General Electric Company, et al. v. Wilkins
Filing
190
MEMORANDUM DECISION re plaintiff's Motion for Preliminary Injunction, documents 15 and 16 . The Court orders defendant Thomas Wilkins and those acting in concert with him, and those who have actual notice of this order, are enjoined and rest ricted from licensing or offering to license any interest in the technology described in the '565 and '985 patents, or from making any representation that Wilkins is presently legally entitled to license such technology, pending the entry of final judgment in this action or further order of the Court; order signed by Judge Oliver W. Wanger on 5/5/2011. (Rooney, M)
1
2
3
4
UNITED STATES DISTRICT COURT
5
EASTERN DISTRICT OF CALIFORNIA
6
7
8
GENERAL ELECTRIC COMPANY,
9
Plaintiff,
10
1:10-cv-00674–OWW-JLT
MEMORANDUM DECISION REGARDING
PLAINTIFF’S MOTION TO FOR
PRELIMINARY INJUNCTION (Docs.
15, 16)
v.
11
THOMAS WILKINS,
12
Defendant.
13
I. INTRODUCTION.
14
15
A. Plaintiff’s Allegations
16
Plaintiff General Electric Company(“Plaintiff”) brings this
17
action against Defendant Thomas Wilkins (“Defendant”) for damages
18
and
19
Plaintiff is a developer of energy technologies and the holder of
20
U.S. Patent Nos. 6,921,985 (“‘985 Patent”) and 6,924,565, (“the’565
21
patent”).1
22
‘565 patent and asserts that he is an unnamed co-inventor of the
23
’985 patent.
24
patents.
relief.
According
to
Plaintiff’s
complaint,
Defendant is listed as one of seven inventors of the
Defendant asserts an ownership interest in both
Defendant was employed as an electrical engineer by Enron Wind
25
26
injunctive
Corp.
(“Enron”),
Plaintiff’s
predecessor
in
interest,
27
1
28
Only allegations common to Plaintiff’s original complaint and first amended
complaint are included in this summary.
1
1
intermittently
2
Defendant’s job responsibilities while employed by Enron included
3
the design, development, installation and testing of wind turbine
4
generators.
5
2002,
6
intellectual property.
7
from
approximately
April
1998
to
May
2002.
Enron filed for bankruptcy protection in 2002. In May
Plaintiff
Defendant
purchased
became
Enron’s
Plaintiff’s
assets,
employee
in
including
May
of
its
2002.
8
Defendant served as Plaintiff’s lead power systems electrical
9
engineer in California, and his job was to develop new designs for
10
wind turbine equipment. On May 31, 2002, Defendant first conceived
11
the invention underlying the ‘565 patent.
12
allege when the invention underlying the ‘985 was first thought of,
13
or who first thought of it. Defendant voluntarily resigned from
14
Plaintiff in December 2002.
15
Plaintiff
applied
for
the
‘565
and
Plaintiff does not
‘985
patents
after
16
Defendant terminated his employment with Plaintiff.
17
2004,
18
connection with Plaintiff’s application for the ’565 patent, but
19
Defendant refused.
Defendant has never signed an assignment
20
expressly
the
21
Plaintiff’s requests that he do so.
22
assignment from Defendant in connection with the ‘985 patent.
23
Plaintiff
requested
assigning
that
’565
Defendant
patent
to
sign
In February
documents
Plaintiff,
in
despite
Plaintiff did not seek an
In 2009, Defendant purported to license the ‘985 patent to one
24
of Plaintiff’s competitors.2
25
Plaintiff that he was offering to license the ‘565 patent to
In May 2010, Defendant informed
26
27
28
2
On February 11, 2011, the court granted a motion to intervene filed by
Mitsubishi Heavy Industries, Ltd., and Mitsubishi Power Systems Americas, Inc.,
the competitors Defendant purported to grant licenses to.
2
1
others.
2
such conduct.
3
B. Procedural History
4
Defendant refused Plaintiff’s request to cease and desist
Plaintiff filed a motion for preliminary injunction on July 9,
5
2010. (Docs. 15, 16).
On July 12, 2010, Plaintiff filed an ex
6
parte application requesting that the court advance the hearing on
7
its motion for preliminary injunction to August 16, 2010.
8
23).3
(Doc.
9
Defendant filed a motion to dismiss Plaintiff’s original
10
complaint on July 15, 2010; the hearing on the motion was set for
11
September 27, 2010.
12
an ex parte motion seeking to “suspend briefing on the Motion for
13
Preliminary Injunction” until after the hearing on Defendant’s
14
motion to dismiss.
15
expressed Defendant’s hope that resolution of the motion to dismiss
16
would moot Plaintiff’s motion for preliminary injunction. (Doc. 27
17
at 2).
18
(Doc. 26).
On July 20, 2010,
(Doc. 27).4
Defendant filed
Defendant’s ex parte motion
On July 21, 2010, the court issued a minute order setting a
19
scheduling
conference
for
July
22,
2010
in
order
to
discuss
20
resolution of the parties’ respective ex parte requests.
21
28). After conducting the July 22 scheduling conference, the court
22
issued a minute order that directed Plaintiff to file a motion for
23
a temporary restraining order (“TRO”) by July 26, 2010 and set a
24
hearing for Plaintiff’s motion for August 6, 2010. (Doc. 29). The
(Doc.
25
3
26
27
Local Rule 230(b) provides a twenty-eight day notice requirement. E.D. Cal.
R. 230(b).
A hearing date on August 16, 2010 would have provided Defendant
thirty-eight days notice.
4
28
Defendant's motion also advanced opposition to Plaintiff's request to advance
the hearing on Plaintiff's motion for preliminary injunction. (Id).
3
1
minute
2
reciprocal depositions, “preferably” by August 3, 2010.
3
order
also
directed
the
parties
to
complete
limited
(Id.).
On July 26, 2010, Plaintiff filed a motion seeking a TRO and
4
supporting documents.
