Automatic Assignment vs. Mere Promise: Key Lessons from DDB Technologies v. MLB Advanced Media
The Chain of Title in Patent Ownership Doesn’t End at the USPTO.
Digital databases often stop where the real story begins. Patent ownership disputes aren’t won with PDFs; they are won with the primary evidence buried in the U.S. National Archives (NARA). Our federal records researchers with the hands-on NARA expertise dig deeper than digital databases to recover the complete file wrappers and original patent assignment records— the “smoking gun” documents that prove (or disprove) ownership. We speak the language of the archives so you can speak with authority in court.
In DDB Technologies. L.L.C. v. MLB Advanced Media, L.P., 517 F.3d 1284 (Fed. Cir. 2008) the Federal Circuit held that an employment agreement using present-tense “does hereby grant and assign” language creates an automatic assignment of future inventions by operation of law, but vacated the district court’s dismissal and remanded for jurisdictional discovery because the agreement was ambiguous and the parties’ conduct—including Schlumberger’s decade-long silence and its executives’ testimony that the inventions did not belong to the company—was centrally relevant to determining whether the baseball simulation patents actually fell within the scope of the employment agreement.
Patent ownership disputes can turn on a single sentence buried in an old employment agreement. Did the inventor simply promise to assign rights in the future, or did the contract language operate as an immediate, automatic transfer? The answer can mean the difference between owning a valuable patent portfolio and watching a competitor walk away with it. A case that illustrates this distinction is DDB Technologies, L.L.C. v. MLB Advanced Media, L.P., decided by the U.S. Court of Appeals for the Federal Circuit on February 13, 2008. Beyond its immediate holding, the case offers enduring lessons about automatic assignment, the right to a jury trial on jurisdictional facts, the critical importance of jurisdictional discovery, the role of party conduct in interpreting ambiguous contract terms, and—perhaps most importantly for inventors and their legal counsel—the vital role of historical research in proving or disproving patent ownership.
A Side Project, an Employment Agreement, and a Lawsuit
The story begins with Dr. David Barstow, an employee of Schlumberger, a major oilfield services company. During his employment from 1980 to 1994, Barstow worked on software projects related to controlling and recording data from physical sensors used in logging oil wells. But he also worked on personal projects, including a collaboration with his brother Daniel on a method for broadcasting data about a live event—such as a baseball game—and producing a computer simulation of that event for viewers. This side project eventually led to four patents: three “Computer Simulation Patents” (U.S. Patent Nos. 5,526,479; 5,671,347; and 6,204,862) and one “Pattern-Matching Patent” (U.S. Patent No. 5,189,630). Two of the applications were filed, and one patent issued, while Barstow was still employed at Schlumberger.
Crucially, Barstow had signed an employment agreement with Schlumberger. Paragraph 4 of that agreement stated that Barstow “agrees to and does hereby grant and assign” to Schlumberger his entire right, title, and interest in ideas, inventions, and improvements that fell within certain categories. Those categories included inventions that “relate in any way to the business or activities of Schlumberger” or that “are suggested by or result from any task or work of Employee for Schlumberger.” The agreement also contained a separate clause in which Barstow agreed to “execute specific assignments and do anything else properly requested by Schlumberger” to secure such rights.
For years, Schlumberger took no action regarding Barstow’s baseball simulation patents. In fact, testimony from Schlumberger’s own in-house counsel and lab director indicated that they knew about Barstow’s personal project, discussed it, and concluded that it did not apply to Schlumberger’s business. No one at Schlumberger ever told Barstow that his personal work belonged to the company. However, no formal written disclaimer or reassignment was ever executed.
Fast forward to 2004. DDB Technologies, the company formed by the Barstow brothers, sued MLB Advanced Media for patent infringement. More than a year later, immediately before the close of discovery, MLBAM entered into negotiations with Schlumberger. On April 7, 2006, Schlumberger assigned to MLBAM all of its rights and interest in the patents in suit, along with a retroactive license. MLBAM then moved to dismiss the lawsuit for lack of subject matter jurisdiction, arguing that DDB had failed to join all co-owners of the patents (including Schlumberger and now MLBAM) and that DDB could not sue MLBAM because MLBAM had acquired an ownership interest. The district court agreed and dismissed the case. DDB appealed.
The Automatic Assignment Question
The first major issue on appeal was whether the employment agreement created an automatic assignment of rights in future inventions or merely an obligation to assign in the future. This question matters enormously in patent litigation. If an assignment is automatic, legal title vests in the assignee by operation of law as soon as the invention comes into being, with no further paperwork required. If the contract is merely a promise to assign, the inventor retains legal title until a separate assignment is executed, and the promisee may have only equitable rights.
