STC.UNM v. Intel Corporation

Filing 206

MEMORANDUM OPINION AND ORDER by District Judge Robert C. Brack GRANTING IN PART AND DENYING IN PART 178 MOTION for Summary Judgment of Unenforceability and Memorandum in Support (jn)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
STC.UNM,
Plaintiff,
vs.

No. 10-cv-1077 RB/WDS

INTEL CORPORATION,
Defendant.
MEMORANDUM OPINION AND ORDER
This matter is before the Court on Defendant Intel Corporation’s Motion for Summary
Judgment for Unenforceability and Memorandum in Support, filed January 19, 2012. (Doc. 178).
Jurisdiction arises under 28 U.S.C. § 1338. Having considered the submissions and arguments
of counsel, relevant law, and being otherwise fully advised, the Court GRANTS IN PART AND
DENIES IN PART Intel’s motion.
I.

Introduction
This case arises from Intel Corporation’s (Intel’s) alleged infringement of patent rights

held by UNM.STC (“STC”), the patent arm of the University of New Mexico, relating to
photolithography techniques used in the manufacture of semiconductors. STC charges Intel with
infringement of claim numbers 6 and 7 of United States Patent No. 6,042,998 (“the ’998
patent”), entitled “Method and Apparatus for Extending Spatial Frequencies in Photolithography
Images.” (Doc. 113 at 4, 10).
On January 19, 2012, Intel filed the instant Motion for Summary Judgment (doc. 178),
asserting that the ’998 patent is and always has been unenforceable as a matter of law.
Specifically, it argues that the ’998 patent is unenforceable because it and an earlier patent (U.S.

Patent No. 5,705,3231) (“the ’321 patent”) are not commonly owned, as required by a disclaimer
filed with the United States Patent and Trademark Office (“PTO”) in connection with the’998
patent’s issuance. Intel asks the Court to grant summary judgment on this basis and to dismiss
STC’s claim for infringement in its entirety. In the alternative, Intel argues that if STC’s
Response were to establish that common ownership of the patents arose at some point, the Court
should declare ’998 unenforceable from its issuance until that date, precluding recovery of
damages for that period.
II.

Factual Background
A.

District of New Mexico Local Rule of Civil Procedure 56.1(b)

As a threshold matter, at the April 10, 2012 hearing held on the instant motion, counsel
for STC submitted that Intel’s Reply failed to comply with Local Rule of Civil Procedure 56.1(b)
because it did not respond to each additional genuine issue of material fact set forth by STC in its
Response. Local Rule 56.1(b) provides that “[a]ll material facts set forth in the Response will be
deemed undisputed unless specifically controverted.” D.N.M.LR-Civ. 56.1(b). The Court
agrees that Intel failed to specifically respond to STC’s statement of additional facts and will
therefore deem the majority of these facts undisputed. However, several of STC’s purported
factual statements are actually self-serving legal conclusions which the Court has disregarded in
consideration of this motion.
B.

History of the ’321 and ’998 Patents

In the early 1990's, Steven Brueck, Director of the University of New Mexico (“UNM”)
Center for High Technology Materials, made certain inventions that were incorporated into
patent application SN 08/123,543 (“SN/543”), filed on September 20, 1993. Three additional

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co-inventors were listed on the application: (1) UNM employee An-Shyang Chu, (2) UNM
employee Saleem H. Zaidi, and (3) Sandia Corporation Bruce L. Draper. While prosecution of
SN/543 was pending, however, the inventors terminated the application and incorporated its
claimed inventions into a separate application. This new application was filed on June 6, 1995,
as a “continuation” of SN/543 and adopted SN/543’s entire specification. It eventually issued as
the ’321 patent on January 6, 1998, naming the same four individuals as co-inventors.
On June 3, 1996 – approximately eight months following SN/543’s termination – the four
co-inventors filed a joint assignment of their interest in the “invention” of SN/543 to UNM.
However, UNM soon realized that this assignment had been filed in error because co-inventor
Bruce Draper, a Sandia Corporation employee, had mistakenly assigned his interest in SN/543 to
UNM rather than to Sandia. To correct the problem, UNM executed a new assignment
transferring the interest “previously assigned to [it] by Bruce Draper” to “Sandia National
Laboratories.” The second whereas clause of this assignment explained that “Bruce Draper was
and is an employee of Assignee and the assignment from Bruce Draper to Assignor was made in
error.” (Id.) Although this assignment labeled “Sandia National Laboratories” as both the
assignee and as Draper’s employer, Draper in fact worked at Sandia National Laboratories but
was employed by “Sandia Corporation.” (Doc. 178 at 7).
The PTO recorded the assignment from UNM to Sandia National Laboratories on
October 22, 1996 – fourteen months after the SN/543 application was abandoned. This
assignment was never filed in connection with the ’321 patent, despite its status as a
“continuation” of SN/543 and incorporation of SN/543’s entire specification. Accordingly, the
original patent documents associated with patent ’321 refer to UNM as the sole assignee and

