Omni Medsci, Inc. v. Apple Inc.

7 F.4th 1148
CourtCourt of Appeals for the Federal Circuit
DecidedAugust 2, 2021
Docket20-1715
StatusPublished
Cited by5 cases

This text of 7 F.4th 1148 (Omni Medsci, Inc. v. Apple Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Omni Medsci, Inc. v. Apple Inc., 7 F.4th 1148 (Fed. Cir. 2021).

Opinion

Case: 20-1715 Document: 84 Page: 1 Filed: 08/02/2021

United States Court of Appeals for the Federal Circuit ______________________

OMNI MEDSCI, INC., Plaintiff-Appellee

v.

APPLE INC., Defendant-Appellant ______________________

2020-1715, 2020-1716 ______________________

Appeals from the United States District Court for the Northern District of California in Nos. 4:19-cv-05673-YGR, 4:19-cv-05924-YGR, Judge Yvonne Gonzalez Rogers. ______________________

Decided: August 2, 2021 ______________________

THOMAS A. LEWRY, Brooks Kushman PC, Southfield, MI, argued for plaintiff-appellee. Also represented by JOHN S. LEROY, CHRISTOPHER C. SMITH.

JEFFREY PAUL KUSHAN, Sidley Austin LLP, Washing- ton, DC, argued for defendant-appellant. Also represented by JOSHUA JOHN FOUGERE; BROOKE SHANELLE BOLL, Los Angeles, CA; MICHAEL ROBERTS, Dallas, TX; IRENE YANG, San Francisco, CA.

SARAH E. WAIDELICH, Honigman LLP, Ann Arbor, MI, argued for amicus curiae The Regents of the University of Case: 20-1715 Document: 84 Page: 2 Filed: 08/02/2021

Michigan. Also represented by J. MICHAEL HUGET; RIAN DAWSON, Detroit, MI. ______________________

Before NEWMAN, LINN, and CHEN, Circuit Judges. Opinion for the court filed by Circuit Judge LINN. Dissenting opinion filed by Circuit Judge NEWMAN. LINN, Circuit Judge. In this certified interlocutory appeal, Apple seeks to overturn the denial of its motion to dismiss Omni MedSci’s (“Omni”) patent infringement complaint for lack of stand- ing. For the reasons below, we affirm the district court’s holding that the University of Michigan (“UM”) bylaws did not effectuate a present automatic assignment of Dr. Is- lam’s patent rights and therefore affirm the district court’s denial of Apple’s motion to dismiss. BACKGROUND Dr. Islam is a tenured professor of electrical and com- puter engineering at UM. In 2011, Dr. Islam received an additional appointment to the Cardiovascular Center (“CVC”) at UM’s medical school. J.A. 895. When Dr. Islam joined the UM faculty, he executed an employment agree- ment that included a provision agreeing to abide by UM’s bylaws. UM Bylaw 3.10, the focus of the issues in this ap- peal, “stipulates the conditions governing the assignment of property rights to members of the University Faculty and Staff.” J.A. 592. It provides the disposition of intellec- tual property under three distinct conditions: 1) Patents and copyrights issued or acquired as a result of or in connection with administration, re- search, or other educational activities conducted by members of the University staff and supported di- rectly or indirectly (e.g., through the use of Univer- sity resources or facilities) by funds administered Case: 20-1715 Document: 84 Page: 3 Filed: 08/02/2021

OMNI MEDSCI, INC. v. APPLE INC. 3

by the University regardless of the source of such funds, and all royalties or other revenues derived therefrom shall be the property of the University. *** 4) Patents, copyrights, and property rights in computer software resulting from activities which have received no support, direct or indirect, from the University shall be the property of the inventor, author, or creator thereof, free of any limitation which might otherwise arise by virtue of University employment. 5) In cases which involve both University-sup- ported activity and independent activity by a Uni- versity staff member, patents, copyrights, or other property right in resulting work products shall be owned as agreed upon in writing and in advance of an exploitation thereof by the affected staff mem- ber and the Vice-Provost for Research in consulta- tion with the Committee on Patents and Copyrights and with the approval of the Univer- sity’s Office of the General Counsel. It is under- stood that such agreements shall continue to recognize the traditional faculty and staff preroga- tives and property rights concerning intellectual work products. Id. (emphases added). In 2012, Dr. Islam took an unpaid leave-of-absence from UM to “start[] a new Biomedical Laser Company.” J.A. 603. 1 During his leave, Dr. Islam filed multiple

