A recent court decision from the Southern District of New York dismissed a patent infringement lawsuit based on two issues with the patents’ chain of title. In Picture Patents LLC v. Aeropostale Inc. (S.D.N.Y 4/15/11), the defendants won a motion to dismiss based on the plaintiff’s lack of standing to file suit.
The inventor, Michelle Baker, was the founder and sole member of Picture Patents. Baker applied for the three patents-in-suit between 1994 and 1999. Prior to filing the patents, Baker was employed with IBM Corporation as a software analyst. As part of her employment, Baker signed IBM’s intellectual property agreement, which stated:
I hereby assign to IBM my entire interest in any idea, invention, design . . . computer program and related documentation . . . hereafter made or conceived solely by me . . . [that] (a) relate to the actual or anticipated business or research and development of IBM or its subsidiaries, or (b) are suggested by or result from any task assigned to me or work performed by me on for or on behalf of IBM and its subsidiaries.
Although Baker applied for the patents after she left IBM, the court found that she conceived the inventions while at IBM, and that the inventions related to IBM’s business. Therefore, the court found that under IBM’s IP agreement she had assigned all of her rights to IBM, including rights to obtain patents in the future.
Even though this point alone would have been enough to win the day for the defendants, the court found another defect in the patents’ chain of title. Baker also owned another company named Intellinet, and she assigned the patents to Intellinet in 2003. In 2006, Baker signed another document assigning the patents to the plaintiff (Picture People LLC). Baker signed both assignments naming herself as assignor; the second assignment made no mention of Intellinet. Thus, the court found the assignment to Picture People invalid because in 2006 “Baker herself had no rights in the Patents to assign to Picture People.”
The assignment issues in this case illustrate the benefits that may arise from a strong IP assignment document (such as IBM’s), as well as the importance of thorough due diligence when acquiring patent rights.