OPINION AND ORDER
SPRIZZO, District Judge:
In this action, the plaintiff seeks a judgment pursuant to 35 U.S.C. § 256 (1982) declaring him the joint inventor of the invention claimed in United States Patent
Nos. 4,197,781 (“the ’781 patent”) and 4,274,324 (“the ’324 patent”), and an order directing the Commissioner of Patents and Trademarks to correct the patents accordingly. These patents were issued to defendant Louis N. Giannuzzi and licensed to the defendant Rawlplug Company (“Rawl-plug”).
The defendants move for summary judgment on the grounds of res judicata and judicial estoppel. The plaintiff cross-moves for summary judgment, asserting collateral estoppel in his favor. For the reasons that follow, the defendants’ motion is denied. The Court certifies for interlocutory appeal the order denying the defendants’ motion for summary judgment on the ground of res judicata. The plaintiff’s motion is denied.
BACKGROUND
The parties to this action have been adversaries for most of this decade. The history of this case is detailed in
McSherry v. Giannuzzi,
227 U.S.P.Q. 868 (Bd. of Pat. App. & Int.1985),
aff'd,
790 F.2d 95 (Fed. Cir.1986), and
Mechanical Plastics Corp. v. Rawlplug Co.,
119 A.D.2d 641, 501 N.Y.S.2d 85 (2d Dep’t 1986). The following brief summary is taken substantially from these two opinions.
On December 9, 1975, McSherry entered into a written consulting agreement with Die Cast & Forge Company (“Die Cast”), a wholly owned affiliate of the defendant Rawlplug. Rawlplug guaranteed the performance of Die Cast.
See McSherry, supra,
227 U.S.P.Q. at 870; Affidavit of Thomas W. McSherry (“McSherry Aff.”), Ex. F. Pursuant to the agreement, McSherry was to develop and design new products and improve old ones for Die Cast. Die Cast was granted the exclusive right and license to manufacture, use and sell any invention developed by McSherry under the agreement. If Die Cast failed to exercise this right within four years of the time an invention was disclosed to it, all rights to the invention reverted to McSher-ry. In return, McSherry was entitled to royalties, which were calculated by a percentage of the gross selling price of the products invented by McSherry.
See
McSherry Aff., Ex. F.
During his employment with Die Cast, McSherry invented a plastic wall anchor, referred to by the parties as the “C6 anchor.” The C6 anchor was disclosed by McSherry to Die Cast, and specifically to the defendant Louis N. Giannuzzi, an employee of Die Cast who had worked with McSherry.
See McSherry, supra,
227 U.S. P.Q. at 870. In September 1977, the relationship between McSherry and Die Cast was terminated, and McSherry was allegedly informed by Die Cast that it did not intend to market the C6 or obtain a patent thereon.
See Mechanical Plastics, supra,
119 A.D.2d at 641, 501 N.Y.S.2d at 87. Thereafter, Giannuzzi applied for patents in his own name as sole inventor of a wall anchor that has been designated the “Poly-toggle.” Patents claiming this device were issued to Giannuzzi as sole inventor in 1980 and 1981.
See supra
note 1. These patents have been licensed to Rawlplug.
In 1979, Die Cast and Rawlplug began to manufacture and market the Polytoggle. In 1981, McSherry, believing that the Poly-toggle anchor was substantially the same as his C6 anchor, precipitated an interference proceeding in the Patent and Trademark Office between his C6 anchor patent
application
and the ’324 patent.
See
McSherry Aff. at ¶¶ 7-8. In this interference proceeding, McSherry asserted that he, and not Giannuzzi, was the sole first inventor of the anchor, and that the patent should name him as sole inventor.
See Mechanical Plastics, supra,
119 A.D.2d at 642, 501 N.Y.S.2d at 87; McSherry Aff. at 117 & Ex. L. The Board of Patent Appeals and Interferences (the “Board”) found in favor of Giannuzzi, and awarded him priority of invention.
