Viken Detection Corporation v. Videray Technologies, Inc.
District Court, D. Massachusetts
Viken Detection Corporation v. Videray Technologies, Inc.
Trial Court Opinion
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
___________________________________
)
VIKEN DETECTION CORPORATION, )
)
Plaintiff, )
) Civil Action
v. ) No. 24-cv-11375-PBS
)
VIDERAY TECHNOLOGIES INC. and )
PAUL E. BRADSHAW, )
)
Defendants. )
)
MEMORANDUM AND ORDER
September 12, 2025
Saris, J.
INTRODUCTION
Plaintiff Viken Detection Corporation (“Viken”) and Defendant
Videray Technologies Inc. (“Videray”) are competitors in the x-
ray scanner market. After Defendant Paul E. Bradshaw left his
employment at Viken to establish Videray in 2017, Viken sued
Videray and Bradshaw (together, “Defendants”) for misappropriation
of trade secrets and confidential information. The parties settled
that dispute in 2020 via a settlement agreement containing general
releases.
Almost four years later, Viken filed this suit against
Defendants to challenge the inventorship and ownership of U.S.
Patent No. 11,940,395 (“the ’395 patent”), which lists Bradshaw as
the inventor and Videray as the assignee. Viken primarily alleges
that one of its employees conceived of the invention claimed in
the ’395 patent while he and Bradshaw were working together at
Viken. Viken also seeks to rescind the 2020 settlement agreement
based on alleged fraudulent misrepresentations made by Defendants
that induced Viken to enter into the agreement.
Defendants now move to dismiss Viken’s amended complaint
under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6).
Defendants contend that Viken released its inventorship and
ownership claims in the 2020 settlement agreement and that, as a
result, Viken lacks a concrete stake in the adjudication of those
claims. Additionally, Defendants argue that Viken’s rescission
claim is untimely and, alternatively, fails to state a plausible
basis for relief.
After hearing, the Court ALLOWS Defendants’ motion to dismiss
(Dkt. 26).
BACKGROUND
The Court draws the following background from the well-
pleaded facts in Viken’s amended complaint, documents attached to
or incorporated by reference into the amended complaint, and facts
subject to judicial notice. See Cheng v. Neumann, 51 F.4th 438,
441 (1st Cir. 2022).
I. The Invention
Backscatter x-ray imaging is an approach for detecting
contraband in hidden areas, such as behind a solid panel of a
vehicle. Backscatter instruments direct a narrow x-ray beam at a
solid surface and create an image from x-rays that reflect off
items on the surface’s back side. Such instruments generally
include components that focus the x-rays emitted by the x-ray
source into a narrow beam useful for scanning. One of these
components is a chopper wheel, which rotates when the instrument
is producing x-ray energy. The chopper wheel has slits that create
a “pencil beam” of x-ray energy. ’395 patent at 1:43-45. Because
the slits are small compared to the chopper wheel’s overall surface
area, the x-rays hit a solid region and scatter off the wheel for
most of its rotation. These scattered x-rays travel in various
directions, including parallel to the wheel.
To protect the user from these scattered x-rays, the chopper
wheel and certain other components are surrounded by a metallic
housing. Backscatter instruments have long used tungsten and
tungsten alloys for the housing because those metals effectively
shield significant amounts of the scattered x-ray energy. Tungsten
is, however, a rare and expensive metal.
The ’395 patent teaches a chopper wheel design that reduces
the scattered x-ray energy that hits the housing and, thus, allows
for use of a more common metal for the housing. To do so, the
patent uses “a labyrinth design” with two “projections” on inner
and outer locations on the wheel. Id. at 2:52-60. These projections
“increase[] x-ray energy attenuation of x-rays scattered from the
chopper wheel before the x-ray energy reaches the housing.” Id. at
2:55-57. With this design, the housing can be made of a cheaper
and lighter metal than tungsten, such as brass, but will still
significantly limit the x-ray energy that escapes the instrument.