5
the parties submitted a stipulation pursuant to which
6
agreed to withdraw its TRO application and cooperate with Defendant
7
on various scheduling matters in exchange for Defendant’s agreement
8
to refrain from certain conduct.
9
stipulation on July 20, 2010 (“Stipulation”).
10
11
(Docs. 30, 31, 32, 33).
(Doc. 37).
On July 30, 2010,
Plaintiff
The court signed the
(Doc. 38).
parties’ Stipulation provided, in pertinent part:
1. GE’s motion for a temporary restraining order is
denied as moot;
12
13
2. The hearing date for GE’s motion for preliminary
injunction is taken off calendar pending the hearing on
Wilkins’ motion to dismiss;
14
15
16
17
18
19
3. The hearing date for Wilkins’ motion to dismiss shall
be set on a date agreeable to the Court at the earliest
practicable opportunity, and the briefing schedule shall
be pursuant to the local rules; and
4. The Court will set a hearing date on briefing schedule
for GE’s motion for a preliminary injunction at the
hearing on Wilkins’ motion to dismiss.
The parties
request that the hearing on GE’s motion for a preliminary
injunction be set within 35 days of the hearing on
Wilkins’ motion to dismiss.
20
21
22
23
24
THEREFORE, the parties stipulate and agree that pending
GE’s hearing on the motion for a preliminary injunction
that neither Wilkins, nor any person or entity acting in
concert with Wilkins, shall:
1. Take any steps to license, purport to license, grant,
or purport to grant rights to third parties in GE’s
Patent Nos. 6,924,565 and 6,921,985 (the “„565 and „985
Patents”); or
25
26
2. Modify or extend the license agreement with Mitsubishi
Heavy Industries, Ltd. and/or related entities related to
GE’s ‘565 and ‘985 Patents; or
27
28
3. Engage in any conduct that would convey or tend to
convey to third parties that Wilkins is licensing or will
4
The
1
license any ownership interest in the „565 or „985
Patents; or
2
4. Represent on his website or otherwise, unless under
oath in judicially required or requested testimony, that
he believes he has an ownership interest in the ‘565 and
‘985 Patents, or that he believes he has the lawful right
to license under the ‘565 and ‘985 Patents.
3
4
5
(Doc. 38 at 3-4).
6
On September 2, 2010, Plaintiff filed an ex parte application
7
to continue the hearing date on Defendant’s motion to dismiss due
8
to a scheduling conflict.
(Doc. 40).
Defendant filed vehement
9
opposition to Plaintiff’s request for continuance on September 7,
10
2010.5
(Doc. 41).
Defendant’s opposition argued that Defendant
11
only agreed to the Stipulation based on the assumption that his
12
motion to dismiss would be heard on September 27.
(Doc. 41 at 2).
13
Defendant’s
opposition
threatened
noncompliance
with
the
14
Stipulation if the hearing on Defendant’s motion to dismiss was not
15
held on September 27.
(Doc. 41 at 4).
16
The court conducted a hearing on Plaintiff’s ex parte request
17
to continue the hearing on the motion to dismiss on September 16,
18
2010.
In an attempt to effect a compromise solution to the
19
parties’ contentious dispute, the court issued a minute order that
20
granted Plaintiff’s request for continuance but also stated that
21
the Stipulation would expire on September 27, 2010.
(Doc. 45).
On
22
September 17, Plaintiff’s counsel emailed the court and stated that
23
Plaintiff would proceed with the September 27 hearing date for the
24
motion to dismiss in order to preserve the terms of Stipulation,
25
26
5
27
28
In the opposition to Plaintiff’s ex parte request, Defendant’s counsel accused
Plaintiff’s counsel of fraud in procurement of the Stipulation.
The court
rejected Defendant’s accusation.
Defendant’s counsel also vowed not to agree
to any further stipulations in this case. (Doc. 41 at 4).
5
1
pursuant to which the Stipulation was to remain in place until the
2
preliminary injunction hearing.
3
minute order on September 17 which provided:
4
5
(Doc. 46). The court issued a
In view of the Plaintiff electing to proceed to hearing
on 9/27/2010, Stipulated [TRO] and Scheduling Order shall
remain in full force and effect according to its original
terms.
6
7
8
9
(Doc. 46).
The court heard Defendant’s motion to dismiss on September 27,
2010.
During the hearing, the court announced its tentative
10
decision to dismiss the contract cause of action pled in the
11
complaint with leave to amend. The court expressed its belief that
12
although Plaintiff’s complaint was not technically deficient under
13
federal pleading standards, amendment of the complaint would be
14
beneficial during later stages of the litigation:
15
16
17
18
19
20
The Court: [D]o you agree that you should, in effect,
separately state the [distinct breach of contract] claims
you have?
Mr. Hanlon: Your Honor, I think the claims are
sufficiently alleged in the four causes of action that
are stated. I don’t believe there’s a requirement under
federal procedural law that each separate contractual
breach be separately alleged as a separate cause of
action. We could certainly do that if it’s the Court’s
preference, but we don’t believe that GE was required to
so plead.
21
22
23
The Court: I think that’s probably right, but if it does
-- what is alleged doesn’t permit, if you will, the
application of the statute of limitations to what is
alleged to be breached, then you run the risk of having
that barred if you don’t amend.
24
25
(Doc. 87, Trans. at 16-17).
26
close of the hearing:
27
28
The court reiterated its view at the
I’ll just close my thoughts by saying this. The reason
that I mentioned amendment was because although it
doesn’t
dictate
the
Court’s
pleading
standards,
6
1
California law does utilize, to the extent that a
California contract is in dispute here, it does utilize
a primary rights theory to underlie pleading doctrine...
2
3
[I]t seems to me that there is more than one primary
right being asserted by GE in this lawsuit. There’s a
contract right, three of them, and then there’s some
intellectual property rights as well and then there is a
-- an employment property right also that is at dispute
and so down the line if GE wants to live dangerously, I
suppose they can do that...the matter stands submitted.
