Schofield v. French

36 F. Supp. 2d 481, 1999 U.S. Dist. LEXIS 1459, 1999 WL 66117
CourtDistrict Court, D. Rhode Island
DecidedFebruary 9, 1999
DocketCiv.A. 95-103L
StatusPublished
Cited by4 cases

This text of 36 F. Supp. 2d 481 (Schofield v. French) is published on Counsel Stack Legal Research, covering District Court, D. Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schofield v. French, 36 F. Supp. 2d 481, 1999 U.S. Dist. LEXIS 1459, 1999 WL 66117 (D.R.I. 1999).

Opinion

DECISION AND ORDER

LAGUEUX, Chief Judge.

Atlantek, Inc. and its principal Harold Schofield (collectively “Atlantek”) filed this action against DataCard Corporation (“Data-card”) and against Barcode Systems, Inc. and its principal John French (collectively “BSP or “BCS”). 1 The Complaint asks for a declaratory judgment, specifically seeking a resolution of a dispute about technology developed and patents secured by the parties. DataCard has positioned itself identically to Atlantek although they are nominally opponents in this action. French and BSI asserted nine affirmative defenses and filed a series of counterclaims against Atlantek and crossclaims against DataCard.

The matter is now before this Court on Atlantek’s and Datacard’s motions for summary judgment.

Although this case concerns patents, it is not to be decided by reference to patent law. In their motions, both Atlantek and Data- *483 Card argue that even if French and BSI had rights to the technology at issue, they contracted those away in 1988. BSI has offered up a barrage of defenses, but that 1988 contract between Atlantek and BSI remains at the core of the case. The parties dispute whether certain attachments were actually affixed to the contract when French signed it. BSI argues that the issue creates a material dispute that defeats summary judgment.

As discussed below, that is not true. Under Rhode Island law, there are no material facts in dispute, and therefore, this Court can rule on the case as a matter of law. Atlan-tek’s and Datacard’s motions for summary judgment are granted. The movants also prevail on BSI’s counterclaims and cross-claims.

1. Facts and Procedural Stance

DataCard, a Minnesota corporation, is a private manufacturer of the machinery that creates credit, identification and other plastic cards. In the mid-1980s, a DataCard executive recognized the possibility of thermal printing, a then-new technology that would allow the company to print color onto plastic cards. To explore the concept, DataCard hired Atlantek, a Rhode Island corporation run by Harold Schofield to design machinery that would incorporate thermal printing.

Machines of this type include two elements — the electronics component and the mechanical system. Atlantek had expertise with the electronics, and it subcontracted the mechanical portion to Barcode Systems Inc., a California corporation, and its principal John French. The companies were trying to develop machinery that would print color images on two-inch-wide webs of plastic (“the Datacard project”).

The three companies worked together from 1986 into 1988 in a eustomer-eontractor-subcontractor relationship. DataCard contracted with Atlantek through two documents, the 1986 Consulting Agreement and the 1987 Consulting Agreement. Those two companies explicitly agreed that DataCard would own all intellectual property created during those efforts. The language in each Consulting Agreement is identical:

Consultant agrees that the data, concepts, technology and information it receives from Data Card or which it creates through its efforts for Data Card under this Agreement shall be and remain the property of Data Card.

(1986 Consulting Agreement at 2, § 5; 1987 Consulting Agreement at 2, § 5.) In turn, Atlantek subcontracted with BSI by issuing two purchase orders, P.O. #302 and P.O. #328.

In 1988, Atlantek began a project to adapt the technology to other industries, specifically to design machinery or Imperial Chemical Industries 2 (“the ICI project”) that could print color images on larger webs of plastic. 3 DataCard permitted Atlantek to use the intellectual property from the earlier projects, and Atlantek contracted again with BSI for the mechanical portion of the design. That contract was embodied in Project Development Agreement #446 (“PDA #446”) and signed by French and Schofield.

PDA # 446 provided that it would be governed by the law of Rhode Island. It included a paragraph that referred to the 1986 and 1987 Consulting Agreements that had assigned all intellectual property created during the DataCard project to DataCard:

BCS acknowledges, and agrees to abide by, all prior ATLANTEK consulting agreements with DATA CARD CORPORATION identified as exhibits A and B concerning the basic slide mechanism concept which is fundamental to the work performed under this agreement.

(PDA # 446 at § 5, ¶ 3.) At this point, the parties differ on the facts. French avows that th’e Consulting Agreements were not attached as exhibits. DataCard and Atlantek dispute that claim, but for purposes of ruling on their motion for summary judgment, this *484 Court assumes that the Consulting Agreements were not attached.

BSI never completed the ICI project for Atlantek, and the relationship between BSI and the other parties soured. In 1990, Data-card filed two patent applications related to the work done under the Consulting Agreements. Atlantek and its employees cooperated with DataCard. French did not, but DataCard proceeded under the patent regulations that address non-cooperative inventors. Patent # 5,281,038 (“ ’038 Patent”) was issued on January 25, 1994, and French is listed as a co-inventor of the ’038 Patent. Patent #5,080,512 (“’512 Patent”) was issued on January 14, 1992, and French was not listed as an inventor. Atlantek and its employees assigned their ownership interests in the ’038 Patent and the ’512 Patent to DataCard.

This case is about BSI’s and French’s interest in those patents. French refused to execute a form of assignment, and he has alleged that he retains proprietary interest in the patents. Furthermore, French and BSI make similar allegations with respect to two other patents presently owned by DataCard, namely Patent # 5,239,926 (“ ’926 Patent”) and Patent # 5,037,216 (“ ’216 Patent”). Da-taCard does not agree.

Both parties agree, however, that all of the intellectual property at issue was created during the Datacard project. Specifically, they agree that French’s claims are based on work that he did for Atlantek under the 1986 and 1987 Consulting Agreements and P.O. # 302 and P.O. # 328. (See John French and Barcode Systems Inc.’s Statement of Disputed and Undisputed Material Facts at ¶ 32.)

Atlantek filed this action for declaratory relief in 1995. After Atlantek filed its First Amended Complaint, DataCard filed cross-claims against French and BSI seeking similar relief. Although Atlantek is nominally a plaintiff and DataCard is nominally a defendant, their interests in this action are now aligned. Both movants ask this Court to settle the dispute over the technology and the patents — including who owns them, who should have been listed as inventors and whether any party has infringed on any other party’s rights.

In its answer, French and BSI asserted nine affirmative defenses. They also filed counterclaims against Atlantek and cross-claims against DataCard, including claims for:

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Bluebook (online)
36 F. Supp. 2d 481, 1999 U.S. Dist. LEXIS 1459, 1999 WL 66117, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schofield-v-french-rid-1999.