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omit any mention of either Sandia Corporation or Sandia National Laboratories.
On September 17, 1997, ’321 co-inventors Brueck and Zaidi filed a new patent
application which eventually issued as patent ’998, the subject of the instant litigation. UNM,
which had obtained assignments of both Brueck and Zaidi’s interests in ’9981, undertook its
prosecution before the PTO. During prosecution, the PTO twice rejected the ’998 application,
finding that its claimed inventions were not patentable in light of the earlier-filed ’321 patent and
issuing a “double patenting” rejection on this basis. In doing so, it concluded that “[t]he subject
matter claimed in the [’998 application] [wa]s fully disclosed in the [’321] patent” and “the
[’998] claims, if allowed, would improperly extend the ‘right to exclude’ already granted in the
[’321] patent.” (Doc. 179-3, Ex. C at 5; Doc. 179-4, Ex. D at 5).
Although UNM initially argued against the rejection, it ultimately elected to file a
“terminal disclaimer” to obtain issuance of the ’998 patent. A terminal disclaimer is a
mechanism by which a patent applicant can agree to shorten the term of his patent rights in order
to overcome a double patenting rejection. See 35 U.S.C. § 253; 37 C.F.R. 1.321(c). In
accordance with the requirements for terminal disclaimers outlined in 37 C.F.R. § 1.321, UNM’s
disclaimer stated that it was “the owner of record of a 100 percent interest in the instant
application,” disclaimed any term for the ’998 patent extending beyond the term of the ’321
patent, and stipulated that the ’998 patent would “be enforceable only for and during such period
that the instant application (or resulting patent) and the prior [’321] patent are commonly

1

Sometime after the ’998 patent application was first filed, UNM determined that two
other UNM employees, Steve Hersee and Kevin Malloy, were also co-inventors on the patent.
Both UNM and (later) STC petitioned the PTO to correct the list of inventors appearing on ’998
after it issued. Because Hersee and Malloy had both assigned their interests to UNM before the
patent issued, UNM represented itself as holding a 100% interest in ’998 during its prosecution.
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owned.” (Doc. 179-5, Ex. E at 1) (emphasis added). As required by 37 C.F.R. § 1.321(b), UNM
also agreed that the conditions of its disclaimer, including the common ownership requirement,
would “run[] with the Claims of any patent granted on the instant application and [be] binding
upon the grantee, its successors and/or assigns.” (Id.) Based at least in part on the filing of the
terminal disclaimer, the PTO allowed the ’998 patent to issue on March 28, 2000. UNM was the
sole named assignee on the patent cover page.
In July of 2002, UNM assigned its entire interest in patent ’321 to STC. In August of
2007, UNM assigned its entire interest in patent ’998 to STC.
In September of 2008, STC petitioned the PTO for a Certificate of Correction adding
language that would make patent ’998 “a continuation-in-part of [patent ‘321].” (Doc. 179-12,
Ex. L at 5). On December 30, 2008, the PTO granted STC’s request and issued a Certificate of
Correction reflecting patent ’998’s continuation-in-part status.2
On June 22, 2009, STC and Sandia Corporation entered into a Commercialization
Agreement defining how the joint owners would work together to maintain, protect and
commercialize the invention of SN/543 and the ’321 patent. Sandia Corporation agreed that
STC would undertake all activities before the PTO and agreed to refrain from licensing the ’321
patent itself. Rather, it promised to refer all inquiries to STC, which was designated the
“Licensing Party.” Sandia Corporation was to receive a percentage of any licensing income.
The parties did not enter into any Commercialization Agreement regarding ’998, however, as
STC considered itself the owner of a 100% interest in that patent.

2

One effect of taking continuation-in-part status was to change ’998’s priority date to
coincide with the earlier priority date of ’321.
5

Representing itself as the sole owner of ’998, STC filed suit against Intel for
infringement of its rights in the ’998 patent on November 15, 2010. (Doc. 1).
C.

Summary of Arguments

On summary judgment, Intel asserts that STC does in fact own 100% of the ’998 patent,
and that ’998 is unenforceable because it has never shared common ownership with’321.
According to Intel, while UNM’s 1996 assignment to Sandia National Laboratories gave Sandia
Labs an ownership interest in ’321, Sandia Labs has never had any rights in ’998. Intel charges
that this lack of common ownership violates the requirements of the terminal disclaimer upon
which ’998 was granted, which provided that ’998 would be enforceable only so long as it was
commonly owned with ’321. Common ownership, according to Intel, requires the same set of
entities to own 100% of both the earlier patent – here, ’321 – and the currently claimed invention
– here, ’998. (Doc. 178 at 14-15; MPEP § 706.02(l)(2)). Thus, because Sandia Labs has had an
ownership interest in ’321 since its issuance, but has never had rights in ’998, ’998 is
unenforceable as a matter of law.
STC filed a Response on February 2, 2012, in which it asserted that upon reexamination
of the patents, it discovered that it did in fact co-own patent ’998 with Sandia Corporation and
that prior representations to the contrary had been mistaken. In total, STC’s Response advances
three alternate routes by which the Court may find the terminal disclaimer’s common ownership
requirement to be met. First, STC contends that the two 1996 assignments operated to
automatically give Sandia Corporation an ownership interest in ’998 the moment it came into
existence. Next, and in the alternative, STC asserts that the assignments transferred an ownership
interest in ’998 to Sandia Corporation in December of 2008, when the PTO issued the Certificate

