Polyzen, Inc. v. Radiadyne, LLC
Filing
186
ORDER dismissing 89 Motion for Summary Judgment regarding laches, waiver, and estoppel; denying 92 Motion for Summary Judgment regarding RadiaDyne's claim of ownership and DISMISSES without prejudice Polyzen's patent-infringement acti on for lack of subject-matter jurisdiction; dismissing 95 Motion for Summary Judgment regarding RadiaDyne's defense of inventorship; denying 98 Motion for Summary Judgment regarding Polyzen's patent-infringement action. Signed by Chief Judge James C. Dever III on 3/28/2017. (Briggeman, N.)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
No. 5:14-CV-323-D
POLYZEN, INC.,
Plaintiff,
v.
RADIADYNE, LLC,
Defendant.
)
)
)
)
)
)
)
)
)
ORDER
On April 18, 2016, RadiaDyne, LLC ("RadiaDyne" or "defendant") moved for summary
judgment concerning Polyzen, Inc.'s ("Polyzen" or "plaintiff'') patent-infringement claim [D.E. 98]
and filed a memorandum in support [D.E. 100]. Essentially, RadiaDyne contends that, as a matter
of law, it at least jointly owns the patent at issue in this case, U.S. Patent 8,740,845 (''the '845
patent"), that RadiaDyne does not consent to Polyzen's patent-infringement action against
RadiaDyne, and that Polyzen lacks standing to pursue the patent-infringement claim absent such
consent.
See,~' Lucent Techs.. Inc.
v. Gateway. Inc., 543 F.3d 710, 722 (Fed. Cir. 2008); Polyzen.
Inc. v. RadiaDyne.LLC, No. 5:11-CV-662-D, 2016 WL 5360676, at *1-9 (E.D.N.C. Sept. 23,2016)
(unpublished) ("Polyzen f'). Polyzen responded in opposition [D.E. 127] and also filed its own
motionforsummaryjudgmentonownership [D.E. 92]. OnMay25, 2016, RadiaDynereplied [D.E.
167].
As explained below, the '845 patent is a "continuation" ofU.S. Patent 7,976,497 (''the '497
patent"), and the issues presented in RadiaDyne's supplemental summary-judgment motion are
materially indistinguishable from the issues presented in Polyzen I concerning the '497 patent. As
in Polyzen I, the court concludes that it lacks subject-matter jurisdiction over Polyzen's patent-
infringement action because RadiaDyne at least jointly owns the '845 patent, RadiaDyne has not
consented to Polyzen's patent-infringement action, and Polyzen lacks standing to sue for patent
infringement without RadiaDyne's consent.
See Polyzen I, 2016 WL 5360676, at *1-10.
Accordingly, the court denies RadiaDyne's supplemental motion for summary judgment concerning
Polyzen's patent-infringement action [D.E. 98], denies Polyzen's motion for summary judgment
regarding ownership [D.E. 92], and dismisses without prejudice Polyzen' s patent-infringement action
for lack of subject-matter jurisdiction. See Fed. R. Civ. P. 12(b)(1); cf. Fed R. Civ. P. 56.
Additionally, the court dismisses Polyzen's motion for summary judgment regarding RadiaDyne's
defense of inventorship [D.E. 95] and dismisses Polyzen's motion for summary judgment regarding
laches, waiver, and estoppel [D.E. 89].
I.
For clarity, the court restates many of the facts recounted in Polyzen I, without adding
quotation marks. After recounting the facts leading to the issuance of the '497 patent, the court adds
information concerning the '845 patent.
In early 2007, John Isham, founder and president ofRadiaDyne, learned ofPolyzen when
searching the Internet for "medical balloons" and "medical devices." Polyzen I, 2016 WL 5360576,
at *1. Isham had an idea for a non-latex rectal medical balloon catheter used in connection with
prostate treatment and was looking for someone to assist with producj.ng and manufacturing it. Id.
Isham contacted Polyzen, but did,not want to reveal the details of his idea until Polyzen entered into
a Confidentiality Agreement. See id. On February 9, 2007, RadiaDyne and Polyzen entered into a
Confidentiality Agreement. See id. The Confidentiality Agreement stated that "[b]oth parties agree
that no right or license under any patent or trade secret now or hereafter owned or controlled by either
party is granted to the other party by this agreement." ld. (quotation omitted). On February 12, 2007,
2
RadiaDyne and Polyzen began working together to develop a medical balloon device design and the
technology and process necessary to produce and manufacture it. See id.
