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1 September 2020PatentsSarah Morgan

Fed Circuit overturns inventorship ruling in Cisco suit

The US Court of Appeals for the Federal Circuit has concluded that a Massachusetts court was wrong to find that automation company  Egenera couldn’t re-add an inventor to its patent after  Cisco had the patent invalidated.

In a  precedential decision issued Friday, August 28, the Federal Circuit vacated Cisco’s victory and remanded the suit for further proceedings.

Egenera had accused Cisco of infringing US patent number 7,231,430—which claims a platform for automatically deploying a scalable and reconfigurable virtual network—through its enterprise server systems in a suit filed at the US District Court for the District of Massachusetts in August 2016.

Before claim construction, and alongside an inter partes review proceeding, Egenera petitioned the US Patent and Trademark Office to remove Peter Schulter, one of the 11 listed inventors on the patent, as Egenera had realised that all claim limitations had been conceived before Schulter had started working there. The office removed Schulter in January 2018.

Then, following the Massachusetts court’s claim construction and a trial on inventorship, Egenera asked the district court to add Schulter back to the patent.

Judge Richard Stearns concluded that judicial estoppel prevented Egenera from relisting the inventor and held the ‘430 patent invalid for failing to name all inventors.

Egenera appealed against the decision, challenging the district court’s claim construction and the application of judicial estoppel. While the Federal Circuit affirmed the lower court’s claim construction, it vacated the invalidity judgment based on judicial estoppel.

Chief Judge Sharon Prost, on behalf of the court, first turned to whether Egenera could correct inventorship, absent judicial estoppel. Federal Circuit precedent recognises that a patent cannot be invalidated if inventorship can be corrected instead.

Under 35 USC section 256(b), the “error of omitting inventors or naming persons who are not inventors shall not invalidate the patent in which such error occurred if it can be corrected as provided in this section”.

In a footnote, the district court had declared that Schulter’s removal by petition was therefore “a considered act that is unlikely to qualify as an omission ‘through error’”.

But the Federal Circuit concluded that section 256 doesn’t exclude “considered acts” or even “deceptive intention” from the meaning of “error”, and that the exclusion of Schulter fell under the section.

Next, the court turned to judicial estoppel, finding that the case had not met the New Hampshire v. Maine criteria for the equitable doctrine to apply.

Under New Hampshire, the court must examine whether a party’s earlier and later positions are “clearly inconsistent”; whether the party “succeeded in persuading a court to accept” the earlier position; and whether the party would “derive an unfair advantage or impose an unfair detriment” on the other side if not estopped.

“The district court legally erred as to each New Hampshire factor. We therefore hold that the district court abused its discretion by applying judicial estoppel,” said Prost, before remanding the case.

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