University Patents, Inc. v. Kligman

MEMORANDUM

Plaintiffs, The Trustees of the University of Pennsylvania (the University) and University Patents, Inc. (UPI), commenced this action to recover royalties allegedly owed to them by defendants for a preparation for photoaged skin invented by Dr. Klig-man and marketed under license by Johnson & Johnson (J & J), and to seek a declaration of ownership in the patent rights to this product.

.Presently before the court is defendants’ Motion for Summary Judgment premised on the absence of any demonstrated enforceable rights of plaintiffs in Dr. Klig-man’s discovery. The parties have engaged in considerable discovery and have filed voluminous briefs. Oral argument was held on March 27, 1991.

I. PROCEDURAL HISTORY

On May 10, 1989, UPI filed a complaint, claiming that: (1) Dr. Kligman breached his employment contract with the University *1214 and also breached its Patent Policy; (2) UPI, by reason of its agreement with the University, is a third-party beneficiary to the Patent Policy and to the employment contract with Dr. Kligman; (3) because of his wrongful concealment of the invention, Dr. Kligman holds the patent in a constructive trust for the benefit of UPI and the University; and, (4) Dr. Kligman’s conduct constituted a tortious conversion of UPI and University property. UPI, relying on a service agreement with the University, also seeks a judgment declaring that UPI is the owner of and has the right to license the invention to third parties.

On January 22, 1990, the University filed a separate action, claiming that (1) J & J’s conduct constituted a tortious interference with the employment contract between the University and Dr. Kligman; (2) Dr. Klig-man breached his employment contract with the University, specifically Patent and Conflict of Interest Policies set forth in employee handbooks in 1977 and 1983; and, (3) Dr. Kligman and J & J conspired to deprive the University of its rights in the photoaging discovery. The University also claims that J & J failed to pay amounts due under the 1967 and 1975 anti-acne licensing contract. 1 The University seeks an accounting to ascertain the amounts due. Furthermore, the University seeks a judgment declaring (1) that the Kligman/J & J licensing agreement is null and void, and (2) that the University owns all rights and interest in the invention and patent in question. Finally, the University seeks punitive damages from J & J.

The actions filed by UPI and the University were later consolidated. On March 16, 1990, the court granted plaintiffs’ motion to dismiss defendants’ first counterclaim for tortious interference with contract. On May 7, 1990, the court denied plaintiffs’ motion to disqualify defense counsel, but precluded defendants from using information obtained during counsel’s ex parte contacts with certain persons affiliated with the University.

Defendants filed a motion to dismiss plaintiffs’ complaint based on the statute of limitations. With this motion, defendants submitted seventy-one exhibits. Consequently, the court granted plaintiffs’ Rule 56(f) motion to restyle defendants’ motion as one for summary judgment and to permit the parties to take limited discovery. This discovery has been completed and the parties have submitted supplemental briefs and exhibits.

Defendants filed a second motion to dismiss premised upon the alleged non-enforceability of the agreement in question. The court also re-characterized this motion as one for summary judgment and permitted limited discovery. Supplemental briefs, replies, and sur-replies have been filed by the parties. The court denied defendants’ motion to dismiss UPI’s complaint on the ground that it lacked third-party beneficiary standing without prejudice to proffer this contention in an appropriate motion at the close of discovery.

II. LEGAL STANDARD

In considering a motion for summary judgment, the court must determine whether the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show there is no genuine issue as to any material fact, and whether the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c). Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2509, 91 L.Ed.2d 202 (1986); Arnold Pontiac-GMC, Inc. v. General Motors Corporation, 786 F.2d 564, 568 (3d Cir.1986); Fragale & Sons Beverage Co. v. Dill, 760 F.2d 469, 472 (3d Cir.1985); Wolk v. Saks Fifth Avenue, Inc., 728 F.2d 221, 224 (3d Cir.1984); First Jersey National Bank v. Dome Petroleum Limited, 723 F.2d 335, 338 (3d Cir.1983). Only facts that may affect the outcome of a case under applicable law are “material.” Anderson, supra 477 U.S. at 248, 106 S.Ct. at 2510.

All reasonable inferences from the record must be drawn in favor of the non-moving party. Anderson, supra at 256, 106 S.Ct. at 2514. The movant has the *1215 burden of demonstrating an absence of genuine issues of material fact. Gans v. Mundy, 762 F.2d 338, 340 (3d Cir.1985); United States v. Athlone Industries, Inc., 746 F.2d 977, 981-82 (3d Cir.1984); Small v. Seldows Stationery, 617 F.2d 992, 994 (3d Cir.1980). The non-movant then must identify evidence on which a verdict in his favor could be sustained. Childers v. Joseph, 842 F.2d 689 (3d Cir.1988).

