Another case being argued next week at the Federal Circuit that attracted amicus briefs is Omni Medsci, Inc. v. Apple Inc. In this patent case, the Federal Circuit granted Apple’s motion for an interlocutory appeal to review two different district courts’ holdings with respect to an alleged standing problem. This is our argument preview.
In its opening brief, Apple makes two arguments.
First, Apple argues “Omni does not have standing to sue for patent infringement because Omni does not own the patents-in-suit—and never did.” According to Apple, the evidence shows University of Michigan Professor “Dr. Islam ‘had no right to assign [the patents] to [Omni],’ because his employment agreement ‘had divested him of all of his interest’ before he attempted that assignment, and he did not secure a transfer of title of the asserted patents from the University before suing Apple.” Therefore, Apple contends, Omni “was ‘not injured’ by any alleged infringement, ‘lack[s] constitutional standing,’ and ‘cannot maintain th[ese] suit[s] for patent infringement.’”
Second, Apple asserts the district courts’ conclusions upholding Omni’s ownership and standing based “on their conclusion that the employment agreement and University rules do not effectuate a present assignment of future interests” is “unfounded.” In particular, Apple contends the Eastern District of Texas was incorrect in concluding “that transfer of ownership under [University of Michigan] Bylaw 3.10 for any future invention does not occur until the parties determine whether paragraph 1 or paragraph 4 applies to that invention.” According to Apple, “that reasoning confuses the nature of the assignment (whether it is automatic or not) with the assignment’s scope (whether it covers a particular invention)—a distinction that this Court drew clearly in DDB Techs., L.L.C. v. MLB Advanced Media, L.P.” Moreover, Apple argues, the district court erred by misreading “the Bylaw’s reference to ‘[p]atents . . . issued’ to mean that patents must first ‘issue’ to the employee-inventor before Bylaw 3.10 applies.” Importantly, according to Apple, “that error led the Texas court to incorrectly conclude that every assignment under Bylaw 3.10 necessarily occurs in the ‘future’— regardless whether University funds supported the invention or whether patents are even pursued or secured on it.”
Omni Medsci, in its response brief, argues that Apple must prove two things to show that Bylaw 3.10 eliminates standing. First, according to Omni, “Apple must prove (i) the patents-in-suit fall within Bylaw 3.10 ¶1—a fact question. Second, Omni contends Apple must prove “¶1 automatically transferred legal title to [the University of Michigan]—a legal issue.” On the fact question, Omni maintains that Apple “has no evidence to support its claim that the patents-in-suit fall within Bylaw 3.10 ¶1.” And, on the legal issue, Omni asserts that “the phrase ‘shall be . . .’ in Bylaw 3.10 assigns no rights.” Accordingly, Omni urges the court to affirm “[b]ecause Apple cannot prevail on both the facts and the law.”
In its reply brief, Apple argues that Omni’s response brief attempts to convert into a factual determination the interpretation of the University bylaws, when that issue is a legal determination reviewed by the court de novo. Further, it argues, “Omni ignores that Dr. Islam’s operative contract expressly provides that Bylaw 3.10 ‘govern[s] the assignment of property rights’ and that Dr. Islam, by that agreement, agreed that such property rights ‘shall be’ the University’s if they are supported by any UM funds.” According to Apple, adopting Omni’s interpretation of the contract needlessly threatens existing contracts between Universities and researchers and could have sweeping implications.
This case attracted an amicus brief from the Regents of the University of Michigan supporting Apple’s position. In it, the University contends “the lower court’s interpretation of the University’s Bylaws and Policies as effecting only a promise to assign rights in the future and not an automatic assignment of such rights was clearly in error and against the clear meaning of those provisions.” In particular, the University argues, the district courts committed two important errors. First, the University argues “[t]he district court failed to address crucial evidence in the form of the University’s Technology Transfer Policy language.” Second, according to the University, the district court “also failed to consider the University’s longstanding implementation of Bylaw 3.10 and the course of conduct between the University and its faculty.”
Oral arguments will be heard on Thursday, March 4. We will keep track of this case and report on any developments.