E.i. Du Pont De Nemou Rs & Company v. Dr. John Joseph Okuley

*The Honorable Robert Holmes Bell, Chief United States District
Judge for the Western District of Michigan, sitting by designation.
1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2003 FED App. 0331P (6th Cir.)
File Name: 03a0331p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
E.I. DU PONT DE NEMOU RS &
COMPANY,
Plaintiff-Appellee,
v.
DR. JOHN JOSEPH OKULEY,
Defendant-Appellant.
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No. 01-3074
Appeal from the United States District Court
for the Southern District of Ohio at Columbus.
No. 97-01205—John D. Holschuh, District Judge.
Argued: September 12, 2002
Decided and Filed: September 17, 2003
Before: BOGGS and COLE, Circuit Judges; and BELL,
Chief District Judge.*
2 E.I. Du Pont de Nemours v. Okuley No. 01-3074
_________________
COUNSEL
ARGUED: Edward A. Matto, BRICKER & ECKLER,
Columbus, Ohio, for Appellant. C. Craig Woods, SQUIRE,
SANDERS & DEMPSEY, Columbus, Ohio, for Appellee.
ON BRIEF: Edward A. Matto, BRICKER & ECKLER,
Columbus, Ohio, Jerry K. Mueller, Jr., MUELLER &
SMITH, Columbus, Ohio, for Appellant. C. Craig Woods,
SQUIRE, SANDERS & DEMPSEY, Columbus, Ohio, for
Appellee.
_________________
OPINION
_________________
BOGGS, Circuit Judge. The defendant, Dr. John Joseph
Okuley, appeals the summary judgment for the plaintiff, E.I.
Du Pont de Nemours and Company (“DuPont”), in a dispute
involving both contract and patent elements. Okuley helped
discover FAD2, one of the genes encoding the Fatty Acid
Desaturase enzyme, while an employee of Washington State
University (“WSU”), which had a research collaboration
agreement (“RCA”) with DuPont that assigned to DuPont
rights to intellectual property discovered in the course of the
collaboration. When Okuley ceased cooperating with the
processing of DuPont’s application for a patent on FAD2,
DuPont filed suit in the United State District Court for the
Southern District of Ohio for a declaratory judgment that it
owned FAD2 and for specific enforcement of Okuley’s
agreement to cooperate with DuPont. Okuley counterclaimed
for a declaratory judgment that he was the inventor of FAD2
and to rescind his personal assignment of patent rights to
DuPont. The district court granted summary judgment to
DuPont on all issues. After initially appealing the district
court’s decision to this court, Okuley moved to transfer the
appeal to the Court of Appeals for the Federal Circuit. We

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No. 01-3074 E.I. Du Pont de Nemours v. Okuley 3
take appellate jurisdiction of this matter and affirm the
judgment of the district court.
I
In 1991, Okuley, a Ph.D. in molecular biology, began work
at WSU on a project on plant fat metabolism, with the aim of
isolating and patenting genes that could increase the ratio
between beneficial fatty acids and harmful saturated fats.
Under the WSU Faculty Manual (“Faculty Manual”),
employees assigned to WSU any intellectual property arising
out of their employment, and WSU and DuPont were
operating under the RCA regarding the assignment of the
intellectual property arising out of this project. In August
1992, while still employed at WSU, but while working at a
borrowed laboratory at Ohio State University (“OSU”),
Okuley successfully identified the FAD2 gene and
immediately informed both his supervisor at WSU and
DuPont of his discovery. On November 17, DuPont initiated
the patent process on FAD2. After some initial disagreement
about the inventorship of FAD2, the issue was resolved in
May 1993 by DuPont agreeing that inventorship was shared
between Okuley and another WSU scientist and Okuley
agreeing to assign to DuPont his “entire right, title and
interest” in FAD2 and obligating himself to “execute all
applications, papers or instruments necessary or required” for
DuPont to obtain the patent. In December 1994, relations
under this agreement between DuPont and Okuley broke
down over Okuley’s refusal to sign any more of the papers
necessary for the patent application, unless he received “a
reasonable royalty for the use of this invention.” DuPont
thereafter filed a petition with the Patent and Trademark
Office (“PTO”) to process the FAD2 patent application
without Okuley’s consent. At the time briefs in this case were
filed, both the petition and the application were still pending,
but on April 16, 2002, the PTO issued the patent litigated
here.