We’ll get a decision out to you as soon as we can.
4
5
6
7
(Id. at 23-24).
A Memorandum Decision dismissing Plaintiff’s
8
complaint without prejudice was entered on October 8, 2010.
(Doc.
9
58).6
10
On
September
28,
2010, the
court
issued
a
minute
order
11
vacating as
moot
the hearing
date
on Plaintiff’s
motion
for
12
preliminary injunction; this minute order was a clerical error, as
13
there was no hearing date on calendar pursuant to the Stipulation.
14
(See Doc. 38 ¶2).
15
On
October
1,
2010,
the
court
held
a
status
conference
16
regarding yet another contentious dispute among the parties–this
17
time,
the
parties’
dispute
concerned
the
status
of
their
18
Stipulation.
Defendant argued that because the court stated its
19
tentative decision to dismiss the complaint, and because the court
20
did not set a hearing date or briefing schedule for the motion for
21
preliminary injunction at the close of the hearing on the motion to
22
dismiss, the Stipulation “expired on its own terms.”
(Doc. 52).
23
The court rejected Defendant’s position, noting that the terms of
24
the stipulation enjoined Defendant from certain actions “pending
25
GE’s hearing on the motion for preliminary injunction.”
(Doc. 108
26
27
6
28
The formal order dismissing the original complaint was signed on October 18,
2010, after Plaintiff filed the FAC.
7
1
at 8).
2
unequivocally specified that the life of the agreement was to
3
extend until the hearing on Plaintiff’s motion for preliminary
4
injunction.
5
that there was no complaint on file, the court stated:
6
The court held that the language of the Stipulation
(Doc. 108 at 8).
In response to Defendant’s argument
[W]e have a complaint...under the injunction and
declaratory relief claims for the alleged...interference
with the alleged patent rights...at least those claims
are going to survive until the next round or dispositive
motion...As of today we do have a complaint because I’ve
only announced a tentative ruling and I haven’t made a
dispositive order...We had an agreement that this interim
order would be in effect until the hearing of the
preliminary injunction motion, and that was to be within
35 days of the [September 27], which was the hearing date
on the motion [to dismiss]
7
8
9
10
11
12
(Doc. 108 at 10).7
13
order
14
stipulated temporary restraining order remains in full force and
15
effect
16
injunction...Motion for Preliminary Inunction set for 10/18/2010 at
17
11:00 AM.”
18
directed Defendant to file opposition to Plaintiff’s motion for
19
preliminary injunction on or before October 8, 2010.
20
Defendant filed opposition to Plaintiff’s motion on October 8,
21
2010.
22
opposition on October 14, 2010.
which
After the hearing, the court entered a minute
provided
pending
the
in
hearing
(Doc. 53).
(Doc.
pertinent
62).
on
part:
the
“The
motion
Court
for
ORDERED
preliminary
The Court’s October 1, 2010 minute order
Plaintiff
filed
a
reply
to
(Id.).
Defendant’s
(Doc. 77)
23
On October 12, 2010, the court ordered Plaintiff to submit an
24
amended complaint by October 14, 2010 so that Defendant would have
25
the
amended
complaint
in
his
possession
at
the
hearing
on
26
27
28
7
After the court explained its holding that the Stipulation remained in force,
Defendant's counsel informed the court that Defendant would not comply with the
court’s ruling. (Id.).
8
1
Plaintiff’s motion for preliminary injunction. Plaintiff filed its
2
First Amended Complaint (“FAC”) on October 13, 2010.
(Doc. 74).
3
The court heard Plaintiff’s motion for preliminary injunction
4
on October 18, 2010 and stated orally on the record that it would
5
issue a written decision granting a preliminary injunction.
6
83).
7
fact and conclusions of law.
(Doc.
The court directed Plaintiff to prepare proposed findings of
(Id.).
8
Defendant submitted a request for leave to file supplemental
9
opposition to the motion for preliminary injunction on October 20,
10
2010; the court denied Defendant’s request on October 21, 2010, as
11
the matter had been heard on notice. (Docs. 84, 86).
12
Plaintiff submitted proposed findings of fact and conclusions
13
of law on October 25, 2010.
(Doc. 94).
Defendant filed objections
14
to Plaintiff’s proposed findings of fact and conclusions of law on
15
October 26, 2010.
(Doc. 95).
II. LEGAL STANDARD.
16
17
"A preliminary injunction is an extraordinary remedy never
18
awarded as of right." Winter v. Natural Resources Defense Council,
19
Inc., 129 S. Ct. 365, 376 (2008) (citation omitted). "A plaintiff
20
seeking a preliminary injunction must establish that he is likely
21
to succeed on the merits, that he is likely to suffer irreparable
22
harm in the absence of preliminary relief, that the balance of
23
equities tips in his favor, and that an injunction is in the public
24
interest." Id. at 374 (citations omitted).
25
be awarded upon a clear showing that the plaintiff is entitled to
26
relief. Id. at 376 (citation omitted) (emphasis added).
27
///
28
///
9
An injunction may only
1
III. FINDINGS OF FACT.
2
A. Defendant's Employment With GE and Enron
3
1.
4
employment to Defendant dated December 17, 2001 ("2001 Enron Offer
5
Letter").
6
offered to Defendant in the 2001 Enron Offer Letter was "Power
7
Systems Engineer."
8
responsibilities of a Power Systems Engineer as follows:
9
Enron Wind Corporation ("Enron") extended a written offer of
(Doc. 18, Brace Decl. at 1).
The title of the position
The 2001 Enron Offer letter described the
Will be responsible for the design, development,
installation, and testing of the Enron Wind Dynamic VAR
system.
Duties will include direct interaction with
project developers, site operators, park owners,
utilities, Enron Wind Manufacturing and vendors. Will
help establish performance criteria, testing procedures,
installation procedures, and product manuals data
10
11
12
13
Will work to assure proper electrical design of all
Ballance-of-Plant (BOP) items including pad mount
transformers, electrical infrastructure, sub-station
design
review
including
all
data
acquisition
requirements.
