United States Court of Appeals
for the Federal Circuit
______________________
VAPOR POINT LLC, KEITH NATHAN, KENNETH
MATHESON,
Plaintiffs-Cross-Appellants
DON ALFORD, JEFFEREY ST. AMANT,
Counterclaim Defendants-Cross-Appellants
v.
ELLIOTT MOORHEAD, NANOVAPOR FUELS
GROUP, INC., BRYANT HICKMAN,
Defendants-Appellants
______________________
2015-1801, 2015-2003
______________________
Appeals from the United States District Court for the
Southern District of Texas in No. 4:11-cv-04639, Judge
Vanessa D. Gilmore.
______________________
Decided: August 10, 2016
______________________
JASON AARON WIETJES, Polsinelli PC, Dallas, TX,
argued for plaintiffs-cross-appellants and counterclaim
defendants-cross-appellants. Also represented by
MICHAEL DAVID PEGUES.
WILLIAM PETERSON RAMEY III, Ramey & Schwaller,
LLP, Houston, TX, argued for defendants-appellants.
2 VAPOR POINT LLC v. MOORHEAD
______________________
Before O’MALLEY, CHEN, and STOLL, Circuit Judges.
Opinion for the court filed PER CURIAM.
Concurring opinion filed by Circuit Judge O’MALLEY.
PER CURIAM.
Vapor Point, L.L.C., Keith Nathan (“Nathan”), and
Kenneth Matheson (“Matheson”) (collectively “Vapor
Point”) sued Elliott Moorhead (“Moorhead”), NanoVapor
Fuels Group, Inc., and Bryant Hickman (“Hickman”)
(collectively “NanoVapor”) in the United States District
Court for the Southern District of Texas, seeking to have
Nathan and Matheson recognized as joint inventors under
35 U.S.C. § 256 on NanoVapor’s U.S. Patent Nos.
7,727,310 (“the ’310 patent”) and 8,500,862 (“the ’862
patent”). NanoVapor responded by suing Vapor Point,
seeking to have Moorhead recognized as a joint inventor
under 35 U.S.C. § 256 on Vapor Point’s U.S. Patent Nos.
7,740,816; 7,803,337; 8,337,585; 8,337,604; 8,337,763 and
for declaratory relief regarding inventorship of
NanoVapor’s ’310 and ’862 patents. After a four-day
evidentiary hearing, the district court issued an order
granting Vapor Point’s motion for correction of inventor-
ship and denying each of NanoVapor’s motions. Vapor
Point moved for exceptional case status and attorneys’
fees. The district court issued a final judgment correcting
inventorship, dismissing the action with prejudice, and
denying Vapor Point’s motion for exceptional case status
and attorneys’ fees.
NanoVapor appeals the district court’s order on inven-
torship and its dismissal of the case. Vapor Point cross-
appeals the same order to the extent it holds that the case
is not exceptional and that an award of attorneys’ fees is
not warranted. We find that the district court did not err
in dismissing the case after determining inventorship,
VAPOR POINT LLC v. MOORHEAD 3
especially in light of NanoVapor’s concession that a de-
termination of inventorship would resolve the case. We
further find that the district court did not abuse its dis-
cretion in denying Vapor Point’s motion for exceptional
case status and attorneys’ fees. Therefore, we affirm.
BACKGROUND
The factual and procedural history in this case is con-
fusing, but is important to the issues we resolve. We do
our best to lay it out with clarity.
The patents-in-suit are generally directed “to the re-
moval of volatile fuel vapors, also known as volatile
organic compounds (‘VOCs’), from storage tanks and other
holding vessels, generally in the oil and gas industry.”
Inventorship Order at 3, Vapor Point, L.L.C., et al. v.
Moorhead, et al., No. 4:11-CV-04639 (S.D. Tex. Mar. 13,
2015), ECF No. 321 (hereinafter “Inventorship Order”).
“EPA and state ‘clean air’ regulations regulate the per-
centage of contaminates that may be discharged” into the
atmosphere. Id. at 4. The patents-in-suit “address this
problem by capturing and recovering the fuel vapors.” Id.
“NanoVapor is an industry leader in the field of [VOC]
containment, including a process called Vapor Suppres-
sion System developed by Moorhead that aims to control
or eliminate combustible and toxic gases in fuel storage
and transfer operations.” Id. at 7. After working with
Moorhead to help market this technology, Nathan became
Chief Operating Officer of NanoVapor in 2007. Id. at 8. 1
1 The parties agree that Moorhead and Nathan
were acquainted before Nathan began work with
NanoVapor, but disagree regarding the length of their
interaction. NanoVapor alleged they met “at an industry
conference in 2005” while Vapor Point alleged they “began
working [together] . . . in the summer of 2006.” Id. at 7.
4 VAPOR POINT LLC v. MOORHEAD
NanoVapor later hired Matheson to help with the “com-
mercial embodiment” of the technology being developed.
Id. Moorhead filed provisional patent application
60/871/766 on December 22, 2006, claiming the vapor
suppression system that is the subject of NanoVapor’s
’310 patent. The ’310 patent claims priority to this appli-
cation. The parties disagree over whether Nathan was
aware at the time of the progress of the patent applica-
tion. Id. at 8.
