Marriage ends, but patent interest endures

Authors: David Cotta and Peter Cuomo (Edwards Wildman Palmer LLC, Boston, MA, USA)

Taylor v Taylor Made Plastics, Inc, Case No 12-CV-746-T-EAK-AEP (MD Fla) 29 April 2013

Journal of Intellectual Property Law & Practice (2013) doi: 10.1093/jiplp/jpt143, first published online: September 1, 2013

The United States District Court for the Middle District of Florida held that a sole inventor lacked standing to bring a claim for patent infringement where his ex-wife, who had gained an ownership interest through marriage, was not joined as a co-plaintiff.

Legal context

Any party who wishes to bring a civil suit in the United States must have legal standing. Since standing must exist at all times, plaintiffs must ensure that they have standing when they file suit and throughout the course of the litigation. A party's standing to sue for patent infringement derives from the Patent Act, which provides that ‘[a] patentee shall have remedy by civil action for infringement of his patent’ (35 USC § 281). The term ‘patentee’ in this statute includes not only the inventors and assignees, but also ‘the successors in title to the patentee’ (35 USC § 100). Where there are multiple owners of a patent, all of the owners must join as parties in any litigation to enforce the patent in order to establish standing to sue for infringement. If one owner refuses to join, the other owners lack standing and may not proceed with the infringement suit.

Facts

This case related to an inventor's standing to bring a suit for patent infringement. Whereas most challenges to standing in patent infringement litigation involve the failure to join inventors or corporations with an interest obtained through licence or assignment, Taylor was relatively unusual in that the standing issue was created by the distribution of marital assets among spouses.

James Taylor sued Taylor Made Plastics Inc for infringement of US Patent No 5,806,566, which covers a storm drainage conduit plug and sealing band. After the complaint was filed, Taylor Made was contacted by the plaintiff's ex-wife, Louisa Taylor, who informed Taylor Made that she co-owned the patent pursuant to a divorce decree. Seizing upon this information, Taylor Made filed a motion to dismiss the complaint for a lack of standing.

The Middle District of Florida granted Taylor Made's motion and dismissed the case for lack of standing. The court explained that, while patent law is governed by federal statute, the question of patent ownership is an issue requiring the application of state law. Under Florida state law, property acquired during a marriage is presumed to be a marital asset. Florida law also dictates that ‘a patent is personal property that may be the subject of equitable distribution when the inventor and his or her spouse dissolve their marriage’. In this case, Taylor's patent was a presumptive marital asset. Consistent with this presumption, the divorce decree divided ownership of the patent between Taylor and his wife. Accordingly, the court found that Ms Taylor needed to participate in the litigation in order for Mr Taylor to have standing enforce the patent.

Analysis

Although the Taylor case presents unique facts, the body of law supporting the decision was not new. US courts have long required that all parties with an ownership interest in a patent must be joined in an infringement action, Ethicon, Inc v US Surgical Corp, 135 F 3d 1456, 1467 (Fed Cir 1998) (citing Waterman v Mackenzie, 138 US 252, 255 (1891)), and courts analysing patent cases have long deferred to state law on the issue of patent ownership. The Taylor court relied on established precedent, reflected in its citation of Enovsys LLC v Nextel Communications, Inc, 614 F 3d 1333 (Fed Cir 2010). In Enovsys, the Court of Appeals for the Federal Circuit affirmed the denial of a motion to dismiss for lack of standing where a plaintiff-inventor failed to join his ex-wife. The appeals court agreed that, under California state law, the patents were the presumptive joint property of the couple because the patent applications had been filed while the couple was married. In Envosys, however, the court found that the state court divorce decree gave complete ownership to the plaintiff-inventor, providing him with standing even absent joinder of his ex-wife.

Practical significance

In many states, an inventor's patent will become marital property as long as it was acquired during the marriage. Inventors should be aware of community property laws and other laws governing the allocation of marital assets in the state where they reside, particularly if they are going through a divorce proceeding. Inventors who are involved in divorce proceedings, or are otherwise providing for the distribution of marital assets, should be mindful of the consequences of divided patent ownership. Inventors can avoid being saddled with patent rights they cannot enforce by keeping patent ownership whole or by reaching an agreement with their spouses that requires their spouses to join in and cooperate with subsequent efforts to enforce jointly owned patents