Will work directly with Enron Wing
Execution group, and Enron Wing engineering.
14
15
16
Will be responsible for the specification, and overall
performance of the Variable Speed Drive Converters used
on all Enron Wind Variable Speed turbines. Duties will
include specification system design, testing, and vendor
qualification. Design development engineering input for
any in-house design is also expected.
17
18
19
20
Will interact with the Advanced Technology Group as
needed to provide input for new technology developments
including control system, converter system, ptich system,
generator system, and overall wind turbine design.
21
22
23
(Doc. 18, Brace Decl., Ex. A at 1).
The 2001 Enron Offer Letter
24
stated "As part of your terms of employment, you will be required
25
to sign a Confidentiality and Inventions Agreement."
(Id. at 2).
26
27
2.
Defendant commenced employment with Enron in January 2002.
28
(Doc. 18, Brace Decl. at 2; Ex. A at 4).
10
At some point in early
1
2002, Defendant signed the 2001 Enron Offer Letter.
2
Pursuant to the terms of the 2001 Enron Offer Letter and Enron's
3
general
4
Confidentiality and Inventions Agreement ("Enron C & I Agreement")
5
as a condition of his employment.
6
A at 2).
business
practice,
Defendant
was
required
(Id.).
to
sign
a
(Doc. 18, Brace Decl. at 2; Ex.
7
8
3.
In early 2002, Norland Brace, Enron's Director of Human
9
Resources, was involved in due diligence preparations in connection
10
with the proposed sale of Enron.
(Doc. 18, Brace Decl. at 2).
11
Mr. Brace was charged with ensuring that each of Enron's employees,
12
including its engineers, had signed Enron's C & I Agreement so that
13
Enron could present the agreements to prospective buyers.
14
When Mr. Brace was unable to locate a signed copy of Defendant's C
15
& I Agreement, he personally
16
Agreement along with other employment documents, including a copy
17
of the 2001 Enron Offer Letter; these documents comprised Enron's
18
"employment packet."
(Id.).
took a copy of the Enron's C & I
(Id.).
19
20
4.
Defendant initially refused to sign the Enron C & I Agreement.
21
(Doc 18, Brace Decl. at 2).
22
signing the C & I Agreement was a condition of his employment and
23
that he would be terminated if he did not sign the agreement.
24
(Id.).
25
Agreement and the 2001 Enron Offer Letter;
26
indicates that he witnessed Defendant sign these documents on
27
February 3, 2002.
28
February 3, 2002 was a Sunday.
Mr. Brace informed Defendant that
Mr. Brace witnessed Defendant sign the Enron C & I
(Id.).
Mr Brace's declaration
The court takes judicial notice that
11
1
5.
A signed copy of Defendant's Enron C & I Agreement was sent by
2
Enron to prospective buyers as part of Enron's due diligence
3
requirement, along with the C & I Agreements of Enron's other
4
employees.
(Doc. 18, Brace Decl. at 2).
5
6
6.
A signed copy of Defendant's Enron C & I Agreement cannot be
7
located by Plaintiff.
8
experienced problems locating documents from the set of records
9
that should contain Defendant's signed Enron C & I Agreement, as
(Doc. 18, Brace Decl. at 2).
10
such records have been moved off site.
11
Plaintiff has
(Id.; Doc. 17, Hunt Decl.
at 2).
12
13
7.
Defendant worked for Enron from January 2002 until May 2002.
14
(Doc 18, Brace Decl. at 2).
15
16
8.
On May 10, 2002, Plaintiff acquired certain of Enron's assets,
17
including intellectual property related to Enron's wind turbine
18
operations.
(Doc. 19, McGinness Decl. at 2; Doc. 63, Schulte
19
Decl., Ex.
E at 5).
20
"rights...under any and all employment contracts" were expressly
21
excluded from the assets Plaintiff purchased from Enron. (Doc. 68,
22
Schulte Decl. at 5).
Pursuant to the purchase agreement,
23
24
9.
In 2002, David Hunt, GE's current Human Resources Manager,
25
Global Mergers and Acquisitions, was part of the human resources
26
team that was responsible for integrating Enron's employees into
27
Plaintiff's business.
28
the integration process, all Enron employees were required to sign
(Doc. 17, Hunt Decl. at 1-2).
12
As part of
1
various
employment
forms
2
Plaintiff.
3
provided by Plaintiff, they would have been immediately terminated.
4
(Id.).
(Id.).
as
a
condition
to
employment
with
If any employee refused to sign the forms
5
6
10.
Defendant commenced employment with Plaintiff as a Power
7
Systems Engineer in May 2002.
(Doc. 18, Brace Decl. at 3).
8
9
11.
On May 29, 2002, Defendant signed a document entitled "The
10
Spirit & Letter of Our Commitment" in which Defendant acknowledged
11
that he had received various documents that comprised the guide to
12
Plaintiff's employee policies ("Spirit and Commitment Letter").
13
(Doc. 17, Hunt Decl. at 2, Ex. B).
14
was to require employees to sign all documents that accompanied the
15
Spirit and Commitment Letter at the same time.
16
Decl. at 2). One of the documents Defendant acknowledged receiving
17
by
18
Employee Innovation and Proprietary Information Agreement ("GE EIPI
19
Agreement").
20
locate a copy of the GE EIPI Agreement signed by Defendant.
21
17, Hunt Decl. at 2).
signing
the
Spirit
and
Plaintiff's business practice
Commitment
(Doc. 17, Hunt Decl. Ex. B).
Letter
(Doc. 17, Hunt
was
Plaintiff's
Plaintiff is unable to
(Doc.
22
23
12.
The Spirit and Commitment Letter contains a provision which
24
provides "I understand that every employee is required to comply
25
with the policies described in the guide."
26
2, Ex. B).
(Doc. 17, Hunt Decl. at
27
28
13.
Defendant resigned from Plaintiff’s employ on December 1,
13
1
2002.
