Federal Circuit affirms tossed patent suits against HTC and BlackBerry
The US Court of Appeals for the Federal Circuit upheld a lower court’s dismissal of patent lawsuits against HTC, BlackBerry and Motorola Mobility yesterday.
In a split decision, the Federal Court affirmed a decision by the US District Court for the Southern District of New York to dismiss complaints filed by Advanced Video Technologies, a licensing company, for lack of standing.
The New York court based its decision on the grounds that a co-owner of the patent was not a party to the actions and the co-owner’s ownership interests were not transferred to Advanced Video.
The dispute involved US patent number 5,781,788, called “Full duplex single clip video codec”, although the technology of the patent was not at issue.
Three co-inventors are listed on the patent: Beng-Yu Woo, Xiaoming Li, and Vivian Hsiun, all of whom were employed by Infochips Systems (which is now defunct) when the invention was created. Woo and Li transferred their interests to Advanced Video.
According to Advanced Video, Hsiun assigned her co-ownership interests to Advanced Video through a series of transfers, the first of which was made before the ‘788 patent application was filed, under an employment agreement between Hsiun and Infochips.
Advanced Video listed four transfers in total: the second transfer being when Infochips assets were seized by Lease Management when Infochips went out of business in 1992, the third when Lease Management sold the Infochips assets to Woo in 1995, and fourth when Woo assigned his ownership interest to an entity called AVC Technology.
AVC Technology transferred its assets to Advanced Video before AVC was dissolved.
When AVC filed the patent application in 1995, Woo and Li assigned their interests to AVC, but Hsiun refused to assign.
The US Patent and Trademark Office granted AVC’s request to prosecute the application without an assignment from Hsiun.
In 2015, Advanced Video filed suits against HTC, BlackBerry and Motorola and, in response to a motion to dismiss, Advanced Video argued that Hsuin’s interest had been acquired by a series of transfers.
Advanced Video claimed that three provisions in the employment contract, a “will assign” provision, a trust provision, and a “quitclaim” provision, effected the transfer.
But Circuit Judge Jimmie Reyna, speaking on behalf of the court, disagreed with Advanced Video’s arguments.
“The ‘will assign’ language alone does not create an immediate assignment of Hsiun’s rights in the invention to Infochips,” he noted.
On the trust provision, Advanced Video argued that “will hold in trust” created an immediate trust under California law in favour of Infochips.
Reyna concluded that even if the court were to determine that Hsiun’s interests were immediately placed in trust, it doesn’t follow that the interests were automatically or ever transferred to Infochips.
And on the quitclaim provision, which waives Hsuin’s rights to interests in any patent rights assigned under the agreement, the court held that as no patent rights were ever assigned to Infochips, the quitclaim provision didn’t apply.
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