Pannu v. lolab

. Pannu v. Iolab Corp. (S.D. Fla. 1997)

The district court decision in Pannu v. Iolab Corp.16 was handed down in February 1997. The Federal Circuit decision will be discussed in the next section.

Dr. Pannu owned a patent for an improved intraocular plastic lens, for which he was the sole named inventor. He sued Iolab for patent infringement, seeking damages and injunctive relief. Iolab defended by alleging that the patent was invalid under 35 U.S.C. § 102(f) for plaintiff's failure to join Dr. Link, a third party, as a joint inventor in the patent. 17

Dr. Pannu did not deny Iolab's allegation of nonjoinder. Instead, he argued that even if Dr. Link was a joint inventor, the patent was still "correctable" under 35 U.S.C. § 256. Therefore, Iolab should still be liable for infringement unless it could prove by clear and convincing evidence that the patent was "uncorrectable." Iolab rebutted that Dr. Pannu, as the patentee, had the burden of going forward with a § 256 motion. Therefore, Iolab contended that the burden should shift to Dr. Pannu to prove that the patent was correctable.

Note that Iolab's argument is essentially the same as those offered by the defendants in Burroughs Wellcome and PerSeptive. In each of these cases, the accused infringer attempted to combine proof of nonjoinder and an allegation of deceptive intent into a single "check and checkmate" defense. Once again, the district court rejected this attempt.

The court granted judgement as a matter of law in Dr. Pannu's favor on Iolab's nonjoinder and invalidity defenses. Since Iolab had not submitted evidence to the court pointing to any deceptive intent on the part of the unnamed inventor, the district court reasoned that the patent could be corrected under § 256. Therefore, the court concluded that no reasonable jury could find that the patent was invalid under § 102(f) for failure to name Dr. Link as an inventor.

II. Recent Developments

A. The Federal Circuit's Decision in Pannu v. Iolab Corp.

In August 1998, the Federal Circuit vacated the lower court's order in Pannu and remanded the case for further proceedings. The court held that:

[w]hen a party asserts invalidity under § 102(f) due to nonjoinder, a district court should first determine whether there exists clear and convincing proof that the alleged unnamed inventor was in fact a co-inventor. Upon such a finding of incorrect inventorship, a patentee must invoke section 256 to save the patent from invalidity. 18

Based on this reasoning, the Federal Circuit ruled that the district court erred by not sending the inventorship issue to the jury.

Essentially, the Federal Circuit's ruling in Pannu places the burden of proof on the patentee to show that the patent is "correctable" under § 256. This, of course, includes the burden of proving that the unnamed inventor acted without deceptive intent. 19 The court noted in footnote 4 of its opinion that "[w]hile lack of deceptive intent, as a negative, may be hard for a patentee to prove . . . good faith is presumed in the absence of a persuasive showing of deceptive intent." 20

Given this curious guidance from the Federal Circuit regarding the burden of proof, it is difficult to see what the district court in Pannu did wrong. According to the Federal Circuit, the plaintiff in Pannu had the burden of proving that Dr. Link, an unnamed inventor, acted without deceptive intent in the events leading to his failure to be named as an inventor. On the other hand, footnote 4 dictates that good faith on the part of a nonjoined inventor is presumed in the absence of persuasive proof to the contrary. How can these seemingly inconsistent statements be reconciled? The most logical conclusion, we think, is that footnote 4 is tantamount to placing the burden of proof on the defendant, not the plaintiff.

After all, Dr. Pannu certainly had no incentive to produce proof of deceptive intent, since by doing so he would have rendered his own patent invalid. Dr. Link had no incentive to reveal fraudulent intent on his own part, since he stood to gain co-ownership of a potentially valuable patent by simply signing on to a statement of good faith. Indeed, the only party who had any logical incentive to prove deceptive intent on the part of the unnamed inventor was Iolab, and during a full trial on the merits it failed to produce any such evidence.

It would seem, then, that the district court simply looked at the respective interests of the parties and put the burden here it most logically fell - on the defendant. We think that the district court's instincts in Pannu were essentially correct. However, there is still a question of whether these instincts comport with the Federal Court's ruling in Stark regarding the proper role of a court in managing § 256 motions.

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