2
B. The ‘565 Patent
3
14.
4
a document entitled "Record of Invention" for technology described
5
as "Continuous WTG VAR Support and Prioritization."
6
McGinness Decl. Ex. B).
7
signed the form as an inventor.
8
stated that Defendant first thought of the invention on May 31,
9
2002 and indicated that the inventors' division was "General
10
(Doc. 18, Brace Decl. at
3).
On May 31, 2002 Defendant signed and submitted
Electric Wind Energy."
to Plaintiff
(Doc. 19,
A second person, Nagwa Elkachouty, also
(Id.).
The Record of Invention
(Id).
11
12
15.
On August 18, 2003, Plaintiff filed a patent application for
13
the technology described in the Record of Invention. (See Doc. 26,
14
Ex. 1 at 37; Doc. 19, McGinness Decl. at 2).
15
patent application with an unsigned Inventor Declaration and Power
16
of Attorney Form for Defendant.
Plaintiff filed the
(See Doc. 26, Ex. 1 at 37).
17
18
16.
After
receiving
19
Nonprovisional Application" in November 2003, Plaintiff, through
20
counsel,
21
requesting that Defendant sign an Inventor Declaration and Power of
22
Attorney form in connection with the patent application. (Doc. 26,
23
Ex. 1 at 38).
24
attorney of record for the patent application, spoke with Defendant
25
on the phone and Defendant stated that he was not willing to sign
26
the Inventor Declaration and Power of Attorney form.
27
Mendonsa received the unexecuted forms from Defendant on February
28
24, 2004.
sent
a
Defendant
"Notice
a
letter
to
File
dated
Missing
February
Parts
10,
of
2004,
On February 11, 2004, Paul Mendonsa, Plaintiff's
(Id.).
(Id.).
Mr.
On March 17, 2004, Plaintiff filed a petition
14
1
under 37 C.F.R. § 1.47(a) to continue the patent application in the
2
name of Defendant.
(Id.).
3
4
17.
On August 2, 2005, United States Patent No. 6,924,565 B2
5
("‘562 Patent") issued for technology titled "Continuous Reactive
6
Power Support for Wind Turbine Generators."
7
Decl. Ex. A at 1).
8
Invention established the basis for the ‘565 Patent.
9
McGinness Decl. at 2).
(Doc. 19, McGinness
The technology disclosed in the Record of
(Doc. 19,
The ‘565 Patent named seven inventors, one
10
of whom was Defendant and one of whom was Nagwa Elkchouty.
11
Each of the inventors listed in the ‘565 Patent is a current or
12
former employee of Plaintiff, and other than Defendant, each has
13
assigned his or her rights in the patent to Plaintiff.
14
McGinness Decl. at 2).
15
the assignee on the ‘565 Patent.
16
at 1).
17
(Id.).
(Doc. 19,
"General Electric Company" is listed as
(Doc. 19, McGinness Decl. Ex. A
The abstract to the ‘565 Patent provides:
Real and reactive power control for wind turbine
generator systems.
The technique described herein
provides the potential to utilize the total capacity of
a wind turbine generator system (e.g., a wind farm) to
provide dynamic VAR (reactive power support). The VAR
support provided by individual wind turbine generators in
a system can be dynamically varied to suit application
parameters.
18
19
20
21
22
(Id.).
23
24
18. Plaintiff has licensed and continues to offer licenses for the
25
use of the technology subject to the ‘565 Patent.
26
McGinness Decl. at 2).
(Doc. 19,
27
28
19.
On June 2, 2010, Defendant, through counsel, sent an email to
15
1
Plaintiff's counsel containing a document entitled "Notice of
2
Non-Abandonment and Intent to License" ("June 2010 Notice").
3
(Doc. 20, Glynn Decl. at 2, Ex. C1).
4
that
5
selling, licensing, engineering, and designing wind turbines and
6
wind farms to utilize [the technology underlying the ‘565 Patent]."
7
(Id. at Ex. C1 at 1).
Defendant
was
"actively
The June 2010 Notice stated
performing
work
in
commerce
by
8
9
C. The ‘985 Patent
10
20. On July 26, 2005, United States Patent No. 6,921,985 B2 ("‘985
11
Patent") issued for technology described as "Low Voltage Ride
12
Through for Wind Turbine Generators."
13
Ex. C at 1).
14
Defendant is not one of them. (Id.).
15
appeared on the application transmittal letter and cover sheet
16
Plaintiff initially filed with the U.S. Patent and Trademark
17
Office.
18
Patent is a current or former employee of Plaintiff and each has
19
assigned his or her rights in the patent to Plaintiff.
20
McGinness Decl. at 2). "General Electric Company" is listed as the
21
assignee on the ‘985 Patent.
22
1).
23
24
25
26
27
28
(Doc. 19, McGinness Decl.
Five inventors are named in the ‘985 Patent;
(Doc. 64).
However, Defendant's name
Each of the inventors listed in the ‘985
(Doc. 19,
(Doc. 19, McGinness Decl. Ex. C at
The abstract to the ‘985 Patent provides:
A wind turbine. The wind turbine includes a blade pitch
control system to vary a pitch of one or more blades and
a turbine controller coupled with the blade pitch control
system. A first power source is coupled with the turbine
controller and with the blade pitch control system to
provide power during a first mode of operation.
Uninterruptible power supplies coupled to the turbine
controller and with the blade pitch control system to
provide power during a second mode of operation. The
turbine controller detects a transition from the first
mode of operation to the second mode of operation and
16
1
2
causes the blade pitch control system to vary the pitch
of one or more blades in response to the transition.
(Id.).
3
4
21.
On August 7, 2009, an Administrative Law Judge ("ALJ") for
5
the United States International Trade Commission issued an "Initial
6
Determination" which held that Defendant was an inventor "of the
7
subject matter of claim 15 of the ‘985 patent."