NanoVapor alleged that Nathan and Matheson “plot-
ted to steal [NanoVapor’s] technology and destroy
[NanoVapor’s] business when [Nathan and Matheson]
developed the commercial embodiment of NanoVapor’s
patent-pending concept.” Id. According to NanoVapor,
“an outside group conducted due diligence testing that
exceeded expectations,” after which Nathan and Mathe-
son “decided to steal the technology and associated trade
secrets.” Id. NanoVapor asserts that Nathan and Mathe-
son “each requested a 20% stake in NanoVapor, which
[NanoVapor] rejected.” Id.
In contrast, Vapor Point alleges that “the ’310 patent
[NanoVapor] filed for on December 18, 2007 wrongfully
incorporated, disclosed, and claimed all of Nathan and
Matheson’s conceptual and inventive contributions.” Id.
The ’862 patent, according to Vapor Point, similarly
misappropriated Nathan and Matheson’s work. Id.
Nathan and Matheson allege that they are the true
inventors of the technology disclosed in the ’310 patent
“because Defendant Moorhead brought on Nathan and
Matheson to help him reengineer the system and bring it
to market but that Moorhead wrongfully filed for the ’310
patent without consent, notice, or compensation to Na-
than or Matheson.” Id. at 9. Based on the allegations,
Vapor Point asked that the district court correct inventor-
ship of the ’310 and ’862 patents to add their names to
both, or possibly even substitute their names for Moor-
head’s on both.
VAPOR POINT LLC v. MOORHEAD 5
For its part, NanoVapor asked the district court to al-
ter the inventorship of Vapor Point’s five patents to in-
clude Moorhead “because the Vapor Point patents are
based on Defendant Moorhead’s conceptions in the ’310
patent.” Id.
In addition to its requests to correct the inventorship
of NanoVapor’s patents, Vapor Point also asserted a
number of state law claims against NanoVapor: common-
law fraud, fraud by nondisclosure, unjust enrichment,
tortious interference, misappropriation of trade secrets,
and the Texas Theft Liability Act. First Amended Com-
plaint at ¶¶ 61–104 (Counts III–VIII), Vapor Point (S.D.
Tex. Aug. 16, 2013), ECF No. 151. NanoVapor, in turn,
asserted a number of affirmative defenses to the claims in
Vapor Point’s First Amended Complaint, including that
“[Vapor Point] cannot prevail because [Vapor Point has]
an obligation to assign any invention to NanoVapor Fuels
Group, Inc.” Original Answer to First Amended Com-
plaint at ¶ 116, Vapor Point (S.D. Tex. Aug. 30, 2013),
ECF No. 155; see also id. at ¶ 117 (specifying that an
obligation to assign arises from an alleged employment of
Nathan and Matheson by NanoVapor). In its counter-
claim NanoVapor also asserted infringement of the ’310
patent and eight state law claims: misappropriation of
trade secrets, the Texas Theft Liability Act, fraud, breach
of fiduciary duty, tortious interference with business
relationships, tortious interference with prospective
business relationships, breach of contract, and unjust
enrichment. Fourth Amended Counterclaim at ¶¶ 83–
138, Vapor Point (S.D. Tex. May 14, 2014), ECF No. 212.
On June 25, 2014, the district court issued an order
denying NanoVapor’s motion for an evidentiary hearing
on inventorship. Order, Vapor Point (S.D. Tex. June 25,
2014), ECF No. 241. The district court reasoned that,
“[b]y requesting findings of fact and conclusions of law
relating only to inventorship under 35 U.S.C. § 256, both
parties are essentially requesting that this Court bifur-
6 VAPOR POINT LLC v. MOORHEAD
cate the inventorship claims from the state law and
infringement claims and make an early determination on
the inventorship issues.” Id. at 1. Because “the state law
causes of action share a common factual core with the
inventorship claims and judicial determination of the
inventorship issues at [that] time would deprive the
parties of their right to a jury trial,” the district court
denied the parties’ request for an evidentiary hearing. Id.
at 2.
NanoVapor then filed a notice with the district court
dismissing its state law claims “with prejudice to re-
filing.” Notice of Nonsuit of State Law Claims, Vapor
Point (S.D. Tex. Aug. 1, 2014), ECF No. 254. In that
notice, NanoVapor asserted that, “[i]n response to
[NanoVapor] non-suiting their state law claims, [Vapor
Point has] agreed to nonsuit” its state law claims. Id. at
2. “After [Vapor Point’s] concurrent nonsuit of the state
law claims only claims related to inventorship and in-
fringement will remain before the Court.” Id. In so doing,
NanoVapor explicitly “request[ed] the Court to decide the
inventorship issues as there is no right to a jury trial on
contested fact issues related to inventorship.” Id. Accord-
ingly, the district court dismissed all of the state law
claims pled by either Vapor Point or NanoVapor, with
prejudice. See Order on Notice of Nonsuit of State Law
Claims, Vapor Point (S.D. Tex. Aug. 11, 2014), ECF No.