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of Correction making ’998 a continuation-in-part of ’321. Finally, STC argues that even were
the Court to determine that Sandia Corporation did not co-own ’998 through operation of the
1996 assignments, it recently executed a new assignment to Sandia Corporation dated December
1, 2011, which cured the ownership problem. In addition, STC contends that UNM’s 1996
assignment to “Sandia National Laboratories” effectively transferred Draper’s interest to
“Sandia Corporation,” which uses the name “Sandia National Laboratories” as a d/b/a. Thus,
according to STC, Sandia Corporation – not Sandia National Laboratories – co-owns both the
’321 patent and the ’998 patent with STC.
Intel levies numerous arguments in response to STC’s propositions, which the Court will
address below. Most significantly for the purposes of this motion, Intel argues that STC’s recent
assignment to Sandia Corporation fails to remedy the ownership problem because ’321 is now
jointly owned by STC, Sandia Corporation, and Sandia National Laboratories, whereas ’998 is
jointly owned only by STC and Sandia Corporation. According to Intel, Sandia National
Laboratories is a distinct entity from Sandia Corporation – it is not, as STC contends, a d/b/a.
Thus, Intel argues that STC’s most recent assignment fails to create common ownership and
summary judgment is appropriate.
The Court held oral argument on the motion on April 10, 2012. STC and Intel each filed
an additional surreply on April 11, 2012 (doc. 202), and April 18, 2012 (doc. 204), respectively.
The matter is now ready for decision.
III.

Standard
Summary judgment is appropriate where the movant shows there is no genuine dispute as

to any material fact and the movant is entitled to judgment as a matter of law. FED. R. CIV. P.

7

56(a). “A fact is ‘material’ if under the substantive law it could have an effect on the outcome of
the lawsuit. An issue is ‘genuine’ if ‘a rational jur[or] could find in favor of the nonmoving
party on the evidence presented.’ ” Adams v. Am. Guarantee and Liab. Ins. Co., 233 F.3d 1242,
1246 (10th Cir. 2000) (citing Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir.1998).
“A party asserting that a fact is genuinely disputed must support this assertion by citing to
particular parts of materials in the record, including depositions, documents, electronically stored
information, affidavits or declarations, stipulations, . . . admissions, interrogatory answers, or
other materials.” FED. R. CIV. P.56(c)(1)(A). If a party fails to properly support an assertion of
fact or fails to properly address another party’s assertion of fact as required by Rule 56(c), the
court may consider the fact undisputed for purposes of the motion. FED. R. CIV. P. 56(e) &
56(e)(2).
The movant – in this case, Intel – carries the initial burden of showing that no genuine
issue of material fact exists. Id. at 1246; Adler, 144 F.3d at 670. This burden may be discharged
by showing there is an absence of evidence to support the nonmoving party’s case. Celotex
Corp. v. Catrett, 477 U.S. 317, 325 (1986). If the movant meets this initial burden, the burden
then shifts to the non-moving party – here, STC – to find sufficient evidence that would warrant
submission of the case to a trier of fact. Thomas v. Wichita Coca-Cola Bottling Co., 968 F.2d
1022, 1024 (10th Cir. 1992). “Evidence is sufficient to withstand summary judgment if it is
significantly probative and would enable a trier of fact to find in the nonmovant’s favor.” Adams,
233 F.3d at 1246. In making this determination, the trial court must “view the evidence and
draw reasonable inferences therefrom in the light most favorable to the non-moving party.”
Simms v. Oklahoma ex rel. Dept’s of Mental Health & Substance Abuse Serv., 165 F.3d 1321,

8

1326 (10th Cir. 1999).
III.

Discussion
A.

Judicial Estoppel

Intel asserts that STC should be judicially estopped from denying sole ownership of the
’998 patent before December 1, 2011, because it has reaped the benefits of repeatedly and
successfully asserting the opposite. The Court declines to consider application of judicial
estoppel in the instant matter because, as explained below, the undisputed facts establish that
UNM/STC solely owned the ’998 patent from its issuance until December 1, 2011.
B.