Claim 1 of the ’395 patent recites in relevant part:
a chopper wheel having a planar surface configured to
face in a direction of the collimator, a central axis,
a plurality of slits in the planar surface, the plurality
of slits extending in a radially-outward direction
relative to the central axis, a first projection
extending from the planar surface in a direction of the
collimator, the first projection located radially-
outward of the plurality of slits and provided for 360
degrees about the central axis, and a second projection
extending from the planar surface in the direction of
the collimator, the second projection located radially
inward of the plurality of slits and provided for 360
degrees about the central axis . . . .
Id. at 8:1-13.
II. Conception of the Invention
Viken, a corporation headquartered in Massachusetts, develops
x-ray instruments used to detect illegal contraband. Bradshaw
worked at Viken as a mechanical engineer from November 2013 until
his termination in May or June 2017. In his employment agreement
with Viken, Bradshaw assigned to Viken all rights to any invention
that he made, conceived, or reduced to practice while working at
the company and that was related to or useful in the company’s
business.
While employed at Viken, Bradshaw worked on a handheld x-ray
scanner with another Viken engineer named Mark Hamilton. In April
2017, Hamilton recommended to Bradshaw that they include chopper
wheel projections on their prototype. An entry in Hamilton’s
laboratory notebook dated that month depicts a chopper wheel with
two projections on the wheel’s inner and outer portions. Bradshaw
rejected Hamilton’s idea on the basis that the necessary production
efforts and delays would outweigh the utility of the projections.
III. Bradshaw’s Patent Applications and Litigation Between the
Parties
Bradshaw founded Videray shortly after his termination from
Viken. In August 2019, Bradshaw filed a provisional patent
application for a chopper wheel design with projections. On July
28, 2020, he filed a Patent Cooperation Treaty (“PCT”) application
for the same invention. The World Intellectual Property
Organization (“WIPO”) published Bradshaw’s PCT application on
February 11, 2021.1
While Bradshaw was pursuing his patent applications, he and
Videray were engaged in ongoing litigation with Viken. In 2019,
Viken filed two lawsuits against Defendants for misappropriation
1 Although the amended complaint does not allege when WIPO
published the PCT application, Viken does not dispute that the
Court may take judicial notice of the publication date from the
face of the application. See Khoja v. Orexigen Therapeutics, Inc.,
899 F.3d 988, 1001-02 (9th Cir. 2018) (affirming the district
court’s judicial noticing of the filing date of a WIPO patent
application); Mizuho Orthopedic Sys., Inc. v. Allen Med. Sys.,
Inc., 610 F. Supp. 3d 367, 379 n.1 (D. Mass. 2022) (recognizing
that courts may take judicial notice of patent applications). In
any event, the Court’s rationale for dismissing Viken’s claims
does not turn on the date of publication of the PCT application.
of its trade secrets and confidential information in connection
with Defendants’ PX1 device. Defendants’ PX1 and PXUltra products
practice the chopper wheel projection invention. In a discovery
response during those lawsuits, Defendants mentioned that one of
Videray’s products contained “a lip feature around the inner and
outer diameter of the wheel” but did not state that Hamilton had
invented this feature. Dkt. 34-3 at 6. Defendants did, however,
produce the provisional patent application to Viken pursuant to a
protective order that permitted only Viken’s attorneys, general
counsel, and chief executive officer to view the document. Hamilton
was not authorized to view the application, and the Viken officers
allowed to do so were not familiar with Hamilton’s invention.
On October 2, 2020, the parties executed an agreement to
settle the two pending lawsuits (“the Settlement Agreement”). The
Settlement Agreement, which is governed by Massachusetts law,
contains mutual general releases. Viken’s “General Release” of
Defendants reads as follows:
Viken and [its founder] . . . hereby release, remise,
covenant not to sue, and forever discharge Mr. Bradshaw
and all of his personal representatives, heirs, next-
of-kin, legatees, assigns, agents, and attorneys
(“Bradshaw Releasees”) and Videray and its affiliates,
predecessors, successors, parents, subsidiaries,
assigns, shareholders, owners, officers, trustees,
directors, agents, insurers, attorneys, representatives
and employees (“Videray Releasees”) of and from all
claims, acts, debts, demands, actions, causes of action,
suits, counterclaims, dues, sums of money, accounts,
reckonings, judgments, covenants, contracts,
controversies, agreements, promises, representations,
damages and liabilities whatsoever of every name and
nature, both in law and in equity, known or unknown,
which against the Bradshaw Releasees and the Videray
Releasees [Viken and its founder] ever had, now have or
may have[] from the beginning of the world to the date
of this Agreement, including without limitation those
which relate in any way to or arise out of the [two
pending lawsuits].
