StoneHedge v. Gillman: Inventor's Aide Drafting a Patent Does Not Amount to DJ Dispute over Co-Inventorship

Category: Civil Procedure 
 By: Jesus Hernandez, Blog Editor/Contributor 
TitleStoneEagle Services, LLC v. Gillman, No. 2013-1248 (Fed. Cir. March 26, 2014).
Issue[Did] the district court [lack] subject matter jurisdiction over the lawsuit because there was no actual controversy regarding StoneEagle’s inventorship claim—the sole claim in StoneEagle’s original complaint arising under federal law [?]
StoneEagle Services, LLC at *4.
HoldingAs StoneEagle’s only factual allegations concerning inventorship are that Gillman authored the patent application, the complaint, viewed in its totality, has not alleged a controversy over inventorship that satisfies Article III. [...] Additionally, StoneEagle did not allege any other facts existing at the time this com- plaint was filed which would give rise to a federal ques- tion or other cause of action properly before a federal court. […] For these reasons, the district court lacked jurisdiction over this case. […]
Id. at *7 (internal citations omitted).

Procedural HistoryOn February 19 and March 20, 2013, the district court issued orders purporting to clarify a preliminary injunction and enjoining David Gillman, and two entities named Talon Technologies, Inc. (collectively Appellants) from using various materials and processes first developed by plaintiff StoneEagle Services, Inc. (StoneEagle).
StoneEagle Services, LLC at *2.
Legal Reasoning (Rader, CJ, Moore, Reyna)
FactsIn 2006, Robert Allen and Gillman teamed up to adapt Allen’s electronic payment system, then used in the automotive industry, to process health care claims. [The two entered an agreement that] provided, in part, that Allen’s company, StoneEagle, owned the technology in the new health care payment system. […]. As part of the collaboration, StoneEagle also licensed the technology to Appellants […] Allen also filed a patent application on the health care payment system. The application listed Allen as the sole inventor. […] Although not listed as an inventor, Gillman enjoyed an ownership interest in the patent application until at least July 2010.
StoneEagle Services, LLC at *2-3.
Legal Standard: DJ ActionRelevant to the present case, the Supreme Court has explained that the phrase “case of actual controversy” in the Declaratory Judgment Act refers to this constitutional requirement. […] Accordingly, to demonstrate a sufficient controversy for a declaratory judgment claim that satisfies the requirements of Article III, “the facts alleged, under all the circumstances, [must] show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” […]
StoneEagle Services, LLC at *6 (internal citations omitted).
Preparing Patent Application (constructive reduction to pratoce - only) NOT tantamount to Co-inventorshipStoneEagle only alleges that Gillman “suddenly and falsely claimed that it is his patent, that he wrote the patent, that it is on his computer, and that he ‘authored’ or ‘wrote’ it, or words to that effect.” […]These allegations may give rise to a dispute concerning ownership, but they do not implicate inventorship. Indeed, StoneEagle does not allege that Gillman claimed he invented the health care payment system, much less conceived of the idea or contributed to its conception. Rather, StoneEagle only alleges that Gillman claims to have written the patent application. This court has stated that assistance in reducing an invention to practice generally does not contribute to inventorship. […] In this case, the most favorable inference from the record in favor of StoneEagle shows only that Gillman assisted in constructively reducing an invention to practice. […] Those activities confer no more rights of inventorship than activities in furtherance of an actual reduction to practice.
Id. at *7 (internal citations omitted).
Because StoneEagle did not allege an actual controversy over the inventorship of the ’686 patent, the district court lacked jurisdiction over StoneEagle’s declaratory judgment claim. Additionally, because StoneEagle’s complaint did not plead any facts existing when StoneEagle initiated this lawsuit that would give rise to another cause of action properly before a federal court, the district court lacked subject matter jurisdiction over the case. Accordingly, this court vacates the proceedings below, including the preliminary injunction, and remands to the district court with instructions to dismiss.
StoneEagle Services, LLC at *8.
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