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Federal Circuit: Ownership transfer of non-US patents permitted under existing US district court jurisdiction

Global Publication March 2021

In Sionyx LLC v. Hamamatsu Photonics K.K. (Fed. Circuit. December 7, 2020), the Federal Circuit considered whether the district court erred in awarding SiOnyx ownership of Hamamatsu's US patents, while not awarding ownership of Hamamatsu's Japanese patents.

In the subject case, Eric Mazur, a Harvard professor, discovered "a process for manufacturing 'black silicon' by irradiating a silicon surface with ultra-short laser pulses." The resulting material has electronic properties different from traditional silicon, including low reflectivity and high absorption of visible light. Mazur then recruited his student, James Carey, to conduct further research on the black silicon technology and filed US provisional patent applications. In 2005, Mazur and Carey founded SiOnyx to commercialize the technology. SiOnyx later met with Hamamatsu Photonics (Hamamatsu), a manufacture of silicon-based photodetector devices, which expressed interest in the technology.

In 2007, SiOnyx and Hamamatsu entered into an NDA "to allow the parties to share confidential information relating to evaluating applications and joint development opportunities." Paragraph 5 of the NDA also stated that "[t]he Receiving Party acknowledges that the Disclosing Party…claims ownership of the Confidential Information disclosed by the Disclosing Party and all patent, copyright, trademark, trade secret, and other intellectual property rights in, or arising from, such Confidential Information." Upon the agreement, SiOnyx disclosed to Hamamatsu "a manufacturing process for a photodetector device, which were marked as confidential." About a year later, Hamamatsu terminated the joint development and the NDA expired.

After the NDA's expiration, Hamamatsu continued developing the photodetector devices and began filing patent applications in several countries including Japan and US. SiOnyx later learned of the Hamamatsu's patents and accused Hamamatsu of breaching its confidentiality obligations. The companies met to discuss the ownership of both US and Japanese patent applications but did not resolve their dispute. In 2015, SiOnyx brought suit against Hamamatsu in the District of Massachusetts, alleging breach of contract and requesting change of inventorship of the disputed patents.

The jury found that Hamamatsu breached the NDA and found Carey to be a co-inventor of Hamamatsu's US patents. SiOnyx filed post-trial motions seeking sole ownership of the disputed US and Japanese patents as a remedy for Hamamatsu's breach. The district court granted Sionyx sole ownership of the US patents stating "Hamamatsu breached NDA by using SiOnyx's confidential information and that Carey should be named a co-inventor of the [d]isputed US [p]atents necessarily implies that those patents arose, at least in part, from SiOnyx's confidential information." However, the court denied ownership of the Japanese patents because "the court questioned its authority to do so."

Disputed US patents

On appeal, Hamamatsu argued that "finding of co-inventorship necessarily implied that the jury found that Hamamatsu also contributed to the patents" therefore Hamamatsu is "equally entitled to ownership." The Federal Circuit disagreed, stating "[i]t is elementary that inventorship and ownership are separate issues.…[W]hile conception is the touchstone of inventorship, ownership operated based on contract or law – in this case, the NDA…the NDA provides that ownership of patents arising from confidential information exchanged under the agreement is claimed by the disclosing party. But Hamamatsu has not established that any of the patents arose from [Hamamatsu's] confidential information disclosed under the agreement and therefore has failed to show that it is entitled to joint ownership."

Disputed Japanese patents

SiOnyx argued that "the same evidence that establishes its right to sole ownership of the [d]isputed US patents establishes its right to sole ownership of the [d]isputed [f]oreign [p]atents, and the court had authority to compel the transfer of ownership of the foreign patents because the court had jurisdiction over Hamamatsu." The Federal Circuit agreed and pointed to Richardson v. Suzuki Motor Co., Ltd., 868 F.2d 1226, 1249 (Fed. Cir. 1989), stating "it is well established that courts have authority to compel parties properly before them to transfer ownership of foreign patents…This is because an order compelling a party to assign ownership of foreign patent is an exercise of the court's authority over the party, not the foreign patent office in which the assignment is made. Here, there is no argument that the district court lacked jurisdiction over Hamamatsu, and therefore the court had authority to compel assignment of foreign patents." The Federal Circuit further stated, "[w]e agree with SiOnyx that the evidence that established SiOnyx's right to sole ownership of the disputed US patents also applies to the [d]isputed [f]oreign [p]atents.…Hamamatsu has not shown that it contributed confidential information entitling it to joint ownership. And because the disputed US patents claim priority from Hamamatsu's Japanese patent applications, the Japanese applications must be for the same inventions as the disputed US patents."

This case reconfirmed that a US district court has the authority to compel the transfer of ownership of a party's non-US patents where the court has personal jurisdiction over the party and patent ownership turns on US contract law.

NOTE: On February 24, 2021, the Federal Circuit rejected Hamamatsu's petition for a full Federal Circuit rehearing to revisit the decision.

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