Dkt. 18-1 ¶ 6. The Settlement Agreement also required Defendants
to “provide a full narrative accounting, signed under oath by Mr.
Bradshaw, . . . of any taking, use, or disclosure of Viken’s
confidential information and intellectual property” within one
week of execution of the agreement. Id. ¶ 1(b). Bradshaw’s
narrative did not mention Hamilton’s invention.
On March 26, 2024, the U.S. Patent and Trademark Office issued
the ’395 patent based on Bradshaw’s PCT application. The patent
lists Bradshaw as the sole inventor and Videray as the assignee.
LEGAL STANDARDS
I. Article III Standing
Under Article III’s case-or-controversy requirement, the
plaintiff must possess standing to bring his lawsuit, i.e., “a
‘personal stake’ in the case.” TransUnion LLC v. Ramirez, 594 U.S.
413, 423 (2021) (quoting Raines v. Byrd, 521 U.S. 811, 819 (1997)).
The plaintiff bears the burden of establishing standing. See id.
at 430-31. To meet this burden, he “must show (i) that he suffered
an injury in fact that is concrete, particularized, and actual or
imminent; (ii) that the injury was likely caused by the defendant;
and (iii) that the injury would likely be redressed by judicial
relief.” Id. at 423.
“A plaintiff must demonstrate standing ‘with the manner and
degree of evidence required at the successive stages of the
litigation.’” Id. at 431 (quoting Lujan v. Defs. of Wildlife, 504
U.S. 555, 561 (1992)). Thus, when a defendant moves to dismiss for
lack of standing under Rule 12(b)(1), courts generally credit all
well-pleaded facts in the complaint and ask whether the plaintiff
has plausibly alleged the three elements of standing. See In re
Fin. Oversight & Mgmt. Bd., 110 F.4th 295, 307-08 (1st Cir. 2024);
see also Wiener v. MIB Grp., Inc., 86 F.4th 76, 82 n.8 (1st Cir.
2023) (explaining that motions to dismiss for lack of standing are
properly brought under Rule 12(b)(1)).2
II. Failure to State a Claim
To survive a motion to dismiss for failure to state a claim
under Rule 12(b)(6), a complaint must allege “a plausible
entitlement to relief.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
559 (2007). “While a complaint attacked by a Rule 12(b)(6) motion
2 Defendants purport to bring a factual challenge to Viken’s
Article III standing. A factual challenge to subject matter
jurisdiction contests “the accuracy (rather than the sufficiency)
of the jurisdictional facts asserted by the plaintiff.”
Valentin v. Hosp. Bella Vista, 254 F.3d 358, 363 (1st Cir. 2001).
When faced with a factual challenge to jurisdiction, a court may
consider extrinsic evidence submitted by the parties. See id. Here,
Defendants’ standing argument does not rely on documents extrinsic
to the complaint.
to dismiss does not need detailed factual allegations, a
plaintiff’s obligation to provide the grounds of his entitlement
to relief requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not
do.” Id. at 555 (cleaned up). This standard requires a court to
“separate the complaint’s factual allegations (which must be
accepted as true) from its conclusory legal allegations (which
need not be credited).” Kando v. R.I. State Bd. of Elections, 880
F.3d 53, 58 (1st Cir. 2018) (quoting Morales-Cruz v. Univ. of P.R.,
676 F.3d 220, 224 (1st Cir. 2012)). The court must then determine
whether the factual allegations permit it “to draw the reasonable
inference that the defendant is liable for the misconduct alleged.”