Patents ’321 and ’998 were not Commonly Owned Prior to December 1, 2011

STC offers two arguments to support its contention that patents ’321 and ’998 were
commonly owned prior to December 1, 2011. Both fail as a matter of law.
STC first contends that the language of the two 1996 assignments, specifically the terms
“invention” and “issued thereon,” operated to automatically give Sandia3 an interest in patent
’998 the moment it came into existence. The first assignment, from Draper to UNM, reads:
Assignors [including Bruce Draper] do hereby sell, assign, and transfer unto
Assignee [UNM] all their right, title, and interest in and to the invention
[SN/543] in the United States and in all foreign countries and their entire right,
title, and interest in and to any and all Patents which may be issued thereon in the
United States and in any and all foreign countries and in and to any and all
divisions, reissues, continuations, and extensions thereof.
(Doc. 179-25, Ex. X at 3) (emphases added).
The second assignment, from UNM to Sandia National Laboratories, reads:

3

For the purposes of this section, the Court will use the term “Sandia” rather than
referring to “Sandia Corporation” or “Sandia National Laboratories.” The distinction between
them, which is critical to STC’s post-December 2011 argument, is irrelevant to the Court’s preDecember 2011 analysis.
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Assignor [UNM] does hereby sell, assign, and transfer unto Assignee [Sandia]
those rights and interests previously assigned to Assignor by Bruce Draper in the
United States and in all foreign countries and to any and all Patents which may be
issued thereon in the United States and in any and all foreign countries and in and
to any and all divisions, reissues, continuations, and extensions thereof.
(Doc. 179-26, Ex. Y at 3) (emphases added).
According to STC, Draper’s assignment of the “invention” of SN/543, which was
subsequently assigned to Sandia, automatically carried with it an assignment of any resulting
patents – including patent ’998. The word “invention,” STC asserts, incorporates all of the
invention’s “incidents,” Hendrie v. Sayles, 98 U.S. 546, 554-55 (1879), including “all alterations
and improvements and all patents whatsoever, issued and extensions alike, to the extent of the
territory specified in the instrument.” E.I. Du Pont de Nemours & Co. v. Okuley, 2000 U.S. Dist.
LEXIS 21385, at *80 (S.D. Ohio Dec. 21, 2000) (citing Hendrie, 98 U.S. at 554). Because patent
’321 incorporated SN/543’s entire specification, and because the PTO determined that ’998’s
content was “fully disclosed” in ’321, STC argues that patent ’998 incorporates the “invention”
of SN/543 and is one of the “[p]atents which may be issued thereon in the United States.” (Doc.
179-25, Ex. X at 3). Therefore, when ’998 came into existence, Sandia’s ownership interest
vested automatically.
In the alternative, STC contends that the 1996 assignments gave Sandia an interest in all
“continuations” of the SN/543 invention, and that once the PTO issued the Certificate of
Correction making ’998 a “continuation-in-part” of ’321, it became a “continuation” of SN/543
within the meaning of the assignment language. At that point, according to STC, Sandia
automatically gained an ownership interest in ’998.
Intel asserts that both of these ownership theories fail because ownership rights must

10

derive from inventorship. (Doc. 192 at 3-4) (citing Bd. of Trs. of the Leland Stanford Jr. Univ. v.
Roche Molecular Sys., Inc. 131 S.Ct. 2188, 21994-95 (2011)). It argues that although other
parties may later acquire rights in an invention, these rights must find their origin in an inventor
him or herself. It is undisputed that Draper did not co-invent any claims of the ’998 patent.
Thus, according to Intel, Draper had no ownership interest in patent ’998 to assign. The Court
agrees with Intel.
It is bedrock principle that one cannot assign what one does not have. See, e.g., MPEP §
301 (“Each individual inventor may only assign the interest he or she holds.”) Draper can, and
did, assign all of his rights in the “invention” of SN/543 to Sandia4, as well as his rights in
patents “issued thereon” SN/543 and his rights in continuations thereof. On summary judgment,
it is Intel’s burden to show that based on the parties’ undisputed material facts, these rights did
not include a valid, undivided ownership interest in ’998. The Court finds that Intel has met its
burden and holds that Sandia did not co-own patent ’998 with UNM or STC at any point prior to
December 1, 2011.
First, Draper’s rights in the “invention” of SN/543 and patents “issued thereon” did not
encompass an undivided ownership interest in patent ’998. Both the Supreme Court and the
Federal Circuit have held that rights to an invention initially belong to the inventors alone.
“[A]lthough others may acquire an interest in an invention, any such interest – as a general rule –
must trace back to the inventor.” Roche, 131 S.Ct. at 2195; see also Beech Aircraft Corp. v.
EDO Corp., 990 F.2d 1237, 1248 (Fed. Cir. 1993) (“At the heart of any ownership analysis lies
the question of who first invented the subject matter at issue, because the patent right initially

