A federal court in Florida has determined that the assertion of a purely reputational interest by a periodontist and implant surgeon who filed an action to correct dental implant system patents by naming him as an inventor is sufficient to confer standing for a § 256 claim. Krauser v. Evollution IP Holdings, Inc., No. 12-80977 (U.S. Dist. Ct., S.D. Fla., decided September 19, 2013). The Federal Circuit Court of Appeals has not yet taken a position on this particular issue, and other courts have rendered conflicting rulings.
Plaintiff Jack Krauser had filed a previous claim against one of the defendants, seeking a declaration that he was both the inventor and owner of the system. The inventorship claim was voluntarily dismissed without prejudice, and the court ruled on summary judgment that Krauser had no ownership rights to the dental implant system. In the case at bar, the defendants argue in their motion to dismiss that Krauser’s claims are barred by the doctrine of res judicata, he is collaterally stopped from asserting any ownership interest in the patents, his alleged reputational injury is insufficient to establish Article III standing, and defendant Evollution is not subject to personal jurisdiction in Florida.
Because the circuit in which the court sits has adopted a declaratory judgment exception to res judicata, under which the “ordinary principles” of the doctrine are not applied if declaratory relief was the only relief sought in the prior action, the court had to decide whether Krauser’s request for attorney’s fees, in addition to a declaratory judgment, constituted coercive relief and thus barred application of the exception. Under Florida law, attorney’s fees are simply ancillary to a claim for damages, so the court found that the exception applied, “the preclusive effect of the Court’s declaration in the prior action is limited to the subject matter of the declaratory relief” and issues that could have been raised in the earlier proceeding were not precluded. While ownership had previously been litigated and decided, a claim for correction of inventorship had not, and, according to the court, “it is well established that ownership and inventorship are separate issues.”
As to reputational injury, the court examined defamation law to conclude that “Krauser has a vindicatory interest in correcting inventorship because, consistent with common law rationale, an erroneous patent application is itself an injury to his reputation sufficient to confer Article III standing. He need not prove any concrete financial or economic injury to vindicate his reputation because, as in most defamation cases, such injuries will generally be impossible to prove, and success on the § 256 inventorship claim serves a vindicatory purpose even if there is no concrete injury to be redressed. To hold otherwise would mean that the true inventor of a product who lacked any economic or ownership interest in his product would have no means of redress. Notwithstanding the contrary case law set forth above, this Court finds such a result untenable.”
The court agreed to dismiss Evollution from the suit, finding insufficient contacts under Florida’s long-arm statute to exercise jurisdiction over the company. In this regard, the court rejected Krauser’s assertion that the company availed itself of the privilege of conducting activities in Florida through its licensing agreement with co-defendant BioHorizons. Still, the court declined to transfer the matter to Delaware, stating “The Court’s lack of personal jurisdiction over Evollution is not a sufficient reason to require Dr. Krauser to proceed against BioHorizons—over which the Court does have jurisdiction—in another venue which Dr. Krauser may find inconvenient.”