Germanowski v. Harris, 854 F.3d 68, 72 (1st Cir. 2017) (quoting
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
Many of Defendants’ arguments in support of dismissal --
namely, those based on release and the statute of limitations --
implicate affirmative defenses. See Martinez-Rivera v. Puerto
Rico, 812 F.3d 69, 73 (1st Cir. 2016) (“As a general matter,
statutes of limitations are affirmative defenses . . . .”); Ruiz-
Sanchez v. Goodyear Tire & Rubber Co., 717 F.3d 249, 252 (1st Cir.
2013) (“Release is an affirmative defense.”). Courts may grant a
motion to dismiss based on an affirmative defense “as long as
‘(i) the facts establishing the defense are definitively
ascertainable from the complaint and the other allowable sources
of information, and (ii) those facts suffice to establish the
affirmative defense with certitude.’” Burt v. Bd. of Trs. of the
Univ. of R.I., 84 F.4th 42, 50 (1st Cir. 2023) (quoting
Nisselson v. Lernout, 469 F.3d 143, 150 (1st Cir. 2006)).
DISCUSSION
I. Declaration of Ownership
Defendants argue that Viken’s claim for a declaration of
ownership of the ’395 patent should be dismissed because Viken
released this claim in the Settlement Agreement. Defendants assert
that this release provides a basis for dismissal both for lack of
standing under Rule 12(b)(1) and for failure to state a claim under
Rule 12(b)(6). As an affirmative defense, release implicates the
merits of a plaintiff’s claim rather than a court’s jurisdiction.
See Perry v. Merit Sys. Prot. Bd., 582 U.S. 420, 435 & n.9 (2017).
The Court therefore assesses Viken’s argument under the rubric of
Rule 12(b)(6). See United States ex rel. Winkelman v. CVS Caremark
Corp., 827 F.3d 201, 207 (1st Cir. 2016) (“[A]n affirmative defense
may serve as a basis for dismissal under Rule 12(b)(6).”). Viken
does not dispute the Settlement Agreement’s authenticity or argue
that the Court may not consider it in resolving Defendants’ motion
to dismiss. See Alt. Energy, Inc. v. St. Paul Fire & Marine Ins.
Co., 267 F.3d 30, 34 (1st Cir. 2001) (approving consideration of
a settlement agreement on a Rule 12(b)(6) motion where the
complaint “refer[red] to the [agreement] or its terms numerous
times,” the defendant’s “alleged liability . . . depend[ed]
directly upon whether the . . . claims [were] interpreted to have
been released,” and the plaintiff did not dispute the agreement’s
authenticity).
A “settlement agreement is a private contract . . . governed
by general contract law.” Wong v. Luu, 34 N.E.3d 35, 47 (Mass.
2015) (alteration in original) (quoting Warner Ins. Co. v. Comm’r
of Ins., 548 N.E.2d 188, 192 n.7 (Mass. 1990)). Under Massachusetts
law, contract interpretation poses “a question of law for the
court.” Gen. Hosp. Corp. v. Esoterix Genetic Lab’ys, LLC, 16 F.4th
304, 308 (1st Cir. 2021) (citing NTV Mgmt., Inc. v. Lightship Glob.
Ventures, 140 N.E.3d 436, 443 (Mass. 2020)). “When contract
language is unambiguous, it must be construed according to its
plain meaning.” Balles v. Babcock Power Inc., 70 N.E.3d 905, 911
(Mass. 2017); see Gen. Hosp., 16 F.4th at 308. Only if the contract
is ambiguous -- that is, if its language “can support a reasonable
difference of opinion as to the meaning of the words employed and
the obligations undertaken” -- may a court consider extrinsic
evidence. Balles, 70 N.E.3d at 911 (quoting Bank v. Thermo
Elemental Inc., 888 N.E.2d 897, 907 (Mass. 2008)); see Gen. Hosp.,
16 F.4th at 308. Courts “strive ‘whenever reasonably practical’ to
give every word meaning when interpreting a contract.” Wortis v.
Trs. of Tufts Coll., 228 N.E.3d 1163, 1176 (Mass. 2024) (quoting
DeWolfe v. Hingham Ctr., Ltd., 985 N.E.2d 1187, 1196 (Mass. 2013)).