261.
“[S]ection 256 . . . explicitly authorizes judicial resolu-
tion of co-inventorship contests over issued patents.”
MCV, Inc. v. King-Seeley Thermos Co., 870 F.2d 1568,
1570 (Fed. Cir. 1989). Consistent with § 256, the district
court held a four-day evidentiary hearing to determine
inventorship of the patents-in-suit. After the hearing, the
district court issued an order denying NanoVapor’s claims
of inventorship and granting Vapor Point’s to the extent
Nathan and Matheson sought to be added to the ’310 and
VAPOR POINT LLC v. MOORHEAD 7
’862 patents as additional inventors. See Inventorship
Order at 27.
In that decision, the district court addressed the “four
key concepts in the ’310 and ’862 patents”: (1) using
biodiesel as a vapor capture medium; (2) removing VOCs
from a vessel containing fuel vapors and introducing them
into a vapor capture medium (such as biodiesel); (3) using
a particulatizer to create micro-sized VOC particles for
treatment; and (4) using diffusion plates to distribute
micro-sized particles across the vapor capture medium.
Id. at 11. The district court found that Nathan contribut-
ed to the conception of the first three of these four key
concepts and that Matheson contributed to the third and
fourth concepts. See id. at 16–24. The district court
denied NanoVapor’s claim that Moorhead should be a
named inventor on Vapor Point’s patents. See id. at 24–
26.
Following the district court’s resolution of the inven-
torship issues, NanoVapor moved for a new trial “solely
address[ing] the Court’s closing of the case without allow-
ing a trial on the affirmative defenses,” including any
obligation to assign. NanoVapor’s Motion for a New Trial,
Vapor Point (S.D. Tex. Apr. 3, 2015), ECF No. 330. In
Vapor Point’s response, it argued that NanoVapor’s
motion for a new trial on the affirmative defense of an
obligation to assign was improper.
Vapor Point initially asserted a claim for correction of
inventorship under § 256 along with its various state law
tort claims. Because the latter were dismissed with
prejudice, only the federal claim under § 256 remained.
Since “an obligation to assign is not an affirmative de-
fense to a cause of action to correct inventorship,” and
because only the inventorship claims remained, Vapor
Point argued that the equitable affirmative defense of an
obligation to assign also should be dismissed with preju-
dice. Vapor Point’s Response to NanoVapor’s Motion for
8 VAPOR POINT LLC v. MOORHEAD
New Trial at 6, Vapor Point (S.D. Tex. Apr. 24, 2015),
ECF No. 335. Because NanoVapor did not join Nathan
and Matheson—now deemed to be two of the inventors of
the patents-in-suit—in the infringement claims against
Vapor Point, Vapor Point argued that NanoVapor “d[id]
not have standing to pursue [its] claim for infringement of
the ’310 patent, eliminating any claim against Vapor
Point.” Id. at 9; see also Appellant’s Br. at 13 (“All patent
owners must join in a patent infringement suit.
NanoVapor did not join Nathan and Matheson in its
infringement claim. Therefore, NanoVapor did not have
standing to pursue a claim for infringement of the ’310
patent.”) (citing Enovsys LLC v. Nextel Commc’ns., Inc.,
614 F.3d 1333, 1341 (Fed. Cir. 2010) (“When a patent is
co-owned, a joint owner must join all other co-owners to
establish standing.”); 35 U.S.C. § 281). The district court
agreed with Vapor Point and dismissed the case. Final
Judgment at 2, Vapor Point (S.D. Tex. Aug. 24, 2015),
ECF No. 377.
After the court’s order on inventorship, Vapor Point
moved for a determination that the case was exceptional,
entitling it to attorneys’ fees. See Vapor Point (S.D. Tex.
June 16, 2015), ECF No. 347; Vapor Point (S.D. Tex. June
16, 2015), ECF No. 349. The district court, without
discussion, denied these motions in its final order. Final
Judgment at 2, Vapor Point (S.D. Tex. Aug. 24, 2015),
ECF No. 377. We have jurisdiction pursuant to 28 U.S.C.
§ 1295(a)(1).
DISCUSSION
NanoVapor now appeals, arguing, inter alia, that the
district court erred in its determination of inventorship
and erred when it dismissed the case without deciding
whether Nathan and Matheson had an obligation to
assign their inventorship interests to NanoVapor. Vapor
Point appeals the district court’s denial of attorneys’ fees
VAPOR POINT LLC v. MOORHEAD 9
and its decision that the case is not exceptional. We
address each argument in turn.
A. Inventorship Order
“A person who alleges that he is a co-inventor of the
invention claimed in an issued patent who was not listed
as an inventor on the patent may bring a cause of action
to correct inventorship in a district court under 35 U.S.C.
§ 256.” Eli Lilly & Co. v. Aradigm Corp., 376 F.3d 1352,
1357 n.1 (Fed. Cir. 2004). Inventorship is a question of
law entitled to de novo review by this court. Gen. Elec.