III. FACTS

The pertinent facts from the uncontro-verted evidence and the balance of the record viewed in a light most favorable to plaintiffs are as follow.

On August 11, 1965, the then President of the University of Pennsylvania, Gaylord P. Harnell, appointed a Patent Policy Committee to meet and make recommendations to the Trustees of the University. 2 The committee consisted of five faculty members, one administrator and University counsel. The committee drafted a policy which was approved by the trustees in January 1966.

Under the policy, all inventions and discoveries resulting from work carried out on University time or at University expense were to be the property of the University. Specifically, the policy provides:

The Trustees have declared it to be the policy of the University of Pennsylvania that any invention or discovery which may result from work carried out on University time or at University expense by special grants or otherwise is the property of the University. Patents on such inventions or discoveries may be applied for in any country by the University in which case the inventor shall assign his interest in the patent application to the University. The University will exercise its ownership of such patent, with or without profit, with due regard for the public interest as well as the interests of all persons concerned. Procedures for implementation of this policy shall be developed and promulgated by the President of the University.

This basic policy has remained unchanged since 1966. The procedures for implementing the policy, however, have been revised on several occasions. The parties have submitted the procedures as revised in 1973. See Deposition of Anthony Merritt, at 29.

As revised in 1973, the procedures make it clear that the policy was to apply to “all members of the staff of the University whether fully or partially affiliated.” One of the primary features of the implementing procedures is the disclosure requirement which provides: “If a staff member believes he has made an invention or discovery that may be patentable he shall discuss the matter with the Director of Research Administration. The latter will recommend to the Vice Provost for Graduate Studies and Research whether or not the University shall file a patent application.”

If after such disclosure the University decides to apply for a patent, two alternatives are to be considered. The University may arrange for a non-profit patent management organization (“PMO”) to exploit the patent through the granting of licenses to commercial firms. If it appears more advantageous, the University may make such arrangements directly with a commercial firm. Finally, if the University decides that it is not interested in assuming the costs of the patent application, the inventor may apply in his own name and at his own expense. Under such circumstances the inventor shall grant to the University a royalty-free, irrevocable, non-exclusive license to make or use the invention for its own purposes.

Plaintiffs contend that the policy was first published and mailed to faculty members on February 25, 1966. 3 The policy was summarized in the 1969 Faculty and *1216 Administration Handbook. 4 The policy was set forth in the 1977 Research Investigators’ Handbook which was distributed to faculty members through the University’s internal mail system. See Deposition of Anthony Merritt, at 40. The policy as well as new implementing procedures were disseminated in a revised Research Investigators’ Handbook in 1983.

The University also had a Conflict of Interest Policy. Defendants contend that the policy was not enacted, or at least not disseminated, until 1983 when the revised Research Investigators’ Handbook was released. Plaintiffs contend that the policy existed prior to that time but under a different name. It appears that, at least as of 1973, the Patent Policy Implementing Procedures contained a section captioned “Outside Consulting or Employment Agreements.” 5 This section directs the faculty member to advise the Dean or Director of any potential conflict between the member’s obligation under the University’s Patent Policy and any obligation assumed in connection with outside employment. On or about March 8, 1983, the University issued a “Conflict of Interest Policy” for faculty members which restated relevant existing policy and further required its faculty members to disclose to the University, in advance, any research in their respective fields in which they wish to engage for any private enterprise and first to offer such opportunities to the University.

Dr. Kligman is an Emeritus Professor of Dermatology at the University of Pennsylvania and has been affiliated with the University since 1948. See Kligman Affidavit, at if 16. Most of Dr. Kligman’s scientific research has been funded through consulting agreements with various drug and cosmetic companies, and performed at private research facilities, principally Ivy Laboratories and the Simon Greenberg Foundation. See Kligman Affidavit, at 117. Dr. Klig-man established Ivy Laboratories in the 1950’s and the Greenberg Foundation in March 1960. Neither have any affiliation with the University. Id. at 8, 10.

In the 1960’s, while treating inmates at the Holmsburg Prison, Dr. Kligman discovered that Vitamin A Acid was an effective treatment for acne. In an effort to commercialize the invention, Dr. Kligman consulted J & J and later disclosed his discovery to the University.