On March 26,2007, Rubin Shah, a Polyzen employee, sent Isham a quote for a project to
"Design & Thermoform/ RF Weld PU Balloon- Phase 1." See id. *2 (quotation omitted). The quote
totaled $23,500, and it included a price of$4,500 for "design" and a price of$19,000 for prototype
production. Id. Tilak Shah, Polyzen's founder, created the quote. Id. On March 28, 2007,
RadiaDyne issued a purchase order to Polyzen for a total of$23,500. See id. On March 29,2007,
Polyzen sent RadiaDyne its first invoice, and RadiaDyne paid a deposit of $4,500. See id.
On July 20, 2007, Polyzen's Rubin Shah emailed RadiaDyne's John Isham a "first draft" of
the Development and Commercialization Agreement ("DCA") that Polyzen had prepared on July 18,
2007. See id. The "purpose of [the DCA was] to document various verbal agreements and
understandings between the parties and define future expectations of each other as both parties
continue the efforts on the product development and manufacturing of samples for a) feasibility study;
b) functionality testing; c) clinical trials and future commercialization of specific design of rectal
balloon catheter." Id. (quotation omitted). The first draft of the DCA defined "RADIADYNE
PRODUCT" in paragraph 2.e as "[s]pecific design of rectal balloon catheter for locating/supporting
prostate during brachytherapy with Polyzen' s Balloon Process Technology." Id. (quotation omitted).
The first draft of the DCA also confirmed that "[t]he parties agree that RADIADYNE
TECHNOLOGY and RADIADYNE PRODUCT will remain the properties ofRADIADYNE." Id.
(quotation omitted). Thereafter, RadiaDyne and Polyzen agreed upon a three-layer balloon that
Polyzen would make for RadiaDyne to sell to clinicians for "immobilizing the prostate during
radiation therapy treatments for cancer patients." Id. (quotation omitted). The balloon design
"included internal welds and a distal bulge when the balloon was inflated." Id. (quotation omitted).
3
(
On July 27, 2007, Polyzen sent the three-layer balloon design to Isham, which he approved.
See id. On July 31, 2007, Isham sent Rubin Shah an email and told him that RadiaDyne wanted to
launch the product at the October 2007 ASTRO trade show. See id. Rubin Shah responded that same
day and told Isham that Polyzen could meet the deadline despite it being "a very aggressive timeline."
Id. (quotation omitted). Isham replied later in the day and asked for information on the manufacturing
process so he could "submit [an] FDA Registration letter." Id. (quotation omitted).
On August 16, 2007, Polyz~n prepared an updated draft of the DCA. See id. Also on August
16, 2007, Ruben Shah ofPolyzen forwarded the updated draft to Isham ofRadiaDyne for his review.
See id. The August 16, 2007 updated draft DCA stated:
The purpose of this term sheet is to document various verbal agreements and
understandings between the parties and define future expectations of each other as
both parties continue the efforts on the product development and manufacturing of
samples for a) feasibility study; b) functionality testing; c) clinical trials and future
commercialization of specific design of rectal balloon catheter, and this will serve as
a reference document during initial stages of work between the parties until further
manufacturing/supply agreement to be concluded.
Id. (quotation omitted). The August 16, 2007 updated draft DCA contained the same definitions of
"RADIADYNE PRODUCT" and provisions for ownership of"RADIADYNE PRODUCT" as the
July 2007 draft DCA. See id. {quotation omitted).
On September 25, 2007, Polyzen filed a provisional patent application for what would
become the '497 patent. See id. Polyzen did not inform RadiaDyne of the provisional patent
·application, and RadiaDyne was unaware of it. See id. Polyzen intended to file the patent
application before the balloon was publicly displayed at the October 2007 ASTRO trade show. See
On September 26, 2007, Tilak Shah sent Isham quotes for two new phases: Phase II, which
consisted of the production of 100 samples "for testing and trials," and Phase III, which consisted
4
of full-scale production of the medical balloons. See id. *3. RadiaDyne completed purchase orders
for both phases. See id.
On October 9, 2007, Polyzen and RadiaDyne entered into a "Development and
Commercialization Agreement" that memorialized different rights and obligations ofthe two parties.
See id. (quotation omitted). The October 2007 DCA stated:
The purpose of this agreement is to document various verbal agreements ~d
understandings between the parties and define future expectations of each other as
both parties continue the efforts on the product development and manufacturing of
samples for a) feasibility study; b) functionality testing; c) clinical trials and future
commercialization of specific design of rectal balloon catheter.
ld. (quotation omitted). The October 2007 DCA defined "RADIADYNE PRODUCT as"[s]pecific
design of rectal balloon catheter for locating/supporting prostate during radiation therapy with
Polyzen' s Balloon Process Technology" and confirmed RadiaDyne' s ownership of"RADIADYNE
PRODUCT." Id. (quotation omitted). In the October 2007 DCA, at Isham's request, "radiation
therapy" was substituted for "brachytherapy." See id.