Co. v. Wilkins, 750 F.3d 1324, 1329 (Fed. Cir. 2014). “On
appeal from a bench trial, we review a district court’s
decision for errors of law and clearly erroneous findings of
fact.” Trovan, Ltd. v. Sokymat SA, Irori, 299 F.3d 1292,
1301 (Fed. Cir. 2002); see also Preston v. Marathon Oil
Co., 684 F.3d 1276, 1287 (Fed. Cir. 2012). A factual
finding is clearly erroneous when, “although there is
evidence to support it, the reviewing court on the entire
evidence is left with the definite and firm conviction that
a mistake has been committed.” United States v. U.S.
Gypsum Co., 333 U.S. 364, 395 (1948).
NanoVapor argues, inter alia, that the district court’s
determinations on inventorship were not supported by
clear and convincing evidence. See Appellant’s Br. at 23–
30.
For the most part, we disagree. Given the evidence
adduced, we find that the district court was correct to
conclude that both Nathan and Matheson should be listed
as inventors on the ’310 patent, which is the only patent
asserted in NanoVapor’s infringement claim. All inven-
tors, even those who contribute to only one claim or one
aspect of one claim of a patent, must be listed on that
patent. See Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d
1456, 1460 (Fed. Cir. 1998) (“[A] co-inventor need not
make a contribution to every claim of a patent. A contri-
bution to one claim is enough.”) (citation omitted). The
10 VAPOR POINT LLC v. MOORHEAD
district court’s findings that Nathan contributed to three
of the four key aspects of the invention are supported by
substantial evidence. And, substantial evidence supports
the district court’s conclusion that Matheson contributed
to the conception of the use of diffusion plates, as recited
in claims 11 and 12 of the ’310 patent. While we agree
with NanoVapor that the district court erred in finding
that Matheson contributed to the conception of the use of
a particulatizer to create micro-sized VOC particles for
treatment and the use of diffusion plates to distribute
micro-sized particles across the vapor capture medium,
that error does not change the validity of the ultimate
judgment because Matheson was still properly found to be
an inventor of the diffusion plates. 2
These findings are sufficient to support the district
court’s inventorship judgment. Co-inventors need not
“physically work together or at the same time,” “make the
same type or amount of contribution,” or “make a contri-
2 Matheson admitted on cross-examination that the
use of a particulatizer was conceived before Matheson
joined the project, and no other evidence shows that
Matheson was involved in or copied on exchanges between
Moorhead and Nathan on that topic. While the district
court noted that “emails sent from Nathan to Moorhead
between January and March of 2007, include the concept
of introducing VOCs to the vapor capture medium as
micro-sized particles” and that “Nathan’s email messages
to Moorhead including text like ‘Another photo to keep
your spirits high!!’ and ‘pics from lab this AM’ support
[Vapor Point’s] theory that Nathan and Matheson con-
ceived of the need for micro-particles of VOCs,” Inventor-
ship Order at 21–22 (emphasis added), the emails do not
show that Matheson was copied on these exchanges, or
was ever aware of them.
VAPOR POINT LLC v. MOORHEAD 11
bution to the subject matter of every claim of the patent.”
35 U.S.C. § 116. “[I]nventorship is determined on a claim-
by-claim basis.” Trovan, 299 F.3d at 1302 (citing Ethicon,
135 F.3d at 1460).
Because we find that the district court’s conclusions
are supported by substantial evidence for both Nathan
and Matheson—for at least one of the claim elements—we
affirm the district court’s inventorship determinations
with respect to the ’310 patent.
B. Obligation to Assign
NanoVapor next claims that the district court erred
when it dismissed the action without first determining
whether Nathan and Matheson had an obligation to
assign their invention to NanoVapor. The district court
found that it need not resolve whether there was an
obligation to assign the patents because “[a]ll parties
understood that the evidentiary hearing would resolve the
issue of inventorship and would be dispositive of the
remaining infringement claim in the case.” Final Judg-
ment at 2, Vapor Point (S.D. Tex. Aug. 24, 2015), ECF No.
377. In other words, the district court found that
NanoVapor had waived its right to ask the court to decide
the assignment question. We agree.
While NanoVapor did assert that Nathan and Mathe-
son had an obligation to assign their rights to the inven-
tion, it did so only as an equitable affirmative defense to
Vapor Point’s state law claims. See Original Answer to
First Amended Complaint at ¶¶ 116–17, Vapor Point
(S.D. Tex. Aug. 30, 2013), ECF No. 155. As discussed
above, these state law claims were dismissed with preju-
dice. Order on Notice of Nonsuit of State Law Claims,
Vapor Point (S.D. Tex. Aug. 11, 2014), ECF No. 261. The
only remaining claims from Vapor Point’s complaint were
those seeking a correction of inventorship. And, “[i]t is
elementary that inventorship and ownership are separate
issues.” Beech Aircraft Corp. v. EDO Corp., 990 F.2d
12 VAPOR POINT LLC v. MOORHEAD
1237, 1248 (Fed. Cir. 1993); see also Ethicon, Inc. v. U.S.
