Case: Beriont v. GTE Labs., Inc., No. 2013-1109 (Fed. Cir. Aug. 6, 2013) (non-precedential). On appeal from D. Mass. Before Rader, Lourie, and O’Malley.

Procedural Posture: Plaintiff in a declaratory judgment action appealed a ruling that, pursuant to a settlement agreement between the parties, the defendants were not liable for patent infringement or any related cause of action. CAFC affirmed-in-part, vacated-in-part, and remanded.

  • Infringement: The district court correctly held that the plaintiff’s admission that a settlement agreement made the defendants a joint owner of the patent after June 2005 fully resolved the plaintiff’s infringement claims for that time frame. As for activities before June 2005, the district court erroneously held that the defendants had “shop rights” in the invention. The “shop rights” doctrine has its limits—for example, an employer can use the invention only internally in its own business. The district court erred in concluding that the “shop rights” doctrine applied as an infringement defense, without first having made pertinent factual findings regarding the extent of the defendants’ use of the patented invention.
  • Subject Matter Jurisdiction: The district court had made no explicit findings with respect to the plaintiff’s state-law claims for: (1) breach of fiduciary duty; (2) correction of the registration of the patent to reflect that the plaintiff never assigned it to the defendants; and (3) correction of the joint-ownership arrangement. On remand, it would be within the district court’s discretion to exercise supplemental jurisdiction over these state law claims under 28 U.S.C. § 1367, or to decline supplemental jurisdiction if it first dismisses all claims over which it has original jurisdiction.

Lourie, concurring-in-part and dissenting-in-part:

  • Infringement: The majority correctly held that the defendants were not liable for activities before June 2005. As for activities after June 2005, the case need not be remanded for determining the defendants’ infringement liability, because the defendants had ownership of the patent. The plaintiff had assigned the patent to the defendants in both a general assignment agreement and a specific assignment agreement. The assignment was verified by a judgment against the plaintiff, and was recorded in the Patent Office.