On October 25, 2007, at Polyzen's request, RadiaDyne tore up the October 2007 DCA
because Polyzen wanted to change paragraph 6.d concerning manufacturing of the "RADIADYNE
PRODUCT." See id.
On February 8, 2008, Polyzen and RadiaDyne entered into a new and almost identical DCA.
See id. Polyzen drafted the 2008 DCA with the assistance ofWilly Manfroy, an intellectual property
licensing specialist. See id.
The 2008 DCA stated:
The purpose of this agreement is to document various verbal agreements and
understandings between the parties and defme future expectations of each other as
both parties continue the efforts on the product development and manufacturing of
samples for a) feasibility study; b) functionality testing; c) clinical trials and future
commercialization of specific design of rectal balloon catheter.
5
Id. (quotation omitted). The 2008 DCA defined "RADIADYNE PRODUCT" as "[s]pecific design
of rectal balloon catheter for locating/supporting prostate during radiation therapy with Polyzen's
Balloon Process Technology." Id. (emphasis and quotation omitted). The 2008 DCA defined
Polyzen's Balloon Process Technology as "POLYZEN'S PU film welded balloon technology,
including film formulation, thickness and multi-layer film welded, designed to articulate desired
shape and profile of balloons for various applications. Functional coating, including anti-adhesion
coating formulation and process to apply such formulation onto any device. POLYZEN provided
coating services for a fee to cover all out-of-pocket expenses and overhead to prepare samples or
coat the products for its customers." Id. (quotation omitted). In the 2008 DCA, "[t]he parties
agree[d] that RADIADYNE TECHNOLOGY and RADIADYNE PRODUCT will remain the
properties
of RADIADYNE
and POLYZEN
TECHNOLOGY,
DEVICE PROCESS
TECHNOLOGY and BALLOON PROCESS TECHNOLOGY will remain the property of
POLYZEN." Id. (quotation omitted). In the 2008 DCA, the parties also agreed that definition and
assignment of intellectual property survive any termination ofthe 2008 DCA and the confidentiality
agreement dated February 12, 2007, between the parties. Id.
On March 12, 2008, Isham forwarded to Dielectrics, Inc. ("Dielectrics"), another
manufacturer, the "product specification drawings" for the balloon which Polyzen had sent to Isham.
Seeid. *4.
On September 25, 2008, Polyzen filed a utility patent application for a "Multi-Layer Film
Welded Articulated Balloon." See id. The utility patent application would become the '497 patent.
See id.
On September 10, 2009, Isham forwarded to Dielectrics another email from Po1yzen, which
contained an attachment with an updated balloon design. See id. In November 2009, RadiaDyne
6
terminated the 2008 DCA with Polyzen. See id.
On June 6, 2011, Polyzen filed a patent application that became the '845 patent. See [D.E.
99] ~ 22; [D.E. 128] ~ 22. The new application was a "continuation" of the '497 patent that is the
subject ofPolyzen I. See [D.E. 99]
~
23; [D.E. 128]
~
23. The '845 patent names the same two
purported inventors (Tilak Shah and Chris Stone) as the '497 patent. See [D.E. 99 ] ~ 24; [D.E. 128]
~
24. The '845 patent has the same nine drawings as the '497 patent. [D.E. 99]
~
~
26. The only difference is that the '845 patent's drawings were created by Computer-Assisted
22; [D.E. 128]
Design software ("CAD"), rather that hand-drawn as in the '497 patent. Id. [D.E. 99]
~
22.
Moreover, the "Background of the Invention," Brief Description of the Drawings," and "Detailed
Description of the Preferred Embodiments" in the '845 patent are materially indistinguishable from
the corresponding sections in the '497 patent. Id. ~ 27.
On July 12, 2011, the United States Patent & Trademark Office ("PTO") issued Patent No.
7,976,497 (''the '497 patent"). SeePolyzenl, 2016 WL 5360576, at *4. The '497 patent listed Tilak
Shah and Christopher Strom as inventors and Polyzen as the assignee. Id. The '497 patent issued
with five claims, all reciting a three-layer ''medical balloon device." Id. 1 Four of the claims specify
1
The '497 patent's five claims are:
1. A medical balloon device, comprising:
a first thermoplastic film layer comprising a first material, wherein the first layer
includes a first edge;
a second thermoplastic film layer comprising a second material, wherein the second
layer includes a second edge joined to the first edge to form a bottom inflatable
compartment between the first and second layer;
a third thermoplastic film layer including proximal and distal portions and
comprising a third material different from the first and second materials wherein the
third layer includes a third edge joined to the second edge to form a top inflatable
compartment between the second and third layer; and
an opening in said bottom inflatable compartment to receive a lumen, wherein the
bottom inflatable compartment is in fluid communication with the top inflatable
compartment.
