[00:00:09] Speaker 02:
Our next case is James versus J2 Cloud Services LLC number 17-1506.

[00:00:35] Speaker 02:
Good morning, Your Honor.

[00:00:36] Speaker 02:
Good morning, Mr. Voigt.

[00:00:37] Speaker 02:
You reserved five minutes of your time?

[00:00:39] Speaker 02:
I did, Your Honor.

[00:00:41] Speaker 02:
Did I pronounce your name correctly?

[00:00:43] Speaker 02:
So did I, Your Honor.

[00:00:44] Speaker 02:
OK.

[00:00:45] Speaker 02:
But I heard it in many different ways.

[00:00:47] Speaker 04:
For a simple letter.

[00:00:50] Speaker 04:
Your Honor, the lower court dismissed my client's claims based on an alleged lack of jurisdiction under Article 12B1.

[00:01:01] Speaker 04:
And in that ruling, the court made

[00:01:05] Speaker 04:
several errors of both the fact and I believe one of law.

[00:01:09] Speaker 04:
First of all, with respect to the lack of why there was a lack of jurisdiction, the court held that my client had lost or James had lost equitable title to the patent.

[00:01:20] Speaker 04:
There was no mention about a loss of legal title to the patent.

[00:01:23] Speaker 04:
And as this court has enunciated in a number of opinions, patents are full of a bundle of rights.

[00:01:29] Speaker 04:
Some of them are legal title, which gives you the right to pursue.

[00:01:33] Speaker 00:
Can I just change the terminology?

[00:01:35] Speaker 00:
I'm not sure this equitable title, legal title, at least helps me think about it.

[00:01:39] Speaker 00:
The district court found a lack of Article III standing on the theory that your client would not stand to gain anything if on the merits, your client won and became the sole inventor.

[00:01:58] Speaker 00:
And so the question is,

[00:02:00] Speaker 00:
Because the law, we assume, for a standing analysis, that you're right about the merits.

[00:02:07] Speaker 00:
So we're now going to assume that your client will become named as the sole inventor.

[00:02:14] Speaker 00:
It follows from federal law that if nothing else happens, your client has ownership.

[00:02:22] Speaker 00:
And then the question is, is there at this stage of the case something that tells us that your client

[00:02:30] Speaker 00:
gave away or promised to give away that ownership interest.

[00:02:35] Speaker 00:
Am I conceptualizing this correctly?

[00:02:38] Speaker 04:
Yes, sure.

[00:02:38] Speaker 04:
I think it's the real issue is did was the implying of that contract, I think is the analysis.

[00:02:44] Speaker 00:
Well, there are two right there.

[00:02:45] Speaker 00:
So there are two related but somewhat distinct bases for the possibility that your client has at least promised to give away ownership interest.

[00:02:58] Speaker 00:
One is

[00:03:00] Speaker 00:
the software development agreement, which is not even between Mr. James and JFax, but rather between an artificial legal entity, a partnership and JFax.

[00:03:12] Speaker 00:
And then the other is the hired to invent doctrine, whose status as federal law or state law, I at least am somewhat unclear about.

[00:03:23] Speaker 00:
But among other things, I can't find has ever been applied to an agreement between

[00:03:30] Speaker 00:
between two artificial legal entities.

[00:03:34] Speaker 00:
That is, all the cases, as far as I can tell, involve a real live human being who can be an employee, and your agreement was between a partnership and JFax.

[00:03:45] Speaker 00:
That's true, Your Honor.

[00:03:50] Speaker 00:
And your point about the software development agreement is that whatever else it does, you cannot conclude at this stage of the proceedings

[00:03:59] Speaker 00:
that it gave away or promised to give away the ownership rights.

[00:04:04] Speaker 00:
It sure seems to be about copyright and not patents.

[00:04:07] Speaker 04:
That's exactly our point.

[00:04:09] Speaker 04:
And then also the fact, to further cement that conclusion, home, so to speak, is that the inventive work was done months before the execution of the software development agreement.

[00:04:21] Speaker 04:
And if you look at the very terms of the software development agreement, it's all forward-looking.

[00:04:29] Speaker 04:
For example, paragraph two, it says the entity agrees to develop software solutions, write software routines, carry out testing, and otherwise provide technological solutions, whatever that big term means.

[00:04:54] Speaker 04:
And if you look at the actual assignment clause, paragraph three,

[00:04:57] Speaker 04:
It says, JFax shall become the sole owner of all code and compiled software solutions.

[00:05:03] Speaker 04:
Those are the only IP at issue code and software solutions.

[00:05:07] Speaker 00:
Well, I don't think you want to downplay the word compiled, because the term software solutions, it seems to me, is at least potentially broader.

[00:05:17] Speaker 00:
It could be the algorithms embodied in software.

