Heden v. Hill

937 F. Supp. 1222, 1996 U.S. Dist. LEXIS 11629, 1996 WL 465328
CourtDistrict Court, S.D. Texas
DecidedJune 28, 1996
DocketNo. H-94-cv-4095
StatusPublished
Cited by1 cases

This text of 937 F. Supp. 1222 (Heden v. Hill) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Heden v. Hill, 937 F. Supp. 1222, 1996 U.S. Dist. LEXIS 11629, 1996 WL 465328 (S.D. Tex. 1996).

Opinion

ORDER OF ADOPTION

HITTNER, District Judge.

This court has reviewed the Memorandum and Recommendation of the United States Magistrate Judge signed March 8, 1996. The court finds the Memorandum and Recommendation should be, and the same is hereby, adopted as the court’s Memorandum and Order. Accordingly, it is

ORDERED that the Motion of Defendant Groves to Dismiss Count One of Plaintiffs Petition is GRANTED IN PART and DENIED IN PART.

With respect to Heden’s request for Groves to be directed to remove defendant Dale Hill’s name from all papers in the application for the patent to ensure that the issued patent will fully attribute Heden as sole inventor, Groves’s motion to dismiss is GRANTED. Groves’s motion to dismiss is DENIED with regard to Heden’s request for a declaratory judgment that he is the sole inventor of the subject matter of the patent at issue in this case.

The Clerk shall enter this Order and provide a copy to all parties.

MEMORANDUM AND RECOMMENDATION

CRONE, United States Magistrate Judge.

I. Introduction

Pending before the Court is Defendant D. Arlon Groves’s (“Groves”) Motion to Dismiss Count One of Plaintiff’s Second Amended Petition, or in the Alternative, For Partial Summary Judgment (# 102).

Having reviewed the pending motion, the pleadings, the submissions of the parties, and the applicable law, this court is of the opinion that Groves’s motion should be granted in part and denied in part. With respect to [1224]*1224Plaintiff Donald G. Heden’s (“Heden”) request that Groves be directed to remove defendant Dale Hill’s (“Hill”) name from all papers in the application for the patent to ensure that the issued patent will fully attribute Heden as sole inventor, Groves’s motion to dismiss should be granted. With regard to Heden’s request for a declaratory judgment that he is the sole inventor of the subject matter of the patent at issue, Groves’s motion should be denied.

II. Background

According to Heden’s complaint, at some time before 1988, he created a new design for a round-bottom, dump truck body/trailer made of aluminum. In confidence, Heden disclosed to Hill, who was in the trailer manufacturing business, his allegedly revolutionary trailer design. In 1988, Heden and Hill agreed to develop as equal partners, a venture to manufacture Heden’s design. Hill was to be responsible for obtaining and/or providing sufficient capital for the set up of a new company to manufacture, market, and sell commercial units of the invention. In late 1988 and early 1989, Hill requested that Joseph Nowiczewski (“Nowiczewski”) and Robert J. Adam (“Adam”) be included as equal owners to finance the venture.

In 1989, Heden, Hill, Nowiczewski, and Adam agreed to incorporate the proposed business under the name Ultra Lite Manufacturing, Inc. (“Ultra Lite”). Articles of Incorporation were filed on April 5, 1989, with the Texas Secretary of State, creating four classes of stock, with each owner to receive a different class: 10,000 class A shares to Hill; 10,000 class B shares to Now-iczewski; 10,000 class C shares to Heden; and, 10,000 class D shares to Adam. Nowic-zewski was President of Ultra Lite. Adam was ultimately named Chairman of the Board, and Hill was the Chief Executive Officer. At some point in 1989, Heden retained Neal J. Mosely (“Mosely”), a patent attorney, to pursue an application for a patent on his creation and design.

According to Heden, a significant amount of money was spent on improving the fabrication plant on Sellers Road, between May and September 1989. The plant was owned by Nowiczewski and leased to Ultra Lite. Numerous dump truck bodies and trailers, using Heden’s design, were fabricated and sold from March 1989 to June 1990. In the Summer of 1990, Ultra Lite began to suffer financial problems, which according to He-den, resulted from wasteful spending of corporate assets by Nowiczewski and Hill. He-den further claims that Adam failed to fulfill his investment commitment of $100,000.00 in the corporation. Ultimately, the fabrication plant was shut down, and the business was closed due to a lack of funds.

Heden contends that despite the fact he was a named director, several meetings were held by Hill, Adam, and Nowiczewski, without Heden being notified or invited. According to Heden, the meetings were held to discuss a plot to close the company, send it into bankruptcy, and sell the assets of Ultra Lite, including the patent rights, to Hill. Heden alleges that one such meeting was held on August 20, 1990. Shortly after this meeting, Heden claims that Hill sought the assistance of an attorney, Groves.

On October 30, 1990, Groves contacted Mosely by letter requesting files relating to the dump trailer/dump body invention, including the patent application. Groves represented in the letter that his office had been engaged by Ultra Lite for the purpose of obtaining the files. Groves stated in the letter that this was necessitated by Mosely’s failure to deliver the files when requested by Nowiczewski, the President of Ultra Lite. Mosely responded by letter on November 1, 1990, stating that he considered Heden to be his client, not Ultra Lite. Mosely declined to release the files unless jointly instructed by Heden and Ultra Lite as to their disposition. Mosely also stated in the letter that if he did not have a joint resolution of the matter or a withdrawal of Groves’s claim to the files by November 9,1990, he would turn the files over to the court and file an action for interpleader and declaratory judgment. On November 6, Heden authorized Mosely by facsimile to release the files to Ultra Lite. Heden specifically stated in his authorization that he did not give Ultra Lite or any of its stockholders any right of ownership to any of his intellectual property or any of his in[1225]*1225terest or claims to the ownership of the dump truck design or any other designs. After Mosely released the files to Groves, Heden alleges that Groves changed the application from a sole inventorship application in Heden’s name to a joint inventorship application naming Hill first and Heden second, without consulting with Heden or investigating the true inventorship of the design. Subsequently, on January 18, 1991, Groves mailed the application to the Patent and Trademark Office (“PTO”).

Heden alleges that Hill sought the assistance of Groves to exploit Heden’s invention. On January 14, 1991, Groves incorporated Alumatech, Inc. (“Alumatech”). According to Heden, Hill was the sole owner of Aluma-tech at the time of incorporation. Groves was listed as the initial and sole director of Alumatech. One of Alumatech’s purposes, found in its Articles of Incorporation,- was “[t]o manufacture, have manufactured, market, sell, advertise and otherwise promote lightweight, high strength, eontainer/trans-porter systems such as trailers.... ”

In November 1990, Ultra Lite filed for Chapter 7 bankruptcy protection. Heden contends that Hill made a proposal to Nowic-zewski and Adam to buy all of the assets of Ultra Lite in January or February 1991. According to Heden, this proposal included a plan for the sale of the corporation’s ownership interests in all assignments of patent rights it might have.

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Bluebook (online)
937 F. Supp. 1222, 1996 U.S. Dist. LEXIS 11629, 1996 WL 465328, Counsel Stack Legal Research, https://law.counselstack.com/opinion/heden-v-hill-txsd-1996.