Addressing the issue of when patent rights are assigned under a contract, the US Court of Appeals for the Federal Circuit overturned the district court’s finding that a prospective inventor had surrendered his rights to an invention by failing to describe prior inventions at the outset of a contract. TriReme Med., LLC v. AngioScore, Inc., Case No. 15-1504 (Fed. Cir., Feb. 5, 2016) (Dyk, J).

AngioScore holds a patent for an angioplasty balloon catheter for the clearance of arterial blockages. While the invention was in development, an uncontracted physician performed a single study with a prototype and wrote a memorandum on how to correct an issue relating to a catheter piece dislodging when the catheter was extracted. After the initial study, AngioScore hired the physician as a consultant under a contract that purported to require him to (1) list all intellectual property owned by the physician related to AngioScore’s proposed business, products, or research and development; (2) provide a non-exclusive license to any prior conceived invention that the physician incorporated into any work thereafter performed for AngioScore; and (3) assign to AngioScore all inventions conceived, developed or reduced to practice during the term of the agreement. The angioplasty balloon was eventually patented, but the contracted physician was not listed as an inventor. Years later, AngioScore’s competitor, TriReme, approached the contract physician, purchased his rights to the invention and brought suit for correction of inventorship.

AngioScore convinced a California district court that, under California law, TriReme lacked standing to bring suit because the physician had already assigned his rights to AngioScore. TriReme appealed.

The Federal Circuit disagreed, finding that the physician had not assigned his rights by failing to list his earlier discoveries in the contract. The Federal Circuit concluded that, under Cal. Civ. Code § 1639, the plain language of the contract provided AngioScore, at best, a license to the physician’s prior discoveries if they had been integrated into AngioScore’s patented invention. The Federal Circuit also found that TriReme, as the physician’s successor in interest, was not estopped under Cal. Ev. Code § 662 from claiming that there was a prior invention, even where the physician had previously not asserted it. Contract estoppel did not apply because neither the physician nor TriReme were attempting to enforce rights under the contract. The Federal Circuit did agree, however, that if the physician’s work at AngioScore could be considered “developing or reducing to practice” an “invention, development or improvement” under the terms of the contract, then his contribution to the invention may have been assigned under the contract. Because the parties disagreed as to this factual issue, the Federal Circuit remanded the case back to the district court.