Inventorship disputes raise difficult issues; involvement of State universities adds layers of complexity

| September 6, 2013

University of Utah v. Max-Planck-Gesellschaft 

August 19, 2013

Panel:  Moore, Reyna and Wallach.  Opinion by Reyna.  Dissent by Moore.


This case started with the University of Utah suing the University of Massachussetts and others to obtain correction of inventorship in a group of patents co-owned by UMass and the other defendants.  But the main issues in this appeal relate to the status of the plaintiff UUtah and initial co-defendant UMass as State entities.

To overcome UMass’ sovereign immunity defense (a State can be sued by another State only in the Supreme Court under Article III of the Constitution), UUtah amended its complaint to name individual UMass officials, instead of UMass itself.

The District Court held that the lawsuit could proceed, and the Federal Circuit affirms on the grounds that (1) UMass is not a “real party of interest” because deciding inventorship does not involve a core state interest, and (2) UMass is not an “indispensable party” because the officials can adequately represent the interest of UMass as co-owner of the patents.


Dr. Bass worked on RNA interference (“RNAi”) at the UUtah, while Dr. Tuschl worked on the same topic at the UMass.  Dr. Tuschl obtained a group of patents, which Dr. Bass asserts are her conception.  UUtah sued the co-owners of the Tuschl patents including UMass in District Court, seeking correction of inventorship under 35 U.S.C. 256.

UMass raised a sovereign immunity defense, so UUtah amended the complaint to remove UMass as co-defendant and name individual officials of the university instead (President, Executive Vice President, Chief Operating Officer, Treasurer, Director of Office of Technology Management).

The officials moved to dismiss (1) on similar sovereign immunity grounds (the dispute involves UMass as a real party of interest, and a State can be sued by another State only in the Supreme Court under Article III of the Constitution) and (2) for failure to name UMass as a required co-owner (an indispensable party must be joined under Rule 19 of the Federal Rules of Civil Procedure), but the Court refused to dismiss.

Thus, the main issues on review are: (1) is UMass, as a State entity, a real party of interest, so that the suit must be brought in the Supreme Court under Article III, and (2) is UMass, as a co-owner of the patents, an indispensable party, so the suit must be dismissed under Fed. R. Civ. Proc. 19.

(1) UMass is not a real party of interest

The Supreme Court chooses to exercise its original jurisdiction in disputes between States only when the claim is serious and implicates “core sovereign interest” of the State so that the State is a “real party of interest.”  A State is not a real party of interest if full relief can be granted without participation of the State.

For example, in Connecticut v. Cahill (2d Cir. 2000), the Second Circuit held that when a New York state law allows only New York residents to place lobster traps in certain locations, the State of Connecticut can seek the same benefits for Connecticut citizens by suing New York officials in District Court.  For the Second Circuit, a dispute over lobster traps permits does not rise to the level of core sovereign interests such as disputes over boundaries, water rights, contracts between States, for which the Supreme Court would have exclusive jurisdiction.

Here, UMass is not a real party of interest because correction of patent inventorship is not a core interest of the State of Mass. As noted by the Court, “States cannot be inventors.”  Further, even though the ownership question is related to the inventorship, ownership of patents does not implicate important concerns of federalism.

Also, UMass is not a real party of interest because correcting the inventorship does not involve any action by UMass, but only by the Director of the USPTO.

In contrast, the Dissent would have found UMass a real party of interest because the Tuschl patents generate hundreds of millions of dollars, so there is a real risk of depleting the treasury of the State of Massachussetts, which affects a “core State interest.”

(2) UMass is not an indispensable party

Under Fed. R. Civ. P. 19, a suit cannot proceed in the absence of a required party if joinder of that party is (a) feasible, or (b) indispensable.  Here, UMass is co-owner, so it must be joined if feasible, but it is not an “indispensable” party under Rule 19(b).

A patent owner or co-owner must be joined if feasible, and joinder may be indispensable for standing (for example, as plaintiff in an infringement suit), but a patent owner or co-owner is not always an indispensable party in any patent dispute.

The factors to be considered are (1) the extent of the prejudice against the party, (2) the extent to which the relief can be shaped to lessen the prejudice, (3) the adequateness of a judgment in the party’s absence, and (4) the adequateness of another remedy if the action is dismissed.

In Dainippon v. CFMT (Fed. Cir. 1998), the defendant company had assigned all its patents to a wholly owned subsidiary, which licensed it back to the company.  The accused infringer sued the company as exclusive licensee, but the assignee subsidiary could not be joined for lack of personal jurisdiction.  The Federal Circuit held that the suit could go forward in the Northern District of California without the assignee subsidiary, which was not an indispensable party because there would be no prejudice against the subsidiary and judgment as to the parent company alone would be adequate.  This allowed the case to proceed in California, even though the subsidiary could have been joined by filing the suit in Delaware.

Here, similarly to Dainippon, UMass is not an indispensable party because the UMass officials can adequately defend the suit, especially considering that not only all co-defendants have joint representation, but UMass had agreed to let the co-assignee private company Alnylam Pharmaceuticals handle its defense.

The Dissenting Judge Moore would have found UMass an indispensable party on the ground that 35 USC 256(b) requires the court to provide “notice and hearing of all parties concerned.”  Under traditional Federal Circuit analysis, co-owners have overlapping but not identical interests.

Judge Moore notes that UUtah cannot complain that suing in the Supreme Court would be too complex for this dispute, because the dispute would have been simpler if Dr. Bass of UUtah had filed her own application and attempted to trigger an interference.


We are reminded that additional attention to the issues of inventorship and ownership of a patent is warranted when an entity related to a U.S. State or the U.S. Federal Government is involved, due to jurisdictional consequences.  This case notwithstanding, it is probably preferable to consider that each co-owner will most likely be treated as an indispensable party in any lawsuit involving the patent.

Full Opinion


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