State Law Governs Pre-Patent-Application Invention Rights: Do we Need Uniform Rules?

Suppes v. Katti and Fender (Fed. Cir. 2017) (non-precedential)

I should probably be a bit careful writing about this case because of its closeness to home.  Galen Suppes is a recently fired engineering professor from University of Missouri (my employer); Chris Fender is the director of our University Technology Transfer office, known here as the Office of Technology Management & Industry Relations and Katti is a professor of radiology and physics.

When it hired Suppes, the University (a wing of the State of Missouri) bound Suppes to an agreement that, inter alia, gave the University ownership and control over the filing of patents stemming from Suppes future inventions.

The University “shall have ownership and control of any Invention or Plant Variety developed in the course of the Employee’s service to the University.” University of Missouri Collected Rules and Regulations § 100.D.1.a.

The basis of Suppes lawsuit was that the University took control, but then failed to actually file patent applications on his inventions.

In the appeal, Suppes (acting pro se) presented some interesting arguments:

1. That pre-patent invention ownership is a right reserved to the people under the 10th Amendment of the U.S. Constitution and that the State thus violated his constitutional rights by taking ownership and then failing to file for patent rights.
2. The State actions stifled the progress of science and thus violated his due process rights; and
3.  The State violated Suppes 5th Amendment rights by taking his invention-rights without just compensation.

These were all rejected by the the district court, and that decision is affirmed on appeal (nonprecedential opinion).

One way to think about Suppes argument here is to consider the employment contract as a state law that applies to anyone who works for the state (at least this branch of the state). And, the state law says that the University (rather than the inventor) owns the inventions.

In discussing inventorship rights pre-patent-application, the Federal Circuit makes an interesting set of holdings. First, the court holds that the Constitution does not directly set any limit on inventorship rights.  Rather, the Article I provision is simply an authorization to Congress to act:

The Constitution, standing alone, grants the power to Congress to “secur[e] for limited times to . . . inventors the exclusive right to their . . . discoveries.” Any rights Mr. Suppes has in his inventions are thus subject to Congress’s implementation of the Constitution by statute. 35 U.S.C. § 261 provides that “[a]pplications for patent, patents, or any interest therein, shall be assignable in law by an instrument in writing.”

Of course, Section 261 only directly applies to “applications,” “patents,” and “interest[s] therein.” A straightforward interpretation of the provision is that Section 261 says nothing about pre-application assignments.  As such, pre-application assignment of rights falls back to state law. “The allocation of interests prior to the filing of a patent application is thus a matter of state contract law and is not preempted by the Patent Act.”  Later, the court reiterates that no Federal public policy (such as preemption) would void the state contract:

The determination of whether a statute prohibiting the assignment of “inventive thoughts” would promote the Progress of Science is therefore, at least initially, allocated to Congress by the Constitution. To the extent that Mr. Suppes is arguing that the contract is void as a matter of public policy, that is once again a matter of state contract law.

In the end, Suppes easily loses this case, but it raises some interesting issues in my mind, including: (1) a tacit recognition that states could enact a set of pre-filing quasi-patent rights without those being preempted by Federal Law – perhaps as an expansion of state trade secrecy law; and (2) an implicit call for uniform law associated with ownership and transfer of pre-filing invention rights.

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Follow-up reading: Regents of University of New Mexico v. Knight, 321 F.3d 1111 (Fed. Cir. 2003).