The Federal Circuit began by clarifying the applicable law. While state law generally governs contract interpretation, the court held that “the question of whether a patent assignment clause creates an automatic assignment or merely an obligation to assign is intimately bound up with the question of standing in patent cases.” Accordingly, the court treated it as a matter of federal law.
Applying federal law, the court drew a clear line. If the contract expressly grants rights in future inventions, no further act is required once an invention comes into being, and the transfer of title occurs by operation of law. By contrast, contracts that merely obligate the inventor to grant rights in the future may vest the promisee with equitable rights but do not by themselves vest legal title.
Turning to the specific language of Barstow’s agreement, the court found it decisive. The agreement stated that Barstow “agrees to and does hereby grant and assign” all rights in future inventions. This was not merely an agreement to assign; it was an express, present-tense assignment. Therefore, if the patents fell within the scope of the agreement, they would have been automatically assigned to Schlumberger with no further act required. The court rejected DDB’s argument that the separate clause requiring Barstow to execute specific assignments created any conflict, noting that nothing in that clause negated the clear present assignment language.
The Jury Trial Issue
DDB also argued that it was entitled to a jury trial on the jurisdictional issue of standing, contending that the jurisdictional facts were so intertwined with the merits that dismissal without a jury was inappropriate. The Federal Circuit disagreed. While acknowledging that most regional circuits look to the degree of intertwinement between jurisdictional facts and merits facts, the court held that the interpretation of the employment agreement—depending partly on state contract law and partly on Federal Circuit law regarding patent assignment clauses—was not so intertwined with the substantive patent law governing infringement and invalidity that dismissal was inappropriate. The court therefore rejected DDB’s jury trial argument, though it noted that a right to a jury trial on other issues in the case would remain.
The Discovery Abuse of Discretion
The most practically significant part of the DDB opinion—and the basis for the remand—concerned jurisdictional discovery. After MLBAM moved to dismiss, DDB requested limited discovery on issues directly relevant to whether the patents fell within the scope of the employment agreement. DDB sought documents related to Schlumberger’s ownership interest, communications between Barstow and Schlumberger, any agreements between them, and any alleged breaches. MLBAM initially indicated it would agree to a 30-day extension for reasonable discovery. Nonetheless, the district court denied DDB’s discovery motion and proceeded to a hearing.
The Federal Circuit held that this denial was an abuse of discretion. The court observed that the employment agreement was plainly ambiguous as to what inventions were “related to” or “suggested by” Barstow’s work. Because of that ambiguity, extrinsic evidence—including the conduct of the parties—could be considered to determine their true intent. The testimony already presented suggested that Schlumberger knew about Barstow’s baseball project, considered whether it fell within the agreement, and concluded it did not. But the crucial question was the extent of Schlumberger’s knowledge. The requested discovery could have produced copies of patent applications in Schlumberger’s files, notes of conversations, further communications between Barstow and Schlumberger, and internal communications about whether Schlumberger believed it had an ownership interest.
The court emphasized that when jurisdictional and merits issues are intertwined but separable, a district court must give the plaintiff an opportunity for discovery appropriate to the nature of the motion to dismiss. Because the discovery requests were centrally relevant to the jurisdictional question, and because the district court denied them without adequate justification, the Federal Circuit vacated that part of the decision and remanded for limited jurisdictional discovery.
The Importance of Historical Research in Patent Ownership Disputes
The DDB case stands for the proposition that when a written agreement is ambiguous, or when no clear assignment exists, the historical record becomes paramount. And that historical record is often far richer than a single signed document.
For an inventor trying to prove that a patent was never assigned, or for an employer trying to prove that it was, the types of evidence that matter are precisely the kinds of documents that often sit forgotten in basements, storage lockers, or corporate archives. These include: employment handbooks and policy manuals from the relevant time period, which may contain invention assignment clauses that the inventor never separately signed; internal company memoranda discussing whether a particular invention fell within the scope of an employee’s duties; patent prosecution files showing who paid the legal fees and who was listed as the assignee on the patent application; correspondence between the inventor and the employer, including emails, letters, or even handwritten notes; meeting minutes or board resolutions acknowledging or disclaiming ownership of intellectual property; and testimony from former employees, supervisors, or in-house counsel who remember the conversations that took place at the time.
