The Federal Circuit in Shukh v. Seagate held that “concrete and particularized reputational injury can give rise to Article III standing” under 35 U.S.C. § 256.1 Standing under § 256 exists “when a plaintiff has either an expectation of ownership of a patent or a concrete financial interest in the patent.”2 In Shukh, the Federal Circuit expanded the scope of § 256 standing stating “a trier of fact could conclude that Dr. Shukh’s omission from the disputed patents had a concrete impact on his reputation in his field,”3 and accordingly vacated the district court’s grant of summary judgment and remanded for further proceedings.
On appeal, Shukh challenged the district court’s decision that he lacked standing to pursue his § 256 claim on two grounds.
First, Shukh argued that the Federal Circuit panel should overrule its prior holding in Filmtec Corp. v. Allied-Signal.4 The court reasoned under Filmtec, Dr. Shukh’s assignment in the Employment Agreement of his ownership and financial interests in his inventions conveyed legal title in those inventions to Seagate.5 Because of this conveyance, the district court found that Dr. Shukh has no ownership interest or financial interest in the patents that would give him standing to pursue his § 256 claim. The court refused to recognize Shukh’s reasoning, as it cannot overrule the Filmtecholding without en ban action.6
Secondly, Shukh argued that the district court erred in granting summary judgment to Seagate on his § 256 claim for lack of standing. He argued that a trier of fact could conclude that his reputation was damaged because he was not recognized as the inventor of the patents.
The Federal Circuit had previously declined to decide whether reputational injury, standing alone, may satisfy the constitutional standing requirements for a § 256 claim.7 However, the court in the instant case held that concrete and particularized reputational injury can give rise to Article III standing. The court noted, “being considered an inventor of important subject matter is a mark of success in one’s field, comparable to being an author of an important scientific paper.”8 The court reasoned that “[p]ecuniary consequences may well flow from being designated as an inventor.”9The Federal Circuit determined that “there is a genuine dispute of material fact as to whether Dr. Shukh’s negative reputation for seeking credit for his inventions is traceable to Seagate’s omission of Dr. Shukh as an inventor from the disputed patents.”10 Accordingly, the Federal Circuit vacated and remanded the case to the district court with respect to the court’s ruling on reputational injury as a basis for § 256 standing.
While it remains critical for companies to include the appropriate “does hereby assign” language in their relevant contracts (e.g., employment contracts or consulting contracts) as elucidated in Stanford v. Roche,11 based on the Federal Circuits reasoning in Shukh v. Seagate, it appears that such language may not completely shield a company from a suit for omitting a potential inventor.