The U.S. Court of Appeals for the Federal Circuit gave preclusive effect to a California divorce decree adjudicating ownership rights to the patents-in-suit and affirmed the district court’s denial of a defendant’s motion to dismiss the case for lack of standing. Enovsys LLC v. Nextel Communications, Inc., et al., Case No. 09-1167 (Fed. Cir., Aug. 3, 2010) (Prost, J.) (Newman, J., concurring-in-part, dissenting-in-part).
Mundi Fomukong is co-inventor of the two patents-in-suit covering systems for disclosing a mobile device’s location only to authorized requests. He conceived the inventions and filed the patent applications while married to Fonda Whitfield in California. One of the patents had already issued when the couple filed for divorce in 2001, while the other issued several months after the divorce was finalized in October 2002.
In 2006, Fomukong and his co-inventor formed Enovsys and assigned ownership of the patents to the company. Enovsys subsequently filed a patent infringement suit against Sprint Nextel. Sprint Nextel moved to dismiss the case because Enovsys had failed to join Whitfield, who Sprint Nextel claimed still maintained an ownership interest in the patents-in-suit based on California’s community property laws. Whitfield had also assigned her interest in the patents to Sprint Nextel. The district court denied Sprint Nextel’s motion and concluded that Enovsys had full legal title to the patents. At trial, the jury found that Sprint Nextel infringed the patents in suit and that the patents were not invalid. Sprint Nextel appealed denial of its motion to dismiss for lack of standing, and denial of its post-verdict judgment as a matter of law (JMOL).
The Federal Circuit affirmed, including on the issue of ownership and standing. Fomukong and Whitfield divorced each other by way of summary dissolution—California’s “quickie” divorce—in which there is no hearing or trial. Parties to summary dissolution must either affirm that they have no community property or sign a property settlement agreement listing all community assets and liabilities. Fomukong and Whitfield both checked the box on the petition stating they had no community property and failed to attach a property settlement agreement to their divorce petition. After a six-month waiting period, both parties signed the request to finalize the divorce.
Sprint Nextel argued that because the divorce decree did not expressly adjudicate community property rights, Whitfield maintained her ownership interest in the patents. The Federal Circuit disagreed, holding that the presumption that the patents were community property was overcome by the jointly filed divorce petition which affirmatively stated that Fomukong and Whitfield had no community property. The divorce decree, therefore, conclusively settled patent ownership in Fomukong’s favor, even though silent on the issue. The Court further held that the state divorce decree is entitled to res judicata effect and rejected Sprint Nextel’s attempt to relitigate Whitfield’s property rights to the patents. Therefore, Whitfield retained no ownership interest, and Enovsys had standing to bring and maintain the suit.