Although “‘a release may be prompted by the settlement of a
specific dispute or resolution of a specific issue,’ . . . the
parties may choose to negotiate a general release that ‘operates
to settle all other, unrelated matters.’” Gen. Hosp., 16 F.4th at
309 (quoting Eck v. Godbout, 831 N.E.2d 296, 300-01 (Mass. 2005)).
This type of release “embraces everything included within its
terms,” even those matters “not specifically in the parties’ minds
at the time the release was executed.” Crocker v. Townsend Oil
Co., 979 N.E.2d 1077, 1086 (Mass. 2012) (first quoting Radovsky v.
Wexler, 173 N.E. 409, 410 (Mass. 1930); and then quoting Eck, 831
N.E.2d at 301). A general release may encompass causes of action
that had not yet accrued when the release was executed. See Gen.
Hosp., 16 F.4th at 310; Eck, 831 N.E.2d at 302. “The guiding
principle is that the plain meaning of the unambiguous terms of
the release control.” Gen. Hosp., 16 F.4th at 310.
The Settlement Agreement contains a general release by Viken
in Defendants’ favor. Specifically, Viken “release[d], remise[d],
covenant[ed] not to sue, and forever discharge[d]” Defendants:
of and from all claims, acts, debts, demands, actions,
causes of action, suits, counterclaims, dues, sums of
money, accounts, reckonings, judgments, covenants,
contracts, controversies, agreements, promises,
representations, damages and liabilities whatsoever of
every name and nature, both in law and in equity, known
or unknown, which against [Defendants] [Viken] ever had,
now ha[s] or may have[] from the beginning of the world
to the date of this Agreement, including without
limitation those which relate in any way to or arise out
of the [two pending lawsuits].
Dkt. 18-1 ¶ 6.
Viken does not dispute that this release encompasses claims
that it could have brought against Defendants as of the date the
parties executed the Settlement Agreement (October 2, 2020).
Defendants argue that at that point Viken could have sued to
determine ownership of the provisional and PCT patent applications
Bradshaw filed in August 2019 and July 2020, respectively. District
courts are split on whether a party may sue for a declaration of
ownership of a patent application before the patent is issued when,
as here, the ownership claim rests at least in part on a dispute
over inventorship. Compare Vita-Herb Nutriceuticals, Inc. v.
Probiohealth LLC, No. SACV 11-1463 DOC (MLGx), 2013 WL 271713, at
*3 (C.D. Cal. Jan. 23, 2013) (concluding that such a claim may be
brought), with Fin Brand Positioning, LLC v. Take 2 Dough Prods.,
Inc., 758 F. Supp. 2d 37, 42 (D.N.H. 2010) (holding to the
contrary).
But even if Viken could not have sued for a declaration of
ownership at the time the Settlement Agreement was executed, the
general release still bars Viken from bringing its ownership claim.
As Defendants argue, the Settlement Agreement not only released
claims Viken had against Defendants as of the date of its execution
but also released Defendants from any “acts” that “against
[Defendants] [Viken] ever had, now have or may have[] from the
beginning of the world to the date of this Agreement.” Dkt. 18-1
¶ 6. While this aspect of the release is awkwardly phrased, the
Court agrees with Judge Joun, who construed this same release in
a patent infringement suit between these parties, that the release
encompasses claims that are based on pre-Settlement Agreement
acts, even if those claims accrued only after execution of the
Settlement Agreement. See Videray Techs., Inc. v. Viken Detection
Corp., No. 23-cv-13035 (D. Mass. Sept. 30, 2024), Dkt. 30 at 13-
16. This language evinces the parties’ intent to broadly release
Defendants from all conduct that occurred before they signed the
Settlement Agreement. Construing the release to encompass only
claims that had accrued by that point would render meaningless the
inclusion of the term “acts” in the release. See Wortis, 228 N.E.3d
at 1176 (explaining that courts “strive ‘whenever reasonably
practical’ to give every word meaning when interpreting a contract”
(quoting DeWolfe, 985 N.E.2d at 1196)); see also Armstrong v. White
Winston Select Asset Funds, LLC, 648 F. Supp. 3d 230, 250 (D. Mass.