[00:05:20] Speaker 00:
But when you add the word compiled, it can't be.

[00:05:22] Speaker 00:
Nobody compiles an algorithm.

[00:05:24] Speaker 00:
You're compiling source code into machine code.

[00:05:28] Speaker 04:
Well, that's the point, Eric.

[00:05:29] Speaker 04:
We don't know because we don't have a factual record.

[00:05:32] Speaker 04:
And if we're doing what equity demands, you need to have a factual record to do so.

[00:05:38] Speaker 04:
And we don't have one here at a motion to dismiss stage.

[00:05:41] Speaker 04:
It's just premature.

[00:05:42] Speaker 04:
And the further paragraph 3 goes on, as soon as it is developed, that is clear, forward-looking language.

[00:05:52] Speaker 04:
Disagreement is all forward-looking.

[00:05:54] Speaker 04:
It doesn't look at anything that James did two months prior to.

[00:05:57] Speaker 00:
What's the significance in your mind of it being forward-looking?

[00:06:02] Speaker 04:
Well, it can't cover what was in the past unless it says so.

[00:06:06] Speaker 02:
Why wouldn't that cover something that happened in the past as soon as it has developed?

[00:06:12] Speaker 02:
And now you go, well, it was developed two years ago, and so that's covered.

[00:06:18] Speaker 04:
No, we pledge, Your Honor, it was developed several months earlier.

[00:06:21] Speaker 02:
No, I understand that.

[00:06:23] Speaker 02:
You're arguing, though, that this is only forward-looking.

[00:06:26] Speaker 02:
So it can't encompass any prior acts.

[00:06:29] Speaker 04:
It's correct, because it's forward-looking.

[00:06:32] Speaker 04:
It doesn't refer to your past inventions, ideas, whatever you want to call it.

[00:06:39] Speaker 04:
It only looks what you're going to do from this date forward.

[00:06:43] Speaker 04:
If something's been already done in the past, it can't be an assignment of that already, because that's already been created.

[00:06:49] Speaker 04:
This is only concerning itself with what will be created.

[00:06:52] Speaker 04:
And that's an important distinction, because,

[00:06:55] Speaker 04:
We're looking at, and part of the equity is, was he hired to invent or hired to implement?

[00:07:03] Speaker 04:
I mean, the case law makes a distinction there.

[00:07:07] Speaker 04:
And with the hired to implement, a shock right, for lack of a better word, and you just have a right to practice.

[00:07:13] Speaker 00:
Can I ask you about the hired to invent?

[00:07:15] Speaker 00:
And this refers to something that may have passed more quickly than you were quite able to take in.

[00:07:20] Speaker 00:
I'm not sure what's been made of it.

[00:07:23] Speaker 00:
JFex did not hire Mr. James.

[00:07:26] Speaker 04:
Correct.

[00:07:26] Speaker 00:
JFax entered into a contract with GSP, a partnership.

[00:07:31] Speaker 00:
Correct.

[00:07:31] Speaker 00:
Are any hired to invent cases like that?

[00:07:34] Speaker 04:
Not that I'm aware of.

[00:07:35] Speaker 04:
They're all restricted to employees, as far as I can tell.

[00:07:38] Speaker 00:
And on the assumption that that's true as a descriptive matter of all the cases, why should that distinction make a difference if you think it does?

[00:07:51] Speaker 04:
Well, that distinction would make a difference

[00:07:54] Speaker 04:
And inequity wouldn't even apply to James the individual, the inventor.

[00:08:01] Speaker 04:
There would be no basis to strip James the inventor of ownership in this instance.

[00:08:08] Speaker 03:
I don't understand that answer.

[00:08:09] Speaker 03:
What makes a difference if you hire two people that are a partnership or one person that's a sole employee to invent something for the purpose of the hire to invent doctrine?

[00:08:21] Speaker 03:
Isn't the whole point of it is,

[00:08:23] Speaker 03:
If I'm a company and I hire you and say, I want you to go out and do this for me, I get the rights to that.

[00:08:32] Speaker 03:
What makes a difference if it's one person or a partnership for that doctrine?

[00:08:37] Speaker 03:
Title has to be assigned or transferred.

[00:08:40] Speaker 03:
That's not the question I asked.

[00:08:42] Speaker 03:
What makes the difference?

[00:08:44] Speaker 03:
The higher, let me make it simple.

[00:08:47] Speaker 03:
Assuming, I think the higher to invent doctrine means if I hire you to do something for me and give you instructions on what to do, you never own the patent rights to that.

[00:08:57] Speaker 03:
I own the patent rights to that.

[00:08:59] Speaker 03:
What makes a difference if I hire you as an individual or you as a partnership?

[00:09:06] Speaker 03:
I don't think it's- Or you as some kind of corporation, even though you're the sole owner of the whole corporation.

