Malcolm R. Wommack v. Durham Pecan Company, Inc.
715 F.2d 962, 219 U.S.P.Q. (BNA) 1153, 1983 U.S. App. LEXIS 16542 (1983)
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Rule of Law:
An employer acquires a non-exclusive, royalty-free license (a "shop right") to use an employee's patented invention when the employee consents to the employer's use and the invention is developed for practical or commercial application with the assistance of the employer's time, materials, or facilities. The employee's consent, which creates an estoppel, is the principal consideration, not whether the employer's assistance occurred before or after the invention was technically "reduced to practice."
Facts:
- Malcolm Wommack was a general laborer at Durham Pecan Company, hired for tasks like sweeping floors, with no agreement regarding inventions.
- Working at home on his own time and with his own materials, Wommack discovered and experimented with a process using yellow food coloring to make pecan worms fluoresce under UV light, making them easier to separate from pecan meats.
- Wommack demonstrated the process to his employer, W.M. Durham, and later fully disclosed the method.
- When Durham asked to use the process in the company's plant, Wommack verbally consented by saying, 'Yes.'
- Wommack and another employee, using Durham's plant and equipment, adapted and implemented the process for commercial use within a few hours.
- Durham loaned Wommack company sorting equipment for his home experiments, and Wommack used the experience from the plant to prepare his patent application.
- After being fired for unrelated reasons, Wommack demanded payment for Durham's continued use of the process.
- Durham continued using the process for several years without paying Wommack royalties.
Procedural Posture:
- Malcolm Wommack sued Durham Pecan Company in federal district court for patent infringement.
- The case was submitted to a jury, which returned answers to 26 special verdicts.
- Based on the jury's findings, the district court held that Durham had acquired a shop right to use the process.
- The district court dismissed Wommack's infringement claim.
- Wommack, as the appellant, appealed the dismissal to the United States Court of Appeals for the Fifth Circuit.
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Issue:
Does an employer acquire a shop right, providing a complete defense to a patent infringement claim, when an employee who was not hired to invent consents to the employer's use of their invention and the employer's resources are used to adapt the invention for commercial application, even if the employee conceived and reduced the invention to practice on their own time?
Opinions:
Majority - Gee, Circuit Judge
Yes. An employer acquires a shop right to use an employee's invention when the totality of the circumstances, especially the employee's consent, creates an estoppel. The shop right doctrine is an equitable defense based on estoppel, which prevents an employee from later demanding royalties after encouraging the employer to use an invention. The court reasoned that the 'ultimate fact to be proved' is the employee’s consent, not a technical analysis of whether the employer’s help came before or after the invention was 'reduced to practice.' Here, Wommack expressly consented to Durham's use, actively participated in implementing the process using company resources, and accepted the loan of company equipment for his own benefit. This conduct created an implied, royalty-free license for Durham to use the process, estopping Wommack from later demanding payment.
Analysis:
This case clarifies the 'shop right' doctrine by de-emphasizing the rigid patent law concept of 'reduction to practice' as a determinative factor. Instead, it elevates the equitable principle of estoppel, making the employee's consent and conduct the central inquiry. The decision provides employers with a more flexible defense against infringement claims from employees, even when an invention is largely developed off-site. For future cases, courts will focus less on a timeline of invention and more on the holistic nature of the employer-employee cooperation and whether the employee's actions induced the employer to invest in and use the invention.
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