to practice, without extensive research or
experimentation.") (emphasis added).
Tavory also argues that none of the named inventors had any UNIX
programming abilities and thus he must have been a co-inventor because Telefind's
server was a UNIX machine. However, inventors are not required to have known how
to reduce their conceived inventions to practice to establish conception. Thus,
Campana's lack of programming savvy and Tavory's UNIX expertise may establish that
Tavory was instrumental in reduction to practice, but they are irrelevant here to
conception. 6 And any defects in Campana's conception or inventorship, which Tavory
argues at length, are not relevant here where Tavory did not plead any challenge to the
named inventors' inventorship. In other words, even if Campana and his co-inventors
did not conceive of the invention, that fact alone does not prove that Tavory did
conceive of the interface switch.
Therefore, we conclude that Tavory failed to establish a genuine issue of material
fact as to his inventorship of the patents-in-suit. As a result, we affirm the district court's
grant of summary judgment as to Tavory's correction of inventorship claim.
6
Such circumstances could have been probative of conception if, for
example, the claims of the patents-in-suit specifically required UNIX programming or
limitations specific to UNIX servers. But no claim recites any such limitation here.
2007-1527 10
B. Unjust Enrichment
We next turn to Tavory's contention that the district court erred in dismissing his
state law unjust enrichment claim for failure to state a claim upon which relief can be
granted. See Fed. R. Civ. P. 12(b)(6). The district court held that his unjust enrichment
claim is preempted by federal patent law. 7 We review the grant of a motion to dismiss
without deference. Adv. Cardiovascular Sys., Inc. v. Scimed Life Sys., Inc., 988 F.2d
1157, 1160 (Fed. Cir. 1993). Dismissal is only proper when, based on the pleadings, "it
appears beyond doubt that the plaintiff can prove no set of facts in support of his claim
which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). All
factual disputes must be resolved, and all reasonable inferences drawn, in favor of the
non-movant. Adv. Cardiovascular Sys., 988 F.2d at 1160-61.
Federal Circuit law governs whether federal patent law preempts a state law
claim, a question we review de novo. Ultra-Precision Mfg., Ltd. v. Ford Motor Co., 411
F.3d 1369, 1376 (Fed. Cir. 2005). An unjust enrichment claim is preempted by federal
patent law when it conflicts with "the accomplishment and execution of the full purposes
and objectives of Congress." Id. at 1377 (quoting Aronson v. Quick Point Pencil Co.,
440 U.S. 257, 262 (1979)).
Tavory's complaint alleges that NTP "has received substantial and valuable
benefits from Tavory in the form of royalties, payments or other compensation for the
use of Tavory's wireless email invention and of [Tavory's] Push Software," and that "it
would be inequitable and unjust for Defendant, NTP, to retain the benefit of the use of
7
The district court alternatively held that the unjust enrichment claim is
preempted by federal copyright law. We need not reach this holding because we affirm
the district court's holding that the claim is preempted by federal patent law. We also do
not reach NTP's argument that the claim is barred by Virginia's statute of limitations.
2007-1527 11
the Tavory invention and the Tavory Push Software without payment to Tavory for the
fair value of such use." J.A. at 51. As is clear from the complaint, Tavory's allegations
only concern NTP's activities regarding the patents-in-suit, and the complaint does not
allege any other uses of his "wireless email invention" or "Push Software" by NTP. See
J.A. at 44-45 (Tavory's complaint alleging that NTP's patents incorporate his "wireless
email invention" and "Push Software" and that he "contributed to the conception of the
inventions reflected" in the patents-in-suit). These activities would include, Tavory
asserts, the license agreement and related payments received by NTP in its settlement
with RIM in the RIM litigation. Thus, Tavory's unjust enrichment claim essentially seeks
his share of monies received by NTP from the licensing and enforcement of the patents-
in-suit, such as those from the RIM settlement, which he is allegedly entitled to due to
his contribution to the conception of the invention claimed in those patents, i.e., because
he is the co-inventor of those patents.