Dr. Kligman presented his invention to J & J on or about August 3, 1967. See Affidavit of Harold L. Warner. Mr. Warner was a patent attorney for Johnson & Johnson from 1957 until February 1, 1976. Mr. Warner states that he discussed the University’s Patent Policy with Dr. Klig-man and stated that in his mind there was a question as to whether the Policy applied to this invention. Mr. Warner stated that Dr. Kligman maintained that the University had no claim to the invention because the bulk of the work was done on his own time and expense at Holmsburg Prison but that he intended to donate the royalties to the University because he was expected and wanted to help fund the Dermatology Department. Finally, Dr. Kligman agreed to notify the University and resolve any problems. Warner Affidavit, at 11 8; Klig-man Affidavit, 1127.

On August 24, 1967, Dr. Kligman wrote to Encel H. Dodge, who was then the Director of the Office of Project Research and Grants of the University. In the letter, Dr. Kligman states that he wished to bring to the University’s attention his de *1217 velopment of a new topical preparation for the treatment of acne. Dr. Kligman also stated that the innovation is “probably not patentable since the active ingredient is a Vitamin A derivative.” He further stated that the formulation was developed on his own time with personal funds. Dr. Klig-man stated that he was negotiating about potential royalties with J & J, and that he had proposed a 3% royalty to be paid to the University for exclusive use by the Dermatology Department. On September 11, 1967, Mr. Dodge responded stating that, in his opinion, University policy did not prohibit such a royalty arrangement. Mr. Dodge also referenced Dr. Kligman’s statements that the invention was probably not patentable and was developed entirely on his own time using his own funds.

Mr. Warner then drafted a three-way agreement which makes clear that Dr. Kligman was the sole owner of the acne invention and that the “University has relinquished its rights, if any, to J & J in the ‘Kligman Acne Treatment.’ ” A patent ultimately issued for the acne invention on April 24, 1973. This patent was assigned to J & J which conducted voluminous tests and thereafter secured FDA approval. The drug was introduced into the market under the name Retin-A and proved to be an enormous success. J & J has profited and the University has received millions of dollars in royalties.

Mr. Warner drafted three subsequent agreements in accordance with his understanding that the University had acknowledged that Dr. Kligman could freely license inventions made on his own time and with his own funds. See Warner Affidavit, at 1114. The University was not made a party to these agreements which included an agreement regarding a Vitamin-A Acid/Steroid combination drug and consulting agreements entered into in 1970 and 1972.

During the 1970’s and early 1980’s, Dr. Kligman invented a second method of using Vitamin A Acid to retard the effects of aging of the skin. This discovery was an outgrowth of his work with Vitamin A Acid for the treatment of acne. See Kligman Affidavit, at ¶ 37. During the 1970’s, he used Vitamin A Acid to treat acne among residents of the Riverview Home for the Aged. Dr. Kligman states that this work was conducted as part of his work at Ivy Laboratories. The plaintiffs allege that Dr. Kligman discovered and reduced to practice these inventions using University funds, facilities, hospital patients and staff.

In 1971, Dr. Kligman wrote to J & J regarding the new observations and in early 1974 he sent them a manuscript outlining his findings. See Kligman Affidavit, at ¶ 38, 42. At this time, J & J filed an Investigational New Drug Application with the FDA and thereafter filed a Clinical Trial Protocol outlining the studies that would be run. Dr. Kligman’s wife, Dr. Lorraine Kligman, who is also a member of the University’s Department of Dermatology, was involved in the studies.

On June 15, 1978, J & J agreed to sponsor Dr. Lorraine Kligman’s studies of the affect of Vitamin A Acid on rhino mice exposed to ultraviolet radiation. The grant from J & J was paid to the Simon Green-berg Foundation. See Kligman Affidavit, at 1144; Grant Letter from Dr. Gerdin, dated June 15, 1978. J & J sponsored other research in this project at Ivy Laboratories and the Simon Greenberg Foundation, including grants in 1980 and 1982. See Kligman Affidavit, at 1149.

On August 28, 1981, Dr. Kligman filed a patent application for the photoaging preparation in his own name. Plaintiffs allege that this was in violation of the Patent Policy. Regarding the University, Dr. Kligman states:

“Although I had developed the photoag-ing invention on my own time and at my own expense, the application did not hide my affiliation with the University or the fact that University facilities were involved in a portion of the work. Thus, the application specifically stated that I was a member of the University’s Dermatology Department. It also disclosed the existence of the animal studies conducted at the University (the ones conducted by my wife Lorraine Kligman pursuant to a Johnson & Johnson grant) *1218 as well as a clinical study conducted at the University’s Aging Skin Clinic.”