[00:09:14] Speaker 04:
On one hand, it still comes down to what entity owned the rights to begin with.

[00:09:19] Speaker 04:
So is that the answer that it doesn't matter?

[00:09:23] Speaker 04:
In this case, even if it doesn't matter, it doesn't matter because the facts are too premature and factually... No, no, I understand that.

[00:09:32] Speaker 03:
You're answering questions.

[00:09:33] Speaker 03:
I just wanted to know what the difference between James as an individual person or James as part of a partnership was for purposes of the application.

[00:09:42] Speaker 03:
of the higher to invent doctrine.

[00:09:43] Speaker 03:
I understand you would disagree with at least the vision of it I just articulated, which I'm not saying is the correct one.

[00:09:51] Speaker 04:
Correct.

[00:09:52] Speaker 04:
Quite honestly, I don't think in this instance, I don't think equity is going to make a difference or would get a different link as compared to whether this was a legal entity, maybe it was, and maybe it was.

[00:10:03] Speaker 04:
I do not know the answer to that.

[00:10:05] Speaker 04:
It's a factual consideration to be taken into account.

[00:10:08] Speaker 02:
Does it matter whether the person that's being hired is an independent contractor?

[00:10:14] Speaker 04:
The case law is unclear on that.

[00:10:16] Speaker 04:
Some courts have said it does matter.

[00:10:18] Speaker 02:
What's your argument?

[00:10:19] Speaker 02:
What's your position on that?

[00:10:21] Speaker 04:
My position is, Your Honor, that I think it should matter because you need more precise contracts and to enable an employee

[00:10:33] Speaker 04:
There's an implicit understanding that you're working for that person for whatever job responsibilities are.

[00:10:39] Speaker 04:
But in an independent contractor, you don't have that surrounding circumstances.

[00:10:43] Speaker 04:
It has to be defined by contract.

[00:10:44] Speaker 04:
And if the person hiring the person doesn't specify exactly what they're getting and what they expect and what they expect to receive, I don't think it should be on the burden on the independent contractor.

[00:10:56] Speaker 04:
I mean, copyright has a similar analogy on a work for hire.

[00:11:00] Speaker 04:
I mean, you specifically have to exclude that out

[00:11:03] Speaker 04:
a copyright if you hire a photographer to do something.

[00:11:07] Speaker 04:
So I think it can make a difference.

[00:11:09] Speaker 00:
I'm sorry, what does copyright?

[00:11:11] Speaker 04:
I think copyright has this notion that if you don't specifically spell out in a work for hire what you can and can't do, the author of the copyright retains certain rights.

[00:11:25] Speaker 04:
And I think it's in the work for hire doctrine.

[00:11:28] Speaker 04:
And I think contractually, again, it has to be for the median of the minds.

[00:11:33] Speaker 04:
It needs to be spelled out.

[00:11:36] Speaker 04:
And I think it does make a difference, because when you have an employer relationship, there's implicit understandings.

[00:11:42] Speaker 03:
Are you saying that, at least for independent contractors, the contract has to specifically say what the IP rights are going to be in order for them to be transferred to the company hiring an independent contractor?

[00:11:58] Speaker 04:
It certainly should be the burden on the company hiring a contractor to specify that.

[00:12:03] Speaker 04:
I mean, just for these very circumstances.

[00:12:05] Speaker 03:
But if that's the case, then that writing would qualify under 261, wouldn't it?

[00:12:10] Speaker 04:
This would, Your Honor.

[00:12:11] Speaker 03:
Well, then would there be any applicability of the Hire to Invent Doctrine whatsoever if we have a specific writing?

[00:12:21] Speaker 03:
I mean, isn't that the whole point of the Hire to Invent Doctrine, at least as some of these really old Supreme Court cases and some references in some of our newer cases is that if

[00:12:32] Speaker 03:
that somebody hires you to do a certain thing for them, that they're the ones that get the rights to the ownership of that invention, not you, because you were hired to invent it for them.

[00:12:45] Speaker 03:
And that we wouldn't need this doctrine if there was a specific agreement saying, I'm hiring you to invent this.

[00:12:52] Speaker 03:
I get the IP rights.

[00:12:56] Speaker 04:
I see what you're saying.

[00:12:58] Speaker 04:
Maybe it is means distinction between employee

[00:13:01] Speaker 04:
an independent contractor.

[00:13:04] Speaker 02:
You're into your rebuttal time.

[00:13:05] Speaker 02:
You want to reserve it?

[00:13:07] Speaker 02:
I'll reserve it.

[00:13:13] Speaker 01:
Okay, thank you.

[00:13:14] Speaker 01:
Mr. Ruttenberg?

[00:13:15] Speaker 01:
Yes, good morning.

[00:13:16] Speaker 01:
Guy Ruttenberg for the appellate.

