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Judge McMahon Dismisses Case Because Agreement that Inventor “will assign” Doesn’t Mean “did assign”

On June 14, 2016, S.D.N.Y. District Judge Colleen McMahon granted defendants HTC Corporation, HTC America, Inc., Blackberry Limited, Blackberry Corporation, and Motorola Mobility LLC’s (collectively “Defendants”) motion to dismiss with prejudice a patent infringement complaint filed by plaintiff Advanced Video Technologies LLC (“AVT”) because AVT didn’t  join all “necessary” parties.

AVT alleged that Defendants infringed U.S. Patent No. 5,781,788. One of the patent’s original inventors had signed an employment agreement with AVT’s predecessor that provided she “will assign to the Company all my right, title, and interest in and to any and all inventions.”  The court held that this language merely contained the inventor’s promise to assign the invention sometime in the future, and did not effect a present assignment, explaining that “‘[w]ill’ is the language of a promise to do something in the future; it does not suggest present action.”  The court distinguished the agreement’s language with another contract that stated that the inventor “hereby conveys, transfers and assigns” its rights, explaining that “‘hereby’ means ‘by this document,’ which is being executed presently and not in the future.”

Because AVT neither owned the patent in full nor joined the inventor, the court granted Defendants’ motion to dismiss for failure to join a necessary party, “it being well settled that a patent infringement action cannot be maintained unless every owner of the patent is a plaintiff.”

AVT next argued that the agreement granted the inventor’s employer and its successors a power of attorney to compel the inventor to cooperate in the prosecution of the patent.  The court, however, pointed out that even if that were true, AVT had offered no evidence that it or its predecessors had ever exercised that power of attorney and signed the inventor’s name on the patent application or on an assignment of her interest in the invention.

Finally, the court held that whether or not the power of attorney had been successfully transferred to AVT, it had expired by its plain terms when the patent issued.  The court explained that the agreement provided that the power of attorney was “to further the prosecution and issuance of letters patent . . . ,” and so “existed for the limited purpose of obtaining the patent.”

Case:  Advanced Video Techs. LLC v. HTC Corp., No. 15 Civ. 4626 (CM) (S.D.N.Y. June 14, 2016).  The patent-in-suit is 5,781,788.