2. The medical balloon device of claim 1, wherein the second and third layers are
7
an inflated distal bulge or "arcuate shape." Id.
On November 21, 2011, Polyzen filed suit in this court against RadiaDyne alleging patent
infringement ofthe' 497 patent. Id. On December 13, 2011, RadiaDyne moved to dismiss Polyzen' s
action for lack ofjurisdiction and to correct ownership of the patent-in-suit. ld. On December 23,
2011, RadiaDyne sued Polyzen in the United States District Court for the Southern District of Texas,
alleging breach of contract, fraud, federal unfair competition under 15 U.S. C. § 1125(a), conversion,
and trespass to chattels. See id. On February 24,2012, the Southern District of Texas transferred
RadiaDyne's case to this court. See id. On July 2, 2012, the court consolidated the two cases. See
On June 3, 2014, the '845 patent issued with 21 claims, all directed to "a medical balloon
device." [D.E. 99]
~~
28-29; [D.E. 128]
~~
28-29. On June 4, 2014, Polyzen filed this action
against RadiaDyne asserting the '845 patent. [D.E. 99] ~ 30; [D.E. 128] ~ 30. Radiadyne's answer
asserted that:
[p]ursuant to the contracts between Polyzen and RadiaDyne, and the terms and
conditions of the purchase orders and invoices between RadiaDyne and Polyzen,
RadiaDyne was and is the lawful owner of the design of the rectal balloon device
secured intermediate said secori.d and third edges so that the distal portion ofthe third
layer bulges upwardly upon inflation.
3. The medical balloon device of claim 1, wherein the top inflatable compartment
is adapted to distend to form a bulged conformation of the distal portion of the third
layer relative to the proximal portion upon inflation.
4. The medical balloon device of claim 1, wherein the top inflatable compartment
is further secured between the second and third layers intermediate said second and
third edges to form an arcuate shape in the distal portion of the third layer
upon inflation.
5. The medical balloon device of claim 1, wherein the second and third layers are
secured at an intermediate portion so that said third layer upon inflation bulges
upwardly between the intermediate portion and the third edge at the distal portion of
the third layer.
ld. at *4 n.l.
8
made by Polyzen for RadiaDyne, as well as any intellectual property relating thereto
[and as] such, RadiaDyne is entitled to an assignment of the '845 Patents ... and
Polyzen's claims of infringement of the '845 Patent must be dismissed.
[D.E. 99] ~ 31 (alteration in original); see [D.E. 128] ~ 31.
OnApril18, 2016, Radiadyne filed a supplemental motion for summary judgment [D.E. 98],
a statement of material facts [D.E. 99], and a memorandum in support [D.E. 100]. On May 12, 2016,
Polyzen responded in opposition [D.E. 127, 128, 129]. On May 25, 2016, RadiaDyne replied [D.E.
167] and responded to Polyzen's objections to RadiaDyne's statement of facts in support of the
motion for summary determination on the issue of joint ownership [D. E. 179].
On April18, 2016, Polyzen moved for summary judgment regarding laches, waiver, and
estoppel [D.E. 89, 90, 91], regarding RadiaDyne's claim of ownership [D.E. 92, 93, 94], and
regarding RadiaDyne's defense ofinventorship [D.E. 95, 96, 97]. RadiaDyne responded to these
motions [D.E. 118 through 126].
On September23, 2016, the courtissuedPolyzenl. SeePolyzenl, 2016 WL 5360576, at *1.
In that order, the court concluded that it lacks subject-matter jurisdiction over Polyzen's patentinfringement claim concerning the '497 patent because RadiaDyne at least jointly owns the '497
patent, RadiaDyne has not consented to the Polyzen' s patent infringement claim, and Polyzen lacks
standing to sue for patent infringement without RadiaDyne' s consent. Id. at * 1-10. Accordingly,
the court dismissed without prejudice Polyzen's patent infringement claim concerning the '497
patent for lack of subject-matter jurisdiction. ld.
n.
Summary judgment is appropriate if the moving party demonstrates that there is no genuine
dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.
R. Civ. P. 56(a). The party seeking summary judgment must initially show an absence of a genuine
9
dispute of material fact or the absence of evidence to support the nonmoving party's case. Celotex
Corp. v. Catrett,477U.S. 317,325 (1986). Ifamovingpartymeetsitsburden, the nonmoving party
must "come forward with specific facts showing that there is a genuine issue for trial." Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,587 (1986)(quotationandemphasisomitted).
