The Federal Circuit vacated the decision of a district court declaring a patent invalid for failure to name all inventors. The Court held the patentee’s former request to remove the inventor and subsequent attempt to add that inventor back to the patent were justified and did not trigger judicial estoppel.
Egenera, Inc. owns U.S. Patent No. 7,231,430, directed to an automatically-deployed, scalable, reconfigurable virtual network. Egenera sued Cisco, in Massachusetts, alleging infringement by Cisco’s enterprise server systems. In response, Cisco filed a petition for inter partes review (“IPR”) challenging the ’430 Patent. Egenera then successfully petitioned the USPTO to remove one of the named inventors, Mr. Schulter, from the ’430 Patent—allegedly because it realized the claims had been conceived before Mr. Schulter was hired. (The Court noted that the request was partly motivated by Egenera’s attempt to swear behind the key IPR reference.) The PTAB later declined to institute the IPR petition.
During the ensuing district court claim construction proceedings, the court construed a limitation with the phrase “logic to modify” (the “Logic Limitation”), found it to be a means-plus-function limitation under 35 U.S.C. § 112(f), and held that the corresponding structure was “the combination of a virtual LAN proxy, a physical LAN driver, and a virtual LAN server” (the “tripartite structure”). At trial, Mr. Schulter was found to have invented the tripartite structure, thereby making him an inventor of the ’430 Patent. As a result, Egenera sought to have Mr. Schulter added back to the patent as an inventor. But the district court ruled that Egenera was judicially estopped from re-adding Mr. Schulter, since it had previously requested that he be removed; as such the’430 Patent was found invalid for failing to name all inventors.
The Federal Circuit affirmed the district court’s claim construction but vacated the inventorship estoppel holding. The Court considered the meaning of “error” within 35 U.S.C. § 256, which provides for certificates of correction in the case of an “error” in inventorship. The Court noted all errors, intentional or not, are covered by § 256. And the Court rejected the argument that the America Invents Act (“AIA”)— which struck the requirement that the error “arose without any deceptive intention”—altered this finding. The Court found the AIA stills supports that “error” simply means “the incorrect listing of inventors.”
The Federal Circuit, using First Circuit law, also rejected the District Court’s holding regarding judicial estoppel, which considers “(1) whether a party’s earlier and later positions are ‘clearly inconsistent’; (2) whether the party ‘succeeded in persuading a court to accept’ the earlier position; and (3) whether the party would ‘derive an unfair advantage…’ on the other side if not estopped.” The Court found Egenera’s two positions were not inconsistent: Egenera did not know the Logic Limitation would be construed to be a means-plus-function limitation using Mr. Schulter’s tripartite structure. The Court also (narrowly) held that Egenera’s prior inventorship change did not amount to “persuading a tribunal” because it was ministerial and contained no substantive analysis. Lastly, the Court did not find unfair advantage because—even assuming Egenera’s original inventorship change request was purely tactical—it had no impact and resulted in no judicial determination. As the Court noted, however, there might have been a different outcome had Cisco’s IPR been instituted and Egenera had succeeded in convincing the tribunal it could swear behind the key reference during the IPR.