2022) (construing release covering “any and all claims,
counterclaims, demands, actions and causes of action . . . that
the Releasing Parties . . . have or may have against the Released
Parties . . . from the beginning of the world to the date of this
Agreement” to encompass “any claims related to [the Released
Parties’] conduct that occurred prior to the execution of the
[release]”).
Viken’s ownership claim is based on pre-Settlement Agreement
conduct and, thus, falls within the scope of the general release.
Viken claims it is the sole owner of the ’395 patent because its
employees assigned all inventions to it and either Hamilton or
Bradshaw invented the chopper wheel projections in 2017 while they
were Viken employees. Defendants asserted their ownership of the
invention when Bradshaw filed patent applications in August 2019
and July 2020. All of these acts that undergird Viken’s ownership
claim occurred before the parties executed the Settlement
Agreement in October 2020.
Moreover, the release expresses the parties’ intent to cover
“claims” and “acts” that “relate in any way to or arise out of
the” two lawsuits that the Settlement Agreement resolved. Dkt. 18-
1 ¶ 6. One of those suits concerned Defendants’ alleged
misappropriation of Viken’s trade secrets and confidential
information in connection with Defendants’ PX1 device. Viken
alleges that the PX1 device practices the invention claimed in the
’395 patent, which Defendants misappropriated from Viken. Viken’s
ownership claim therefore “relate[s]” to the prior lawsuits and is
encompassed by the release.
Viken asserts that the general release does not bar its
ownership claim because it already possessed legal title to the
’395 patent when the parties executed the Settlement Agreement. In
Viken’s view, it gained legal title at the moment Bradshaw filed
the underlying patent application because of Hamilton’s assignment
of inventions to it. See Bd. of Trs. of Leland Stanford Junior
Univ. v. Roche Molecular Sys., Inc., 583 F.3d 832, 842 (Fed. Cir.
2009) (explaining that an assignee’s “equitable title” in an
invention conceived by an assignor “converted to legal title no
later than the [patent] application’s filing date”). Defendants,
however, were actively asserting ownership of the invention
claimed in the ’395 patent before execution of the Settlement
Agreement by filing patent applications claiming the invention and
disclosing those applications to Viken in the prior litigation.
While Viken may be correct that its ownership rights in the ’395
patent commenced when the underlying patent application was filed,
it released its ability to assert those ownership rights as part
of the Settlement Agreement.
II. Correction of Inventorship
Defendants seek dismissal of Viken’s claim under 35 U.S.C.
§ 256 for correction of inventorship of the ’395 patent on two
grounds: first, that Viken lacks Article III standing to bring
this claim because Viken released its claim of ownership of the
patent and, thus, has no personal stake in resolution of the
inventorship question; and second, that Viken released the
inventorship claim in the Settlement Agreement. Because “a federal
court must resolve any doubts about [Article III] standing before
proceeding to adjudicate the merits of a given case,” DiCroce v.
McNeil Nutritionals, LLC, 82 F.4th 35, 39 (1st Cir. 2023) (quoting
United States v. Catala, 870 F.3d 6, 9 (1st Cir. 2017)), the Court
begins -- and ends -- with Defendants’ first argument.
“[A] plaintiff seeking correction of inventorship under § 256
can pursue that claim in federal court only if the requirements
for constitutional standing -- namely injury, causation, and
redressability -- are satisfied.” Larson v. Correct Craft, Inc.,
569 F.3d 1319, 1326 (Fed. Cir. 2009). To establish standing, a
plaintiff generally must show some financial interest in the
outcome of the inventorship question. See James v. J2 Cloud Servs.,
LLC, 887 F.3d 1368, 1373 (Fed. Cir. 2018); Larson, 569 F.3d at
1327. This financial interest may consist of the ownership rights
that flow from inventorship. See James, 887 F.3d at 1372-73. If
the plaintiff “lacks an ownership interest” in the patent and the
outcome of the inventorship claim “will not generate any other
direct financial rewards,” the plaintiff normally does not have
standing to pursue the claim. Larson, 569 F.3d at 1327. For
example, “[w]hen the owner of a patent assigns away all rights to
the patent,” he lacks a “‘concrete financial interest in the
patent’ that would support standing in a correction of inventorship
action.” James, 887 F.3d at 1373 (alteration in original) (quoting
Trireme Med., LLC v. AngioScore, Inc., 812 F.3d 1050, 1053 (Fed.