See Kligman Affidavit, at H 54.

At this time, news of the invention was carried in the popular press and was the subject of numerous magazine articles. Id. at 55, 56. Dr. Kligman began to discuss the discovery at various scientific lectures and conferences around the world. Id. at 57. Anthony Merritt, the University’s Director of Research Administration, was aware of this publicity. He believed, however, that the product in question was merely a new adaption of the old preparation and therefore was covered by the 1967 agreement.

On July 18, 1984, with the patent application still pending, Dr. Kligman signed a licensing agreement with J & J. The new agreement declared that Dr. Kligman was the sole owner and was free to license the invention. The agreement gave J & J the exclusive right to make, use and sell the invention and had a favorable royalty rate for Dr. Kligman, which was on a sliding scale of 5%, 3% and 1% of U.S. sales. 6 Again, like all of the agreements which came after the first Retin-A agreement, the University was not made a party to the agreement.

Patent No. 4,603,146 issued in July 1986 for the photoaging discovery. Because Dr. Kligman filed the patent himself, his attorney claimed that small entity status entitled him to reduced filing fees. The patent application had been denied several times when, in May 1984, Dr. Kligman retained the services of another patent attorney, Mr. Schwarze. See Kligman Reply Affidavit, at ¶ 26. Because the licensing agreement was not yet signed, Mr. Schwarze prepared another small entity status application. Once the licensing agreement was signed, the small entity status had to be changed. Dr. Kligman waited until September 1986 to do this, and in January 1987, the Patent Office granted the change.

In June 1978, the University entered into an agreement with UPI which was amended and re-executed in August 1983 and again in September 1987. Under these agreements, UPI was required to provide certain licensing services for the University in exchange for a percentage of royalties to which the University became entitled because of rights it might acquire under its Patent Policy. • UPI states that during the course of its relationship with the University it received over 322 disclosures from various University faculty members. See A. Sidney Alpert Affidavit, at 113.

Plaintiffs allege that in April 1988, UPI for the first time became aware of the new invention and thereafter notified the University of its existence. Plaintiffs allege that they spent a year trying to get Dr. Kligman to provide evidence that he discovered the invention independently of the University, but that he failed to produce any such evidence. Thereafter, UPI filed its action in this court.

IV. ANALYSIS AND DISCUSSION

Defendants contend that the University can show no contractual obligation upon Dr. Kligman by which he was required to assign his rights in the photoaging invention to the University. Defendants contend that employment policies and handbooks generally are not binding under Pennsylvania law, that the Patent Policy in question is not binding, and that even if it is, it is not applicable in the context of the present dispute. Plaintiffs argue that the patent policy was binding and obligated Dr. Klig-man to assign his patentable rights to the University.

Although “ownership” and “in-ventorship” are not identical for patent law purposes, they are related. Inventorship provides the starting point for determining ownership of patent rights. The true and original inventor must be named in the application for a patent and, absent some effective transfer or obligation to assign *1219 the patent rights, the original inventor owns the right to obtain the patent. See D. Chisum, Patents § 22.02 (1990). Patents have the attributes of personal property and both patents and applications for patents are assignable. 35 U.S.C. § 261. 7

Since a patent is a creature of federal statutory law, it may be transferred only in the manner provided by such law. See E. Lipscomb, Walker on Patents § 19:4, at 333 (3d ed. 1986). An assignment of a patent must be in writing. 35 U.S.C. § 261. The writing must show a clear and unmistakable intent to transfer ownership, McClaskey v. Harbison-Walker Refactories Co., 138 F.2d 493 (3d Cir.1943), and must be executed by the pat-entee or by the patentee’s assigns or legal representatives. Lipscomb, supra, § 19:7.

An agreement to assign a patent or an interest therein is an executory contract which may be valid and enforceable. Gas Tool Patent Corp. v. Mould, 133 F.2d 815 (7th Cir.1943); Thomas v. Thomas Flexible Coupling Co., 353 Pa. 591, 46 A.2d 212 (1946); Lipscomb, supra, § 19:15. An equitable assignee may sue in law for damages or in equity for specific performance. See Blum v. Commissioner, 183 F.2d 281 (3d Cir.1950); Mississippi Glass Co. v. Franzen, 143 F. 501, 506 (3d Cir.1906). Since contracts to assign patent rights do not have a statutory basis, but rather have a basis in common law or in equity, they need not be in writing and they may be implied as well as express. Lipscomb, supra, § 19:16. “Implied contracts may arise from the circumstances surrounding a case, such as employment or confidential relationship.” Id.