A genuine issue for trial exists ifthere is sufficient evidence favoring the nonmoving party for a jury
to return a verdict for that party. Anderson v. Libert;y Lobby. Inc., 477 U.S. 242, 249 (1986). "The
mere existence of a scintilla of evidence in support of the plaintiffs position [is] insufficient ...."
ld. at252; see Beale v. Hardy, 769 F.2d213, 214 (4th Cir. 1985)("Thenonmovingparty, however, '
cannot create a genuine issue of material fact through mere speculation or the building of one
inference upon another."). Only factual disputes that might affect the outcome under substantive law
properly preclude summary judgment. Anderson, 4 77 U.S. at 248. In reviewing the factual record,
the court views the facts in the light most favorable to the nonmoving party and draws reasonable
inferences in that party's favor. Matsushim, 4 75 U.S. at 587-88. "When cross-motions for summary
judgment are before a court, the court examines each motion separately, employing the familiar
standard under Rule 56 of the Federal Rules of Civil Procedure." Desmond v. PNGI Charles Town
Gaming. L.L.C., 630 F.3d 351, 354 (4th Cir. 2011).
RadiaDyne seeks summary judgment and contends that Polyzen lacks standing to sue because
RadiaDyne at least jointly owns the '845 patent and does not consent to Polyzen's patentinfringement action.
See,~'
SiRF Tech.• Inc. v. Int'l Trade Comm'n, 601 F.3d 1319, 1325 (Fed.
Cir. 2010) (holding that "[a]bsent the voluntary joinder of all co-owners of a patent, a co-owner
acting alone" lacks standing to sue for patent infringement (quotation omitted)); Lucent Techs .. Inc.,
543 F.3dat 721-22 (same); IsraelBio-Eng'gProjectv. Amgenlnc., 475 F.3d 1256, 1264 (Fed. Cir.
2007) ("Where one co-owner possesses an undivided part of the entire patent, that joint owner must
10
join all the other co-owners to establish standing."); Ethicon, Inc. v. U.S. Surgical Cotp., 135 F.3d
1456, 1468 (Fed. Cir. 1998) ("[A]sa matter of substantive patent law, all co-owners must ordinarily
consent to join as plaintiffs in an infringement suit."); Schering Com. v. Roussel-UCLAF SA, 104
F .3d 341, 345 (Fed. Cir. 1997) ("[O]ne co-owner has the right to impede the other co-owner's ability
to sue infringers by refusing to voluntarily join in such a suit."). "Absent the voluntary joinder of
all co-owners of a patent, a co-owner acting alone will lack standing." Israel Bio-Eng' g Project, 4 75
F.3d at 1264--65.
Polyzen, as the party bringing the patent-infringement action, must establish that it has
standing to sue for patent infringement concerning the '845 patent.
See,~'
MHL TEK. LLC v.
Nissan Motor Co., 655 I<; .3d 1266, 1274 (Fed. Cir. 2011). In support of its position that it has
standing to sue RadiaDyne for patent infringement concerning the '845 patent, Polyzen contends that
RadiaDyne is not the co-owner of the '845 patent.
Subject-matter jurisdiction is the court's "statutory or constitutional power to adjudicate the
case." Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 89 (1998) (emphasis omitted). The
court "must determine that it has subject-matter jurisdiction over [a claim] before it can pass on the
merits of that [claim]." Constantine v. Rectors & Visitors of George Mason Univ., 411 F.3d 474,
479-80 (4th Cir. 2005). Polyzen has the burden of establishing that the court has subject-matter
jurisdiction over its patent-infringement action. See.~' Steel Co., 523 U.S. at 104; Richmond.
Fredericksburg & Potomac R.R. v. United States, 945 F.2d 765, 768 (4th Cir. 1991).
Whep. a district court may dismiss a claim under Rule 56 or Rule 12(b)(1) for lack of subjectmatter jurisdiction, the Fourth Circuit has "observe[d] that[,] rather than granting summary judgment
pursuant to Rule 56[], the district court should ... dismiss[] the suit for want ofjurisdiction under
Rule 12(b)(l)." Williams v. United States, 50 F.3d 299, 304 (4th Cir. 1995); see White Tail Park,
11
Inc. v. Stroube, 413 F.3d 451, 459 (4th Cir. 2005); Evans v. B.F. Perkins. Div. of Standex Int'l
Corp., 166 F.3d 642,647 & n.3 (4th Cir. 1999); see also Saval v. BL Ltd., 710 F.2d 1027, 1029 n.2
(4th Cir. 1983). Proceeding under the Ru1e 12(b)(1) framework is appropriate even where neither
party has brought amotion under it. See Williams, 50 F.3d at 301-02, 304 (discussing procedural
posture).