Surgical Corp., 135 F.3d 1456, 1465 (Fed. Cir. 1998)
(“Questions of patent ownership are distinct from ques-
tions of inventorship.”). “[I]nventorship is a question of
who actually invented the subject matter claimed in a
patent. Ownership, however, is a question of who owns
legal title to the subject matter claimed in a patent,
patents having the attributes of personal property.” Id.
The parties agree that ownership is not an affirmative
defense to an inventorship claim under § 256. See, e.g.,
Appellant’s Response and Reply Br. at 3 (“ownership is
not an affirmative defense to inventorship”); Oral Arg. at
26:19–27:10, available at http://
oralarguments.cafc.uscourts.gov/default.aspx?fl=2015-
1801.mp3 (counsel for Vapor Point arguing that owner-
ship is not a defense to inventorship). The voluntary
dismissal of the state law claims mooted NanoVapor’s
affirmative defense that Nathan and Matheson had an
obligation to assign any rights in the ’310 patent to
NanoVapor.
NanoVapor went further by affirmatively represent-
ing to the district court that resolution of the inventorship
issue would dispose of the infringement issue. On August
29, 2014, the district court asked NanoVapor’s counsel
whether the trial to determine inventorship would “basi-
cally be the entire trial on the merits.” J.A. 1480. Coun-
sel for NanoVapor responded: inventorship “is ultimately
most likely dispositive of the other issue, now just in-
fringement, and ultimate willfulness at that point if it’s
decided against NanoVapor.” J.A. 1480–81; see also J.A.
392 (August 6, 2014 letter from NanoVapor’s counsel
seeking a status conference and representing that “the
only two issues remaining are inventorship and infringe-
ment.”). Inventorship is dispositive of infringement if and
only if NanoVapor waives its ownership by assignment
claim. Ultimately, the district court decided the inventor-
ship issue against NanoVapor when it determined that
VAPOR POINT LLC v. MOORHEAD 13
Nathan and Matheson were co-inventors. NanoVapor’s
clear representation that such a determination would be
“ultimately most likely dispositive” of the inventorship
issue is a waiver of any assertion of ownership of Nathan
and Matheson’s rights.
The district court did not err, therefore, in dismissing
the infringement claim with prejudice because “[a]ll
parties understood that the evidentiary hearing would
resolve the issue of inventorship and would be dispositive
of the remaining infringement claim in the case.” Final
Judgment at 2, Vapor Point (S.D. Tex. Aug. 24, 2015),
ECF No. 377.
EXCEPTIONAL CASE AND ATTORNEYS’ FEES
Vapor Point cross-appeals the district court’s deter-
mination that it is not entitled to attorneys’ fees and the
case is not exceptional. While we would have preferred a
written explanation for its decision, upon review of the
record, we do not find that the denial of Vapor Point’s
motion was an abuse of the district court’s discretion.
CONCLUSION
The district court’s ultimate determination on inven-
torship is supported by substantial evidence. NanoVapor
cannot now assert equitable defenses to claims that were
voluntarily dismissed. Moreover, NanoVapor waived its
right to pursue ownership under an obligation to assign
theory by explicitly representing that resolution of the
inventorship issue would resolve the infringement issue.
For the reasons discussed above, and because we find
each of NanoVapor’s additional arguments unpersuasive,
we affirm.
AFFIRMED
United States Court of Appeals
for the Federal Circuit
______________________
VAPOR POINT LLC, KEITH NATHAN, KENNETH
MATHESON,
Plaintiffs-Cross-Appellants
DON ALFORD, JEFFEREY ST. AMANT,
Counterclaim Defendants-Cross-Appellants
v.
ELLIOTT MOORHEAD, NANOVAPOR FUELS
GROUP, INC., BRYANT HICKMAN,
Defendants-Appellants
______________________
2015-1801, 2015-2003
______________________
Appeals from the United States District Court for the
Southern District of Texas in No. 4:11-cv-04639, Judge
Vanessa D. Gilmore.
______________________
O’MALLEY, Circuit Judge, concurring.
I agree that the district court’s conclusions on inven-
torship are, as detailed in the majority opinion, supported
by substantial evidence. I also agree that, by the stipu-
lated dismissal of all state law claims and through its
representations to the district court, NanoVapor’s counsel
waived its right to an additional hearing on whether it
has the right to assert ownership over the patent interests
of Nathan and Matheson. I write separately, however,
because I believe that, even if we did not find waiver, 35
2 VAPOR POINT LLC v. MOORHEAD
U.S.C. § 261 requires NanoVapor to demonstrate that any
assignment of patent rights was executed in writing,
which it undeniably cannot do. NanoVapor’s admission
that no writing exists should render unnecessary its
request for an evidentiary hearing to determine if Nathan
and Matheson had an obligation to assign their interests
in the ’310 patent to NanoVapor. Without an assignment
in writing, Nathan and Matheson could not give
NanoVapor legal title to the patents sufficient to maintain
standing in a patent infringement suit for money damag-
es. To the extent Teets v. Chromalloy Gas Turbine Corp.,
83 F.3d 403 (Fed. Cir. 1996) and its progeny are to the
contrary, this court should consider overruling that prec-
edent when presented with the question in a case where
the issue is determinative of the outcome.