4

Via the chain of assignments from Draper to UNM, and from UNM to Sandia.
11

vests in the inventor who may then, barring any restrictions to the contrary, transfer that right to
another . . . .”); MPEP § 301 (“The ownership of the patent (or the application for the patent)
initially vests in the named inventors of the invention of the patent . . . . The patent (or patent
application) is then assignable by an instrument in writing . . . .”) (quotation omitted).
STC concedes that Draper did not co-invent any claims in the ’998 patent. (Doc. 187 at
12). It sidesteps the apparent implication of this concession – that Draper had no rights in ’998
to assign – by arguing that “questions of patent ownership and inventorship are distinct issues,”
and that each common inventor of an application is permitted to assign his interest in the whole
patent to a third party – not only those parts to which he himself contributed. This is because “a
joint inventor as to even one claim enjoys a presumption of ownership in the entire patent.”
Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456, 1466 (Fed. Cir. 1998). Thus, STC argues
that when Draper assigned his rights in the “invention” of SN/543 to UNM, which subsequently
assigned those rights to Sandia, Sandia “took an ownership interest in every future patent
irrespective of whether Draper made any inventive contribution to any or all of those patents.”
(Doc. 187 at 12).
STC’s argument goes too far. That Draper enjoyed a presumption of ownership over the
entire SN/543 invention does not empower him to assign rights in all future patents, in
perpetuity, that can be traced back to SN/543 regardless of any inventive contribution. Again,
Draper cannot assign what he does not have. By STC’s logic, Draper (and by virtue of
assignment, Sandia) would take an automatic ownership interest in any future patent arising in
SN/543’s ownership chain no matter how remote from his original invention. Patent ’998 is
itself two steps removed from SN/543; it is a continuation-in-part of a continuation of SN/543.

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Nothing STC offers would preclude Draper/Sandia from automatically claiming an ownership
interest in a continuation-in-part of patent ’998, or in a continuation-in-part of that continuationin-part. The history of the PTO is filled with long and convoluted chains of ownership. See,
e.g., Eli Lilly and Co. v. Barr Labs., Inc., 251 F.3d 955, 960 n.4 (Fed. Cir. 2001) (patent at issue
was a continuation-in-part of a continuation of a division of a great-grandparent application);
Mark A. Lemley & Kimberly A. Moore, Ending Abuse of Patent Continuations, 84 B.U. L.REV.
63, 107 (2004) (discussing a patent which claimed to be a continuation-in-part of seventeen
different applications, each with its own priority chain). Given this fact, the practical impact of
STC’s blanket proposition is largely unworkable. It would grant inventors of original
applications ownership interests in every patent arising in the ownership chain, through
generations of continuations or continuations-in-part, affording them the right to exclude others
from practicing inventions far removed from their own original conceptions and to which they
made no contribution – inventive or otherwise.
STC somewhat attempts to restrict the implications of its argument by stressing that the
commonality between SN/543 and ’998 makes ’998 a patent “issued thereon” the SN/543
invention, thus providing a direct connection to support Draper’s interest in ’998.5 Specifically,
it asserts that the PTO’s determination that “[t]he invention of the ’998 patent was ‘fully
disclosed’ in the ’321 patent and therefore in the SN/543 patent application” grants ’998 status as

5

STC also states that patent ’998 “ ‘incorporated by reference the entirety of the ’321
patent.’ ” (Doc. 187 at 8). While true, patent ’998 also incorporated by reference 15 additional
works, including basic treatises like Introduction to Fourier Optics and Introduction to
Microlithography. (See Doc. 179-7, Ex. G, Col. I at 5-55). STC does not assert that the authors
or inventors of these 15 additional references have rights in the ’998 patent. Thus, the Court
does not find this fact to be persuasive.
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a “resulting” patent or a patent issued “on” the invention of SN/543. However, STC still fails to
explain why Draper himself has an interest in ’998, even assuming it is a patent issued “on” the
SN/543 invention, despite not being a named inventor. In addition, STC cites no authority
establishing that the PTO’s finding of common subject matter between ’998 and ’321 has
independent legal force in this context. Rather, STC’s “issued thereon”/commonality argument
effectively replaces the question of inventorship with an inquiry into patent content. STC
appears to argue that because Draper had full rights to the SN/543 “invention,” at least some of
which the PTO determined made its way into the ’998 patent, he is automatically granted a right
to the entirety of ’998. However, this argument implicitly raises questions regarding “how
much” content-overlap or “what type” of PTO finding is required to support transfer of an
original inventor’s ownership interest, which STC fails to address. More critically, even
assuming the existence of a significant content-overlap between SN/543 and ’998, STC provides
no authority to suggest this overlap affords Draper an undivided ownership interest in’998 absent
a single inventive contribution to the claims of that patent6. It is axiomatic in patent law that “the
claims of a patent define the invention to which the patentee is entitled the right to exclude.”
Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005). STC admits that Draper made no
contribution to ’998’s claims. Therefore, as a matter of law, Draper’s rights in the “invention” of
SN/543 and in patents “issued thereon” do not include an undivided ownership interest in patent
’998.
The same flaw pervades STC’s alternative argument, that Draper had a valid interest to