4 E.I. Du Pont de Nemours v. Okuley No. 01-3074
On November 3, 1997, DuPont filed a three-count
complaint against Okuley in the United States District Court
for the Southern District of Ohio. Subject matter jurisdiction
was based on diversity, DuPont being a Delaware
corporation, with its principal place of business in Delaware,
and Okuley a citizen of Ohio, and the matter in controversy
meeting the jurisdictional amount. The first count sought a
declaratory judgment that DuPont had exclusive ownership of
the FAD2 gene, at least vis-a-vis Okuley. The second count
sought specific enforcement of Okuley’s contractual duties to
continue executing documents necessary for DuPont to pursue
the FAD2 patent. The third count sought the same relief on
the basis of Okuley’s common law duties. Okuley
counterclaimed, seeking rescission of his personal assignment
of FAD2 to DuPont and a judicial declaration that Okuley
was the sole owner and inventor of FAD2. On November 1,
2000, after extensive discovery, the parties filed cross-
motions for summary judgment on all counts. The district
court granted summary judgment to DuPont on all issues. It
concluded that it had no jurisdiction to entertain Okuley’s
claim to inventorship, that DuPont owned the rights to FAD2
under its agreement with WSU, that Okuley was bound by the
Faculty Manual to assign all interests in FAD2 to DuPont;
and that Okuley’s personal, written assignment to DuPont
was valid, enforceable, and not subject to rescission. Okuley
timely appealed the district court’s judgment to this court.
After filing his proof brief in this court, Okuley moved to
transfer the appeal to the Court of Appeals for the Federal
Circuit, on the basis that it had exclusive appellate jurisdiction
in this case.
II
We first turn to the issue of proper appellate jurisdiction.
This court has jurisdiction over almost all appeals from final
decisions of district courts within its geographical boundaries.
28 U.S.C. § 1294. However, the Court of Appeals for the
Federal Circuit has exclusive jurisdiction over appeals from
final decisions of a district court, if the jurisdiction of that

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No. 01-3074 E.I. Du Pont de Nemours v. Okuley 5
court was based, in whole or in part, on 28 U.S.C. § 1338(a),
subject to certain exceptions not applicable here. 28 U.S.C.
§ 1295. District court jurisdiction under § 1338(a) extends
“only to those cases in which a well-pleaded complaint
establishes either that federal patent law creates the cause of
action or that the plaintiff’s right to relief necessarily depends
on resolution of a substantial question of federal patent law,
in that patent law is a necessary element of one of the well-
pleaded claims.” Christianson v. Colt Indus. Operating
Corp., 486 U.S. 800, 809 (1988). The seemingly amorphous
“substantial question of federal patent law” component of the
test merely makes clear that a plaintiff cannot avoid federal
patent jurisdiction by leaving out an element necessary to the
success of his claim, any more than a plaintiff can create
federal jurisdiction by including extraneous references to
federal law. Ibid. Moreover, it is important to note that only
inventorship, the “question of who actually invented the
subject matter claimed in a patent,” is a question of federal
patent law. Beech Aircraft Corp. v. Edo Corp., 990 F.2d
1237, 1248 (Fed. Cir. 1993). “Ownership, however, is a
question of who owns legal title to the subject matter claimed
in a patent, patents having the attributes of personal property”
and is not a question of federal patent law. Ibid.
These principles are illustrated by Rustevader Corp. v.