There are two ways that the court may conclude that it lacks subject-matter jurisdiction under
Ru1e 12(b)(1). See Lovern v. Edwards, 190 F.3d 648, 654 (4th Cir. 1999). "The court may find
insufficient allegations in the pleadings, viewing the alleged facts in the light most favorable to the
plaintiff, similar to an evaluation pursuant to Ru1e 12(b)(6). Alternatively, after
an evidentiary
hearing, the court may weigh the evidence in determining whether the facts support the jurisdictional
allegations." Id. (citations omitted). Thus, a motion under Ru1e 12(b)(1) permits "[a] trial court [to]
consider evidence by affidavit, depositions or live testimony without converting the proceeding to
one for summary judgment." Adams v.
B~
697 F.2d 1213, 1219 (4th Cir. 1982); see Suter v.
United States, 441 F.3d 306,309 n.2 (4th Cir. 2006). When the court weighs the evidence relevant
to subject-matter jurisdiction, "the presumption of truthfulness normally accorded a complaint's
allegations does not apply, and the district court is entitled to decide disputed issues of fact with
respect to subject matter jurisdiction." Kerns v. United States, 585 F3d 187, 192 (4th Cir. 2009).
Here, neither party has requested an evidentiary hearing, but both have submitted competent
evidence relevant to subject-matter jurisdiction. Thus, the court considers that evidence in resolving
the dispute about subject-matter jurisdiction. See id. at 192-93; White Tail Park. Inc., 413 F.3d at
459; Evans, 166 F.3d at 647; Williams, 50 F.3d at 303-04; Saval, 710 F.2d at 1029 n.2.
In resolving whether Polyzen has standing to assert its patent-infringement action concerning
the '845 patent, this court notes that it has twice analyzed the '497 patent and the 2008 DCA. See
12
Polyzenl, 2016 WL 5360576, at *7. Specifically, on February 18,2015, this court resolved pending
motions for partial summary judgment. See id. In its order, the court discussed the '497 patent and
the 2008 DCA. The court reiterated:
The 2008 DCA assigns to RadiaDyne the so-called "RadiaDyne Product," or the
"[s]pecific design of rectal balloon catheter for locating/supporting prostate during
radiation therapy with Polyzen's Balloon Process Technology." 2008 DCA~~ 2.e,
6.a (original emphasis omitted and emphasis added). "Design" means, among other
definitions, "a preliminary sketch or outline . . . showing the main features of
something to be executed," or ''the drawing up of specifications as to structure,
forms, positions, materials ... in the form of a layout for setting up, building, or
fabrication." Webster's Third New International Dictionary 611-12 (1993). The
Balloon Process Technology, which paragraph 2.e of the 2008 DCA' expressly
incorporates into the RadiaDyne Product, includes "Polyzen' s PU film welded
balloon technology ... designed to articulate desired shape and profile of balloons
for various applications." Id. ~ 2.d.
Id. On August 7, 2015, this court again discussed the '497 patent and the 2008 DCA. The court
wrote:
The relevant contractual language in the 2008 DCA states that "RadiaDyne
Product will remain the propert[y] of RadiaDyne." 2008 DCA [D.E. 109-16] 4
(paragraph 6.a). "Remain" means ''to continue unchanged in form, condition, status,
or quantity" or "continue to be." Webster's Third New International Dictionary 1919
(1993). "Will remain" arguably falls into a grey zone between the strong operative
language of"does hereby grant," which unambiguously creates a present interest, and
the future-focused language of"will be assigned," which creates only an equitable
interest and not legal title. Cf. Roche, 583 F .3d at 841 (noting that a promisee "might
have gained certain equitable rights" against the inventor where the contract
contained an agreement to assign); Arachnid, 939 F.2d at 1581 ("Although an
agreement to assign in the future inventions not yet developed may vest the promisee
with equitable rights in those inventions once made, such an agreement does not by
itself vest legal title to patents on the inventions in the promisee."). The most natural
reading, however, creates a present legal interest in RadiaDyne in an exclusive
license. "Will remain" suggests that the RadiaDyne Product always has been and
continues to be the property ofRadiaDyne; there was no additional right that needed
to be assigned when the '497 patent application was filed and when the '497 patent
issued. Thus, the 2008 DCA created by operation of law an exclusive license for
RadiaDyne to the claims of the '497 patent covered by the definition ofRadiaDyne
Product. See Roche, 583 F .3d at 842 (noting that a present assignment creates a legal
title in the Pl:l,tent ''no later than the [patent] application's filing date"); Tilak Shah
30(b)(6) Dep. [D.E. 132-1] 192 (Polyzen filed its provisional patent application on
13
September 25, 2007). With the automatic issuance of an exclusive license, Polyzen
did not breach the terms of the 2008 DCA because it transferred to RadiaDyne, to the
extent legally possible, the patent rights that the 2008 DCA created in RadiaDyne.