6

STC does not argue that Sandia has rights only in the common subject matter; it argues
that the 1996 assignments gave Sandia undivided ownership rights in the entirety of ’998.
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assign Sandia in patent ’998 as a “continuation” of SN/543. Even assuming patent ’998 – which
is a continuation-in-part of a continuation of SN/543 – is encompassed within the assignments’
“continuation” language, STC still fails to provide a legal basis explaining why Draper can
automatically claim an undivided ownership interest in a patent he did not invent. Despite
STC’s proffer of numerous cases meant to support the proposition that common owners of an
invention “enjoy common ownership in continuing patents,” (doc. 202 at 2), STC cannot provide
a single instance of an inventor claiming an ownership interest in a continuing patent to which he
or she concededly made no inventive contribution.
Based on the parties’ undisputed material facts, Draper had no undivided ownership
interest in patent ’998 to assign because he made no inventive contribution to the claims of that
patent. Because Sandia is entitled to no more than Draper’s interest in ’998, as a matter of law,
Sandia did not co-own ’998 with UNM or STC prior to December 1, 2011.
C.

Factual Issues Remain Regarding the Current Ownership of Patent ’321

Having found that Sandia did not co-own patent ’998 with UNM or STC by operation of
the1996 assignments, the Court must next consider whether STC’s December 1, 2011
assignment of an undivided interest in patents ’998 and ’321 to Sandia Corporation served to
cure the defect in ownership. To prevail on its motion, Intel must show that there is no genuine
dispute as to any material fact and that notwithstanding STC’s recent assignment, patents ’998
and ’321 remain owned by different entities as a matter of law. The Court finds that Intel cannot
meet this burden and therefore denies Intel’s motion for summary judgment for the period
following December 1, 2011.
On December 1, 2011, STC executed the following assignment naming “Sandia

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Corporation” as the assignee:
Pursuant to the ASSIGNMENT dated October 15, 1996 and related
documents and events, STC.UNM and Sandia Corporation are and have been
since at least December 30, 2008 common owners of both U.S. Patents Nos.
5,705,321 and 6,042,998.
STC.UNM wants to protect the parties interests in the above patents against
all possible challenges, therefore in an abundance of caution, STC.UNM,
confirms the prior assignment and, in view of the above premises and good
and valuable consideration the receipt of which is hereby acknowledged, also
hereby assigns an undivided interest in each of U.S. Patents Nos. 5,705,321
and 6.042,998 to Sandia Corporation.
(Doc. 179-31, Ex. DD) (emphasis added).
The practical effect of this assignment is uncontested: it conveyed an undivided interest
in ’998 and ’321 to Sandia Corporation as of December 1, 2011. The critical question for the
Court is whether UNM’s1996 assignment to Sandia National Laboratories (“Sandia Labs”)
functioned to split ownership of ’321 between STC and Sandia Labs prior to December 1, 2011.
If this is the case, as Intel urges, then ’321 is currently owned by three entities – STC, Sandia
Labs, and Sandia Corporation – whereas ’998 is owned only by STC and Sandia Corporation. In
this scenario, the terminal disclaimer requirement of common ownership remains unmet and
’998 remains unenforceable.
In support of its contention that the 1996 assignment conveyed an ownership interest in
’321 to Sandia Labs, Intel first points to the plain language of the assignment. And rightfully so;
the second, “corrective” 1996 assignment undisputedly lists “Sandia National Laboratories” as
the assignee of Draper’s interest in SN/543. According to Intel, this assignment effected a valid
transfer of ownership to Sandia Labs, which Intel contends is an independent legal entity
currently holding title to a variety of physical and intellectual property interests.

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Intel cites numerous sources to support its characterization of Sandia Labs’ legal status.
First, the Sandia Labs website itself clearly states that it and Sandia Corporation are distinct
entities: “Sandia [Labs] ‘is a government-owned/contractor-operated (GOCO) facility,” whereas
“Sandia Corporation, a Lockheed Martin company, manages [Sandia Labs] for the U.S.
Department of Energy’s National Nuclear Security Administration.” (Doc. 192 at 11). Second,
Intel points to “numerous federal statutes” recognizing Sandia Labs as a “federal agency.” (Id.)
Third, it cites to several Tenth Circuit cases which “recognize[] the distinction between Sandia
National Laboratories (the federal agency) and Sandia Corporation (the privately held company
that currently operates the Laboratories under a federal contract.” (Id.) Fourth, it points to the
“Assignments” page of the PTO website, which shows that Sandia Labs has been named a patent
assignee 323 times. (Doc. 193-1 at 2). Finally, it cites 42 U.S.C. § 5908, which vests title to any
invention “made or conceived in the course of or under any contract of the Secretary” in the
United States, for the proposition that Sandia Corporation does not automatically own inventions
by inventors employed at Sandia Labs. Thus, according to Intel, there is no reason to presume
that an assignment to Sandia Labs equals an assignment to Sandia Corporation.
On its face, Intel’s proffered evidence is highly persuasive. Deeper examination,
however, reveals several significant problems. With regard to the Sandia Labs website, for
example, although the website does make a clear distinction between Sandia Corporation and
Sandia Labs, it provides no indication that Sandia Labs is an independent legal entity, capable of,
or holding title to property. Rather, the material cited by Intel and viewed on the website
supports the proposition that the federal government owns Sandia Labs and its associated
property. Second, none of the federal statutes Intel cites actually refer to Sandia Labs as a

