Last week, the Court of Appeals for the Federal Circuit issued an opinion in Roku, Inc. v. ITC, No. 22–1386 (January 19, 2024), holding that the language “hereby sells and assigns” is a present conveyance of rights and not merely a promise to do so in the future.
Roku creates various TV streaming technologies, such as the Roku streaming channel and the Roku stick. Universal Electronics filed a complaint against Roku with the International Trade Commission alleging infringement of U.S. Patent No. 10,593,196. The ’196 patent concerns managing different communication protocols so that different electronic devices can “talk” to each other, such as a DVD player and TV. The invention of the ’196 patent “essentially translates between the different types of devices.”
The ITC instituted an investigation. Roku filed a motion arguing that Universal lacked ownership of the ’196 patent because one of the inventors, Mr. Barnett, had merely promised to assign his rights in the invention to Universal in the future. In the assignment to Universal, Mr. Barnett “hereby sell[s] and assign[s] . . . [his] entire right, title, and interest in and to the invention,” including “all divisions and continuations thereof, including the subject-matter of any and all claims which may be obtained in every such patent.” The Commission held that language was a present conveyance of Mr. Barnett’s rights and not merely a promise of a future conveyance. The administrative law judge found against Roku. The ITC affirmed the administrative law judge’s findings, including that Universal had ownership rights to assert the ’196 patent. Roku appealed several issues, including the ownership issue.
However, the Federal Circuit affirmed the ITC on all issues, including the ownership dispute. The Federal Circuit began its analysis by pointing out that an earlier agreement between Mr. Barnett and Universal was not the operative assignment. That earlier agreement only said that “inventions created by Mr. Barnett ‘shall be’ the property of Universal.” While the appellate court did not have reach whether that language was an automatic assignment or merely a promise to assign rights in the future, its choice to avoid that language suggests that it might not be sufficient. Instead, the court of appeals focused on the latter assignment that included the “hereby sells and assigns” language. Although that language has been scrutinized too as to whether it creates an automatic assignment, the Federal Circuit again affirmed that it was sufficient. “The language of each assignment states that Mr. Barnett ‘hereby sell[s] and assign[s] . . . [his] entire right, title, and interest in and to the invention,’ including ‘all divisions and continuations thereof, including the subject-matter of any and all claims which may be obtained in every such patent. (citation omitted) On its face, the agreement language constitutes a present conveyance.”