McSherry, supra,
227 U.S.P.Q. at 874.
This decision was affirmed by the Court of Appeals for the Federal Circuit.
McSherry then filed this action pursuant to 35 U.S.C. § 256 (1982)
to have his name added to Giannuzzi’s patents as a joint inventor of the Polytoggle. The defendants moved to dismiss the complaint on the ground that it failed to state a cause of action or alternatively for summary judgment on the ground that the action was barred by the doctrine of collateral estop-pel. The motion to dismiss was granted by order dated November 9, 1987, and the plaintiff was directed to file an amended complaint. The amended complaint was filed on November 12, 1987.
DISCUSSION
A.
Res Judicata
The defendants first assert that the prior decision of the Board of Patent Appeals and Interferences in
McSherry v. Giannuzzi, supra,
bars the plaintiff from bringing this action. Specifically, the defendants argue that because McSherry did not raise the joint inventorship issue during the interference proceeding, he is precluded by the doctrine of res judicata from raising this issue now.
"Under the doctrine of
res judicata,
or claim preclusion, a ‘final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or
could have been raised in that action.’
”
Fay v. South Colonie Central School District,
802 F.2d 21, 28 (2d Cir.1986) (quoting
Federated Department Stores v. Moitie,
452 U.S. 394, 101 S.Ct. 2424, 69 L.Ed.2d 103 (1981)) (emphasis added);
see Young Engineers, Inc. v. ITC,
721 F.2d 1305, 1314 (Fed.Cir.1983). It is therefore essential to a res judicata bar that the litigant against whom it is asserted would have faced no procedural barriers to the assertion of the claim in the earlier action.
See Young Engineers, supra,
721 F.2d at 1314-15.
Thus,
[t]he general rule ...
Free access — add to your briefcase to read the full text and ask questions with AI
OPINION AND ORDER
SPRIZZO, District Judge:
In this action, the plaintiff seeks a judgment pursuant to 35 U.S.C. § 256 (1982) declaring him the joint inventor of the invention claimed in United States Patent
Nos. 4,197,781 (“the ’781 patent”) and 4,274,324 (“the ’324 patent”), and an order directing the Commissioner of Patents and Trademarks to correct the patents accordingly. These patents were issued to defendant Louis N. Giannuzzi and licensed to the defendant Rawlplug Company (“Rawl-plug”).
The defendants move for summary judgment on the grounds of res judicata and judicial estoppel. The plaintiff cross-moves for summary judgment, asserting collateral estoppel in his favor. For the reasons that follow, the defendants’ motion is denied. The Court certifies for interlocutory appeal the order denying the defendants’ motion for summary judgment on the ground of res judicata. The plaintiff’s motion is denied.
BACKGROUND
The parties to this action have been adversaries for most of this decade. The history of this case is detailed in
McSherry v. Giannuzzi,
227 U.S.P.Q. 868 (Bd. of Pat. App. & Int.1985),
aff'd,
790 F.2d 95 (Fed. Cir.1986), and
Mechanical Plastics Corp. v. Rawlplug Co.,
119 A.D.2d 641, 501 N.Y.S.2d 85 (2d Dep’t 1986). The following brief summary is taken substantially from these two opinions.
On December 9, 1975, McSherry entered into a written consulting agreement with Die Cast & Forge Company (“Die Cast”), a wholly owned affiliate of the defendant Rawlplug. Rawlplug guaranteed the performance of Die Cast.
See McSherry, supra,
227 U.S.P.Q. at 870; Affidavit of Thomas W. McSherry (“McSherry Aff.”), Ex. F. Pursuant to the agreement, McSherry was to develop and design new products and improve old ones for Die Cast. Die Cast was granted the exclusive right and license to manufacture, use and sell any invention developed by McSherry under the agreement. If Die Cast failed to exercise this right within four years of the time an invention was disclosed to it, all rights to the invention reverted to McSher-ry. In return, McSherry was entitled to royalties, which were calculated by a percentage of the gross selling price of the products invented by McSherry.
See
McSherry Aff., Ex. F.