17

federal “agency.” In large part, they list Sandia Labs as a “facility” owned by the federal
government. When the Court raised this point during oral argument, counsel for Intel
acknowledged that the labs likely could not be characterized as an “agency,” but suggested
Sandia Labs could be some other governmental entity without attempting greater specificity.
Third, the Tenth Circuit cases cited by Intel refer to the distinction between Sandia Labs and
Sandia Corporation but once again do not suggest that Sandia Labs can own property. One of
cases Intel cites, for example, expressly states that “[t]he United States government owns all of
the land, buildings, and other property as [Sandia Labs].” Domme v. United States, 61 F.3d 787,
188 (10th Cir. 1995). Fourth, although the PTO Assignments webpage does list Sandia Labs as
an assignee 323 times, when the Court further inspected these individual assignments, a large
number showed assignments from individual inventors to Sandia Labs, and then from Sandia
Corporation to the Department of Energy. In many of these, the PTO website showed no record
of assignment from Sandia Labs to Sandia Corporation, begging the question of how Sandia
Corporation was able to assign ownership interests in patents belonging to a separate legal
entity.7 Furthermore, Intel’s attached list of assignments fails to reflect that there are two
separate Sandia Labs facilities: one in California and one in New Mexico, both operated by
Sandia Corporation. In examining the PTO website, the Court observes that both individual
laboratory locations ostensibly receive assignments. This raises the question: does an

7

Explanation for this observation may lie in STC’s contention, discussed below, that
parties have a practice of labeling “Sandia Labs” as the assignee on assignment cover sheets
while identifying “Sandia Corporation” as the real party in interest on underlying patent
documents. Even assuming this to be the case, however, these records evidence ambiguity in the
PTO Assignments webpage and detract from the persuasive value of Intel’s assignment record
argument.
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assignment to the Sandia Labs in Livermore equal an assignment to the Labs in New Mexico?
Are they a single “entity,” or are they two? Finally, while Intel’s citation to 42 U.S.C. § 5908
may support its position that an assignment to Sandia Labs should not be “presumed” to be an
assignment to Sandia Corporation, it also further strengthens the notion that the United States
government – in which title to these inventions automatically vests – also owns title to associated
laboratory property.8
STC’s case fares little better. STC rests its argument on the assertion that Sandia Labs is
the d/b/a name for Sandia Corporation, as well as a trademark and the name for the facilities
used by Sandia Corporation. Sandia Labs cannot, according to STC, legally hold title to patents.
In support of its position, STC first cites to the deposition testimony of Kevin Bieg, a Fed. R.
Civ. Pr. 30(b)(6) witness for “Sandia,” who states that Sandia Corporation “do[es] business as
Sandia National Laboratories” and that most of the public “knows [it] as Sandia National
Laboratories.” (Doc. 187 at 2). STC then cites to a number of Sandia Corporation filings in
unrelated prior cases in which Sandia Corporation represented that Sandia Labs was its d/b/a
name. Finally, STC’s surreply attaches a sample of 20 patents previously identified by Intel as