Cowatch, 842 F. Supp. 171 (W.D. Pa. 1993). In that case,
Rustevader sued its former employee, Cowatch, and
Cowatch’s father in state court. The defendants had jointly
taken out a patent and Rustevader demanded assignment of
the patent under a breach of employment contract theory. The
defendants removed to federal court on the basis of federal
patent jurisdiction and Rustevader asked for remand on the
basis that there was no federal jurisdiction. The court
reasoned that if the suit had been filed exclusively against the
former employee, the court could have ordered an assignment
to the employer on the basis of contract, regardless of whether
the son was the inventor, and a resolution of the inventorship
issue would not have been necessary. However, the plaintiff
also made a claim against the father, who was not in
6 E.I. Du Pont de Nemours v. Okuley No. 01-3074
contractual privity with the plaintiff. If the father was in fact,
as the patent application claimed, an inventor of the disputed
patent, Rustevader had no right to the assignment of his
interest. If the son was the sole inventor and the contract
assigned his rights to Rustevader, Rustevader had a right to
the assignment of both father’s and son’s interest. Therefore,
Rustevader’s claim against the father required a resolution of
the question of inventorship and unintentionally invoked
federal patent jurisdiction.
This court has appellate jurisdiction if, and only if,
DuPont’s well-pleaded complaint necessarily requires
resolution of the question of inventorship. The only claim in
DuPont’s complaint relevant to this question is the request for
a declaratory judgment that DuPont had “sole title to [the
FAD2] intellectual property.” At first blush, to determine the
validity of such a broad claim would appear to require
resolution of the inventorship question, but a focus on the
issues facing the court leads to the opposite conclusion. First,
the district court only had the power to adjudicate the relative
rights of the parties. Even if a hypothetical third party X had
been the true inventor of the FAD2 gene, no judgment could
have affected X’s rights, as the district court never took
personal jurisdiction over X. Therefore, the court needed
concern itself only with the relative rights of DuPont and
Okuley, regardless of the language of the complaint. The
broad language of the complaint was extraneous to the
resolution of the matter between the parties to the case.
DuPont could not create federal patent jurisdiction by making
the unnecessarily broad claim. Okuley cannot now use the
overbreadth of DuPont’s complaint to claim federal patent
jurisdiction.
Second, as between Okuley and DuPont, the district court
could have resolved the relative interests in FAD2 on several
theories. For example, it could have determined that one of
DuPont’s other researchers was the sole inventor of FAD2
and that Okuley therefore had no right to the intellectual
property. That would have required answering the

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No. 01-3074 E.I. Du Pont de Nemours v. Okuley 7
1The alternative rule, that federal patent jurisdiction is invoked
whenever any of the theories on the basis of which a claim may succeed
necessarily states a complaint under patent law, would eradicate Beech
Aircraft’s distinction between inventorship actions, arising under the
federal patent law, and patent ownership actions, not arising under the
federal patent law, as any patent ownership claim could hypothetically
succeed on the basis that the claimant was the inventor, rather than the
contractual purchaser of the invention. Such an alternative rule would
also be contrary to Christianson.
2It is worth noting that, while of course subject matter jurisdiction is
decided on the basis of the well-pleaded complaint and not the well-tried
case, over the course of the four-year litigation there appears to have been
abso lutely no disagreement between the parties that Okuley was an
inventor of FA D2 . All issues in this case were decided solely on the
validity and construction of agreements between the parties and the
involved universities.
3Okuley’s counter-claim does not affect the issue o f appellate
jurisdic tion of the Federal Circuit. Even if he had standing to sue to
clarify invento rship, still no federal patent ap pellate jurisdiction wo uld
exist, because Okuley’s inventorship claims were counter-claims. “[A]
counterclaim–which appears as part of the defendant’s answer, not as part
inventorship question. Alternatively, the district court could
have reasoned, as in fact it ultimately did, that if Okuley was
the inventor of FAD2, he contractually assigned all his
interests to DuPont. That would not have required answering
the inventorship question. If there are several alternative
theories on which a claim may succeed, patent law
jurisdiction is only invoked when all alternative theories
necessarily state a complaint under the patent law.
