Press Release April 19, 2011

Court Rules IBM Owns Patents Obtained by Former Employee

A Goodwin Procter team led by IP Litigation partner Mark Abate obtained a significant victory for IBM in Picture Patents v. Aeropostale in U.S. District Court for the Southern District of New York.  In a decision that became public this week, the court ruled that, under IBM’s employee agreement regarding intellectual property rights, IBM owns patents obtained by an employee after leaving IBM.

In 2007 and 2008, Picture Patents filed lawsuits against website operators alleging infringement of a patent related to a graphical user interface. The inventor, Michelle Baker, was a part-time employee at IBM’s TJ Watson Lab from 1990 to 1993 when she conceived of the invention. She obtained patents on the invention after leaving IBM and assigned them to Picture Patents.

The defendants subpoenaed IBM for Baker’s employment records and later filed a motion to dismiss for lack of ownership, alleging IBM owned the patent under the IP rights agreement signed by Baker on joining IBM. IBM was joined as a declaratory judgment defendant and counterclaimed for ownership.

The parties filed cross-motions for summary judgment and dismissal. IBM alleged its IP rights agreement vested ownership in IBM. Picture Patents alleged the invention was not covered by the agreement and IBM’s ownership claim was barred by the statute of limitations, laches, estoppel and waiver.

The court determined that the IP rights agreement “clearly applies to” the invention and the corresponding patents, rejecting arguments that the agreement did not apply because the invention did not result from “assigned tasks” at IBM and because Baker worked on it on her own time. The court held that, under the IP rights agreement, ownership in the patents vested in IBM.

The court then rejected Picture Patents’ remaining claims that statute of limitations, laches, equitable estoppel or the waiver/modification defense barred IBM’s ownership of the patent.