[00:13:21] Speaker 01:
We agree, obviously, that the independent contractor versus employee relationship is not determinative or irrelevant.

[00:13:27] Speaker 01:
Standard Parts is an independent contractor.

[00:13:31] Speaker 00:
How do we know that, by the way?

[00:13:32] Speaker 00:
I can't figure out how we know whether Mr. Peck was an independent contractor or something, some other kind of employee.

[00:13:45] Speaker 00:
I mean, he was getting a salary and then he had a bonus.

[00:13:48] Speaker 00:
What else do we know?

[00:13:49] Speaker 01:
We know he was a lawyer.

[00:13:50] Speaker 01:
He was actually an attorney that was engaged to do a project and that part of the remuneration depended on the success of the project.

[00:14:01] Speaker 01:
I think in at least one case in a concurrence, Judge O'Malley characterized that.

[00:14:06] Speaker 00:
I know, but that was a parenthetical without explanation.

[00:14:09] Speaker 00:
And I guess I've read standard PEC several times, and I don't understand how one can tell whether he was an employee or an independent contractor.

[00:14:17] Speaker 01:
Well, I guess that kind of goes to the point, which is there's no reason that I can think of, and there's no reason that I think has been articulated as to why the hired to invent doctrine should depend on whether or not someone is paid

[00:14:29] Speaker 01:
What would be a W2 as opposed to 1099 under some state law or for that matter under Australian law.

[00:14:36] Speaker 01:
So I haven't seen any reason why that would be a determining factor.

[00:14:39] Speaker 01:
The factor is under the case law, what's the intent of the relationship as determined by the facts.

[00:14:46] Speaker 01:
and what we have here.

[00:14:47] Speaker 00:
I agree that the focus has to be on what this software development agreement sort of shows or indicates and whatnot, because the definition of the contract, as indeed it was in standard parts.

[00:15:00] Speaker 00:
Can I just ask you this question?

[00:15:04] Speaker 00:
Hired to invent doctrine, is that in the post-Iri world a matter of federal law anymore?

[00:15:13] Speaker 01:
So the way Tietz looks at it, Tietz suggests that it might be a matter of state law.

[00:15:18] Speaker 00:
Because it's all just about what's implicit in the relation and whether one would find an implied in fact transfer.

[00:15:28] Speaker 01:
True, based upon the facts.

[00:15:30] Speaker 01:
And it's not just the contract.

[00:15:31] Speaker 01:
There could be other facts as well, as the court relied on in this case.

[00:15:35] Speaker 01:
But what Tietz says, for example, in that case, I believe it was Florida law.

[00:15:38] Speaker 01:
And the court basically said that Florida law looks to the pre-eerie case law like standard parts.

[00:15:43] Speaker 01:
In this case, no one has argued to the district court that the case law should have been any different than that.

[00:15:47] Speaker 01:
For example, there was no argument that somehow California law or Delaware law or New York law or Australia law should have applied.

[00:15:55] Speaker 01:
California is where this court was for ear doctrine purposes.

[00:15:58] Speaker 01:
The contract is governed by Delaware law.

[00:16:01] Speaker 01:
This individual had, I guess, they had met in New York.

[00:16:03] Speaker 01:
He claims to be in Australia.

[00:16:04] Speaker 01:
The plaintiff had never argued below that somehow any of that should matter.

[00:16:09] Speaker 01:
And so like in the Teeks case, what ended up happening was essentially

[00:16:13] Speaker 01:
they were applying the federal law as articulated by the Supreme Court, no one has suggested that that would make any difference.

[00:16:19] Speaker 01:
And I'm not aware of any reason why it should.

[00:16:22] Speaker 00:
So it's all about what the circumstances, probably most importantly the actual contractual relation involved here, but not only that, would support by way of an inference about intent to transfer.

[00:16:40] Speaker 01:
Right.

[00:16:42] Speaker 01:
Whether it's the contractor or other factors, basically you look at the facts and figure out, is this a situation where there is any way that the contractor or employer, whatever you want to call him, whether that individual could have retained any rights.

[00:16:57] Speaker 01:
And in fact, the court here made specific factual findings that he did not retain rights.

[00:17:01] Speaker 00:
And I think Mr. James concedes in his fact, I'm sorry, factual findings on the rule 12B,

[00:17:09] Speaker 00:
One motion.

[00:17:10] Speaker 01:
Yes, sir.

[00:17:10] Speaker 01:
The court makes factual findings that are cited into order.

[00:17:13] Speaker 01:
And in fact, Mr. James concedes in this brief, the legal standard here, although it's de novo on standing, to the extent there are any factual findings, Mr. James concedes that those factual findings are actually reviewed for clear error.

[00:17:26] Speaker 01:
And the judge went through quite a few factors that she pointed to.

