May 27, 2010

SGR Counsel to ALK Holdings in Federal Circuit Frivolous Claims Ruling

ATLANTA (May 27, 2010) — On May 24, 2010, in Carter v. ALK Holdings, Inc., the U.S. Court of Appeals for the Federal Circuit affirmed the lower court’s finding that two of the claims brought by the plaintiff against defendants, involving pursuit of an inventor’s lawsuit, were frivolous under Rule 11.

The Federal Circuit also found that a third claim was not frivolous and reversed the district court’s award of sanctions based on this third claim.

The claims were based on allegations by Randall Carter, a former executive at ALK Holdings Inc., that he had invented a safe deposit box lock and was terminated after he refused to sign over to his supervisor the patent rights to the invention. Carter also contended that his supervisor and another individual unlawfully had themselves named as co-inventors with Carter on a patent application for the safe deposit box lock invention with the help of a patent attorney. The lawsuit contained numerous claims, including claims that the defendants had violated Mr. Carter’s constitutional rights in naming Carter’s supervisor as a co-inventor, that the defendants had breached the duty to keep patent applications confidential under 35 U.S.C. Section 122, and that the patent attorney had breached his fiduciary duty under the Manual of Patent Examining Procedure and created a conflict of interest by representing both Carter and his supervisor in filing the patent application.

Elizabeth Borland, partner in Smith, Gambrell & Russell’s intellectual property practice, represented appellees ALK Holdings, Inc. and Carter’s supervisor Michael Hassebrock before the Federal Circuit in the appeal, with assistance from attorneys Kerri Hochgesang and Todd Williams.

Ms. Borland had represented the appellees in the lower court action as well, in which she successfully prevailed on a motion to dismiss all claims brought by the plaintiff against her clients and obtained an award of sanctions against the plaintiff’s counsel.

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