During his employment with Die Cast, McSherry invented a plastic wall anchor, referred to by the parties as the “C6 anchor.” The C6 anchor was disclosed by McSherry to Die Cast, and specifically to the defendant Louis N. Giannuzzi, an employee of Die Cast who had worked with McSherry.
See McSherry, supra,
227 U.S. P.Q. at 870. In September 1977, the relationship between McSherry and Die Cast was terminated, and McSherry was allegedly informed by Die Cast that it did not intend to market the C6 or obtain a patent thereon.
See Mechanical Plastics, supra,
119 A.D.2d at 641, 501 N.Y.S.2d at 87. Thereafter, Giannuzzi applied for patents in his own name as sole inventor of a wall anchor that has been designated the “Poly-toggle.” Patents claiming this device were issued to Giannuzzi as sole inventor in 1980 and 1981.
See supra
note 1. These patents have been licensed to Rawlplug.
In 1979, Die Cast and Rawlplug began to manufacture and market the Polytoggle. In 1981, McSherry, believing that the Poly-toggle anchor was substantially the same as his C6 anchor, precipitated an interference proceeding in the Patent and Trademark Office between his C6 anchor patent
application
and the ’324 patent.
See
McSherry Aff. at ¶¶ 7-8. In this interference proceeding, McSherry asserted that he, and not Giannuzzi, was the sole first inventor of the anchor, and that the patent should name him as sole inventor.
See Mechanical Plastics, supra,
119 A.D.2d at 642, 501 N.Y.S.2d at 87; McSherry Aff. at 117 & Ex. L. The Board of Patent Appeals and Interferences (the “Board”) found in favor of Giannuzzi, and awarded him priority of invention.
McSherry, supra,
227 U.S.P.Q. at 874.
This decision was affirmed by the Court of Appeals for the Federal Circuit.
McSherry then filed this action pursuant to 35 U.S.C. § 256 (1982)
to have his name added to Giannuzzi’s patents as a joint inventor of the Polytoggle. The defendants moved to dismiss the complaint on the ground that it failed to state a cause of action or alternatively for summary judgment on the ground that the action was barred by the doctrine of collateral estop-pel. The motion to dismiss was granted by order dated November 9, 1987, and the plaintiff was directed to file an amended complaint. The amended complaint was filed on November 12, 1987.
DISCUSSION
A.
Res Judicata
The defendants first assert that the prior decision of the Board of Patent Appeals and Interferences in
McSherry v. Giannuzzi, supra,
bars the plaintiff from bringing this action. Specifically, the defendants argue that because McSherry did not raise the joint inventorship issue during the interference proceeding, he is precluded by the doctrine of res judicata from raising this issue now.
"Under the doctrine of
res judicata,
or claim preclusion, a ‘final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or
could have been raised in that action.’
”
Fay v. South Colonie Central School District,
802 F.2d 21, 28 (2d Cir.1986) (quoting
Federated Department Stores v. Moitie,
452 U.S. 394, 101 S.Ct. 2424, 69 L.Ed.2d 103 (1981)) (emphasis added);
see Young Engineers, Inc. v. ITC,
721 F.2d 1305, 1314 (Fed.Cir.1983). It is therefore essential to a res judicata bar that the litigant against whom it is asserted would have faced no procedural barriers to the assertion of the claim in the earlier action.
See Young Engineers, supra,
721 F.2d at 1314-15.
Thus,
[t]he general rule ... is largely predicated on the assumption that the jurisdiction in which the first judgment was rendered was one which put no formal barriers in the way of a litigant’s presenting to a court in one action the entire claim including any theories of recovery or demands for relief that might have been available to him under applicable law. When such formal barriers in fact existed and were operative against a plaintiff in the first action, it is unfair to preclude him from a second action in which he can present those phases of the claim which he was disabled from presenting in the first.
Id.
at 1315 (quoting
Restatement (Second) of Judgments
§ 26(c) (1982)).