DISCUSSION
35 U.S.C. § 261 provides that “[a]pplications for pa-
tent, patents, or any interest therein, shall be assignable
in law by an instrument in writing.” This is an explicit
statutory requirement that “all assignments of patent
interest be in writing.” Sky Techs. LLC v. SAP AG, 576
F.3d 1374, 1379 (Fed. Cir. 2009). The “in-writing” re-
quirement for patent assignment goes back at least as far
as the Patent Act of 1836, noting that “assign-
ment[s] . . . shall be recorded in the Patent Office within
three months from the execution thereof.” Patent Act of
1836, ch. 357, § 11, 5 Stat. 117 (where recordation re-
quires a writing); see also Patent Act of 1870, ch. 230,
§ 36, 16 Stat. 198 (codified as amended in 1874 as R.S.
§ 4898) (“[E]very patent or any interest therein shall be
assignable in law, by an instrument in writing . . . .”);
Blakeney v. Goode, 30 Ohio St. 350, 355 (1876) (“[S]uch
contracts must be in writing as affect the title to the
patent; other contracts, which affect equitable interests,
may be by parol.”).
VAPOR POINT LLC v. MOORHEAD 3
In assessing whether an attempted assignment is suf-
ficient to transfer title or ownership, courts must look to
whether the parties can satisfy this “in-writing” require-
ment. Abbott Point of Care Inc. v. Epocal, Inc., 666 F.3d
1299, 1302 (Fed. Cir. 2012) (“Transfers of title, otherwise
known as assignments, are controlled by 35 U.S.C.
§ 261 . . . .”). Without a written assignment that satisfies
§ 261, a party who is not the inventor simply lacks stand-
ing to bring a patent infringement suit for money damag-
es. Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245, 1250
(Fed. Cir. 2000) (holding that a “written instrument” was
needed to document the “transfer of proprietary rights” to
support standing to sue for patent infringement) (citing
35 U.S.C. § 261). Our case law, in most cases, reflects this
apparently inviolable rule.
We have written, for example, that, although a license
may be written, verbal, or implied, if a license is to confer
standing it must be written so as to “resemble an assign-
ment in both form and substance” to prevent parties from
“engag[ing] in revisionist history, circumventing the
certainty provided by the writing requirement of section
261 by claiming to be patentee by virtue of a verbal licens-
ing arrangement.” Enzo APA & Son, Inc. v. Geapag A.G.,
134 F.3d 1090, 1093 (Fed. Cir. 1998). And while this
court has acknowledged that patent ownership may be
transferred by “operation of law” rather than through a
written assignment—such as by way of inheritance, see
Sky Techs., 576 F.3d at 1379—§ 261 applies where an
employer claims an employee had an obligation to assign
his or her rights in an invention to the employer.
In Teets, however, a panel of this court held that the
“in-writing” requirement of § 261 can be ignored. In that
case, the district court found that Teets solely owned the
invention-at-issue and granted him an injunction against
his employer Chromalloy, who appealed. A panel of this
court resolved the conflict between the litigants on two
separate theories: the shop right doctrine and an implied-
4 VAPOR POINT LLC v. MOORHEAD
in-fact contract. See 83 F.3d at 407, 408–09. This court
first found that Chromalloy had a shop right, which
“permits the employer to use the employee’s invention
without liability for infringement.” Teets, 83 F.3d at 407.
This would have been sufficient to end the inquiry on
appeal—Teets could not obtain an injunction against his
employer if the employer has a valid shop right, an equi-
table claim to use the invention. The panel further re-
solved the matter, however, by holding (1) that “an
employee may . . . freely consent by contract to assign all
rights in inventive ideas to the employer”—which is
certainly a correct statement of law—and (2) even “with-
out such an express assignment,” an employer may prove
the “existence of an implied-in-fact contract to assign
inventive rights” under state law principles. This is
where the Teets decision becomes irreconcilable with
§ 261. Id. at 407–08. Even with “no express agreement of
any kind with Teets,” the panel not only vacated the
injunction against Chromalloy, but also reversed the
district court’s determination that Teets owned all rights
in the patent-in-suit. It did so, moreover, without so
much as a nod to the language of § 261. Id. at 409.
But § 261 cannot be ignored or rendered inapplicable
by contrary state law contract principles. Section 261 is a
federal statute that must prevail even where state law
would otherwise allow a court to find and enforce a non-
written agreement between the parties. See Sky Techs.,
576 F.3d at 1379 (“Usually, federal law is used to deter-
mine the validity and terms of an assignment, but state
law controls any transfer of patent ownership by opera-
tion of law not deemed an assignment.”); DDB Techs.,
L.L.C. v. MLB Advanced Media, L.P., 517 F.3d 1284, 1290
(Fed. Cir. 2008) (“Although state law governs the inter-
pretation of contracts generally, the question of whether a
patent assignment clause creates an automatic assign-
ment or merely an obligation to assign is intimately
bound up with the question of standing in patent cases.