8

Intel’s Surreply also includes a footnote stating that 15 U.S.C. § 3710(e)(5) requires
Sandia Labs to transfer certain intellectual property rights to users in the private sector pursuant
to Sandia Labs’ membership in the Federal Laboratories Consortium for Technology Transfer.
Intel suggests that this requirement would “make no sense” if Sandia Labs could not hold patent
rights. Upon reviewing 15 U.S.C. § 3710(e)(5), the Court does not find this statute to establish
Sandia Labs’ ability to own patent rights. It further observes that the requirement does make
sense if the labs are transferring property rights from the United States government, or a
particular federal agency such as the Department of Energy, to private users. See, e.g., 15 U.S.C.
§ 3710(a)(1) (“It is the continuing responsibility of the Federal Government to ensure the full use
of the results of the Nation’s Federal investment in research and development. To this end the
Federal Government shall strive where appropriate to transfer federally owned or originated
technology to State and local governments and to the private sector.”) (emphasis added).
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being “assigned” to Sandia Labs, and shows that the underlying patent documents actually
transferred ownership of these patents to Sandia Corporation. STC contends this evidence
establishes that Sandia Corporation had a practice of printing “Sandia Labs” on assignment
cover sheets, but identifying “Sandia Corporation” within the assignments as the real party in
interest. (Doc. 202 at 2). STC argues that this interchangeable use of the two designations to
refer to the same entity confirms that Sandia National Laboratories is indeed a d/b/a of Sandia
Corporation.
As was the case with Intel, STC’s arguments have some persuasive weight. They also,
however, have problems. First, even if Sandia Labs is a d/b/a for Sandia Corporation, this does
not necessarily end the inquiry. Although “[g]enerally, the designation ‘d/b/a’ or ‘doing
business as’ is merely descriptive of the person or corporation doing business under some other
name,” there are instances where a d/b/a can be an independent legal entity. General Ins. Co. of
America v. Clark Mall, Corp., 631 F. Supp. 2d 968, 973 (N.D. Ill. 2009). Although the question
whether Sandia Labs is generally a d/b/a for Sandia Corporation may have some import, the
more critical question is whether in this instance, the assignment to Sandia Labs effectively
operated to transfer ownership rights in ’321 to Sandia Corporation.
Second, STC’s citations to Sandia Corporation’s prior court filings are largely unhelpful.
In conducting its own search, the Court identified numerous inconsistencies in the way Sandia
Corporation has identified itself in prior proceedings. In one case, for example, Sandia
Corporation confirmed its use of the d/b/a in answering a Plaintiff’s Complaint with “Sandia
Corporation, Inc., d/b/a Sandia National Laboratories.” Bespalko, et al v. Sandia Corp., Inc.
d/b/a Sandia Nat’l Labs, Lockheed Martin Corp., & AT&T, 99cv1466 (Doc. 31). In another,

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Sandia Corporation specifically disclaimed the use of a d/b/a. Matic v. Sandia Corp. d/b/a
Sandia National Labs, 05cv0453 (Doc. 5 ¶ 3) (“Defendant admits the allegations contained
therein except it denies that it is a ‘d/b/a’ and affirmatively states that it operates and manages
Sandia National Laboratories until [sic] a contract with the U.S. Department of Energy.”)
Finally, STC’s attachment of underlying patent documents in its surreply, while informative,
does not establish ’321’s ownership as a matter of law. In contrast to those patent documents,
the 1996 assignment at issue identifies only Sandia National Laboratories as assignee.
There are, however, other factors supporting STC’s position. First, the 1996 assignment
listing “Sandia National Laboratories” as assignee also states that Draper “is an employee of
Assignee” and was employed by “Assignee” at the time he assigned his interest in SN/543 to
UNM. It is uncontested, however, that Draper was not employed by Sandia Labs; he was
employed by Sandia Corporation. Second, nothing the parties cite nor anything else the Court
could identify conclusively establishes that Sandia Labs currently holds title to property,
intellectual or otherwise. The Court was unable to find any instances of Sandia Labs exercising
its patent rights through infringement suits, did not see Sandia Labs on any list of federal
agencies or sub-agencies, and repeatedly observed the labs referred to as “facilities” in the
statutes cited by Intel. Finally, it was Sandia Corporation – not Sandia Labs – that was party to
the Commercialization Agreement with STC defining how these entities would work together to
protect and commercialize the ’321 patent. (Doc. 188-6, Ex. 6 at 1).
Faced with this conflicting evidence, and without the presence of representatives from
Sandia Corporation, Sandia National Laboratories (assuming its separate existence), or the
Department of Energy attesting to the existence of an ownership interest in ’321, the Court is

21

unable to determine that Sandia Labs owns an undivided interest in ’321 as a matter of law.
This question will therefore remain outstanding pending further development of the record. The
parties are invited to submit further dispositive motions on the issue should evidence come to
light conclusively establishing whether Sandia National Laboratories, as an independent legal
entity, holds title to the ’321 patent via the 1996 assignments.
D.

Standing

It is undisputed that STC’s December 1, 2011 assignment of an undivided ownership
interest in ’998 to Sandia Corporation created joint ownership of that patent. Addition of a new
co-owner at this point, however, raises the issue of proper standing. “Where one co-owner
possesses an undivided part of the entire patent, that joint owner must join all the other
co-owners to establish standing. . . . Absent the voluntary joinder of all co-owners of a patent, a
co-owner acting alone will lack standing.” Israel Bio-Engineering Project v. Amgen, Inc., 475
F.3d 1256, 1264-65 (Fed. Cir. 2007) (quotations omitted). The parties are encouraged to confer
with one another and to file appropriate motions with the Court addressing this issue within a
reasonable period of time.
THEREFORE, IT IS ORDERED that Intel’s Motion for Summary Judgment for
Unenforceability and Memorandum in Support, filed January 19, 2012 (doc. 178), is
GRANTED IN PART AND DENIED IN PART.
IT IS FURTHER ORDERED that United States Patent No. 6,042,998 is declared
unenforceable prior to December 1, 2011.

ROBERT C. BRACK
UNITED STATES DISTRICT JUDGE
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