Dismissal of Claim for Misappropriation of Trade Secrets and Correction of Inventionship Improper When the Plaintiff Was Not Given Appropriate Opportunity to Respond and Amend Complaint

The plaintiff sought correction of inventorship of several patents of the defendant based on an allegation of misappropriation of the plaintiff’s trade secrets. The district court dismissed the complaint for failing to state a claim upon which relief could be granted, finding that a document by the plaintiff, published prior to the filing of the defendant’s patents, was judicially noticeable as a public disclosure of the plaintiff’s trade secrets. The plaintiff’s motion to strike the material, or, in the alternative, prepare a sur-reply, was denied. The plaintiff also moved to file an amended complaint with additional factual allegations regarding the communication of its trade secret information to the defendants, but the district court dismissed, finding that that information should have been included in the original complaint. The district court also found the plaintiff’s claims to be time barred.

The Federal Circuit reviewed these dismissals under the law of the Sixth Circuit, which would construe the complaint in the light most favorable to the plaintiff, drawing all reasonable inferences in the plaintiff’s favor. The Federal Circuit first acknowledged that joint inventorship requires some quantum of collaboration that would include communication between the parties during the inventive effort. Based on the plaintiff’s meeting with the defendant’s agents, the defendant’s unauthorized photographing of the plaintiff’s prototype, and the plaintiff’s receipt of information that the defendant copied the plaintiff’s technology, the Federal Circuit found that the plaintiff’s request for correction of inventorship was plausible.

The dismissal of the plaintiff’s claims as time barred was also vacated, finding that the plaintiff was not given an opportunity to establish reasonable diligence. The dismissal of the plaintiff’s proposed amended complaint was described as “troubling” due to the other errors committed by the district court, along with the recognition that leave to amend should be freely given when justice so requires. Thus, the Federal Circuit vacated the district court decision and remanded for further proceedings.