Addressing the burdens of proof associated with a standing challenge based on the validity of an assignment, the U.S. Court of Appeals for the Federal Circuit upheld the U.S. International Trade Commission’s (USITC’s) determination that the recordation of a patent assignment at the U.S. Patent and Trademark Office (USPTO) created a rebuttable presumption of a valid assignment which shifted the burden to rebut that presumption to the party challenging standing. SiRF Technology, Inc. v. International Trade Commission, Case No. 09-1262 (Fed. Cir., Apr. 12, 2010) (Dyk, J.).

The dispute involved patents generally related to global position systems (GPS). One of the inventors conceived of the GPS-related invention while working for his previous employer, Magellan, where he had signed an employment agreement containing an assignment for “all inventions … which are related to or useful in the business of the Employer … and which were … conceived … during the period of the Employee’s employment, whether or not in the course of the Employee’s employment.” Several months later, the inventor left Magellan and began his employment with Global Locate. The inventor then assigned the invention to Global Locate and the assignment was recorded with the USPTO. Subsequently, Global Locate initiated an investigation at the ITC and the respondents challenged standing based on the prior (employment agreement) assignment to Magellan.

All parties agreed that when challenged to do so, Global Locate had the burden to establish standing. The Federal Circuit concluded that Global Locate met its burden by introducing the assignments from the inventors to Global Locate that had been recorded at the USPTO and that identified Global Locate as the patent owner. The Federal Circuit articulated the core standing issue as to “whether Global Locate also had the burden of establishing that an interest in the patent had not been previously assigned by the [inventor] to Magellan.” The Federal Circuit held, as a matter of federal law, that the recordation of a patent assignment creates a presumption of validity as to the assignment and places the burden to rebut such a showing on one challenging the assignment.”

Turning to the facts of the case, the Federal Circuit found, under federal law, that by use of the typical “employee assigns” language, the Magellan employment agreement contained an automatic assignment clause that immediately granted the employer rights in the subject invention, i.e., without any further action. Turning to whether the invention in question was in fact a subject invention, the Federal Circuit construed the “related to or useful in the business of the Employer” language under state law and found the language ambiguous. As permitted by the applicable state law, the Court looked to admitted extrinsic evidence to discern the meaning of the contract. The extrinsic evidence demonstrated that both companies considered the GPS invention at issue to be owned by Global Locate, not Magellan; i.e., the invention did not meet the “related in or useful in” criteria and therefore did not qualify as an invention subject to the automatic assignment clause. Accordingly, the Federal Circuit upheld the USITC’s decision that appellants failed to carry their burden to rebut the presumption of validity of the assignment from the inventor to Global Locate.