Correcting Inventorship in Pending Application Cannot Be Done in District Court

Client Alert

In Pappalardo v. Stevins, the Federal Circuit affirmed the dismissal of a declaratory judgment action filed in federal court by a person requesting to be named the sole inventor on a pending patent application, ruling that such an action could not be filed until after a patent is issued from the application.

Michael Pappalardo sued Samantha Stevins in district court, requesting a declaratory judgment naming him the sole inventor of U.S. Patent Application SN 15/275,597 (“the ’597 application”). The district court granted Stevins’ motion to dismiss for absence of subject matter jurisdiction. Pappalardo appealed, and the Federal Circuit remanded to the district court with orders to dismiss the declaratory judgment action with prejudice.

Pappalardo met Stevins at a pharmaceutical products trade show and described to her his idea for a new product. Pappalardo alleged Stevins untruthfully stated that she had investors for the product, and she agreed to work with Pappalardo to commercialize it. Stevins recommended filing the ’597 application, which named Stevins as a joint inventor with Pappalardo.

Pappalardo alleged Stevins tried to independently exploit his technology, and he sued Stevins, requesting a declaratory judgment for sole inventorship of the ’597 application. The district court dismissed the declaratory judgment action on the basis that it lacked jurisdiction to correct inventorship of a pending patent application, citing 35 U.S.C. § 256.

On appeal, Pappalardo argued that the district court erred in dismissing his claim for sole inventorship because correction of inventorship provides federal question subject matter jurisdiction. The Federal Circuit agreed with the district court that Pappalardo’s declaratory judgment claim should be dismissed—however, for different reasons. While the district court dismissed the case for lack of subject matter jurisdiction without prejudice, the Federal Circuit held that the district court “should have instead dismissed the claim with prejudice for failure to state a claim for plausible relief pursuant to Rule 12(b)(6).”

The Federal Circuit explained that the district court had subject matter jurisdiction over Pappalardo’s declaratory judgment claim because a district court’s jurisdiction encompasses “any civil action arising under any Act of Congress relating to patents.” The Supreme Court has explained that this jurisdiction includes “cases in which a well-pleaded complaint establishes either that federal patent law creates the cause of action or that the plaintiff’s right to relief necessarily depends on the resolution of a substantial question of federal patent law.” The court observed that Pappalardo sought declaratory judgment under state law that Stevins dishonestly filed a declaration with the U.S. Patent and Trademark Office that she was a joint inventor of the invention claimed in the ’597 application, and that he should instead be declared the sole inventor. However, the court explained that because Pappalardo’s inventorship claim fell under federal law, 35 U.S.C. § 256, the court interpreted Pappalardo’s claim as an action for correction of inventorship. Accordingly, the district court did have subject matter jurisdiction “[b]ecause inventorship is a unique question of patent law.”

However, the court agreed with the district court’s dismissal because Pappalardo’s claim “fails to allege a cause of action upon which relief can be granted. A § 256 claim for correction of inventorship does not accrue until the patent issues.” In addition, the court explained, there were no other causes of action to contest inventorship of a pending patent application. According to the court:

Should a patent issue from the ’597 application, nothing prevents Pappalardo from seeking declaratory judgment relief on a correction of inventorship claim at that time. . . . At this time, however, Pappalardo’s claim must be dismissed with prejudice pursuant to Rule 12(b)(6).

Accordingly, the court remanded to the district court with orders to dismiss the request to correct inventorship with prejudice.

Why it matters: This case reiterates that federal courts only have jurisdiction for correction of inventorship when the patent issues. Prior to patent issuance, correction of inventorship can only be handled by the U.S. Patent and Trademark Office.

Click here to read the Federal Circuit’s decision in Pappalardo v. Stevins.

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Irah Donner is a partner in Manatt’s intellectual property practice and is the author of Patent Prosecution: Law, Practice, and Procedure, Tenth Edition, With 2018 Supplement published by Bloomberg BNA. This case analysis will be included in the next edition of the treatise.

Irah’s practice concentrates on patent prosecution, technology audits, intellectual property (IP) transactional due diligence, transactional work including licensing and development agreements, and litigation support. Irah provides counseling and advice about using IP as a strategic tool to drive innovation and technological developments so clients—such as startups, fintech companies, financial institutions and the like—can expand and defend their competitive positions and realize the highest value from their IP assets.