The present ease arises in the context of an employment relationship. 8 As the Pennsylvania Superior Court stated “[t]he major body of law on an employer’s and employee’s respective rights in the inventive or creative work of the employee evolved in the nineteenth and early twentieth centuries during our nation’s industrial revolution” and the “basic” rules are fairly well-settled. Aetna-Standard Engineering Co. v. Rowland, 343 Pa.Super. 64, 69, 493 A.2d 1375 (1985).

The general rule is that an individual owns the patent rights in the subject matter of which he is an inventor even though he conceived of the subject matter or reduced it to practice during the course of employment. Chisum, supra § 22.03. The “mere existence of an employer-employee relationship does not of itself entitle the employer to an assignment of any inventions which the employee devises during the employment.” Aetna-Standard, supra, at 69, 493 A.2d 1375 (citing United States v. Dubilier Condenser Corp., 289 U.S. 178, 53 S.Ct. 554, 77 L.Ed. 1114 (1933)); Marshall v. Colgate-Palmolive-Peet Co., 175 F.2d 215, 217 (3d Cir.1949). This is true even where the employee uses the time and facilities of the employer. Colgate, supra, at 217. Even where “one is employed ... to work in a particular line in which he is an expert, there is no inference that inventions which he makes while working belong to the employer.” Mosser Industries Inc. v. Hagar, 200 U.S.P.Q. 608, 612 (C.P. Lehigh 1978) (quoting Restatement (Second) of Agency § 397, comment a).

To this general rule there are two exceptions and one limitation. First, an employer owns an employee’s inventions if the employee is a party to a contract to that effect. Second, where an employee is hired to invent something or solve a partic *1220 ular problem, the property of the inventions of the employee related thereto belongs to the employer. Standard Parts Co. v. Peck, 264 U.S. 52, 44 S.Ct. 239, 68 L.Ed. 560 (1924); Colgate, supra, at 217; Quaker State Oil Refining Co. v. Talbot, 315 Pa. 517, 174 A. 99 (1936); Aetna Standard, 343 Pa.Super. at 74, 493 A.2d 1375. See also Chisum, supra, § 22.03.

Where an employee uses the time or facilities of his employer, the employer may have a non-exclusive and non-trans-ferrable royalty-free license (that is, a “shop right”) to use the employee’s patented invention. United States v. Dubilier, 289 U.S. 178, 53 S.Ct. 554, 77 L.Ed. 1114 (1933); Gill v. United States, 160 U.S. 426, 16 S.Ct. 322, 40 L.Ed. 480 (1896); Solomons v. United States, 137 U.S. 342, 11 S.Ct. 88, 34 L.Ed. 667 (1890); see Chisum, supra.

These basic principles were discussed by the Supreme Court in 1933 and have remained substantially unchanged:

One employed to make an invention, who succeeds, during his term of service, in accomplishing that task, is bound to assign to his employer any patent obtained. The reason is that he has only produced that which he was employed to invent. His invention is the precise subject of the contract of employment. A term of the agreement necessarily is that what he is paid to produce belongs to his paymaster. On the other hand, if the employment be general, albeit it covers a field of labor and effort in the performance of which the employee conceived the invention for which he obtained a patent, the contract is not so broadly construed as to require an assignment of the patent. ...

Recognition of the nature of the act of invention also defines the limits of the so-called shop right, which, shortly stated, is that, where a servant, during his hours of employment, working with his master’s materials and appliances, conceives and perfects an invention for which he obtains a patent, he must accord his master a nonexclusive right to practice the invention. This is an application of equitable principles. Since the servant uses his master’s time, facilities, and materials to attain a concrete result, the latter is in equity entitled to use that which embodies his own property and to duplicate it as often as he may find occasion to employ similar appliances in his business. But the employer in such a case has no equity to demand a conveyance of the invention, which is the original conception of the employee alone, in which the employer had no part.

Dubilier, 289 U.S. at 187-89, 53 S.Ct. at 557-58.