Christianson, 486 U.S. at 810.1 As DuPont’s assignment
theory sounded in contract, not patent law, DuPont’s claim to
the sole ownership of the gene did not invoke patent law
jurisdiction.2 Therefore, appellate jurisdiction lies with this
court.
A separate jurisdictional issue arises with respect to
Okuley’s counter-claim of sole inventorship, which the
district court had dismissed for lack of jurisdiction.3 In the
8 E.I. Du Pont de Nemours v. Okuley No. 01-3074
of the plaintiff’s complaint–cannot serve as the basis for ‘arising under’
jurisdiction.” Holmes Group, Inc. v. Vornado Air Circulation Sys., 535
U.S. 826 , 831 (2002). Hence a patent-law counter-claim does not create
federal patent jurisdiction under § 1338.
proceedings below, Okuley had argued that the district court
had been granted jurisdiction in two sections of the patent
code.
Whenever through error a person is named in an
application for patent as the inventor, or through error an
inventor is not named in an application, and such error
arose without any deceptive intention on his part, the
Director may permit the application to be amended
accordingly, under such terms as he prescribes.
35 U.S.C. § 116 (emphases added).
Whenever through error a person is named in an issued
patent as the inventor, or through error an inventor is not
named in an issued patent and such error arose without
any deceptive intention on his part, the Director may, on
application of all the parties and assignees, with proof of
the facts and such other requirements as may be imposed,
issue a certificate correcting such error. . . . The court
before which such matter is called in question may order
correction of the patent on notice and hearing of all
parties concerned and the Director shall issue a
certificate accordingly.
35 U.S.C. § 256 (emphases added).
We affirm the holding of the district court on the basis of
the language of § 116 and § 256 and their notable differences.
At the time of the trial and the briefs, no patent had yet been
issued. Therefore, only § 116 applied. Section 116 does not
mention courts, but rather gives discretion to the Director of
the PTO to permit amendments to patent applications and to
do so under such terms as the Director deems proper. Section

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No. 01-3074 E.I. Du Pont de Nemours v. Okuley 9
256, by contrast, explicitly mentions the courts and the
authority of the courts to compel action by the Director.
Comparing these two sections, it is clear that Congress
intended to draw a distinction between patent applications and
issued patents. While the patent is still in the process of
gestation, it is solely within the authority of the Director. As
soon as the patent actually comes into existence, the federal
courts are empowered to correct any error that the Director
may have committed. Such a scheme avoids premature
litigation and litigation that could become futile if the
Director declined to grant a patent or voluntarily acceded to
the claims of the would-be inventor prior to issue. We
conclude, therefore, that the district court lacked jurisdiction
to review the inventorship of an unissued patent.
After the briefs in this case were filed, the PTO issued a
patent naming Okuley, among others, as inventor. While this
may have created § 256 jurisdiction to review Okuley’s
inventorship claim, in reviewing the district court’s judgment
we consider the facts as faced by that court, without prejudice
to a § 256 claim should Okuley choose to file such an action.
In this appeal, Okuley has dropped any argument that § 256
was applicable and merely made a perfunctory statement that
§ 116 vests jurisdiction in the courts implicitly because
“inventorship is a question of law.” However, federal courts
have not been granted jurisdiction to settle all questions of
law.
III
Having disposed of the somewhat thorny issues of federal
patent jurisdiction, we now turn to the substance of the claims
adjudicated by the district court and appealed here. These are
questions of property and contract law and, as explained
above, do not arise under federal law, patent law or otherwise.