1 Apple labels the leave an unpaid sabbatical. The label is not determinative of our decision here. We use the phrase “leave of absence” because that is what Dr. Islam communicated to UM in his April 27, 2012 letter. J.A. 603. Case: 20-1715 Document: 84 Page: 4 Filed: 08/02/2021

provisional patent applications. Upon returning to UM in 2013, he filed non-provisional applications claiming prior- ity to those provisional applications. After those applica- tions issued as patents, Dr. Islam assigned the patent rights to Omni on December 17, 2013 and recorded their assignment with the Patent and Trademark Office. One of those patents is an ancestor of the patents-in-suit here. Neither UM nor Apple substantively dispute that the patents at issue are not directly related to Dr. Islam’s teaching, but rather grew out of his time on leave. In 2013, Dr. Islam requested that UM’s Office of Technology Trans- fer (“OTT”) confirm Dr. Islam’s ownership of his inventions. OTT denied the request, noting the expenditure of medical school funds to support the cost of Dr. Islam’s space and administrative time required to process Dr. Islam’s ap- pointment to the CVC. J.A. 895. In internal communica- tions, UM also noted that UM provided “medical school faculty partners who have helped springboard ideas with him.” J.A. 885. After a number of communications, various officials at UM—including the Director of Licensing at OTT, the Executive Director of OTT, an Associate Dean at the Engineering School, and the University’s Director of Li- censing—reiterated that they considered UM to be the owner of the patents and noted that Dr. Islam and Omni considered Omni to be the owner of the patents. Dr. Islam was notified of a formal appeals process to challenge UM’s determination of its ownership, but he did not pursue that appeal process. In 2018, Omni sued Apple in the Eastern District of Texas, asserting infringement of U.S. Patent Nos. 9,651,533 and 9,861,286 (the “asserted patents”). Apple filed a motion to dismiss for lack of standing under Fed. R. Civ. P. 12(b)(1), alleging that UM, not Omni, owned the Case: 20-1715 Document: 84 Page: 5 Filed: 08/02/2021

OMNI MEDSCI, INC. v. APPLE INC. 5

asserted patents. 2 Apple argued that Dr. Islam agreed “to abide by all University rules and regulations” including UM bylaw 3.10 when he joined the UM faculty. Apple spe- cifically argued that paragraph 1 of bylaw 3.10 automati- cally transferred legal title to the patents at issue to UM, leaving Dr. Islam with no rights in the invention to assign to Omni. Apple thus contended that Omni lacked standing to assert the patents against Apple. The Eastern District of Texas concluded that para- graph 1 of bylaw 3.10 was not a present automatic assign- ment of title, but, at most, a statement of a future intention to assign. Omni Medsci, Inc. v. Apple Inc., No. 2:18-cv- 00134, ECF No. 276 (E.D. Tex. Aug. 14, 2019) (“District Court Op.”). The district court thus concluded that dismis- sal was improper. Id. at 1. The case was thereafter trans- ferred to the Northern District of California. Apple filed for reconsideration, which the district court denied, finding “no manifest error” in the Eastern District’s decision. Omni MedSci, Inc. v. Apple Inc., No. 19-cv-05924, ECF No. 346 (N.D. Cal. Nov. 25, 2019). Apple filed an unopposed motion for certification of the standing question to this court, which the Northern District granted. ECF No. 354 (Feb. 14, 2020). Apple appeals the denial of dismissal. We have jurisdiction under 28 U.S.C. §§ 1292(c)(1)

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7 F.4th 1148, Counsel Stack Legal Research, https://law.counselstack.com/opinion/omni-medsci-inc-v-apple-inc-cafc-2021.