This case falls squarely within this exception. Each party to an interference proceeding
has previously sworn to the inventorship of the claimed invention,
and cannot advance an inconsistent position during the interference proceeding.
See Kilbey v. Thiele,
199 U.S.P.Q. 290 (Bd. of Pat. Int.1978). Therefore, unlike the federal rules of civil procedure, the rules governing interference proceedings do not permit a party to plead alternative theories of recovery. Since McSherry could only have claimed to be a joint inventor at the cost of forgoing his claim to be the sole inventor, he should not be barred from asserting that claim here.
The defendants’ argument that McSher-ry could have raised the joint inventorship issue before the Board by making a motion pursuant to 37 C.F.R. § 1.231(a)(c)
to amend his application to add Giannuzzi as a joint inventor does not alter this conclusion. Indeed, had such a motion been made and granted, McSherry would still have been precluded from arguing that he was the sole inventor of the Polytoggle.
The Court rejects McSherry’s argument that res judicata is inapplicable because the Board lacked the power to afford the relief sought here,
i.e.,
to declare him a joint inventor and amend the inventorship of the ’324 patent.
See Fay, supra,
802 F.2d at 29. Although it is true that the
Board lacked the power to amend Giannuz-zi’s patent because the Commissioner can only amend the inventorship of a patent “on application of all the parties and assignees,” 35 U.S.C. § 256 (1982), which, in view of Giannuzzi’s claim to be the sole inventor, was not possible here,
see Dee v. Aukerman,
625 F.Supp. 1427, 1430 (S.D.Ohio 1986), nevertheless the Board could have granted McSherry the equivalent relief: an award of priority to an application naming Giannuzzi and himself as joint inventors.
Therefore, McSherry is incorrect when he asserts that the Board did not have the power to declare him a joint inventor of the Polytoggle, although, as discussed
supra,
had McSherry claimed to be a joint inventor in the interference proceeding he would have been precluded from asserting his sole inventorship claim.
B.
Judicial Estoppel
The defendants next argue that the position taken by McSherry in other proceedings precludes him from asserting in this action that the omission of his name from Giannuzzi’s patents was the result of an error, which is an essential element of his claim under Section 256.
See Aukerman, supra,
625 F.Supp. at 1430. In essence, the defendants’ argument rests upon the fact that McSherry has previously alleged that the defendants engaged in various acts of fraud and bad faith with respect to patenting the Polytoggle.
“The doctrine of judicial estoppel allows a court to preclude a party from asserting a position contrary to one upon which it prevailed in a prior proceeding.”
Long Island Lighting Co. v. Transamerica Delaval, Inc.,
646 F.Supp. 1442, 1447 (S.D.N.Y.1986) (footnote omitted). However, the party against whom this doctrine is invoked must have been successful in the prior proceeding, or at least have received some benefit from the previously taken inconsistent position.
See Jackson Jordan, Inc. v. Plasser American Corp.,
747 F.2d 1567, 1579 (Fed.Cir.1984);
Long Island Lighting Co., supra,
646 F.Supp. at 1447;
see also
Wright & Miller,
Federal Practice and Procedure
§ 1283, at 376-77 (1969) (estoppel appropriate where litigant acting in bad faith or party’s procedural position would lead to inequitable result). Moreover, in the Federal Circuit, reliance and prejudice are essential before an adversary may be precluded from asserting an inconsistent position.
See Jackson Jordan, supra,
747 F.2d at 1580.
Therefore, the defendants cannot rely on the doctrine of judicial estoppel unless at the very least (1) McSherry has
taken an inconsistent position in a prior adversary proceeding; (2) McSherry received some benefit from the previously taken inconsistent position; and (3) McSherry took the inconsistent position in order to mislead the Court or to obtain an unfair advantage as against the defendants.