[00:17:30] Speaker 01:
First and foremost was the FDA itself.

[00:17:33] Speaker 01:
But beyond that... Well, let's focus on the SDA.

[00:17:36] Speaker 00:
The key provision, which I think the judge cited was... Was it five point something?

[00:17:42] Speaker 00:
No, no.

[00:17:43] Speaker 00:
The provision with the language about Section 3, I guess.

[00:17:47] Speaker 00:
JFAC shall become the sole owner of all code and compiled software solutions.

[00:17:54] Speaker 00:
That sounds to me... I mean, well, actually, it sounds very much to me like it is about

[00:18:01] Speaker 00:
a copyright interest in the product?

[00:18:04] Speaker 01:
Well, I think he says more than that because the rest of the sentence says, the sole owner of all code and compiled software solutions as described in this agreement.

[00:18:13] Speaker 01:
In other words, whatever is described in this agreement was to create software solutions or code and compile software solutions.

[00:18:21] Speaker 01:
And I think I should back up and say two things.

[00:18:24] Speaker 01:
Mr. James was engaged to create software.

[00:18:29] Speaker 01:
Whatever he did... His partnership was.

[00:18:32] Speaker 00:
Right.

[00:18:32] Speaker 01:
Well, and I agree with that.

[00:18:34] Speaker 01:
He hasn't made that distinction, and I guess he's conceded that it doesn't matter.

[00:18:37] Speaker 00:
But whatever... What he's conceded is that he wins even without it.

[00:18:41] Speaker 01:
Okay.

[00:18:42] Speaker 01:
But my point is, before today, we've never... No one has suggested that that would make a difference.

[00:18:48] Speaker 00:
Okay.

[00:18:48] Speaker 00:
So focus on the agreement.

[00:18:49] Speaker 00:
Sure.

[00:18:50] Speaker 01:
So whatever inventions he claims to have had, he either sold those inventions as part of the SDA,

[00:18:57] Speaker 00:
or he abandoned them because he never... I'm sorry, where do you get how he sold those inventions as part of the SDA?

[00:19:03] Speaker 01:
As part of the SDA, he says two things that are important here.

[00:19:08] Speaker 00:
What should I be looking at?

[00:19:09] Speaker 01:
It's section three where he says, it's the language that your honor just quoted, which is that JFax will be the sole owner of all code and compiled software solutions as described in this agreement.

[00:19:21] Speaker 01:
But there's additional language that the court cited to, which is that in the preamble itself,

[00:19:25] Speaker 01:
It says that it should be for the exclusive use.

[00:19:28] Speaker 00:
Exactly the same thing, code and compiled software solutions.

[00:19:31] Speaker 01:
But whatever it is is for the exclusive use.

[00:19:34] Speaker 00:
And he also says that... I'm sorry, but you're skipping a step, right?

[00:19:40] Speaker 00:
It means that the particular software code he developed

[00:19:44] Speaker 00:
is only to be used by JFax, but it doesn't mean that if he takes his inventive ideas of the algorithm and creates new software, that he doesn't have control of that.

[00:19:55] Speaker 01:
So as I said, there's two options here.

[00:19:58] Speaker 01:
Whatever created, he sold it as part of the agreement.

[00:20:02] Speaker 00:
What he sold was the code and compile software solutions.

[00:20:06] Speaker 01:
So to the extent he contends that there's something he had more than that, that's not something that he's... That's not the subject of

[00:20:14] Speaker 01:
his of this agreement.

[00:20:15] Speaker 01:
To the extent he had something else, now he says this agreement isn't backwards looking, I disagree with that.

[00:20:21] Speaker 01:
Forget about that.

[00:20:21] Speaker 01:
Yeah, but to the extent there's something else, that's not redressable under 256 client, because he didn't apply for a patent, he abandoned that.

[00:20:32] Speaker 00:
We don't have a merits argument about abandonment here.

[00:20:38] Speaker 00:
We have to assume the correctness of his 256

[00:20:42] Speaker 00:
claim to be the sole inventor on this patent.

[00:20:46] Speaker 01:
So for our standing argument, there's actually a couple of different arguments.

[00:20:49] Speaker 01:
And they're both raised in the briefing below and here.

[00:20:52] Speaker 01:
One is, is there injury in fact?

[00:20:55] Speaker 01:
The other one is, is there redressability?

[00:20:57] Speaker 01:
And he has changed his argument somewhat from what he argued in the court below, in the sense that this argument that he somehow has additional functionality, an additional invention that's not covered by the SDA,

[00:21:11] Speaker 01:
That's not really an argument he made below, but to the extent he makes that argument now, that's not redressable by a 256 claim.

[00:21:19] Speaker 00:
That's a patent that maybe he had if he claims that... He claims his 256 claim on the merits is, I was the sole inventor, I should be the owner of this patent.