8
On March 2, 2010 the United States International Trade Commission
9
affirmed the ALJ's finding that Defendant was an inventor of the
10
‘985 patent, but held that because Defendant's name did not appear
11
on the face of the patent, he was not an "owner" of the patent.
12
(Doc. 67 at 7).
(Doc. 66 at 3).
13
14
22.
On
May
17,
2010,
Defendant,
through
counsel,
informed
15
Plaintiff's counsel that Defendant had purported to license the
16
technology subject to the ‘985 Patent to MHI.
17
Dec. at 2, Ex. B).
(Doc. 20., Glynn
18
19
23.
On June 2, 2010, Defendant, through counsel, sent an email to
20
Plaintiff's counsel containing a document entitled "Notice of
21
Non-Abandonment and Intent to License" ("June 2010 Notice").
22
(Doc. 20, Glynn Decl. at 2, Ex. C1).
23
that
24
selling, licensing, engineering, and designing wind turbines and
25
wind farms to utilize [the technology underlying the ‘985 Patent]."
26
(Id. at Ex. C1 at 2).
27
///
28
///
Defendant
was
"actively
The June 2010 Notice stated
performing
17
work
in
commerce
by
1
D. Defendant's Recent Conduct
2
24. On July 30, 2010, the parties submitted a Stipulation pursuant
3
to which Defendant agreed to refrain from certain conduct until
4
Plaintiff's motion for preliminary injunction was heard.
5
37).
6
any rights in the subject patents to third parties; (2) engage in
7
any conduct that would convey or tend to convey to third parties
8
that Defendant is licensing or will license any ownership interest
9
in
Inter alia, Defendant agreed not to:
the
subject
patents;
or
(3)
(Doc.
(1) license or grant
represent
on
his
website
or
10
otherwise, unless under oath in judicially required or requested
11
testimony, that he believes he has an ownership interest in the
12
subject patents
13
license the subject patents. (See Doc. 38 at 3-4).
The court
14
signed the Stipulation on July 20, 2010.
On October
15
1, 2010, the court held a hearing to resolve a dispute regarding
16
the parties disparate interpretations of the Stipulation.
17
53).
18
pending a hearing on Plaintiff's motion for preliminary injunction.
19
(Doc. 53).
20
informed the court that Defendant would not comply with the court's
21
order.
or that he believes he has the lawful right to
(Doc. 38).
(Doc.
The court ordered that the Stipulation would remain in force
At the close of the hearing, Defendant's counsel
(Doc. 108, Trans. at 10-11).
22
23
25.
On October 1, 2010, Defendant represented on his personal
24
website that (1) he had the capacity to assign an interest the ‘985
25
patent; (2) entities interested in licensing "LVRT or POWER FACTOR
26
CONTROL"
technology
27
discuss;"
and (3)
28
injunction
should
"there
preventing
is
"contact
[Defendant]
no pending
[Defendant]
18
from
directly
restraining
licensing
his
to
order or
rightful
1
technology."
(Doc. 91, Eldredge Dec. Exs. B, B1).
On October 20,
2
2010, Defendant modified his website by adding the text of the
3
court's October 1 minute order and stating "if you would like to
4
discuss licensing for terms for technologies contained in United
5
States Patents 985 and 565 you will have to wait until this matter
6
is handled with the court, and then terms can be negotiated.
7
come back to this web site from time to time because you never
8
know. Things have a way of just working out for the benefit of all
9
parties."
But
(Doc. 91, Eldredge Dec. Ex. C).
10
IV. CONCLUSIONS OF LAW
11
12
A. Jurisdiction
13
1. Jurisdiction over this action is proper pursuant to 28 U.S.C. §
14
1332 based on diversity of citizenship.
15
16
2. Equitable powers are an inherent part of the judicial power
17
committed to the federal courts by Article III of the United States
18
Constitution.
19
Cir. 2010)(citing Pa. v. Wheeling & Belmont Bridge Co., 59 U.S.
20
460, 462 (1855)).
21
equitable relief; "[t]he essence of equity jurisdiction is the
22
power
23
necessities of the particular case." United States v. Odessa Union
24
Warehouse Co-op, 833 F.2d 172, 175 (9th Cir. 1987).
25
courts also have inherent power to control their dockets and to
26
promote efficient use of judicial resources.
27
Express, Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir.
28
2007) (citation omitted).
of
the
E.g. Rodriguez v. Hayes, 591 F.3d 1105, 1120 (9th
District courts have broad latitude in crafting
court
to
fashion
19
a
remedy
depending
upon
the
District
Dependable Highway
1
2
3. The court’s dismissal of Plaintiff’s original complaint with
3
leave to amend did not render Plaintiff’s motion for preliminary
4
injunction moot, as the court and both parties were aware that
5
Plaintiff intended to and did amend its complaint to clarify its
6
breach of contract claims. An order of a district court dismissing
7
a complaint with leave to amend leaves the suit pending for further
8
proceedings.
9
(1958) (citation omitted).
E.g. Jung v. K. & D. Mining Co., 356 U.S. 335, 337
Where the district court expressly
10
grants a party leave to amend its complaint, it is plain that the
11
court does not intend to relinquish jurisdiction over the case.
12
See WMX Techs. v. Miller, 104 F.3d 1133, 1137 (9th Cir. 1997)
13
(dismissal with leave to amend was not a final appealable order).
14
A district court’s dismissal of a complaint with leave to amend is
15
not a dismissal of the underlying action. Montes v. United States,
16
37 F.3d 1347, 1350 (9th Cir. 1994) (noting distinction between
17
dismissal of a complaint and dismissal of the underlying action);
18
De Tie v. Orange County, 152 F.3d 1109, 1111 (9th Cir. 1998)
19
(same); Martinez v. Flores, 299 F.2d 888.
