The opinion of the court was delivered by: Honorable Paul A. Crotty, United States District Judge
Plaintiff Advanced Magnetic Closures, Inc. ("AMC") brings this action for patent infringement, false advertising, false marking, and common law unfair competition against Defendants Rome Fastener Corporation, Rome Fastener Sales Corporation, Romag Fasteners Inc. and Rings Wire, Inc. (collectively "Romag"). AMC alleges that magnetic fasteners produced by Romag infringe on its U.S. Patent No. 5,572,773 (the "'773 patent"). Romag in turn brings two counterclaims against AMC: (1) for a declaratory judgment that the '773 patent is invalid or not infringed by Romag and (2) for unfair competition pursuant to the Lanham Trademark Act, 15 U.S.C. § 1125(a). The parties cross-moved for summary judgment: AMC to strike Romag's fifth, eight, ninth and tenth affirmative defenses and first counterclaim to the extent they were based on AMC's lack of inventorship, lack of standing, unclean hands, and patent misuse; and Romag to dismiss AMC's claim for patent infringement on the basis of prior inventorship or non-infringement. Oral argument was heard on October 30, 2006. On November 16, 2006, the Court granted AMC's motion in part and dismissed Romag's affirmative defense and counterclaim of patent misuse, and its defense and counterclaim of unclean hands to the extent they were based on conduct unrelated to the '773 patent. The Court reserved decision on Romag's motion and on AMC's motion as to inventorship, standing, and unclean hands related to the '773 patent and ordered a brief reopening of discovery related to those issues.
Having reviewed the supplemental submissions of the parties, the Court grants AMC's motion for summary judgment as to lack of standing and denies it as to lack of inventorship and unclean hands, and denies Romag's motion in its entirety.
The issues before the Court are rooted in disputes over the invention of the '773 patent and a similar patent held by Romag, U.S. Patent No. 5,722,126 (the "'126 patent"). Each patent claims a magnetic fastener with a central hole, but the '773 patent claims a central hole that increases the magnetic attraction of the fastener, while the '126 patent claims a central hole that decreases the magnetic attraction. The named inventor of the '773 patent is Irving Bauer ("Bauer"),*fn2 AMC's President and sole owner. The named inventor of the '126 patent is Howard Reiter ("Reiter"), President of Defendant Romag Fasteners, Inc. and Vice President of the other Romag Defendants.
Romag contends that the true inventor of the '773 patent is not Bauer but Robert Riceman ("Riceman"), and that the naming of Bauer was a deliberate fraud on the Patent and Trademark Office ("PTO"). Romag also contends that Reiter invented Romag's product prior to the invention covered by the '773 patent, and thus it cannot be liable for infringement.
I. Undisputed Facts Regarding the '773 Patent
In or about the fall of 1992, Riceman approached Alexander Fischer ("Fischer") with a plan to license and enforce U.S. Patent No. 4,453,294 (the "'294 patent").*fn3 Riceman's proposal included purchasing the Randolph Rand Corporation ("Randolph Rand"), which was enforcing a similar patent, from Mitchell Medina ("Medina"). Riceman had variously been a consultant and employee of Randolph Rand since 1989, and under his consulting agreement any inventions he developed were the property of Randolph Rand. Fischer brought in Bauer as his partner, and on October 2, 1993 they purchased certain of Randolph Rand's assets, apparently not including the rights to any patents or inventions owned by Randolph Rand. The assets were assigned to a newly incorporated company named Randolph Rand Corporation of New York ("RRNY"), and Riceman was hired by the new company.
At some point during the summer of 1994, Riceman began working with David Novais, a patent lawyer at the firm of Oblan, Spivak, McClelland, Maier & Neustadt, P.C. ("Oblan, Spivak") to prepare the claims of the '773 patent application. During the preparation, Riceman wrote Novais a letter asking him to disregard a previous letter calling the patent's inventorship into question, and stating that Bauer was the inventor of the patent. The '773 patent application, with Bauer named as the inventor, was filed on February 15, 1995. On November 16, 2004, Riceman, Bauer, Fischer and RRNY, among others, entered into an agreement settling a lawsuit brought by Riceman against RRNY and the Magnetic Snap Corporation. Under the agreement, Riceman released RRNY and the Magnetic Snap Corporation from all "claims of patent rights, including claims as inventor or co-inventor," and agreed not to "assist anyone else who is in litigation with" the other parties to the agreement. Declaration of Irving Bauer ("Bauer Dec."), Exhibit 4.
II. Bauer's Evidence of Inventorship of the '773 Patent
Bauer testified that he conceived of his new magnetic fastener by September 6, 1992, when he discussed the invention with Fischer and showed him a sketch of the device. Bauer declares that he constructed a working version in his machine shop within a month of that meeting and had prototypes made by A-C La Cava, a machine parts manufacturer, between August and October of 1993. In July 1994, Bauer declares that he sent a copy of the same sketch of his invention to a patent attorney at Oblan, Spivak. Bauer also declares that he asked Riceman to prepare drawings of his invention and to handle all communications with Oblan, Spivak, though in his deposition testimony he could not recall any person other than his attorney assisting him in the preparation of the '773 patent application form. During his deposition, Bauer was unable to explain the features of his invention except to state that it was "whatever it says in this patent." Declaration of Wendy Miller ("Miller Dec."), Exhibit 11 at 41.
Fischer testified that Bauer told him he had invented a new magnetic fastener with a central hole that increased magnetic attraction at the September 6, 1992 meeting. Fischer also testified that Bauer made sketches of his invention at the meeting, but did not recall anything else he and Bauer discussed. He similarly could not recall the details of any other meetings he participated in around that time or anything else about events during that general time period. Fischer also produced an appointment book with "G. Bauer" written on the September 6, 1992 page. The book includes a number of dates with "Bob Riceman" written on them, but Fischer could not recall what those references signified.
AMC also presents a declaration from Alfonso La Cava ("La Cava") to corroborate Bauer's testimony, and submits an invoice supposedly from A-C La Cava, along with a check from Bauer to A-C La Cava dated December 17, 1993. At his deposition on December 21, 2006, however, La Cava testified that the declaration was prepared for him in advance, and that he had assumed it was accurate but could not himself remember the details it set forth, particularly the dates of events. La Cava also testified that Bauer gave him a check for drilling holes in a number of magnetic disks, but that he had certainly not prepared an invoice for Bauer relating to the work. He did believe it was possible that Bauer had prepared an invoice himself at the time. La Cava stated, on December 21, 2006, that this work was performed, "maybe ten, 13 years ago," and that it was not based on any design, drawing, or plan. Second Supplemental Declaration of Wendy Miller, Exhibit 28 at 12. AMC also presents a photocopy allegedly showing the prototypes made by A-C La Cava in October 1993, but it is impossible to determine whether they are similar, let alone identical, to the patented magnetic fastener.
D. Additional Documentary Evidence
AMC presents a number of other documents in support of Bauer's inventorship. As noted, it submits a copy of a sketch allegedly prepared by Bauer on September 6, 1992. The sketch has seven rough figures, some essentially illegible notations, and no legible date. AMC also submits a copy of a copy of the original sketch on which additional notations were made, most of them apparently restating, in clearer block letters, the original notations. It also includes a date, "9/6/92," which could conceivably reflect an illegible, and partly cut off, notation on the original. In addition, AMC provides a copy of a page dated May 4, 1994 allegedly ...