In DDB, the most compelling evidence that Schlumberger may not have owned the patents came not from a formal assignment or disclaimer, but from the testimony of Schlumberger’s own executives. Charles Huston, Schlumberger’s in-house counsel for software matters, testified that he knew about Barstow’s baseball project, discussed it with the lab director, and concluded that it did not apply to Schlumberger’s business. Dr. Reid Smith, the lab director, testified that he never suggested Barstow’s personal work belonged to Schlumberger and was not aware of anyone at the company ever stating such a belief. This was historical evidence of the most powerful kind: contemporaneous statements by the party now claiming ownership, indicating that at the time, they did not believe they had any rights.
The court also found significant Schlumberger’s decade-long silence. From the time Barstow left Schlumberger in 1994 until MLBAM initiated negotiations in 2005, Schlumberger did nothing to assert ownership over the patents. Under contract law, such silence and inaction can be evidence of how the parties themselves interpreted the agreement. For an inventor, the absence of any claim of ownership by the employer could be extraordinarily powerful evidence that no assignment ever occurred—or that the employer waived any rights it might have had.
The practical lesson is clear: do not assume that the absence of a formal assignment document ends the inquiry. Historical research—digging through old files, locating former employees, searching USPTO assignment records, and reconstructing the factual record of what the parties said and did at the time—can be the difference between winning and losing a patent ownership dispute. And as DDB makes clear, courts will permit discovery into these historical facts when the written agreement is ambiguous or when the factual record is incomplete.
Key Takeaways from the Decision
Several important lessons emerge from DDB Technologies v. MLB Advanced Media.
First, draft employment agreements with care. For employers, present-tense language such as “does hereby grant and assign” may create an automatic assignment and prevent later arguments that a separate assignment was required. For employees and their subsequent assignees, the absence of such present-tense language may preserve an argument that legal title never transferred.
Second, the conduct of the parties matters. When a contract is ambiguous, courts will consider how the parties acted during performance. Silence, inaction, and contemporaneous statements about ownership can all be powerful evidence. In DDB, Schlumberger’s decade-long silence and its executives’ testimony that they did not believe the inventions belonged to the company were highly relevant.
Third, jurisdictional discovery is not a luxury; it is a necessity when facts are disputed. The Federal Circuit made clear that denying discovery on central jurisdictional questions can be an abuse of discretion, particularly when the underlying contract is ambiguous and extrinsic evidence is necessary to resolve the ambiguity.
Fourth, the right to a jury trial on jurisdictional facts is not automatic, even when those facts overlap with the merits. The degree of intertwinement matters, and courts may resolve jurisdictional issues at a preliminary hearing if they are not so intertwined that a full trial on the merits is required.
Fifth, historical research could be essential. The DDB case demonstrates that the historical record—including testimony, internal communications, corporate silence, and contemporaneous statements—can be dispositive in determining patent ownership. For a patent with no clear paper trail, digging into the historical facts may reveal that no assignment ever occurred, or that the employer waived its rights through decades of inaction.
The Outcome: Affirmance in Part, Remand for Discovery, and a Notable Dissent
The Federal Circuit affirmed the district court’s holdings that the statute of limitations and equitable defenses were not available and that no jury trial was required on standing. But it vacated the dismissal and remanded for limited jurisdictional discovery, leaving the ultimate question of whether the patents fell within the scope of Barstow’s employment agreement for the district court to reconsider after discovery. Judge Newman dissented in part, arguing that the majority had prematurely ruled on several issues and that state law, not federal law, should govern interpretation of the employment contract.
For patent owners, licensees, and their counsel, DDB Technologies v. MLB Advanced Media remains a vital precedent on the law of automatic assignment, the importance of discovery in jurisdictional disputes, and the enduring relevance of how parties actually behave when the written word is unclear. It is a reminder that in patent law, as in so many areas, the story is often found not just in the signed documents but in the actions—and inactions—that follow. The DDB case is a powerful affirmation that historical research—unearthing the buried records, forgotten conversations, and decades of silence—can be the key to proving ownership when the paper trail has gone cold.
Who Really Owns Your Invention? The Archives Know.
Your name may be on the patent — but ownership, scope, and obligation are written in the historical record. And right now, you may not have access to the full story.
Following the lessons of DDB Technologies v. MLB, get in touch with NARA-experienced archival researchers at All Language Alliance, Inc. to unearth certified copies of the records that matter: original patent file wrappers, assignment histories that establish what was actually transferred — and what wasn’t.
Don’t negotiate, litigate, or license from incomplete information. Before the other side uses the historical record against you, make sure you’ve read it first. The truth of your invention’s ownership exists. We’ll find it, and can have the certified documents apostilled or legalized for use in a foreign country.
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