WATERJET TECHNOLOGY v. Flow Intern. Corp.

996 P.2d 598
CourtWashington Supreme Court
DecidedApril 6, 2000
Docket68500-2
StatusPublished
Cited by18 cases

This text of 996 P.2d 598 (WATERJET TECHNOLOGY v. Flow Intern. Corp.) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
WATERJET TECHNOLOGY v. Flow Intern. Corp., 996 P.2d 598 (Wash. 2000).

Opinion

996 P.2d 598 (2000)
140 Wash.2d 313

WATERJET TECHNOLOGY, INC., Plaintiff,
v.
FLOW INTERNATIONAL CORPORATION, Mohamed Hashish, and Steven Craigen, Defendants.

No. 68500-2.

Supreme Court of Washington, En Banc.

Argued March 9, 2000.
Decided April 6, 2000.

David Horace Binney, Andrew F. Pratt, William Owen Ferron, Jr., Seattle, for Defendants.

Mark Gerard Jackson, Seattle, for Plaintiff.

JOHNSON, J.

In the following certified questions the United States District Court, Western District of Washington, asks us to discern whether an agreement (the Craigen Agreement) requiring employee Steven Craigen to assign patents to employer Waterjet Technology, Inc. (Waterjet) is enforceable in whole or in part under RCW 49.44.140 or, *599 alternatively, under Washington common law:

1. Did the Craigen Agreement provide adequate notice to Craigen under RCW 49.44.140(3)?
2. If not, may Waterjet enforce the portion of the Craigen Agreement that is consistent with the requirements of RCW 49.44.140(1)?
3. If not, may Waterjet enforce an implied agreement that Craigen assign the patent
in-suit to Waterjet, or did RCW 49.44.140 preempt an employer's common law rights to inventions invented by employees who were hired or directed by the employer to invent them?

Order Granting Pl.'s Mot. for Certification of State Law Questions to the Supreme Ct. of Wash. at 1.

We hold under the facts of this case the Craigen Agreement did provide adequate notice under RCW 49.44.140(3) and even were notice insufficient, the remedy would be limited to excision of the portions of the agreement inconsistent with RCW 49.44.140(1). In light of these determinations, we do not reach the third question.

In reaching our conclusions, we rely on the facts provided by the federal district court, which constitute the entirety of the record. RCW 2.60.010(4).

FACTS

Waterjet, plaintiff in this action, is a Washington corporation engaged in research and development of high pressure and abrasive waterjet cutting, drilling, and milling technology. Waterjet was formerly known as Flow Industries, Inc.[1] In 1974, Flow International Corporation (Flow International), a defendant in this action, was formed as a subsidiary of Waterjet. In 1983, Flow International "spun off" from Waterjet, although the two companies continued to work together until 1995.

Waterjet owns, by assignment, an extensive portfolio of United States patents in its area of research and development. Waterjet has always required its employees to assign their patents to Waterjet. These patents are the result of research and development performed by Waterjet's employees at Waterjet's behest and using Waterjet's resources and facilities. For each of these patents, Waterjet pays the fees for prosecution of the patent application and the fees charged by the United States Patent and Trademark Office.

In 1983, Waterjet hired Steven Craigen as a senior laboratory technician; Waterjet later promoted Craigen to the position of associate engineer. At the date of his hire, Craigen signed an employment agreement. Paragraph three of the Craigen Agreement stated:

3. I will disclose promptly to [Waterjet] in writing all ideas, inventions and discoveries conceived or developed in whole or in part, during the term of my employment with [Waterjet], related to any of [Waterjet's] business whether or not conceived or developed during working hours or on the property of [Waterjet]. Such ideas, inventions and discoveries shall be the property of [Waterjet] and it shall have the right to any patents which may be issued with respect to the same. I will also, and hereby do, assign to [Waterjet] and/or its nominees all my right, title and interest in such ideas, inventions and discoveries and all rights, title and interest in any patent applications or patents that may be issued based thereon. I agree to sign applications for patents, assignments, and other papers, and do such things as [Waterjet] may require for establishing and protecting its ownership and to effectuate the foregoing, either during my employment or thereafter.

Stipulation Regarding Questions Certified to the Supreme Ct. of Wash. Attach. 1, at 1.

*600 Craigen is the named inventor on several patents. He has assigned at least three of these patents to Waterjet. In 1992, Craigen and other Waterjet employees submitted an invention disclosure form to Waterjet describing a method and apparatus for milling using high pressure waterjet-containing abrasives (1992 Invention). This invention was created by Waterjet employees, including Craigen, during Craigen's tenure of employment at Waterjet. Waterjet employees conducted the research and development for the 1992 Invention at Waterjet's direction. The 1992 Invention was subsidized by Waterjet directly and funded from Waterjet's government and commercial contracts.

The 1992 Invention became the subject of United States Patent 5,704,824 (Patent 824), prosecuted and paid for by Waterjet and issued on January 6, 1998. Of the eight members of the team that developed the invention, seven assigned their rights in Patent 824 to Waterjet; Craigen, the remaining member of the team, did not. In 1997, Craigen accepted a position with Flow International, Waterjet's former subsidiary.

In 1998, Waterjet filed an action in the United States District Court, Western District of Washington, alleging infringement by Flow International of Patent 824. The complaint also sought to compel assignment of Craigen's rights to Patent 824.[2] In 1999, Craigen initiated an action in King County Superior Court to determine his obligation, if any, to assign his rights in Patent 824 to Waterjet.[3] Pursuant to RCW 2.60.020, the federal district court then certified to this court the three questions listed above.

ANALYSIS

I. Did the Craigen Agreement provide adequate notice to Craigen under RCW 49.44.140(3)?

Agreements governing assignment of patents by employees to employers are governed by statute in Washington. RCW 49.44.140. The statute provides as follows:

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