Personalized User Model and Konig vs. Google (Fed. Cir. 2015) is an interesting case and a complete legal mess...
Let me paint the picture for you. An inventor (Konig) was an employee at a non-profit research institute called SRI. One of the conditions of Konig being hired at SRI (in fact, a condition that is so typical now it found in practically all employer-employee agreements) was that Konig had to promise to assign (i.e. transfer) to his employer SRI all rights in in any patents he acquired on inventions that were created using company time and/or company resources.
Needless to say, while Konig was an employee at SRI, he started up his own side-project with one of his business colleagues, apparently using company time and/or company resources. Without telling SRI, Konig and his business colleague invented a "personalized information service." They then acquired a patent on this system (again, without telling SRI). After this patent issued, they then brought a lawsuit against Google for infringing their patent.
Google found out about Konig's employment agreement (i.e., that Konig had made a contractual promise to assign all rights in his patents to SRI) and then acquired from SRI all rights that SRI held in this same technology.
Google's thought here was: Konig can't sue us for patent infringement when he doesn't even own the rights to the patents at issue. As a condition of SRI employing Konig in the first place, Konig promised that he would assign all rights in his patents to SRI. We recently acquired all rights that SRI owns in this technology by a validly executed contract. We therefore hold all rights in these "personalized information service" patents, not Konig, and by extension, Konig can't sue us for infrininging these patents.
Of course, the devil is in the details. Seasoned patent professionals know that a clause in a contract like: "I promise to assign..." may not have the same legal effect as "I do now hereby assign..." The former statement utilizes a future tense, i.e., the author is stating what he plans to do later... but it hasn't happened yet. The latter statement, by using the present tense, makes the assignment become effective immediately (i.e., the rights are transferred as soon as the agreement is signed/executed).
Now enter the intricacies of contract law. If a party promises to do something in the future, and doesn't (assuming the contract is valid all of the other contractual requirement have been satisfied), the aggrieved party will have a "breach of contract" cause of action against the party that failed to deliver his side of the bargain.
However, the aggrieved party must bring their breach of contract action in a timely fashion or they can wind up being timebarred by a statute of limitations. State legislation specifies how much time you have to bring each particular cause of action; "breaches of contract" causes of action typically have statutes of limitations from three to four years (but note: each state has a different set of laws).
The state where these events took place was Delaware, and Delaware has a three year statute of limitations for breach of contract actions. Konig argued that because SRI never brought their breach of contract action against Konig in the relevant three year window, SRI was timebarred and thus no longer could compel Konig to assign to SRI any rights in these patents. Moreover, Google couldn't have possibly acquired any rights in these patents from SRI because SRI didn't have any rights in these patents to transfer to Google in the first place.
To add more complexity to this drama, Delaware also has what is known as a "discovery rule." Essentially, the discovery rule suspends the relevant statute of limitations (i.e., it "freezes the clock") when the injury at issue was "inherently unknowable" and "the claimant was blamelessly ignorant of the wrongful act and the injury."
In case you are wondering: Why even have such a "discovery rule"? A simple illustration might help. Suppose you owned an original Van Gogh painting and a thief managed to break into your museum and swap it out for a fake one. For the next 30 years you were laboring under the false belief that the painting inside your museum was true and authentic. When you finally get around to selling it, however, you discover (to your dismay) that it is actually not authentic. This prompts you to launch an investigation where you wind up reviewing all of the museum CCTV footage for the last thirty years. Through tireless work and dedication, you eventually discover the identity of the thief.
If the statute of limitations for "conversion of chattels" (i.e. the civil cause of action associated with the theft of your painting) was only 3 years, the thief could basically take this posture: "Haha! You didn't sue me in time! Your action is timebarred!", and he would not have to return the painting back to you, nor would he have to pay you the fair market value of what he stole. Because this is an utterly ridiculous result, U.S. states over the years have implemented such discovery rules which "toll" (i.e. suspend) the relevant statute of limitations, at least until the point in time in which an aggrieved party knew, or should have known, that he has suffered an injury. Delaware's discovery rules in particular require that the statute of limitations be tolled for the period of time when the injury was "inherently unknowable" and "the claimant was blamelessly ignorant of the wrongful act and the injury."
Google argued that SRI did not know, and could not have reasonably known, that Konig had been granted a patent on this technology, and that therefore the statute of limitations on breach of contract should be tolled under Delaware's discovery rule. However, both the lower court and the Federal Circuit (when the case was brought on appeal) did not agree with Google, essentially stating that SRI was not "blamelessly ignorant" here - they consciously failed to protect their own interests. First, issued patents are published and are easily accessible to everyone. Second, SRI knew that Konig was quitting soon since an exit interview had already been conducted. Any reasonable company, upon learning that Konig was quitting, should have at least considered the possibility that one of the reasons Konig was quitting was because he had developed a new invention. Had the company been diligent in tracking their employees behavior, they would have surely discovered Konig's patent. Instead, SRI slept on their rights. Therefore, since SRI cannot be said to be "blamelessly ignorant" of the wrongful act and injury, the statute of limitations had not been tolled by Delaware's discovery rule.