[00:21:30] Speaker 00:
You did not, and I don't see any findings and I don't think you made an argument, that even if he were the sole owner of this patent and he hadn't given away the ownership rights,

[00:21:40] Speaker 00:
and that he hadn't promised to give away the ownership rights, that he had no stake in being the sole owner.

[00:21:49] Speaker 01:
The argument, Your Honor, we made is twofold.

[00:21:52] Speaker 01:
To the extent his argument is that he has some sort of interest in the patent or information that was conveyed to J2 as part of the agreement, he sold that.

[00:22:03] Speaker 01:
To the extent he had anything else, we have made the argument, both in the district court and here,

[00:22:08] Speaker 01:
But that's not redressable as a 256 claim, which is also a standing issue because it goes to redressability.

[00:22:16] Speaker 03:
And that is to say someone who could- Do you have to convince us that the language of that agreement specifically conveys the patent invention to your client for you to win?

[00:22:29] Speaker 01:
I think we have to.

[00:22:31] Speaker 01:
It's not just the agreement itself.

[00:22:32] Speaker 01:
I think there are other factors.

[00:22:34] Speaker 01:
And I think what we would say is that... And what other factors are those?

[00:22:37] Speaker 01:
Well, the court cited extensive factors, actually, in your decision.

[00:22:40] Speaker 01:
And it's the same factors that were cited in Teitz.

[00:22:43] Speaker 01:
The fact that he never participated in the filing of a patent application.

[00:22:47] Speaker 01:
The fact that for 20 years he didn't say anything, hey, where's my patent application?

[00:22:51] Speaker 01:
The fact that he didn't pay any of the maintenance fees or prosecution fees, or he didn't participate.

[00:22:57] Speaker 03:
How does that go to?

[00:22:59] Speaker 03:
That goes to...

[00:23:00] Speaker 03:
whether he invented it or whether he should have a correction claim.

[00:23:04] Speaker 01:
That goes to standing.

[00:23:05] Speaker 01:
It goes to the intent of the parties.

[00:23:07] Speaker 01:
And again, remember, under teats and under standard parts, there is a factual finding here that you can do in a 12b1 standard and say, what are the factual findings that look at the intent of the parties at the time of the transaction?

[00:23:20] Speaker 01:
And you can look at facts afterwards as well.

[00:23:23] Speaker 01:
And the court actually discussed this point.

[00:23:25] Speaker 01:
And it's very similar.

[00:23:26] Speaker 03:
Is there anything else contemporaneous to the signing of that agreement?

[00:23:30] Speaker 03:
Would that would suggest he was hired to invent this?

[00:23:34] Speaker 03:
The invention described in the patent?

[00:23:37] Speaker 01:
I mean, yes.

[00:23:38] Speaker 01:
The whole structure of the agreement was that JFax had created an invention.

[00:23:43] Speaker 01:
He cites the agreement.

[00:23:45] Speaker 01:
No, no.

[00:23:45] Speaker 01:
He cites the New York Times article that the court also cited, too, where the court said that these individuals that JFax had dreamed up this concept, and then they go to him to implement it.

[00:23:56] Speaker 00:
And so that sounds like this wasn't the hire to invent at all.

[00:24:02] Speaker 01:
Well, we've never taken the position that he's an inventor at all.

[00:24:05] Speaker 01:
That's his position.

[00:24:06] Speaker 01:
But the relationship is clear that whatever it is that we hired him to do, it was going to be owned by us.

[00:24:13] Speaker 00:
No, see, that's what I think is, to put it mildly, not clear from the agreement.

[00:24:19] Speaker 00:
The agreement is about the deliverable.

[00:24:22] Speaker 00:
It's not about the ownership of the invention on its face.

[00:24:26] Speaker 01:
Well, I guess I would say that to the extent there's something else that's not deliverable, he's never applied for a patent on that.

[00:24:33] Speaker 01:
And I'm not aware of any section.

[00:24:35] Speaker 00:
You applied for a patent on his invention.

[00:24:37] Speaker 01:
We applied for a patent on what we thought was our invention.

[00:24:39] Speaker 01:
And to the extent he had any role in that, our view is that he had signed it or contributed as part of the SDA.

[00:24:46] Speaker 01:
To the extent he is now coming along 20 years later and says, I am the only person.

[00:24:52] Speaker 01:
This is his argument.

[00:24:53] Speaker 01:
If we understand his argument, his argument

[00:24:55] Speaker 01:
I am the sole inventor with the sole right to apply for a patent.

[00:25:00] Speaker 01:
I've never seen a case that suggests the Section 256 claim can be used.

[00:25:05] Speaker 00:
That's a merits, you may be right that 256 shouldn't provide relief in that circumstance, but that's a merits point.

