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Vapor Point sued NanoVapor to add two of Vaper Point’s employees, who had previously worked at NanoVapor, as inventors on two of NanoVapor’s patents. NanoVapor asserted a number of counterclaims and affirmative defenses, including an equitable defense that the Vapor Point’s employees had an obligation to assign their invention to NanoVapor.  After resolving the inventorship disputes in Vapor Point’s favor, the district court dismissed with prejudice the remaining state law claims, including Vapor Point’s equitable defense that its employees had an obligation to assign their inventorship interests to NanoVapor.  The district court reasoned that there was no need to resolve whether there was an obligation to assign the patents, because “all parties understood that the evidentiary hearing would resolve the issue of inventorship and would be dispositive of the remaining infringement claim in the case.”  In other words, the district court found that NanoVapor had waived its right to ask the court to decide the assignment question. 

NanoVapor appealed the district court’s decisions on inventorship and the assignment equitable defense (an issue of patent ownership, which is distinct from inventorship).  After affirming the district court’s determination of inventorship on appeal, the Federal Circuit confirmed that “ownership is not an affirmative defense to an inventorship claim under § 256,” and held that NanoVapor’s assertion regarding assignment was “only [] an equitable affirmative defense to Vapor Point’s state law claims” and “the voluntary dismissal of the state law claims mooted NanoVapor’s affirmative defense.”  Further, the Federal Circuit emphasized that “NanoVapor’s clear representation that such a determination would be ‘ultimately most likely dispositive’ of the inventorship issue is a waiver of any assertion of ownership of [former NanoVapor’s employees’] rights.”  The Federal Circuit did not find that the district court’s denial of Vapor Point’s motion for exceptional case status and attorney fees was an abuse of the district court’s discretion.

In concurrence, Judge O’Malley emphasized that § 261 mandates a written instrument reflecting an assignment of patent rights, and accordingly, even if NanoVapor had not waived its assignment defense, it would not have succeeded in its affirmative defense because of the lack of a written assignment instrument.

Vapor Point, L.L.C., et al. v. Moorhead, et al., Case Nos. 2015-1801, 2015-2003 (August 10, 2016); Opinion by: Per Curiam (O’Malley, Chen, and Stoll); concurring opinion by O’Malley; Appealed From: United States District Court for the Southern District of Texas, Gilmore, J.  Read the full opinion here.

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