20
misrepresentation
21
informed assumption of risk not to offer evidence to oppose the
22
injunction
23
injunction requires that Defendant be held accountable for this
24
strategic misevaluation.
at
of
the
this
October
law
and
18,
Defendant’s counsel’s
Defendant’s
2010
hearing
voluntary
on
preliminary
25
26
B. Likelihood of Success
27
4. California Labor Code Section 2860 provides:
28
Everything which an employee acquires by virtue of his
20
and
1
employment, except the compensation which is due to him
from his employer, belongs to the employer, whether
acquired lawfully or unlawfully, or during or after the
expiration of the term of his employment
2
3
Cal. Lab. Code § 2860. California Labor Code section 2860 embodies
4
the universally accepted principal that work product created by an
5
employee belongs to the employer where the employee was hired to
6
create such work product.
See e.g. Lugosi v. Universal Pictures,
7
25 Cal. 3d 813, 826 (Cal. 1979)(Mosk, J., concurring) (collecting
8
cases such as Zahler v. Columbia Pictures Corp., 180 Cal. App. 2d
9
582, 589 (Cal. Ct. App. 1960) (where an employee creates something
10
as part of his duties under his employment, the thing created is
11
the property of his employer"); accord Treu v. Garrett Corp., 264
12
Cal. App. 2d 432, 436 (1968) (an invention created by an employee
13
was held to belong to the employer because that was the very reason
14
he was hired and paid); Famous Players-Lasky Corp. v. Ewing, 49
15
Cal. App. 676 (Cal. Ct. App. 1920) (same)); Aero Bolt & Screw Co.
16
v. Iaia, 180 Cal. App. 2d 728, 736 (Cal. Ct. App. 1960) (where
17
employee is hired to invent, employer owns invention); United
18
States v. Dubilier Condenser Corp., 289 U.S. 178, 216 (1933)
19
(employer owns invention where employee is “hired or assigned to
20
evolve a process or mechanism for meeting a specific need”). There
21
is no dispute that Defendant was Plaintiff’s statutory employee at
22
all times relevant.
23
24
5. On or about May 31, 2002, Defendant signed a document entitled
25
“Record of Invention” providing that he first thought of the
26
technology underlying the ‘565 Patent on May 31, 2002.
The Record
27
of
Invention
indicated
that
the
28
21
invention
was
developed
for
1
"General Electric Wind Energy." (Doc. 19, McGinness Decl. Ex. B).
2
At the time Defendant signed the Record of Invention, he was
3
employed by Plaintiff as a Power Systems Engineer.8
4
conceived the technology underlying the ‘565 patent while employed
5
by
6
developing
7
technology presumptively belongs to Plaintiff. E.g. Treu, 264 Cal.
8
App. 2d at 436; Cal. Lab. Code § 2860.9
9
the record and applicable case law, Plaintiff has established a
Plaintiff
for
such
the
purpose
technology,
of
engineering,
pursuant
to
As Defendant
designing,
California
law,
and
the
In light of the state of
10
11
12
13
14
15
16
8
As a power system’s engineer at Enron, Defendant’s duties included “design,
development, installation, and testing of the Enron Wind Dynamic VAR system;”
“[d]esign development engineering input for any in-house design;” and
“provid[ing] input for new technology developments including control system,
converter system, pitch system, generator system, and overall wind turbine
design.” (Doc. 18, Brace Decl., Ex. A at 1). There is no admissible evidence
indicating that the scope of Defendant’s job duties changed when he transferred
from Enron to GE, and it is reasonable to infer from the evidence on the record
that Defendant’s job duties remained substantially the same at GE.
Further,
Defendant’s representations to the U.S. International Trade Commission reveal
that his job at GE was to “develop new designs” for technology used in GE’s
business. (Doc. 66, Schulte Decl. Ex. C at 4-5).
17
9
18
19
20
21
22
23
24
25
26
27
28
The cases provided in Defendant’s opposition, Dubilier Condenser Corp., 289
U.S. at 188 and Banner Metals, Inc. V. Lockwood, 180 Cal. App. 2d 728, 733 (Cal.
Ct. App. 1960) are of no help to Defendant.
Rather, these cases serve to
reinforce the point that Plaintiff presumptively owns the subject technology in
this action, as the cases highlight the differences between Defendant’s situation
and an employee who independently develops technology on his own.
In Banner
Metals, the inventor was employed by his employer as an order clerk, developed
his invention on his own time at his own expense, and prosecuted the patent for
his invention without involvement from his employer. 180 Cal. App. 2d at 731,
736 (emphasis in original). Similarly, in Dubilier, the employees’ invention was
not developed within the scope of their employment duties. 289 U.S. at 197.
Here, the evidence demonstrates that Defendant developed the subject technology
within the scope of his employment.
Williams v. Weisser, 273 Cal. App. 2d 726,
733-34 (Cal. Ct. App. 1969), cited by Intervenor Mitsubishi, is not persuasive
either. The Williams Court specifically distinguished the lectures at issue in
that case from inventions created by an employee hired to invent: “University
lectures are sui generis...they should not be blindly thrown into the same legal
hopper with valve designs.” Id. at 735 (citing Daniel Orifice Fitting Co. V.
Whalen, 198 Cal. App. 2d 791 (Cal. Ct. App. 1962)). Whalen expressly recognizes
that “[w]here a person is employed to design improvements to the product of his
employer, or to design new products for his employer, and he does so, he may not
use the results of such work for his own use and benefit, and particularly not
to the detriment of his employer.” 198 Cal. App. 2d at 798.
22
1
high probability of success on its claim for declaratory relief
2
regarding its ownership claim to the technology subject to the ‘565
3
patent.
4
5
6.
According
6
International Trade Commission, Defendant worked on developing the
7
technology underlying the ‘985 patent as an employee of Enron Wind
8
during 1999 and 2000.
9
Defendant
also
to
Defendant’s
representations
to
the
U.S.
(Doc. 66, Schulte Decl. Ex. C at 3).
represented
to
the
U.S.
International
Trade
10
Commission that in 2002, he was the lead power systems electrical
11
engineer for GE and that his job was to develop new designs for low
12
voltage ride-through. (Id. at 4-5). In connection with his duties
13
as GE’s lead power systems engineer, Defendant flew to Germany to
14
work on the technology underlying the ‘985 Patent with other GE
15
engineers.