Under 35 U.S.C. § 262, a patent's co-owner may "make, use, offer to sell, or sell
the patented invention" without the consent of the other co-owners and without
accounting to the co-owners. We have held that licensing is also covered by § 262.
Univ. of Colo. Found., Inc. v. Am. Cyanamid Co., 196 F.3d 1366, 1373 (Fed. Cir. 1999)
("Cyanamid IV"). Thus, any of the co-owners of the patents-in-suits may license the
patents-in-suit without obtaining the approval of, or accounting to, the other co-owners.
As a result, even if we accept for the purpose of reviewing the Rule 12(b)(6) dismissal
Tavory's contention that he is a co-inventor of the patents-in-suit, he would still not be
entitled, under § 262, to any portion of the revenues from NTP's licensing activities
since it is undisputed that NTP is the legitimate assignee of Campana's interests in the
2007-1527 12
patents-in-suit. Tavory cannot sidestep § 262 through a state law unjust enrichment
claim; such a claim is preempted because it "stands as an obstacle to the
accomplishment and execution of the full purposes and objectives of Congress" in
enacting § 262, as the district court correctly held.
Tavory argues that Cyanamid IV and University of Colorado Foundation, Inc. v.
American Cyanamid Co., 342 F.3d 1298 (Fed. Cir. 2003) ("Cyanamid VI"), support his
argument that his unjust enrichment claim is not preempted. In these Cyanamid cases,
scientists at the University of Colorado conceived of certain pharmaceutical formulations
of prenatal vitamins that increased the absorption of iron far beyond existing vitamins.
Cyanamid VI, 342 F.3d at 1301-02. Although their research was prompted by a request
from Cyanamid, the conception of the formulations was entirely by these scientists
alone. Id. at 1304. The scientists provided Cyanamid with a confidential copy of a
manuscript they intended to publish; Cyanamid then filed a patent application on the
scientists' formulations claiming its own employee as the sole inventor and even
copying verbatim from the manuscript. Id. at 1303. The scientists filed suit and pled
unjust enrichment based on their allegation that Cyanamid's patent was obtained
unfairly from the scientists' confidential disclosure. We held this claim was not
preempted by federal patent law because it sought restitution for unfair use of
confidential information, not any patent-like protection over an unpatentable or publicly-
available technology. Id. at 1306-07. In other words, the scientists were not seeking
any patent-like remedy; rather, they sought to deprive Cyanamid of an unfair benefit it
gained by breaching the scientists' confidence.
2007-1527 13
Tavory argues that he alleged in his complaint that he provided his software to
Campana in confidence. However, unlike in Cyanamid, whether or not a breach of
confidence occurred has no real bearing on Tavory's claim. In Cyanamid, Cyanamid's
alleged breach of confidence resulted in a fraudulently-obtained patent they did not
deserve. Thus, whether a confidential relationship existed—in fact, we likened it to an
implied contract for non-disclosure—was central to the unjust enrichment claim.
Cyanamid VI, 342 F.3d at 1306. Here, Tavory did not allege in his complaint that the
named inventors should not have received the patents or that they were not in fact
inventors of the claimed invention. Thus, whether Campana breached any confidences
owed to Tavory to obtain the patents-in-suit is inapposite. Rather than seeking to
deprive NTP of an ill-gotten benefit, Tavory seeks to have his alleged fair share of the
benefit and acknowledges that the named inventors also deserve a share. This type of
unjust enrichment claim is precisely what we held was preempted by federal patent law
in Ultra-Precision. There, we noted that Ultra-Precision could not claim that Ford had
received the type of unfair benefit as in the Cyanamid cases because Ultra-Precision
only claimed co-inventorship in Ford's patent, and "Ford's ability to use the invention
claimed in the '312 patent is unencumbered by the existence of any co-inventors [under