[00:25:12] Speaker 00:
We have only in front of us necessarily on the assumption that he's right about his 256 claim

[00:25:20] Speaker 00:
whether he has a stake in this case.

[00:25:23] Speaker 01:
So respectfully, Judge Toronto, I agree with you that there are issues on the merits here as well.

[00:25:29] Speaker 00:
And you made a bunch of those arguments which the judge did not rule on in this report.

[00:25:33] Speaker 01:
But there's also a question of redressability, which is a standing issue.

[00:25:37] Speaker 01:
It is a constitutional standing issue.

[00:25:38] Speaker 00:
You don't decide the merits in determining redressability.

[00:25:42] Speaker 00:
You assume the redressability and injury in fact are not quite perfect mirror images, but they're awfully close

[00:25:50] Speaker 00:
But you still assume that the plaintiff is right about the merits and ask, would that do him any good?

[00:26:00] Speaker 01:
I guess the question I would say on the redressability front is whether or not the purpose of a 256 claim is to redress someone who claims, I didn't file a patent in my invention.

[00:26:12] Speaker 01:
Somebody else did.

[00:26:14] Speaker 00:
Give me some cases that say,

[00:26:16] Speaker 00:
in determining the redressability component of Article 3, you inquire, you question the merits claim about either the cause of action that's being invoked or the correctness of the assertion that that cause of action merits

[00:26:41] Speaker 00:
It is one that generates liability.

[00:26:44] Speaker 01:
And maybe I'm misunderstanding or maybe I'm not characterizing myself correctly.

[00:26:49] Speaker 01:
I'm not suggesting that it's a merits issue.

[00:26:51] Speaker 01:
I'm suggesting... I'm suggesting it's a merits issue.

[00:26:54] Speaker 00:
So tell me where redressability doctrine says you get to make a little bit of judgment about the merits.

[00:27:00] Speaker 01:
So I don't think it does, but I also don't think I'm suggesting that it is a judgment on the merits.

[00:27:06] Speaker 01:
The point of redressability here is even if this is the subject matter he invented,

[00:27:11] Speaker 01:
The question is whether or not he can get to there through a 256 claim.

[00:27:15] Speaker 01:
So to take the position that Your Honor articulated, even if what he's saying is true, that the claims reflect what he invented, can he get there through a 256 claim?

[00:27:24] Speaker 01:
That's redressability.

[00:27:25] Speaker 00:
So on remand, if standing is, if it's reversed, you get to argue that 256 is not available for somebody alleging

[00:27:34] Speaker 00:
that I'm the sole inventor as opposed to a co-inventor, or any number of other arguments about the scope of the 256 statutory cause of action.

[00:27:44] Speaker 00:
That's not an Article III standing question.

[00:27:48] Speaker 01:
That's my understanding of what redressability would mean in that context, is can you actually get the relief you're seeking if you're right?

[00:27:54] Speaker 01:
And my understanding is in this context, to the extent you did anything.

[00:27:58] Speaker 00:
If you're right, including among other things, about the scope of the cause of action.

[00:28:03] Speaker 01:
OK.

[00:28:04] Speaker 01:
I guess my understanding of redressability is a little bit different than that.

[00:28:08] Speaker 01:
But I understand the point.

[00:28:10] Speaker 01:
I think fundamentally here, what we have is that somebody has brought a cause of action where, I'm sorry, men of time.

[00:28:19] Speaker 01:
Our view is that the district court got it right on the staining issue.

[00:28:24] Speaker 01:
Because Mr. James, whatever he did under the contract, he assigned it.

[00:28:28] Speaker 01:
And to the extent there's anything else, it's not redressable on 256 clause.

[00:28:34] Speaker 01:
Thank you, Your Honors.

[00:28:41] Speaker 04:
Mr. Voigt, you have four minutes.

[00:28:43] Speaker 04:
Thank you, John.

[00:28:43] Speaker 04:
I don't think I'll use it all.

[00:28:45] Speaker 04:
I think, Judge Ronto, you're exactly right.

[00:28:47] Speaker 04:
This is premature to dismiss this case.

[00:28:51] Speaker 00:
Well, tell me why your opposite number is not right, that the district court was entitled to and did make factual findings

[00:29:00] Speaker 00:
that warrant the usual deference of factual findings.

[00:29:03] Speaker 00:
What's the procedural objection you have to the district courts having made certain findings about the SDA and surrounding circumstances?

[00:29:16] Speaker 04:
The district court didn't accept the pleadings, the factual statements, and the complaint is true.

[00:29:21] Speaker 00:
I think your, my wife, sorry, I forget the name, Mr. Ruddenberg, sorry, I think he indicated

[00:29:29] Speaker 00:
that the district court was entitled to make factual findings at this stage.