The district court’s jurisdiction was based on the diversity of
the parties. When sitting in diversity, a federal court applies
the substantive law of the state. Erie R. Co. v. Tompkins, 304
U.S. 64, 78 (1938). Hence, our source of law with respect to
10 E.I. Du Pont de Nemours v. Okuley No. 01-3074
4DuPo nt also argues that O kuley’s personal assignm ent was legally
valid and sufficient to transfer whatever interest in FAD 2 rem ained with
Okuley to DuPo nt. However, Okuley executed the assignment in reliance
on DuP ont’s claims that he was legally obligated to do so. W hether these
representations were accurate in turn depends on whether DuPont had a
right to FAD2 before the assignment. Therefore this ground is not in fact
indep endent and we do not reach it.
the contracts WSU entered with Okuley and DuPont in
Washington is Washington law. With respect to the
assignment executed in Ohio and the interpretation of Ohio
statutes, the source is Ohio law.
The judgment appealed was a grant of summary judgment,
so we apply the well-known summary judgment standard:
This court reviews grants of summary judgment de novo,
under the same standard as the district court. Summary
judgment is appropriate when the pleadings, depositions,
answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law. In
reviewing a summary judgment, this court reviews the
factual evidence and draws all reasonable inferences in
favor of the non-moving party. To prevail, the
non-movant must show sufficient evidence to create a
genuine issue of material fact. A mere scintilla of
evidence will not suffice for the non-movant to overturn
the summary judgment, but instead, the non-movant
must show evidence on which the jury could reasonably
find for the non-movant.
Cornist v. B.J.T. Auto Sales, Inc., 272 F.3d 322, 326 (6th Cir.
2001) (internal citations and quotation marks omitted).
DuPont’s claim of ownership to FAD2 rests on the basis of
two contracts: the Faculty Manual and the RCA.4 According
to the Faculty Manual, WSU holds “ownership in patents and

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No. 01-3074 E.I. Du Pont de Nemours v. Okuley 11
other non-patentable intellectual products . . . developed by its
employees as a result of their employment.” The parties do
not dispute that this manual was a legally binding part of
Okuley’s employment contract with WSU. See Thompson v.
St. Regis Paper Co., 685 P.2d 1081, 1087 (Wash. 1984)
(recognizing that under Washington law employment manuals
can give rise to contractual claims). Under the RCA between
DuPont and WSU, WSU’s interest in FAD2 was transferred
to DuPont. In combination, these two contracts serve to
transfer FAD2 from Okuley to WSU and from WSU to
DuPont. Therefore DuPont owns FAD2. Against this
conclusion, Okuley raises a series of objections.
Okuley’s first and most novel objection is based on the fact
that he discovered FAD2 while working under a WSU
employment contract, but in an OSU laboratory and using
OSU equipment. Under Ohio statutory law, “[a]ll rights to
and interests in discoveries, inventions, or patents which
result from research or investigation conducted in any . . .
facility of any state college or university, . . . shall be the sole
property of that college or university” Ohio Rev. Code
§ 3345.14(B). Therefore ab initio the ownership of FAD2
vested in OSU, not Okuley. Nevertheless, the Ohio statute
did not abrogate Okuley’s contract with WSU. Hence Okuley
was also under an obligation to transfer FAD2 to WSU–an
obligation he could not satisfy as at that time he did not own
FAD2. Had matters rested in this posture, interesting, but
quite different, litigation could have ensued involving WSU
and OSU and including questions of the statute’s
constitutionality under the Takings Clause.
However, matters did not rest there. In 1993 , at Okuley’s
insistence, OSU–as apparently is its practice–explicitly
waived its rights to FAD2. If OSU’s waiver was effective,
releasing any statutory rights that it enjoyed, the site of the
research and the statute ceased to have any effect on this case.
However, even if, as Okuley argues, the mandatory language
of the statute prevents OSU from waiving its interest in
FAD2, the outcome is no different because the “waiver” also
12 E.I. Du Pont de Nemours v. Okuley No. 01-3074
5That Okuley was no longer an employee of W SU at the time the
OSU waiver/assignm ent became effective is not relevant. Okuley’s
contractual obligation to give FAD 2 to W SU, incurred during the lifetime
of the contract, survived until fulfilled.
6Okuley now claims that his discovery was not covered under the
Faculty Manual, because at the time of the discovery he was working at
OSU and was using different methods than his W SU supervisor had
suggested. However, it is undisputed that he was still an employee of
W SU, using W SU and DuPont supplies, and working on the project that
he had been given by his WS U supervisors. M oreo ver, he immediately
communicated his success to his W SU supervisor and D uPo nt. Therefore,
Okuley’s claim of independence from WSU must fail. The Fac ulty
Manua l confirms this understanding.
contained an assignment to Okuley of FAD2, an action
undisputedly within OSU’s power. This assignment enabled
Okuley to fulfill his pre-existing contractual obligation to
transfer FAD2 to WSU. Okuley argues that the assignment
transferred FAD2 to him free and clear of any obligation. But
even setting aside the question of whether OSU had the
authority to void a contract to which it was not a party and
executed in another state, the language of the assignment is
unambiguous. The assignment clearly states that it was
“subject to any rights of [WSU] or its research sponsor
[DuPont].” Therefore Okuley’s obligation to give FAD2 to
WSU remained unaltered by the Ohio statute and the OSU
waiver/assignment.5
Next, Okuley claims that if FAD2 became property of
WSU under the Faculty Manual, WSU failed to follow the
manual’s procedures and thus forfeited it back to him.6 The
Faculty Manual states that if WSU’s “Intellectual Property
Committee fails to notify the employee in writing of
determination of ownership within fifty days of full
disclosure, . . . the University’s rights in the patentable
property shall automatically become the property of the
employee.” It is a disputed question of fact whether Okuley
made full disclosure to WSU, triggering the clause in the
Faculty Manual. But even if the clause was triggered, it will

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No. 01-3074 E.I. Du Pont de Nemours v. Okuley 13
7Okuley raises the question that the collaboration agreement with
DuPo nt was not a sponsorship agreement, because DuPont did not
provide funds for the research. However, both W SU and D uPont
construed the agreement as a sponsorship agreement and DuPont provided
valuab le consideration to WSU in the form of access to its database of
genetic material.
not avail Okuley for several reasons. First, the Faculty
Manual explicitly exempts property developed under an
agreement with an outside sponsor from its return clause.7
Second, the clause only vests WSU’s rights back with the
employee. However, under the collaboration agreement with
DuPont, WSU did not have any rights in the property and
only DuPont did. Therefore, WSU had nothing to return to
DuPont.
Okuley also contends that the patent for FAD2 was based
on additional “transformation work” that he performed after
the end of the agreement between WSU and DuPont and that
DuPont incorporated in later versions of its patent application.
However, this transformation work was merely used to
confirm the identity and use of FAD2 covered under the
original patent application. As such it was, as the district
court found, a simple extension of the original patent
application and hence falls under the Faculty Manual’s
language regarding “intellectual products . . . developed by its
employees as a result of their employment” and was assigned
to WSU.
Okuley’s final argument is based upon a reinterpretation of
the RCA, to which he was not a party and with which all
parties to the contract disagree. Under the RCA, almost all
intellectual property rights arising from the research belongs
to DuPont. However, under a clause of the RCA, if DuPont
failed to isolate a gene resulting from the research within nine
months of the identification, and WSU succeeded where
DuPont had failed, the gene would belong to WSU and
DuPont would merely receive a license. Using strained
definitions of the conditions that start the nine-month period,
14 E.I. Du Pont de Nemours v. Okuley No. 01-3074
Okuley argues that it had expired before he even began his
research. According to DuPont and WSU, Okuley’s
discovery of FAD2 started the period and DuPont was able to
isolate the gene almost immediately thereafter. Even if
Okuley had standing to challenge the interpretation of a
contract to which the parties agreed, and his interpretation
were correct, which seems highly unlikely, the effect would
be merely to vest the property in WSU, not Okuley. For
Okuley to obtain the patent, the court would also have to
agree with the above argument regarding the reversion of the
patent to Okuley by inaction of WSU. As we do not, this
issue is moot.
IV
For the foregoing reasons, the judgment of the district court
is AFFIRMED.

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