Holding

The U.S. Court of Appeals for the Federal Circuit in this appeal affirmed a district court's dismissal of an inventorship action for patents relating to laser vision correction technology. Plaintiff-appellant Olivia N. Serdarevic (“Serdarevic”) brought suit on September 15, 2006 against Advanced Medical Optics, Inc. (“AMO”) and VISX, Inc. ("VISX") to seek correction of inventorship, claiming she was the co-inventor or inventor of the technology. The patents were issued between 1987 and 1998. The U.S. District Court for the Southern District of New York found that the equitable defense of laches barred the inventorship claim. On appeal, the Federal Circuit affirmed the district court's finding that Serdarevic’s failure to bring her suit within the six year-limit was unreasonable because she was represented by counsel in 1999 and she did not explain why she was prevented from bringing this action while she was trying to license her alleged invention. Neither did the district court abuse its discretion in holding that Serdarevic had failed to meet her burden to rebut the presumption of evidentiary prejudice, because three witnesses with knowledge of Serdarevic’s inventorship claim all died during the period of her delay. For these reasons, the grant of summary judgment to defendant-appellee AMO and VISX was warranted.

Detailed Summary

In this case, plaintiff-appellant Serdarevic claimed that she is the inventor or co-inventor of technology related to laser vision correction disclosed in six United States patents issued between 1987 and 1998. Serdarevic brought suit on September 15, 2006, against the current owner of the patents, its corporate parent, and the named inventors, seeking correction of inventorship and alleging state-law claims of unjust enrichment and fraud against the named inventors. Opinion, pp.1-2.

All six patents-in-suit have been assigned to defendant-appellee VISX, which is a wholly owned subsidiary of defendant-appellee AMO. Serdarevic claimed to be the sole inventor of the subject matter claimed in the ’388 patent, and a co-inventor of the subject matter claimed in the other five.

The district court granted the defendants’ motions for summary judgment on the basis of laches and the applicable state statutes of limitations. Id., citing Serdarevic v. Advanced Med. Optics, Inc., 06-CV-7107, slip op. at 3, 27 (S.D.N.Y. Sept. 25, 2007). Serdarevic timely appealed.

The rule on laches is that a delay of more than six years after the omitted inventor knew or should have known of the issuance of the patent will produce a rebuttable presumption of laches.” Id., pp. 5-6, citing Advanced Cardiovascular Sys., Inc. v. Scimed Life Sys., Inc., 988 F.2d 1157, 1163 (Fed. Cir. 1993).

Here, Serdarevic admitted knowing of the issuance of the patents-in-suit in October 1998. She did not file suit until September 15, 2006—nearly eight years later. Thus, as the district court correctly concluded, the presumption of laches applied.

The Federal Circuit rejected Serdarevic’s argument that her eight-year delay in bringing suit was reasonable or excusable because of her unfamiliarity with the U.S. patent system, her inability to obtain legal counsel, and her efforts to license her inventorship rights.

The district court considered these excuses, but found them insufficient to rebut the presumption that her delay was unreasonable. Id., p. 9, citing Serdarevic, slip op. at 18. The Federal Circuit agreed with such ruling. In particular, the Federal Circuit held that while Serdarevic herself may have been unfamiliar with the U.S. patent system, she was represented by patent counsel in 1999. Her personal lack of familiarity with the patent system therefore did not excuse her failure to file suit. Id.

Nor can her later inability to find counsel willing to pursue her claims on a contingency basis excused her delay, the Federal Circuit added. “A patentee’s inability to find willing counsel . . . is widely rejected as a legally cognizable reason to excuse an unreasonable delay in filing suit.” Id., citing Hall v. Aqua Queen Mfg., Inc., 93 F.3d 1548, 1554 (Fed. Cir. 1996). Finally, Serdarevic did not explain why her ongoing efforts to license her inventorship rights would prevent her from bringing suit to correct inventorship. If anything, her interest in licensing her claimed invention should have provided a strong incentive for her to correct inventorship as soon as possible.

In this regard, the Federal Circuit Even concluded that even if taken together, Serdarevic’s excuses were insufficient to rebut the presumption that her eight-year delay was unreasonable. Consequently, there was no basis to conclude that the district court abused its discretion when it concluded that Serdarevic’s delay was unreasonable.

Nor did the district court abuse its discretion when it concluded that Serdarevic failed to rebut the presumption of prejudice: “Material prejudice . . . may be either economic or evidentiary. Evidentiary, or ‘defense’ prejudice, may arise by reason of a defendant’s inability to present a full and fair defense on the merits due to the loss of records, the death of a witness, or the unreliability of memories of long past events, thereby undermining the court’s ability to judge the facts. . . . Economic prejudice may arise where a defendant and possibly others will suffer the loss of monetary investments or incur damages which likely would have been prevented by earlier suit.” Id., citing A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1033 (Fed. Cir. 1992) (en banc).

Applying this rule, the Federal Circuit found that Serdarevic had failed to meet her burden to rebut the presumption of evidentiary prejudice, because three witnesses with knowledge of Serdarevic’s inventorship claim all died during the period of her delay, and because of the “cumulative and inherent prejudice from the dimming memories of all participants, including Serdarevic herself.” Id., p. 10, citing Serdarevic, slip op. at 18. Because it concluded that Serdarevic had failed to meet her burden of production on evidentiary prejudice, the district court did not reach the issue of economic prejudice.  The Federal Circuit thus concluded that the district court did not abuse its discretion in finding that Serdarevic had failed to rebut the presumption of evidentiary prejudice.

On the basis of the foregoing, the Federal Circuit affirmed the district court’s grant of summary judgment dismissing Serdarevic’s inventorship action.