StoneEagle Services, Inc. v. Gillman
Addressing whether an actual controversy exists that is sufficient to confer jurisdiction under the Declaratory Judgment Act, the U.S. Court of Appeals for the Federal Circuit vacated and remanded a lower court’s ruling on preliminary injunction, finding that the lower court never had jurisdiction to hear the declaratory judgment suit that was only directed to ownership, and not inventorship, of a patent. StoneEagle Services, Inc. v. Gillman, Case No. 13-1248 (Fed. Cir., Mar. 26, 2014) (Rader, C.J.).
StoneEagle sought a declaratory judgment that it was the sole owner of a patent directed to an electronic payment system after a dispute with a former business associate, David Gillman. Gillman worked with StoneEagle on an electronic payment system to process health care claims developed by StoneEagle’s CEO, Robert Allen. Gillman never claimed to be a co-inventor of the patent, but helped draft the application. The patent named Allen as the sole inventor.
The partnership broke down after a meeting with potential investors who said they considered the patent very valuable. According to StoneEagle’s suit, Gillman became upset and claimed that the patent belonged to him because he wrote it.
StoneEagle sued Gillman seeking a declaratory judgment that it was the sole owner and inventor of the patent. The lawsuit alleged a variety of state law, trade secret and contract claims. The district court issued a preliminary injunction against Gillman.
On appeal, Gillman argued that an actual case-or-controversy exists between the parties, but only over the state-law claim of ownership and that the Declaratory Judgment Act requires a case-or-controversy over an issue under federal law. Gillman conceded he did not invent the patented system and argued that the district court never had jurisdiction over the suit because there was no actual controversy about whether Allen should be the sole inventor.
The Federal Circuit found that StoneEagle never sufficiently alleged there was a controversy over whether Gillman was an inventor. StoneEagle only alleged that Gillman falsely claimed to have helped write the patent, which would not establish a dispute over inventorship because helping to write and file a patent application does not give that person inventorship rights. The Federal Circuit said that Gillman’s claim to have written the patent may establish a dispute over whether he has an ownership interest in the patent, but that is a question of state law not properly before the Federal Circuit.