Tue, Feb. 18

Justices rule intellectual property claims cannot be resolved in state courts

PHOENIX -- Workers who claim an employer illegally stole and patented one of their ideas cannot get relief in state courts, the Arizona Court of Appeals has ruled.

The judges refused to consider arguments by Suzanne Brown that a Tucson-based company that sells items for children had taken her idea for a "child-safe oven.' They said Brown's claims against Lisa Frank Inc. need to be resolved in federal court.

According to Brown, she was asked in 2008 by company owner Lisa Frank to return to the firm where she had worked about a decade earlier. An employment contract was negotiated and Brown started work there in February 2009.

In May, Brown said she told Frank about the oven. After collaborating with Frank and company staff, she produced a sketch of the oven and an outline of its features, which the company sent to its patent attorney by electronic mail, without copying Brown.

The attorney prepared a draft patent application, which was forwarded to Brown without identifying the owner, which ultimately was filed with the U.S. Patent and Trademark Office. The company also filed a trademark application related to the oven, which Brown said she was not told about.

Several months later, the company terminated Brown's employment.

Brown filed suit in Pima County Superior Court.

Several of the counts alleged breach of contract.

But another contended the company had "wrongfully seized possession and control of the invention. Other claims involved whether the company had been unjustly enriched through the theft of the invention and trademark, and that she is the "owner' of the oven as well as the trademark.

A trial judge dismissed the complaints it said were related to the trademark and product, saying it lacked jurisdiction over anything involving patents. Brown then appealed, arguing that inventors maintain a common law right to their ideas independent of federal patent laws.

Appellate Judge Virginia Kelly acknowledged that federal patent laws do not totally preempt state laws.

She said state can regulate patents and copyrights if their rules do not conflict with federal laws. That allows state courts to get involved if the conduct being alleged is not "protected or governed by federal patent law.'

But Kelly said the cases that have been allowed to go forward in state courts are those where the question of ownership of an idea is not in dispute. That frees state courts to deal with related issues of contracts, trade secrets and ownership.

Anything else is off limits.

"The field of federal law preempts any state law that purports to define rights based on inventorship,' Kelly wrote, quoting earlier federal court rulings. That is based on the idea that allowing each state to set its own standards to determine who is the true inventor would undermine the federal goals of both rewarding investors and having uniform national patent standards.

In this case, the judge wrote, Brown may be claiming things like wrongful seizure and control of her invention. But Kelley said none of those can be resolved without first determining who is the inventor. And that, she said, is the exclusive province of the federal court.

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