In Omni Medsci, Inc. v. Apple, Inc., [2020-1715, 2020-1716] (August 2, 2021), the Federal Circuit affirmed the district court’s holding that the University of Michigan bylaws did not effectuate a present automatic assignment of Dr. Islam’s patent rights and therefore affirmed the district court’s denial of Apple’s motion to dismiss on the ground that Omni, Dr. Islam’s assignee, had standing.

The University of Michigan’s bylaws provide that:

Patents and copyrights issued or acquired as a result of or in connection with administration, research, or other educational activities conducted by members of the University staff and supported directly or indirectly (e.g., through the use of University resources or facilities) by funds administered by the University regardless of the source of such funds, and all royalties or other revenues derived therefrom shall be the property of the University.

SLIP OP. 2-3.

If this language worked, an immediate assignment of rights would have taken place and Dr. Islam’s assignment to Omni was a nullity. Omni would have therefore lacked standing, as Apple contended.

The majority reviewed this language and agreed with the district court that it did not presently automatically assign Dr. Islam’s rights to the patent, however. At most, it “reflects a future agreement to assign rather than a present assignment.”

This conclusion was supported by a comparison of the language with Federal Circuit precedent; the fact that the same language was used in other parts of the document that could not possibly be considered to be a present assignment; the fact that the language did not use “present tense words of execution;” and the fact the language was different than assignment language used by the University in other forms.

Judge Newman dissented, finding that the language in the bylaws was an assignment, which meant the assignment to Omni was ineffective, and thus Omni lacked standing.

Takeaway

Regardless of whether you side agree the majority or with Judge Newman, both sides continue to accept without question that it is possible to make a present assignment of something that does not exist. It would  be foolish to not recognize that this is the law and then to not use clear language of present assignment in employee agreements. However, it is equally foolish not to get a confirmatory assignment once something is actually invented.