35 U.S.C. § 262]." Ultra-Precision, 411 F.3d at 1381.
Tavory also argues that § 262 does not apply here because (1) he is a co-
inventor but not a co-owner, and (2) § 262 does not apply to "resolv[ing] infringement
litigation," i.e., the RIM settlement. Appellant's Br. at 43-47. The former argument is
meritless because Tavory has not alleged that he ever assigned or transferred his
ownership interest in the patents at issue (if any). Therefore, if he is adjudged to be a
2007-1527 14
co-inventor, he is also by definition a co-owner. Tavory's latter argument, at least with
regard to the RIM settlement, fails because the RIM settlement agreement was a
license, and as already noted, licensing by co-inventors is covered by § 262. See
Cyanamid IV, 196 F.3d at 1373. But even if it had been an award of damages by the
court, and to the extent Tavory also seeks compensation relating to other litigation
awards NTP may have received, Tavory's claim to a portion of such awards is also
entirely dependent on whether he is a co-owner. A patent infringement suit must join all
of the co-owners for standing purposes. Ethicon, 135 F.3d at 1467. Thus, Tavory's
entitlement here to a portion of any benefits from the enforcement of the patents-in-suit
in patent infringement actions stems solely from his entitlement to being joined as a co-
owner. Here, since Tavory's status as a co-owner depends entirely on whether he was
a co-inventor, 8 the dispositive issue is Tavory's alleged co-inventorship, which is
governed exclusively by federal patent law. See Cyanamid IV, 196 F.3d at 1372.
Therefore, we affirm the district court's dismissal of Tavory's unjust enrichment claim as
preempted by federal patent law.
C. "Federal Equitable Relief"
Finally, we address Tavory's argument that the district court erred in denying him
leave to amend his complaint to add a claim for "federal equitable relief." We apply the
law of the regional circuit in reviewing denials of leave to amend a pleading. Ferguson
Beauregard/Logic Controls, Div. of Dover Res., Inc. v. Mega Sys. LLC, 350 F.3d 1327,
8
If, however, Tavory's co-ownership did not depend on resolving
inventorship or any other issue governed exclusively by federal law, his unjust
enrichment claim may not be preempted because ownership, as distinct from
inventorship, is generally governed by state law. See Jim Arnold Corp. v, Hydrotech
Sys., Inc., 109 F.3d 1567, 1572 (Fed. Cir. 1997).
2007-1527 15
1342 (Fed. Cir. 2003). Here, we review the district court's denial of leave to amend a
pleading for an abuse of discretion. Edwards v. City of Goldsboro, 178 F.3d 231, 242
(4th Cir. 1999). Leave to amend may properly be denied where the amendment would
be futile. See Johnson v. Oroweat Foods Co., 785 F.2d 503, 509 (4th Cir. 1986). The
district court held that amending a complaint with a new claim that could not withstand a
motion to dismiss under Rule 12(b)(6) would be futile. See Schmidling v. City of
Chicago, 1 F.3d 494, 501 (7th Cir. 1993). We agree, and Tavory does not seriously
challenge this view.
Tavory argues in large part that the district court erred in denying him leave to
amend by relying on the same reasoning for its dismissal of Tavory's unjust enrichment
claim, which Tavory argues was also wrong. As already discussed, that decision was
correct. Thus, to the extent Tavory's vague claim for "federal equitable relief" is just a
purported federal version of his state law unjust enrichment claim, the district court
correctly held it was futile to add it to the complaint.
Tavory next relies on Cyanamid IV as supposedly recognizing a "federal
equitable relief" cause of action. But nowhere in that decision do we do so; we note that
the district court considered equitable claims (such as unjust enrichment), and certainly
the equitable remedy of correction of inventorship was at issue, but we vacated all of
the district court's patent-related decisions as based on an erroneous determination of
inventorship (i.e., because it was decided under state law rather than federal law).
Cyanamid IV, 196 F.3d at 1376. To the extent Tavory is arguing that his "federal
equitable relief" claim seeks the correction of the patents to list him as a co-inventor, the
2007-1527 16
district court clearly did not abuse its discretion by denying leave to add such a
duplicative claim.
