In the matter pending in the Western District of Texas, Katrinecz, et al. v. Motorola Mobility LLC, Motorola moved to dismiss the complaint for lack of subject matter jurisdiction. In its complaint, the plaintiffs alleged that Motorola infringed U.S. Patent No. 7,284,872 entitled "Low power, low cost illuminated keyboards and keypads." The '872 patent lists Plaintiffs Katrinecz and Byrd as the inventors. In April 1997, the plaintiffs conceived of a keyboard invention and during the summer of 1997 they developed prototypes. In October 1997, they engaged attorneys and filed their first patent application for the invention on August 26, 1998.
During this time, on August 11, 1998, Katrinecz and his spouse executed a Marital Settlement Agreement dissolving their nine-year marriage. The Florida State court rendered a Final Judgment Dissolving Marriage on September 17, 1998. Motorola contended that the invention of the '872 patent was developed during the marriage and thus should be considered personal property subject to equitable distribution upon dissolution of the marriage. Motorola further asserted that "when a marital settlement agreement fails to address personal property, that property is co-owned by both spouses by operation of law upon entry of final judgment dissolving the marriage." Consequently, because the Agreement did not expressly address the disposition of the rights to the invention, Motorola argued that the rights became co-owned by the inventor and his ex-spouse upon entry of the final judgment on September 17, 1998. Because the ex-spouse co-owned the patent when it issued and because she was not a party to the action, the court lacks subject matter jurisdiction and must dismiss the case.
The plaintiffs responded that there were no patent rights to the invention to be distributed as a marital asset at the time of the Agreement and, even if there were patent rights subject to distribution, based on the terms of the Agreement those rights were conveyed to the inventor.
Court began by reiterating well-established Federal Circuit law that all joint owners must join all other co-owners to establish standing to bring an infringement action. Otherwise, "if ownership in a patent is divided, one co-owner has the right to limit all other co-owners' abilty to sue an infringer by refusing to voluntarily join in an infringement action; generally, an unwilling co-owner cannot be forced to join an infringement action." Slip Op. at 4 (citing STC. UNM v. Intel Corp., 754 F.3d 940, 946 (Fed. Cir. 2014)).
After finding that Florida law applies to the Divorce Agreement and Final Judgment, the court noted that Florida law requires a court to equitably distribute all marital assets between a husband and a wife. Marital assets include assets acquired and liabilities incurred during the marriage, individually by either spouse or jointly by them. The date for determining what is a martial asset subject to division at divorce is "the earliest of the date the parties enter into a valid separation agreement, such other date as may be expressly established by such agreement, or the date of the filing of a petition for dissolution of marriage."
Applying Florida law to the facts of this case, the court determined that the inventor retained sole possession of the keyboard invention:
As of August 11, 1998 [the date when the Divorce Agreement was executed], all aspects of Katrinecz's work on the invention were in Katrinecz's sole possession. Further, the court finds that any marital asset associated with the keyboard invention and whatever other personal property that existed and would lead to the '872 Patent was in Katrinecz's sole possession at the time of the Agreement. Therefore, by the terms of the Agreement, all such property was conveyed to Katrinecz. Further, based on the explicit language in the Agreement, the parties had distributed all of their marital assets; nothing remained undivided.
As the patent application leading to the '872 Patent was filed [on August 26, 1998] after Katrinecz and Cothern executed the Agreement [on August 11], and, by virtue of the Agreement, Katrinecz had and retained sole possession of all marital assets related to the keyboard invention or leading up to the '872 Patent, and, as there were no marital assets related in any way to the '872 Patent remaining undivided after Katrinecz and Cothern's divorce, the court concludes that, as alleged in the First Amended Complaint, Katrinecz and Byrd together "own all right, title, and interest in the '872 Patent." This court has subject-matter jurisdiction over Katrinecz and Byrd's infringement claims alleged against Motorola in this action.
This decision highlights the intersection of property law and patent rights. This case illustrates that it is important to consider whether an inventor's ex-spouse acquired and retained any rights in the invention. As a defendant, a party not only may be able to have the case dismissed for lack of standing, but also may be able to acquire the ex-spouse's interest in the patent-in-suit and thereby immunize itself from any infringement allegations. As a plaintiff, the patent owner will want to confirm that it has sufficient rights in the patent to establish standing to assert a claim for infringement and thus its pre-suit analysis should consider the effect of any inventor's divorce proceedings. Katrinecz, et al. v. Motorola Mobility LLC, Case No. A-12-CA-00235-LY, Docket No. 86 (W.D. Tex. Nov. 7, 2014) (J. Yeakel)