Here, there is a genuine issue of material fact as to the scope of the '497
patent and whether the 2008 DCA required Polyzen to assign the '497 patent to
RadiaDyne or grant an exclusive license to specific claims ofthat patent. Ifthe 2008
DCA required Polyzen to grant an exclusive license, the 2008 DCA also created that
license by operation of law, thereby avoiding the breach of contract that the court
previously determined occurred. Thus, the court grants Polyzen' s motion for
reconsideration [D.E. 146] and denies RadiaDyne's motion for partial summary
judgment on its breach of contract claim [D.E. 112].
Id. *7-8 (quotation omitted).
Under the 2008 DCA, RadiaDyne owns "RADIADYNE PRODUCT." See id. 6. This court
has held and continues to believe that the claims of the '497 patent cover "RADIADYNE
PRODUCT." See id. *8. Even though this court found a genuine issue of material fact as to
''whether the scope of the '497 patent is broader than the definition of RadiaDyne Product, with
specific reference to claim four," id. (quotation omitted), that issue does not change the fact that
RadiaDyne and Polyzen at least jointly own the '497 patent. See id. The same conclusion holds
true for the '845 patent. Simply put, Polyzen and RadiaDyne contractually allocated ownership of
certain subject matter (including "RADIADYNE PRODUCT"), and Polyzen later obtained the '497
patent and the' 845 patent covering the subject matter allocated, at least in part, to RadiaDyne during
the contract period. Thus, RadiaDyne is a co-owner ofthe '497 patent and the '845 patent. See, e.g.,
Lucent Techs .. Inc., 543 F.3d at 721-22; Polyzen I, 2016 WL 5360676, at *1-9; Bushberger v.
Protecto Wrap Co., No. 07-CV-8,2008 WL 725189,at*5 (E.D. Wisc.Mar.l7,2008)(unpublished).
All co-owners of a patent must be joined as plaintiffs to establish standing for a patentinfringement action.
See,~
Lucent Techs.. Inc., 543 F.3d at 721-22; Israel Bio-Eng'g, 475 F.3d
at 1264, 1268; Ethicon. Inc., 135 F.3d at 1468; Bushberger, 2008 WL 725189, at *5. RadiaDyne did
14
not voluntarily join Polyzen' s patent-infringement action concerning the '845 patent. Thus, the court
lacks subject-matter jurisdiction over Polyzen' s patent-infringement action concerning the '845
patent.
See,~' Lucent Techs .• Inc.,
543 F.3dat 721-22; Israel Bio-Eng'g, 475 F.3d at 1264, 1268;
Ethicon. Inc., 135 F.3dat 1468; Bushberger, 2008 WL 725189, at *5. Accordingly, the court denies
RadiaDyne's supplemental motion for summary judgment, denies Polyzen's motion for summary
judgment on ownership, and dismisses without prejudice Polyzen's patent-infringement action
concerning the '845 patent. See Fed. R. Civ. P. 12(b)(1); cf. Fed. R. Civ. P. 56. 2
In opposition to this conclusion, Polyzen makes numerous arguments in both its response in
opposition to RadiaDyne' s motions and Polyzen' s own cross-motion for summary judgment on
ownership. See [D.E. 92, 93, 94, 127, 128, 129]. First, Polyzen argues that the February 2007
Confidentiality Agreement defeats RadiaDyne' s contention that RadiaDyne at least jointly owns the
'845 patent. See Polyzen I, 2016 WL 536056, at *8. RadiaDyne, however, does not claim that the
2007 Confidentiality Agreement created or granted RadiaDyne' s ownership rights in the' 845 patent.
See id. Rather, RadiaDyne contends that RadiaDyne's ownership rights were created by conduct
between the parties and are memorialized in the 2008 DCA. See id. Thus, Polyzen' s argument fails.
Second, Polyzen argues that RadiaDyne really contends that the 2008 DCA assigned
intellectual property to RadiaDyne without using the word assignment or referencing the transfer of
intellectual property rights. See id. RadiaDyne, however, does not contend that the 2008 DCA
assigned or transferred patent rights. See id. Rather, RadiaDyne persuasively contends that it at least
jointly owns the '845 patent based on: (1) the parties' agreement in the 2008 DCA that the balloon ;
2
Alternatively, even ifthe summary-judgment standard applied to RadiaDyne's motion, the
courtwouldgrantsummaryjudgmentinfavorofRadiaDyneunderRule 56. See Fed. R. Civ.P. 56.
