Teets v. Chromalloy Gas Turbine Corp. - 83 F.3rd 403 (Fed. Cir. 1996)

Rule:

Under Florida law, an employer cannot claim ownership of an employee's invention unless the contract of employment by express terms or unequivocal inference shows that the employee was hired for the express purpose of producing the thing patented. Thus, when an employer hires a person for general service and the employee invents on the side, the invention belongs to the employee. However, the employer may claim ownership of the invention if the employer hires a person for the specific purpose of making the invention. Even if hired for a general purpose, an employee with the specific task of developing a device or process may cede ownership of the invention from that task to the employer.

Facts:

The General Electric Aircraft Company (GE) developed a more powerful and fuel efficient jet engine called the GE90. In conjunction with this development, GE designed a composite turbine engine fan blade which was lighter than existing metal fan blades. These lightweight blades, however, fractured more frequently from contact with birds, freezing rain, and other debris. GE tried to solve this problem on its own, but failed. Thus, GE asked DRB Industries, a division of Chromalloy, to devise a method of manufacturing the leading edge for the new composite blades. DRB labelled this project the GE90 Project. Less than a month later, in November 1991, Douglas R. Burnham, General Manager of DRB, assigned Teets as the Chief Engineer on the GE90 Project. Teets spent at least 70% of his time on the GE90 Project. At this time, Teets was an employee at will and had no written employment contract addressing ownership of inventive work. Burnham, on the other hand, had contractually agreed to assign any inventive rights to DRB. Teets developed his own welding process called the hot forming process (HFP), which resolved the problems discovered in DRB’s weld method.GE approved this method and started its practice of ordering one-piece leading edges manufactured with the HFP. In late 1992, Teets and Burnham prepared for a patent application for the HFP, with both men as co-inventors. However, Teets eventually asserted sole ownership of the HFP process in April 1993. On June 18, 1993, Teets filed this action against Chromalloy, seeking, among other things, a declaration of ownership of the HFP. On a summary judgment motion, the court concluded that Chromalloy held a shop right in the process. The district court then proceeded to try the issue of ownership. After a bench trial, the district court concluded that Teets solely owned the HFP and enjoined Chromalloy from licensing, selling, or transferring the HFP for third-party use. 

Issue:

Does Teets own sole ownership over the HFP?

Answer:

No.

Conclusion:

The specific goal of Teets’s project was to develop a one-piece leading edge. GE approached DRB to propose ways to apply a leading edge to turbine blades in its new engine. GE specifically and repeatedly expressed a desire for a one-piece solution. Faced with GE's requests, DRB, through Burnham, assigned Teets as the chief engineer on the GE90 project. Teets spent 70% of his time on that project. After undertaking the GE90 project and attempting several solutions to GE's problem, Teets developed the HFP. Teets reduced the invention to practice using DRB's resources -- DRB's employees, DRB's shop tools and materials, and DRB's time. DRB has paid and continues to pay for the prosecution of a patent application for the HFP. Most important, as recognized by the trial court, Teets repeatedly acknowledged DRB's role in the development of the HFP. He stated "DRB devised or developed" the HFP. In fact, the patent application listed another DRB employee, Burnham, as a co-inventor. Thus, Teets himself recognized DRB's role in the inventive activity. These undisputed facts show an implied-in-fact contract of assignment between Teets and DRB. DRB specifically directed Teets to devise a one-piece leading edge for GE. Having directed Teets to that task, compensated him for his efforts, paid for the refinement of the process, and paid for the patent protection, Chromalloy owns the patent rights in the HFP. The Florida Supreme Court's decision in State v. Neal, 152 Fla. 582, 12 So. 2d 590, 591 governed this case and compelled the conclusion that Teets entered an implied-in-fact contract to assign patent rights to Chromalloy.