See id.
at 1578-80;
United States v. Starrett City Assocs.,
605 F.Supp. 262, 264 (E.D.N.Y.1985). These requirements have not been met in this case.
Although there can be little question that the position taken by McSherry in the state court action is inconsistent with his assertions in this case,
the same is not true of the position taken by McSherry in the interference proceeding. In the interference proceeding, McSherry claimed only that Gi-annuzzi committed a fraud on the Patent and Trademark Office by not disclosing the C6 anchor as prior art during the prosecution of the ’324 patent application, not that he fraudulently concealed McSherry’s participation in the creation of the invention, which was the claim made in the state court proceeding. Thus, McSherry’s allegations during the interference proceeding are not necessarily inconsistent with the assertion that McSherry’s name was omitted from the patent, and Giannuzzi’s name listed therein as sole inventor, as the result of an error.
With respect to the second requirement, McSherry’s allegations of fraud and bad faith have not met with success and have therefore gained him no benefit. In the related state court proceeding, McSherry asserted a cause of action based on fraud alleging that Die Cast, Rawlplug and Gian-nuzzi falsely stated to him that they did not intend to market the C6 anchor, and that the defendants fraudulently applied for a patent. The first aspect of this claim was dismissed because McSherry failed to allege in his complaint that he relied on the alleged misrepresentations. The second aspect was dismissed because it was not interposed within the time prescribed by the statute of limitations.
See Mechanical Plastics, supra,
119 A.D.2d at 643, 501 N.Y.S.2d at 88.
Similarly, McSherry’s claim that Gian-nuzzi committed a fraud on the Patent and Trademark Office by not disclosing the C6 anchor as prior art during the prosecution of the ’324 patent application was rejected by the Board in
McSherry v. Giannuzzi, supra,
227 U.S.P.Q. at 873-74. It is clear, therefore, that McSherry has not received any benefit from his allegations of fraud and bad faith in the prior proceedings.
Lastly, the third requirement is also not satisfied. The defendants have failed to establish either that the Court has been misled, or that they have been prejudiced by McSherry’s inconsistent position. Indeed, the defendants have successfully contested every allegation of fraud and bad faith. Therefore, the defendants have failed to establish the elements of judicial estoppel, and McSherry’s prior inconsistent position cannot serve to preclude his allegation of error in this action.
CERTIFICATION
The defendants have requested that the order denying their motion for summary judgment on the ground of res judicata be certified for interlocutory appeal to the Court of Appeals for the Federal Circuit
pursuant to 28 U.S.C. § 1292(b) (1982 & Supp. V 1987). Section 1292(b) provides:
When a district judge, in making in a civil action an order not otherwise ap-pealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order. The Court of Appeals which would have jurisdiction of an appeal of such action may thereupon, in its discretion, permit an appeal to be taken....
There are three requirements for certification under Section 1292(b): that the order involve (1) a controlling question of law, (2) as to which there is substantial ground for difference of opinion, and (3) that an immediate appeal may materially advance the ultimate termination of the litigation.
The order declining to bar McSherry’s claim that he is a joint inventor of the Polytoggle is appropriate for certification under Section 1292(b). With respect to the third requirement, reversal of this order would dispose of this case. Moreover, this controlling issue of law,
i.e.,
the impact of a claim of sole inventorship in an interference proceeding upon a subsequent claim of joint invention, is one of first impression,
and its determination by the Federal Circuit would contribute to the early termination of similar cases arising under Section 256, and resolve an open issue as to which there is certainly a substantial ground for difference of opinion.
See Brown v. Bullock,
294 F.2d 415, 417 (2d Cir.1961);
Red Bull Associates v. Best Western Int’l,
686 F.Supp. 447, 453 (S.D.N.Y.1988).
The Court therefore certifies this order for interlocutory appeal to the Court of Appeals for the Federal Circuit pursuant to 28 U.S.C. § 1292(b) (1982 & Supp. V 1987).
CONCLUSION
The defendants’ motion for summary judgment is denied. The order denying the defendants’ motion for summary judgment on the ground of res judicata is certified for appeal to the Court of Appeals for the Federal Circuit pursuant to 28 U.S.C. § 1292(b). The plaintiff’s motion for summary judgment is denied.
It is SO ORDERED.