Cir. 2016)).3
The Court agrees with Defendants that Viken lacks standing to
pursue a claim for correction of inventorship of the ’395 patent.
As just explained, Viken released its claim for a declaration of
ownership of the patent as part of the Settlement Agreement. Having
done so, Viken has given up its right to assert ownership of the
patent and the financial interests associated with patent
ownership. Viken therefore lacks any financial stake in the outcome
of the inventorship dispute. See Vita-Herb Nutriceuticals, Inc. v.
Probiohealth, LLC, No. SACV 11-1463 DOC(MLGx), 2013 WL 1182992, at
*4 (C.D. Cal. Mar. 20, 2013) (finding no standing for an
inventorship claim because the plaintiff was “barred by the terms
of [a] General Release from pursuing any claim for co-ownership of
the [patent] and c[ould not] show any concrete financial interest
in the outcome of a suit for corrected inventorship”).
Viken stresses that courts often find a lack of standing in
this context based on a plaintiff’s assignment of patent rights,
see, e.g., Larson, 569 F.3d at 1326-27, whereas here, Viken has
not assigned away any interest it may have in the ’395 patent. An
3 A plaintiff without an ownership interest in an invention may
still establish standing to bring an inventorship claim by showing
a “concrete and particularized reputational injury” that “has an
economic component,” such as an effect on his employment prospects.
Shukh v. Seagate Tech., LLC, 803 F.3d 659, 663 (Fed. Cir. 2015).
Viken does not claim any reputational injury in this case.
assignment, however, is only one way in which a plaintiff may lose
the “ownership interest” in the patent or “other direct financial
rewards” necessary to support standing. Id. at 1327; see Krauser v.
Evollution IP Holdings, Inc., 975 F. Supp. 2d 1247, 1254-56 (S.D.
Fla. 2013) (explaining that the plaintiff suing for correction of
inventorship lacked a “concrete financial interest in the patents
at issue” where he was collaterally estopped from asserting
ownership of the patents). Viken’s release of its ownership claim
accomplished the same result. The Court therefore dismisses
Viken’s claim for correction of inventorship for lack of standing.
III. Rescission
That leaves Viken’s claim for rescission of the Settlement
Agreement. Viken alleges that rescission is warranted because
Defendants fraudulently induced it to enter into the Settlement
Agreement through their failure to disclose their theft of
Hamilton’s invention in 1) discovery in the prior litigation
between the parties and 2) the narrative Bradshaw submitted shortly
after execution of the Settlement Agreement. Defendants respond
that this claim is barred by the statute of limitations and fails
to state a plausible basis for relief. The Court concludes that
the rescission claim is untimely and, thus, does not address
Defendants’ alternative argument.
Defendants assert, and Viken does not dispute, that the
rescission claim rests on allegations of fraudulent
misrepresentation and is therefore subject to a three-year statute
of limitations under Massachusetts law. See Rodi v. S. New Eng.
Sch. of L., 389 F.3d 5, 17 (1st Cir. 2004); Fin. Res. Network,
Inc. v. Brown & Brown, Inc., 754 F. Supp. 2d 128, 157-58 (D. Mass.
