The Ober|Kaler patent litigation team recently won a significant victory for its clients in Maryland federal District Court. We were able to keep a patent infringement suit in the local federal court despite our opponent’s multiple attempts to have the case transferred to its home state of Florida. The latest gambit by our opponent was based on its claim that our clients did not own the patent at the time the lawsuit was filed. While the court’s ruling marks a significant victory for Ober|Kaler and its clients, the decision also provides a valuable lesson for employers in an area of the law that Justice Breyer of the United States Supreme Court called “a technical drafting trap for the unwary.”
Our clients, C.R. Daniels and Casto & Harris, are manufacturers and marketers of a variety of products, including voting booths. The invention at issue in this case was a portable voting booth that embodied a unique design allowing the booths to be nested together for ease in transport. The inventors of the voting booths, both of whom were and are employees of our clients, had obtained a patent in the design and Ober|Kaler brought suit in Maryland on behalf of C.R. Daniels and Casto & Harris.
Our Florida opponent originally requested that the Maryland court dismiss the case because, according to it, the Maryland Court did not have jurisdiction. Specifically, our opponent argued that it could not be sued in Maryland because it had not sold any voting booths or otherwise done business in Maryland. We defeated that motion by showing that, despite the fact that our opponent had no sales in Maryland, it had done business in Maryland by marketing its voting booths at a convention in Ocean City, Maryland.
After that motion was denied, our opponent filed a second motion to dismiss, alleging that C.R. Daniels and Casto & Harris did not own the patent at the time they filed suit. As support for its contention, the other side pointed to the fact that documentation relating to the transfer of the patent from the inventors to their employers was filed with the United States Patent and Trademark Office (the “PTO”) after the lawsuit was filed. Ober|Kaler countered by showing that the inventors’ employment agreements automatically transferred the patent to our clients, and that the documentation filed with the PTO was simply a ministerial act performed to put the public on notice of the transfer. In a 30 page decision discussing this hotly contested area of the law, the Maryland federal court agreed with Ober|Kaler, denied the motion to dismiss, and allowed the case to proceed in Maryland.
Importantly, the Court’s decision highlighted the need for employers to use specific “magic words” in their employment agreements to ensure that inventions created by their employees automatically become the property of the employer. The decision also showed the importance of quickly and properly documenting the transfer of the invention once it comes into existence. Ober|Kaler’s patent law and employment law teams can assist employers in crafting their employment agreements and subsequent transfer documents with the specific language needed to effectuate and record the transfer.
Because of its import, the 30 page decision by District Judge Hollander has already been picked up by the blogosphere. Below is a link recently posted by leagle.com: