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In ordering arbitration of an inventorship dispute, a federal district court in the District of Columbia explained that arbitration was fully capable of providing the relief prescribed by the underlying statute. Specifically, to effect the appropriate relief, the arbitrator could direct the parties to petition to have the patent corrected, and if the parties failed to comply, the arbitration award could be converted into a court order for correction.
In INVISTA North America, S.a.r.l. v. Rhodia Polyamide Intermediates S.A.S., No. 06-2180, 2007 WL 2230273 (D.D.C. Aug. 6, 2007), INVISTA and Rhodia were parties to a confidentiality agreement that prohibited Rhodia from using or disclosing confidential technology utilized in the production of nylon fiber.
The confidentiality agreement specifically prohibited Rhodia from using the technology in a patent application, and under the terms of the agreement, any violation of this provision would result in the patent application being assigned to DuPont, the inventor of the technology.
When INVISTA discovered that Rhodia allegedly used the technology in applying for a patent known as the 293 Patent, INVISTA sued Rhodia, seeking a court order replacing the names of the inventors on the 293 Patent with the names of the DuPont scientists who developed the confidential technology.
Rhodia filed a motion to compel arbitration pursuant to an arbitration clause in the confidentiality agreement. In opposing the motion, INVISTA argued that inventorship claims under 35 U.S.C. § 256 are not arbitrable.
INVISTA gave three reasons in support of its argument. First, INVISTA argued that inventorship disputes are not arbitrable because 35 U.S.C. § 294, which expressly authorizes arbitration of a dispute pertaining to "patent validity or infringement," does not expressly authorize the arbitration of inventorship disputes. The Court rejected this argument because "without express direction from Congress prohibiting the arbitration of Section 256 inventorship disputes, the federal presumption in favor of arbitration prevails."
Second, INVISTA argued that inventorship disputes are not arbitrable because arbitration cannot provide the relief contemplated by Section 256 – namely, either a joint petition for correction to the Director of the Patent and Trademark Office (the Director) or a court order for correction. In rejecting this argument, the Court explained that arbitration can provide the appropriate relief because the arbitrator could direct the parties to petition the Director, and if the parties failed to comply, the arbitration award could be converted into a court order for correction.
Lastly, INVISTA argued that arbitration of inventorship disputes would encroach on the federal courts' statutory authority to adjudicate Section 256 claims. The Court rejected this argument because there is nothing in the language or legislative history to suggest that Congress intended to preclude arbitration of Section 256 claims. Moreover, given its capacity to provide the appropriate relief, arbitration of inventorship disputes would not interfere with the purpose of the statute.
As this case demonstrates, arbitration is capable of providing any relief available in a court of law, either through voluntary compliance with the arbitrator's directives or through judicial confirmation of the award. Rule 20(D) of the National Arbitration Forum Code of Procedure specifically authorizes arbitrators to award any relief that is legally available.
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