Let me paint the picture for you. An inventor (Konig) was an employee at a non-profit research institute called SRI. One of the conditions of Konig being hired at SRI (in fact, a condition that is so typical now it found in practically all employer-employee agreements) was that Konig had to promise to assign (i.e. transfer) to his employer SRI all rights in in any patents he acquired on inventions that were created using company time and/or company resources.
Needless to say, while Konig was an employee at SRI, he started up his own side-project with one of his business colleagues, apparently using company time and/or company resources. Without telling SRI, Konig and his business colleague invented a "personalized information service." They then acquired a patent on this system (again, without telling SRI). After this patent issued, they then brought a lawsuit against Google for infringing their patent.
Google found out about Konig's employment agreement (i.e., that Konig had made a contractual promise to assign all rights in his patents to SRI) and then acquired from SRI all rights that SRI held in this same technology.
Google's thought here was: Konig can't sue us for patent infringement when he doesn't even own the rights to the patents at issue. As a condition of SRI employing Konig in the first place, Konig promised that he would assign all rights in his patents to SRI. We recently acquired all rights that SRI owns in this technology by a validly executed contract. We therefore hold all rights in these "personalized information service" patents, not Konig, and by extension, Konig can't sue us for infrininging these patents.
Of course, the devil is in the details. Seasoned patent professionals know that a clause in a contract like: "I promise to assign..." may not have the same legal effect as "I do now hereby assign..." The former statement utilizes a future tense, i.e., the author is stating what he plans to do later... but it hasn't happened yet. The latter statement, by using the present tense, makes the assignment become effective immediately (i.e., the rights are transferred as soon as the agreement is signed/executed).
Now enter the intricacies of contract law. If a party promises to do something in the future, and doesn't (assuming the contract is valid all of the other contractual requirement have been satisfied), the aggrieved party will have a "breach of contract" cause of action against the party that failed to deliver his side of the bargain.
However, the aggrieved party must bring their breach of contract action in a timely fashion or they can wind up being timebarred by a statute of limitations. State legislation specifies how much time you have to bring each particular cause of action; "breaches of contract" causes of action typically have statutes of limitations from three to four years (but note: each state has a different set of laws).
The state where these events took place was Delaware, and Delaware has a three year statute of limitations for breach of contract actions. Konig argued that because SRI never brought their breach of contract action against Konig in the relevant three year window, SRI was timebarred and thus no longer could compel Konig to assign to SRI any rights in these patents. Moreover, Google couldn't have possibly acquired any rights in these patents from SRI because SRI didn't have any rights in these patents to transfer to Google in the first place.
To add more complexity to this drama, Delaware also has what is known as a "discovery rule." Essentially, the discovery rule suspends the relevant statute of limitations (i.e., it "freezes the clock") when the injury at issue was "inherently unknowable" and "the claimant was blamelessly ignorant of the wrongful act and the injury."
In case you are wondering: Why even have such a "discovery rule"? A simple illustration might help. Suppose you owned an original Van Gogh painting and a thief managed to break into your museum and swap it out for a fake one. For the next 30 years you were laboring under the false belief that the painting inside your museum was true and authentic. When you finally get around to selling it, however, you discover (to your dismay) that it is actually not authentic. This prompts you to launch an investigation where you wind up reviewing all of the museum CCTV footage for the last thirty years. Through tireless work and dedication, you eventually discover the identity of the thief.
If the statute of limitations for "conversion of chattels" (i.e. the civil cause of action associated with the theft of your painting) was only 3 years, the thief could basically take this posture: "Haha! You didn't sue me in time! Your action is timebarred!", and he would not have to return the painting back to you, nor would he have to pay you the fair market value of what he stole. Because this is an utterly ridiculous result, U.S. states over the years have implemented such discovery rules which "toll" (i.e. suspend) the relevant statute of limitations, at least until the point in time in which an aggrieved party knew, or should have known, that he has suffered an injury. Delaware's discovery rules in particular require that the statute of limitations be tolled for the period of time when the injury was "inherently unknowable" and "the claimant was blamelessly ignorant of the wrongful act and the injury."
Google argued that SRI did not know, and could not have reasonably known, that Konig had been granted a patent on this technology, and that therefore the statute of limitations on breach of contract should be tolled under Delaware's discovery rule. However, both the lower court and the Federal Circuit (when the case was brought on appeal) did not agree with Google, essentially stating that SRI was not "blamelessly ignorant" here - they consciously failed to protect their own interests. First, issued patents are published and are easily accessible to everyone. Second, SRI knew that Konig was quitting soon since an exit interview had already been conducted. Any reasonable company, upon learning that Konig was quitting, should have at least considered the possibility that one of the reasons Konig was quitting was because he had developed a new invention. Had the company been diligent in tracking their employees behavior, they would have surely discovered Konig's patent. Instead, SRI slept on their rights. Therefore, since SRI cannot be said to be "blamelessly ignorant" of the wrongful act and injury, the statute of limitations had not been tolled by Delaware's discovery rule.
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