16
Defendant incorporated into the ‘985 Patent presumptively belongs
17
to Plaintiff, as Defendant invented such technology in his capacity
18
as an employee of Plaintiff’s who was being paid to invent.
19
Treu, 264 Cal. App. 2d at 436; Cal. Lab. Code § 2860.
20
has established a high probability of success on its claim for
21
declaratory relief regarding the ‘985 patent.10
(Id.).
Accordingly,
any
technology
invented
by
E.g.
Plaintiff
22
23
C. Irreparable Harm
24
7.
25
that irreparable injury is likely in the absence of preliminary
26
relief; mere possibility of such injury is insufficient.
A plaintiff seeking a preliminary injunction must demonstrate
E.g.
27
10
28
As Plaintiff has established a high probability of success on this equitable
claim, it is unnecessary to discuss Plaintiff’s contract claims.
23
1
Winter, 129 S.Ct. At 375.
2
may constitute irreparable harm.
3
of Fayetteville, 2010 U.S. App. LEXIS 26202*14 (8th Cir. 2010);
4
BellSouth
5
Services, 425 F.3d 964, 970 (11th Cir. 2005); Gallagher Benefit
6
Servs.
7
2008)(unpublished).11
8
holder’s right to license and practice a patent supports a finding
9
of irreparable harm protected by equity and injunctive relief, as
10
the “attendant loss of profits, goodwill, and reputation cannot be
11
satisfactorily
12
Nestle, S.A. v. Casa Helvetia, Inc., 982 F.2d 633, 640 (1st Cir.
13
1992).
v.
Telecomms.,
De
La
Loss of customers and damage to goodwill
Inc.
Torre,
E.g. Rogers Group, Inc. v. City
v.
283
MCImetro
Fed.
Appx.
Access
543,
Transmission
546
(9th
Cir.
A party’s active interference with a patent
quantified.”
See,
e.g.,
Societe
Des
Produits
14
15
8.
In light of Defendant’s conduct, licensing and offering to
16
license
17
Plaintiff will suffer lost customers and damage to its goodwill
18
unless a preliminary injunction enjoins Defendant from further
19
licensing of technology that is presumptively owned by Plaintiff.
20
According to Defendant, he has already intentionally and knowingly
21
licensed a portion of the technology underlying the ‘985 Patent to
technology
claimed
by
Plaintiff,
it
is
likely
that
22
23
24
25
26
27
28
11
In eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 393-94,(2006), the Supreme
Court held that the Federal Circuit erred in adopting a categorical rule that
permanent injunctive relief was available once a patentee established the
validity of its patent and infringement by defendant. Id. at 392-94. eBay
involved a permanent injunction, but the rule espoused therein "has been applied
to preliminary, as well as permanent, injunctions, and has been read to limit the
presumption of irreparable harm [based] solely upon the finding of infringement."
Aurora World, Inc. v. TY Inc., 2009 U.S. Dist. LEXIS 129128*146-47 (C.D. Cal.
2009) (collecting cases) but see Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH
& Co., 571 F.3d 873, 877 (9th Cir. 2009)(applying presumption in trademark case).
24
1
one of Plaintiff’s competitors, and as recently as October 2010,
2
Defendant offered to license the technology at issue in this action
3
on his website despite the existence of a temporary restraining
4
order prohibiting such conduct.
5
sufficient likelihood of irreparable harm to warrant a preliminary
6
injunction. See Concrete Washout Systems, Inc., 2008 WL 5411965 at
7
* 3 (C.D. Cal. 2008) (granting injunction based on likelihood of
8
damage to goodwill); see also Oakley, Inc. v. Sunglass Hut Int'l,
9
2001 WL 1683252, * 11 (C.D. Cal. 2001) (same).
Plaintiff has established a
10
11 D. Equities
12 9.
The equities favor Plaintiff.
Based on the current record, it
13 does not appear that Defendant has rights in the subject technology
14 sufficient
to
permit
Defendant
to
license
the
technology
to
15 Plaintiff’s competitors. Accordingly, an injunction does not impose
16 a significant burden on Defendant. At most, Defendant risks losing
17 licensing
opportunities,
for
a
limited
period
18 technology that he does not hold a patent to.
of
time,
for
Such opportunities
19 are likely limited by prospective customers’ reluctance to pay
20 Defendant money for technology for which he does not hold a patent.
21 Conversely, it appears that Plaintiff owns the subject technology
22 but is at risk of losing customers, suffering diminished goodwill,
23 and having to engage in litigation against multiple parties if
24 Defendant is permitted to continue attempting to license the subject
25 technology; indeed, Plaintiff is already engaged in litigation with
26 a competitor to which Defendant has purported to license some of the
27 subject technology.
28
25
1
2
3
4
5
E. Public Interest
10.
The public has a strong interest in protecting intellectual
property rights.
LEXIS 25900*68 (Fed. Cir. 2010).
F. Conclusion
For the reasons stated, Plaintiff has established it is likely
6
7
8
9
to prevail on the merits, that it is injured by the conduct of
Defendant, that the threatened harm is irreparable, and that an
injunction is in the public interest.
ORDER
10
For the reasons stated, Defendant Thomas Wilkins and those
11
12
13
14
15
16
17
18
19
See, e.g., Spansion, Inc. v. ITC, 2010 U.S. App.
acting in concert with him, and those who have actual notice of this
order, are enjoined and restricted from licensing or offering to
license any interest in the technology described in the ‘565 and
‘985 patents, or from making any representation that Wilkins is
presently legally entitled to license such technology, pending the
entry of a final judgment in this action or further order of the
court.
IT IS SO ORDERED.
Dated:
20 hkh80h
May 5, 2011
/s/ Oliver W. Wanger
UNITED STATES DISTRICT JUDGE
21
22
23
24
25
26
27
28
26
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?