VAPOR POINT LLC v. MOORHEAD 5
We have accordingly treated it as a matter of federal
law.”) (citation omitted); Enzo, 134 F.3d at 1093 (Fed. Cir.
1998) (holding that a plaintiff lacked standing to file suit
because the purported license is not in writing, as re-
quired by federal law); see also In re CFLC, Inc., 89 F.3d
673, 679 (9th Cir. 1996) (“[F]ederal law governs the
assignability of patent licenses because of the conflict
between federal patent policy and state laws, such as
California’s, that would allow assignability.”); PPG In-
dus., Inc. v. Guardian Indus. Corp., 597 F.2d 1090, 1093
(6th Cir. 1979) (“Questions with respect to the assignabil-
ity of a patent license are controlled by federal law.”);
Unarco Indus., Inc. v. Kelley Co., 465 F.2d 1303, 1306 (7th
Cir. 1972) (“We are of the opinion that the question of
assignability of a patent license is a specific policy of
federal patent law dealing with federal patent law. There-
fore, we hold federal law applies to the question of the
assignability of the patent license in question.”). A feder-
al statute on the law of assignments simply trumps
contrary state law.
While it is true that state law principles give rise to
the equitable shop rights Teets addressed in the first
portion of its judgment, state law cannot create standing
where federal law prohibits it. Teets’ holding to the
contrary is wrong.
In this case, NanoVapor conceded to the district court
that it lacked an executed written instrument and con-
ceded again at oral argument before this court that the
non-executed document on which it relies is neither a
writing under § 261 nor contains an assignment clause.
At the inventorship hearing, the district judge asked
counsel for NanoVapor whether Nathan and Matheson
were employees of NanoVapor and, in particular, whether
they had written employment agreements. The following
exchange took place:
6 VAPOR POINT LLC v. MOORHEAD
THE COURT: You guys had written employment
agreements?
MR. RAMEY: Yes, your Honor. They weren’t ac-
tually signed by Mr. Matheson or Mr.—well, Mr.
Nathan signed a prospective hire agreement but
Mr. Matheson didn't even sign that. At that
point, it was just the NDAs that had been signed.
But they had—and the parties—the big point here
is the parties were operating under them.
J.A. 731 (emphasis added). During Nathan’s redirect
examination, Nathan confirmed that he never signed an
employment agreement:
Q Were you ever proffered an employment agree-
ment from NanoVapor?
A I was given employment agreements. I never
signed any of them.
Q Do you recall how many employment agree-
ments you were given?
A Three, maybe four.
J.A. 988 (emphasis added). In its Motion for a New Trial,
NanoVapor stated that, while it was undisputed “that
Nathan and Matheson intended to sign [the employment]
agreements when NanoVapor was funded,” “as
NanoVapor was unable to secure funding by December 18,
2007, Nathan and Matheson did not sign the employment
agreements and left NanoVapor.” NanoVapor’s Motion
for a New Trial at 4, Vapor Point (S.D. Tex. Apr. 3, 2015),
ECF No. 330. And at oral argument in front of this court,
counsel for NanoVapor again confirmed the absence of
any written instrument assigning Nathan and Matheson’s
ownership rights to NanoVapor. Oral Arg. at 01:56–
02:15.
During oral argument, NanoVapor contended that,
even without a signed employment agreement, this court
VAPOR POINT LLC v. MOORHEAD 7
should nevertheless remand for additional proceedings on
ownership and infringement because “the courts can
recognize that the person that was hired was operating
pursuant to an employment agreement [under] Fifth
Circuit law . . . that they were performing according to the
terms of that employment agreement and that employ-
ment agreement maintained that they had an obligation
to assign.” Id. at 04:24–04:51. But NanoVapor immedi-
ately conceded that, whether executed or not, the em-
ployment agreement at issue had no obligation-to-assign
clause. Id. at 05:03–05:24. NanoVapor’s interpretation of
the law of assignment would, moreover, undermine § 261
by conflating the requirements for an assignment suffi-
cient to establish legal title that gives rise to standing to
assert an infringement claim with those that merely give
rise to equitable title under the hired-to-invent and shop
right doctrines.
The Supreme Court has explained that the hired-to-
invent assignment is an equitable one:
If one is employed to devise or perfect an instru-
ment, or a means for accomplishing a prescribed
result, he cannot, after successfully accomplishing
the work for which he was employed, plead title
thereto as against his employer. That which he
has been employed and paid to accomplish be-
comes, when accomplished, the property of his
employer.
Solomons v. United States, 137 U.S. 342, 346 (1890)
(emphasis added); see also Standard Parts Co. v. Peck,
264 U.S. 52, 59–60 (1924) (holding that an independent
contractor engaged to “devote his time to the development
of a process and machinery” to solve a particular problem
for compensation had no legal right to a patent on the
inventions he develops in that employment absent a
contract to the contrary). Under the so-called hired-to-
invent doctrine, therefore, an employer may have an
8 VAPOR POINT LLC v. MOORHEAD
equitable right to practice the claims of the patent by
virtue of the employment relationship. That equitable
right protects an employer from a claim of patent in-
fringement by its employee, but does not operate to trans-
fer legal title in the patent.