The courts of Pennsylvania will enforce express contracts to transfer patent rights which are clear and unambiguous. See White Heat Products Co. v. Thomas, 266 Pa. 551, 555, 109 A. 685 (1920); Mosser Industries, Inc. v. Hagar, 200 U.S.P.Q. 608 (C.P. Lehigh 1978). 9 In this case, there clearly is no express written contract to assign. The University’s 1977 Research Investigators’ Handbook included a standard “Patent Agreement” form and there was a “policy” that “all personnel who may be involved in research must execute a Patent Agreement.” Dr. Kligman, however, never executed such an agreement *1221 and it appears that he was not even requested to do so.

Rather, plaintiffs base their contract claim on implied contract 10 and unilateral contract theories, 11 relying on the University’s Handbook and policies and the parties’ course of dealing.

In the context of patent rights, the courts have been hesitant to “imply” contracts to assign. This reluctance is based on the “nature of invention” — it being the product of original thought:

The reluctance of courts to imply or infer an agreement by the employee to assign his patent is due to a recognition of the peculiar nature of the act of invention, which consists neither in finding out the laws of nature, nor in fruitful research as to the operation of natural laws, but in discovering how those laws may be utilized or applied for some beneficial purpose, by a process, a device, or a machine. It is the result of an inventive act, the birth of an idea and its reduction to practice; the product of original thought; a concept demonstrated to be true by practical application or embodiment in tangible form.

Dubilier, 289 U.S. at 188, 53 S.Ct. at 557 (citations omitted); White Heat, supra, 266 Pa. at 554, 109 A. 685. The law regarding implied contracts to assign patent rights in the employer-employee context has developed primarily in two areas: (1) where the employee is hired for some particular reason, see Standard Parts, supra, and (2) where the employee holds a position of trust as to the employer. See, e.g., Great Lakes Press Corporation v. Froom, 695 F.Supp. 1440 (W.D.N.Y.1987) (president of corporation had legal duty to assign to corporation those patents he obtained during his tenure).

In Standard Parts, the defendant was employed to devise an improvement for the front spring of a Ford automobile. He succeeded, and took out letters patent, claiming the property thereunder. The employer sought to compel an assignment. The Supreme Court held that an agreement to assign could be implied from the terms of the contract of employment. Specifically, the Court stated:

By the contract Peck engaged to “devote his time to the development of a process and machinery,” and was to receive therefor a stated compensation. Whose property was the “process and machinery” to be when developed?

The answer would seem to be inevitable and resistless — of him who engaged the services and paid for them, they being his inducement and compensation, they being not for temporary use, but perpetual use, a provision for a business, a facility in it, and an asset of it....

Standard Parts, 264 U.S. at 59-60, 44 S.Ct. at 241.

These principles have been applied by the courts in Pennsylvania. In White Heat, supra, the Pennsylvania Supreme Court made clear that the “black-letter law” of employer and employee rights to a patented invention must be applied to the facts of a case with careful regard to the particular terms of the individual employment contract. The defendant in White Heat was hired as an expert in the use of silica but also designed and patented an abrasive grinding wheel. The employer sought to compel him to disclose his invention and to assign his patent. The Court held that “where the product of an inventive mind is sought to be appropriated under an agreement to assign to another, the language of the agreement must be clear and show an *1222 unmistakable intention that the particular matter covered by the invention or patent is within the intention of the parties.” 266 Pa. at 555, 109 A. 685.

The Court in White Heat found no such clarity in the agreement before it. The plaintiff was in the business of making products for use in building, and the defendant had contracted to assign to it any patents he received for inventions relating to brick-making. The abrasive wheel, the Court found, was not sufficiently related to building, and thus was outside the assignment contract. The Court found that the plaintiff did not even have an implied, irrevocable license to use the wheel where it was designed and its preliminary construction was done outside working hours and at another plant. Id. at 557, 109 A. 685.

In Quaker State Oil Refining Co. v. Talbot, 315 Pa. 517, 174 A. 99 (1936), defendant employee was hired upon an oral contract to design a specific oil dispensing drumhead for the plaintiff to manufacture. He designed the drumhead, but incorporated into it several devices which he had invented prior to his employment. Plaintiff sought to compel defendant to assign to it legal title to, and any patent application or patent for, the drumhead. The Court stated that “Where an employee by contract is hired to make a particular invention or solve a specific problem for the employer the property in the inventions of the employee belongs to the employer — the employee has sold in advance the fruit of his talent, skill and knowledge, to his employer, who is equitably entitled to it; in making such inventions or solving such problems the employee is merely doing what he was hired to do.” Id. at 523, 174 A. 99.

In Aetna-Standard Engineering Co. v. Rowland, 343 Pa.Super. 64,