Lastly, Tavory relies on Arachnid, Inc. v. Merit Industries, Inc., 939 F.2d 1574(Fed. Cir. 1991). There, we held that the plaintiff could not sue the infringer for
damages because, during the entire period of infringement, plaintiff held equitable title
but not legal title. Id. at 1579-80. Initially, the legal title holder of the patent at issue
entered into an agreement to assign ownership of future inventions to the plaintiff. Id. at
1580-81. The legal owner later executed an actual assignment of ownership to the
plaintiff of a patent to such an invention, but he was not assigned the right to sue for
past infringement. Id. at 1576. Thus, we held that the patentee could still sue for past
infringement but could only be granted equitable relief. Id. at 1579-80. This case is
inapposite here. Tavory is not suing for infringement and is not seeking equitable relief
for infringement. If he was adjudicated to be a co-inventor he would assume legal title
retroactive to issuance because he has never assigned his ownership interests in the
patents-in-suit, if any. Thus, Tavory would never have held equitable title but not legal
title. And Arachnid certainly does not support a vague cause of action for unspecified
"federal equitable relief." Therefore, the district court did not abuse its discretion by
denying leave to amend the complaint.
CONCLUSION
For the reasons provided above, the judgment is affirmed.
NEWMAN, Circuit Judge, concurs in the result
2007-1527 17
NOTE: This disposition is nonprecedential.
United States Court of Appeals for the Federal Circuit
2007-1527
OREN TAVORY,
Plaintiff-Appellant,
v.
NTP, INC.,
Defendant-Appellee.
Appeal from the United States District Court for the Eastern District of Virginia in case
no. 3:06-CV-628, Chief Judge James R. Spencer.
NEWMAN, Circuit Judge, concurring in the judgment.
I too would dismiss Mr. Tavory's claims. I would dismiss on either of two grounds:
first, for laches, for no error has been shown in the district court’s finding that "[t]he
Plaintiff's delay in asserting his authorship has been excessive and unreasonable," Tavory
v. NTP, Inc., 495 F. Supp. 2d 531, 537 (E.D. Va. 2007); and second, on the ground of
estoppel by silence when there was a clear duty to speak, for during Mr. Tavory’s
participation in the litigation between NTP and Research in Motion on these patents, he did
not mention the possibility of his joint inventorship. As the district court observed, starting
with Mr. Tavory’s deposition in 2002 and throughout that litigation, from trial to appeal to
remand to settlement, Mr. Tavory did not state that he was the creator of "the key to the
invention," as he now states. The district court observed that “the first time that Tavory
claimed to be the author of the source code was in 2006, after Mr. Campana [the principal
named inventor] had passed away, and after a healthy settlement between NTP and
Research In Motion had been reached.” Tavory, 495 F. Supp. 2d at 537 n.4.
Mr. Tavory does not dispute these facts. His explanation, that no one asked him if
he was a joint inventor, does not excuse this silence, in the circumstances of his knowledge
of and participation in the litigation. The undisputed facts evoke prima facie laches and
estoppel, which have not been rebutted. On this ground, I concur in the dismissal.
This court, in finding that Mr. Tavory is not a joint inventor, propounds several
purported rules of joint inventorship. For example, the majority opinion states that
"inventors are not required to have known how to reduce their conceived inventions to
practice to establish conception." Maj. op. at 10. That statement is sometimes applicable,
but it is far from a general rule. The courts have often held, that “conception and reduction
to practice go hand in hand;” that is, on the facts of that case, there is no conception
without reduction to practice. See, e.g., Dow Chem. Co. v. Astro-Valcour, Inc., 267 F.3d
1334, 1341 (Fed. Cir. 2001). As another confusing statement, the court bases its
inventorship decision on the statement that “[a]n invention may be novel and non-obvious
as a whole and yet be a combination of elements that are all individually well-known in the
prior art by skilled artisans.” Maj. op. at 7. That statement of law is correct, but we are not
told how it negates Mr. Tavory’s claim to have contributed a novel element to the claimed
invention. Other statements of law are of equally obscure relevance, although their
applicability to these facts is suggested.
Whether or not Mr. Tavory should have been or could have been named as a joint
2007-1527 2
inventor, he waited too long to make the claim. That is a sufficient ground of affirmance.
2007-1527 3