Employee Claiming Employer Patent Theft Denied Relief In State Courts

California – Suzanne Brown, employee for Tuscon, Arizona based Lisa Frank, Inc. is not entitled to relief for alleged patent theft by her former employer in state court, an Arizona appellate court held. Instead, she must pursue her claim in federal court which has exclusive jurisdiction over patents granted by the United States Patent and Trademark Office (USPTO).

Brown returned to work at Lisa Frank after a ten year absence in 2009. Once she began work, she notified the company that she had conceived of an idea for a child-safe oven. Working with other employees, Brown created a sketch of the oven and its details. The company submitted the sketches to its patent attorney who filed a patent and trademark application with the USPTO for the oven without notifying Brown. Brown was later terminated.

Brown originally brought the action in Arizona’s Pima County Superior Court alleging several causes of action for breach of contract, unjust enrichment, and wrongful ownership and control of the invention. That original action, however, was dismissed upon motion by Lisa Frank for lack of subject matter jurisdiction. Brown then appealed the case to an Arizona appellate court which affirmed the lower court’s dismissal of the case.

Under the Supremacy Clause found in the United States Constitution, federal law preempts state law when congress expressly provides for preemption, federal law leaves no room for state law, or where state law and federal law conflict. 28 U.S.C. § 1338 provides that “The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents…” That jurisdiction is exclusive to the extent that it involves federally issued patents.

In this case, Brown argued that though federal law has preempted the patent system, inventors still maintain common law state rights over their inventions and that these rights are enforceable in state court. The appellate court disagreed, holding that Congress reserved the determination of inventorship to the USPTO and that such a determination is within the exclusive jurisdiction of the federal courts. As Brown’s action depended on the resolution of a “substantial question of federal patent law,” federal law preempted the state court’s jurisdiction in this matter.