The court reaches this conclusion after looking at the record in the light most favorable to Polyzen
and drawing all reasonable inferenc~s in Polyzen's favor. See Matsushim, 475 U.S. at 587-88.
15
design would remain owned by RadiaDyne, as reflected in the 2007 DCA and the 2008 DCA's
definitions of "RADIADYNE PRODUCT" as encompassing the balloon design; (2) Polyzen's
..
subsequent application for and procurement of the '845 patent that covers "RADIADYNE
PRODUCT"; and, (3) the legal effect of Lucent's "holding that when a party patents subject matter
that it previously-agreed would be owned or shared with another party, that other party owns or coowns the resulting patent." Id. *5; see Lucent Techs .• Inc., 543 F.3d at 717-22; Israel Bio-Eng'g,
475 F.3d at 1264, 1268; Ethicon. Inc., 135 F.3d at 1468; Bushberger, 2008 WL 725189, at *5.
Third, PolyzenarguesthatLucentis distinguishable. SeePolyzenl, 2016 WL 536056, at *9.
Although Polyzen correctly notes that the agreements between Polyzen and RadiaDyne did not have
the identical ''New Work" clause (including the reference to joint ownership) described in Lucent,
the claims ofthe '845 patent are directed to the specific design of the medical balloon device within
the definition of"RADIADYNE PRODUCT." See id. Moreover, the 2008 DCA makes clear that ·
"RADIADYNE PRODUCT" will remain the property ofRadiaDyne. Therefore, RadiaDyne is at
least a partial owner of the '845 patent under Lucent and Bushberger. See id.; see also Bushberger,
2008 WL 725189, at *5.
Fourth, Polyzen argues that Waterman v. Mackenzie, 138 U.S. 252 (1891), and its progeny
defeat RadiaDyne' s standing argument because Waterman teaches that the owner of a patent cannot
split up its ownership rights and assign different claims to different parties. See id. In Waterm~
I
however, the Supreme Court analyzed transactions that occurred after the patent issued. See
Waterm~
138 U.S. at 255--61. Here, unlike in Waterman, this court is analyzing joint ownership
of the '845 patent based on events that took place before the '845 patent issued and whether those
events created at least joint ownership when the '845 patent issued. See Lucent Techs .. Inc., 543
F .3d at 720-21; Bushberger, 2008 WL 725189, at *5. Thus, Lucent controls, and Waterman and its
16
progeny do not. See Polyzen I, 2016 WL 536056, at *9.
Finally, the factual question concerning whether the scope of the '845 patent is broader than
the definition of'RADIADYNE PRODUCT,' does not legally change whether RadiaDyne at least
jointly owns the '497 patent or '845 patent.
See Lucent Techs .• Inc., 543 F.3d at 721-22;
Bushberger, 2008 WL 725189, at *5. Even if a jury were to determine the scope of some claims
were broader than "RADIADYNE PRODUCT" and included subject matter unrelated to the balloon
design, Lucent teaches that the '845 patent still would at least be jointly owned by Polyzen and
RadiaDyne. See Lucent Techs .. Inc., 543 F.3d at 717-22; see also Israel Bio-Eng'g, 475 F.3d at
1264, 1268; Ethicon. Inc., 135 F.3d at 1468; Bushberger, 2008 WL 725189, at *5.
In sum, RadiaDyne at least jointly owns the '845 patent, and RadiaDyne does not consent to
Polyzen's patent-infringement action against RadiaDyne concerning the'845 patent. Accordingly,
the court denies RadiaDyne' s supplemental motion for summaryjudgment, denies Polyzen' s motion
for summary judgment on ownership, and dismisses without prejudice Polyzen' s patent-infringement
action for lack of subject-matter jurisdiction. See Fed. R. Civ. P. 12(b)(1); cf. Fed. R. Civ. P. 56.
m.
In sum, the court DENIES RadiaDyne's supplemental motion [D.E. 98] for summary
judgment concerning Polyzen' s patent-infringement action, DENIES Polyzen' s motion for summary
judgment regarding RadiaDyne' s claim ofownership [D.E. 92], and DISMISSES without prejudice
·Polyzen's patent-infringement action for lack of subject-matter jurisdiction. See Fed. R. Civ. P.
12(b)(1); cf. Fed. R. Civ. P. 56. Additionally, the court DISMISSES Polyzen'smotionforsummary
judgment [D.E. 89] regarding laches, waiver, and estoppel and DISMISSES Polyzen's motion for ;
summary judgment regarding RadiaDyne's defense ofinventorship [D.E. 95].
17
SO ORDERED. This 2g day of March 2017.
Chief United States District Judge·
I
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