2010). A fraudulent misrepresentation claim accrues when “a
plaintiff learns or reasonably should have learned of the
misrepresentation.” Rodi, 389 F.3d at 17 (quoting Kent v. Dupree,
429 N.E.2d 1041, 1043 (Mass. App. Ct. 1982)); see Davalos v. Bay
Watch, Inc., 240 N.E.3d 753, 757-58 (Mass. 2024) (explaining that
under the discovery rule, which applies to claims of fraudulent
misrepresentation, “a cause of action accrues when the plaintiff
discovers or with reasonable diligence should have discovered that
(1) [it] has suffered harm; (2) [its] harm was caused by the
conduct of another; and (3) the defendant is the person who caused
that harm” (quoting Magliacane v. Gardner, 138 N.E.3d 347, 357
(Mass. 2020))). “In this context, courts sometimes ask when
sufficient indicia of trouble -- storm warnings, so to speak --
should have been apparent to a reasonably prudent person.” Rodi,
389 F.3d at 17.
Viken’s rescission claim accrued no later than October 2020
when the parties executed the Settlement Agreement and Bradshaw
omitted from his post-settlement narrative that Defendants took
the invention allegedly conceived by Hamilton. According to the
amended complaint, Defendants disclosed to Viken Bradshaw’s
provisional patent application claiming the chopper wheel
projection invention during the litigation prior to execution of
the Settlement Agreement. From this disclosure, Viken knew
Defendants were claiming the invention in dispute.
Based on that information, Viken knew or reasonably should
have known by the time the parties executed the Settlement
Agreement and Bradshaw submitted his post-settlement narrative
that Defendants had taken Hamilton’s invention. “[U]nder the
‘collective knowledge’ doctrine, the ‘knowledge’ attributable to
a corporation is normally the sum of all of the knowledge possessed
by all of its employees, regardless of their position.” Humana,
Inc. v. Biogen, Inc., 666 F. Supp. 3d 135, 145 (D. Mass. 2023)
(quoting United States v. Bank of New Eng., N.A., 821 F.2d 844,
856 (1st Cir. 1987)), aff’d on other grounds, 126 F.4th 94 (1st
Cir. 2025); see Sunrise Props., Inc. v. Bacon, Wilson, Ratner,
Cohen, Salvage, Fialky & Fitzgerald, P.C., 679 N.E.2d 540, 543
(Mass. 1997) (“When an agent acquires knowledge in the scope of
[his] employment, the principal . . . is held to have constructive
knowledge of that information” (alterations in original) (quoting
DeVaux v. Am. Home Assurance Co., 444 N.E.3d 355, 358 (Mass.
1983))). While Hamilton may not have personally seen the
provisional application disclosed by Defendants, his knowledge of
the origins of the chopper wheel projection invention is imputed
to Viken. Thus, when Bradshaw omitted from his narrative that he
had stolen that invention, Viken had enough information to know
the truth.
Even if Hamilton’s knowledge were not imputed to the
corporation, Viken still reasonably should have discovered at that
time that Hamilton purported to be the inventor of the chopper
wheel projections. The parties were embroiled in litigation over
Defendants’ alleged misappropriation of trade secrets and
confidential information from Viken, so a reasonably prudent
company in Viken’s position would have investigated whether a Viken
employee had invented the chopper wheel projections claimed in
Bradshaw’s provisional application. That investigation would
readily have uncovered Hamilton’s purported conception of the
invention, as Hamilton and Bradshaw worked closely together while
Bradshaw was still at Viken.
In sum, the amended complaint makes clear that Viken’s
rescission claim accrued no later than October 2020. Viken filed
this lawsuit more than three years later in May 2024, so its claim
is time-barred. The Court therefore dismisses the rescission claim
under Rule 12(b)(6).4
4 Because the disclosure of the provisional patent application
during discovery in the prior lawsuits put Viken on notice of
Defendants’ misrepresentations, the Court need not address
Defendants’ argument that Viken also had constructive notice of
the misrepresentations from the publication of the PCT application
in February 2021.
ORDER
For the foregoing reasons, Defendants’ motion to dismiss
(Dkt. 26) is ALLOWED. Viken’s claim for correction of inventorship
(Count I) is dismissed without prejudice for lack of standing under
Rule 12(b)(1). Viken’s claims for a declaration of ownership of
the ’395 patent (Count II) and for rescission of the Settlement
Agreement (Count III) are dismissed with prejudice for failure to
state a claim under Rule 12(b)(6).
SO ORDERED.
/s/ PATTI B. SARIS
Hon. Patti B. Saris
United States District Judge
Reference
- Status
- Unknown