[00:29:33] Speaker 00:
Why is that wrong?

[00:29:36] Speaker 04:
I think on the jurisdictional issues, it's allowed to do that.

[00:29:40] Speaker 04:
But under the Ninth Circuit law, if those jurisdictional issues are intertwined with the merits of the case, and I think we addressed this in our brief, I can fraudulent on a site, then it's not entitled to do that.

[00:29:56] Speaker 04:
And so when they're intertwined like this,

[00:29:59] Speaker 04:
You're right back to where we're at here today, Your Honor, is making findings, in fact, that are contrary to the pleadings, and that's improper under Rule 12.

[00:30:08] Speaker 04:
And even if the court agrees that the judge can make factual findings, those are clearly erroneous factual findings, as Your Honor pointed out, with respect to the scope of the assignment in paragraph 3.

[00:30:21] Speaker 04:
It had nothing to do with the idea or the invention, but only with software.

[00:30:28] Speaker 04:
And then with respect to the other arguments, 20 years is too long.

[00:30:33] Speaker 04:
It's the discovery rule, another merits-based question.

[00:30:37] Speaker 04:
And again, the something more or something else is the invention, as your honors pointed out.

[00:30:44] Speaker 04:
And the software, the sole ownership and exclusive use is to the software to implement it.

[00:30:51] Speaker 04:
I mean, maybe going back to the first case we heard this morning, the idea was to use

[00:30:58] Speaker 04:
some type of programming to move a cursor without using a click.

[00:31:03] Speaker 04:
And that would be the invention.

[00:31:04] Speaker 04:
But the implementation is the specific software to do that, to implement that.

[00:31:11] Speaker 02:
Here we're talking about software.

[00:31:13] Speaker 02:
We're not talking about anything else, correct?

[00:31:15] Speaker 04:
No, Your Honor.

[00:31:16] Speaker 04:
If you look at the Claim 1, for example, in the 638 patent, it's hardware based.

[00:31:21] Speaker 04:
It's what?

[00:31:22] Speaker 04:
It includes hardware, communication servers, packet switches, and the like.

[00:31:27] Speaker 04:
So the patent itself is an idea of an assembly.

[00:31:33] Speaker 04:
And there's method claims as well in there.

[00:31:41] Speaker 00:
Where in the district court did you say to the district judge, it is premature for you to

[00:31:50] Speaker 00:
figure out what you think the SDA and surrounding circumstances indicate about whether Mr. James did assign his ownership rights or promised to assign?

[00:32:10] Speaker 00:
Where was your procedural objection before the district court to the district court seemingly resolving that question?

[00:32:22] Speaker 00:
I'm looking at the three pages or so in your opposition to the motion to dismiss.

[00:32:31] Speaker 00:
What you call your prematurity argument.

[00:32:40] Speaker 04:
Where was that made?

[00:32:42] Speaker 04:
Well, my prematurity argument, Your Honor, is just to highlight that it's a fact-intensive question on what equity demands.

[00:32:52] Speaker 04:
is for a ruling for another day.

[00:32:58] Speaker 03:
When you say what equity demands, are you, because I agree with Trump, I don't find this equity legal distinction very meaningful.

[00:33:07] Speaker 03:
Are you saying who owns the path?

[00:33:10] Speaker 04:
Yes, sir.

[00:33:11] Speaker 04:
Looking at all the facts, the surrounding circumstances, the conduct of the party, the totality of the factual situation, and making that determination.

[00:33:21] Speaker 03:
But if we can conclude that, I get you.

[00:33:24] Speaker 03:
To me, I seem to think that that is a little bit of a mixed question of the merits and jurisdiction.

[00:33:30] Speaker 03:
Of course, if we conclude on the facts that your client has no right to the invention, then I assume you would agree that he lacks standing.

[00:33:41] Speaker 04:
If there's a meeting of the minds, Your Honor, that requires him to assign or to transfer those rights to JFax, then I would agree with that.

[00:33:50] Speaker 03:
Or that they owned them from the outset, that he was just hired to invent this.

[00:33:55] Speaker 04:
Well, he owned from the outset, Your Honor, would require a 261 transfer for the invention.

[00:34:00] Speaker 03:
Well, let's not talk about that.

[00:34:03] Speaker 03:
To me, that's the hired-to-invent doctrine.

[00:34:05] Speaker 03:
If you're hired to do something, it's not that it's transferred.

[00:34:08] Speaker 03:
It's that you never own the rights to it.

[00:34:10] Speaker 03:
But I don't think we need to.

[00:34:12] Speaker 03:
To me, that seems to be a merits-based question.

[00:34:15] Speaker 03:
And it's at least in dispute here.

[00:34:18] Speaker 03:
Precisely, Your Honor.

[00:34:19] Speaker 03:
OK, we have your argument.