The shop right doctrine is similar. When an employee
invents under the auspices of an employer, the employer
will, at a minimum, have an implied right to use that
invention.
[W]hen one is in the employ of another in a cer-
tain line of work, and devises an improved method
or instrument for doing that work, and uses the
property of his employer and the services of other
employes to develop and put in practicable form
his invention, and explicitly assents to the use by
his employer of such invention, a jury, or a court,
trying the facts, is warranted in finding that he
has so far recognized the obligations of service
flowing from his employment and the benefits re-
sulting from his use of the property, and the assis-
tance of the co-employes, of his employer, as to
have given to such employer an irrevocable license
to use such invention.
Solomons, 137 U.S. at 346. In this way, the concept of an
equitable defense to an infringement claim merges with
the shop right doctrine, which itself arises from the fact
that the work done was for hire. This court has recog-
nized shop rights as providing an employer a right to use
its employee’s invention without subjecting itself to
liability for infringement. In Teets itself, for example, this
court noted:
Consistent with the presumption that the inven-
tor owns his invention, an individual owns the pa-
tent rights even though the invention was
conceived and/or reduced to practice during the
course of employment. At the same time, howev-
VAPOR POINT LLC v. MOORHEAD 9
er, the law recognizes that employers may have
an interest in the creative products of their em-
ployees. For example, an employer may obtain a
shop right in employee inventions where it has
contributed to the development of the invention.
A shop right permits the employer to use the em-
ployee’s invention without liability for infringe-
ment.
Teets, 83 F.3d at 407 (citations omitted).
In Gellman v. Telular Corp., 2011 WL 5966666 (Fed.
Cir. 2011) (nonprecedential), moreover, this court clarified
the equitable nature of the shop right and hired-to-invent
doctrines. This court affirmed the dismissal of an in-
fringement action brought by Ms. Gellman, the widow of
one of the named inventors on the patent-in-suit. This
was because Ms. Gellman failed to prove that the other
co-inventor, an alleged employee of her late husband who
had not joined the suit, had assigned his rights in the
patent to her. The court wisely noted:
[E]quitable claims [of patent ownership] do not
themselves confer standing. . . . Courts have in
some cases held that the inventions of an employ-
ee hired to make that invention fairly belong to
the employer. But this doctrine is expressly equi-
table, and creates only an obligation for the em-
ployee to assign to his employer. It cannot save
Ms. Gellman’s case. . . . For the foregoing reasons,
the district court did not err in dismissing without
prejudice Ms. Gellman’s case for lack of standing.”
Id. at *3 (citations omitted). But equitable title is not
sufficient to confer standing to pursue money damages in
a patent infringement suit. “The general rule is that one
seeking to recover money damages for infringement of a
United States patent (an action ‘at law’) must have held
the legal title to the patent during the time of the in-
fringement.” Arachnid, Inc. v. Merit Indus., Inc., 939 F.2d
10 VAPOR POINT LLC v. MOORHEAD
1574, 1579 (Fed. Cir. 1991) (citing Crown Die & Tool Co.
v. Nye Tool & Mach. Works, 261 U.S. 24, 40–41 (1923)).
In this case, if Nathan and Matheson asserted a claim
of infringement against NanoVapor—they did not—
NanoVapor could have asserted equitable defenses under
these doctrines. See Banks v. Unisys Corp., 228 F.3d 1357
(Fed. Cir. 2000) (applying hired-to-invent doctrine as an
equitable defense); Teets, 83 F.3d 403 (applying shop right
doctrine as an equitable defense). But where, as here, the
question of affirmative standing to sue in the absence of
named inventors is at issue, compliance with § 261 is
mandatory. Any judicially crafted exception must bend
under the unconditional language of § 261. NanoVapor’s
argument that Nathan and Matheson had an obligation to
assign their rights to the ’310 patent, therefore, first
requires the production of a written instrument reflecting
such an assignment. Only then could NanoVapor pursue
its infringement claims.
CONCLUSION
Accordingly, as NanoVapor concedes it cannot adduce
an executed assignment consistent with the requirements
of § 261, and never sought a court order requiring a
written assignment before asserting its infringement
claims, those claims must be dismissed. Nathan and
Matheson—along with Moorhead—currently hold legal
title to the ’310 patent and held legal title at the time suit
commenced. As co-inventors on the ’310 patent, Nathan
and Matheson are entitled to practice the invention
without fear of suit from the other inventors, and vice
versa. Dismissal of the infringement claims against
Vapor Point was, thus, appropriate for this reason as well
as those explained in our majority opinion. To the extent
Teets indicates that it is appropriate for a court to identify
an implied-in-fact contract as a basis for an assignment of
patent ownership rights that gives rise to standing to seek
money damages for patent infringement in the absence of
VAPOR POINT LLC v. MOORHEAD 11
a writing, we should undo that impermissible exception to
the otherwise unconditional language of § 261 as soon as
the appropriate opportunity arises.