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Draim v. Virtual Geosatellite Holdings

May 15, 2006

JOHN E. DRAIM, PLAINTIFF,
v.
VIRTUAL GEOSATELLITE HOLDINGS, INC., ET AL., DEFENDANTS.
MOBILE COMMUNICATIONS HOLDINGS, INC., ET AL., PLAINTIFFS,
v.
JOHN E. DRAIM, DEFENDANT.



The opinion of the court was delivered by: John M. Facciola United States Magistrate Judge

FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER

These consolidated cases were referred to me, upon consent of the parties, for all purposes including trial. Prior to the trial, the parties agreed to the dismissal of all claims except plaintiff John Draim's claim that he is entitled to the payment of bonuses for patents issued after he resigned from the corporate defendants' employ and in which he was a named inventor. A bench trial was held on April 18, 2006 and, after considering the testimony of the witnesses, the exhibits, and the arguments of the parties, I reach the following findings of fact and conclusions of law.

FINDINGS OF FACT

1. In 1992, plaintiff John Draim ("Draim") began working for defendant Mobile Communications Holdings, Inc. ("MCHI") as a consultant. Draim and the president of MCHI, David Castiel ("Castiel") signed a Consulting Agreement under which Draim agreed to assign to MCHI all rights in his inventions conceived during the term of the Consulting Agreement and MCHI agreed to pay Draim a $2,000 bonus upon the filing of a patent application, and a $10,000 bonus upon the successful issuance of any one patent. According to the Consulting Agreement, the actual amount of the bonus would be determined in inverse proportion to the number of co-inventors listed on the patent application. Draim worked for MCHI as a consultant through June 1997.

2. In July 1997, Draim became an employee of MCHI, but a written employment agreement was never drafted or signed. During Draim's employment, the parties continued to operate under the understanding that Draim's inventions would be assigned to MCHI, or to other Castiel affiliated entities, and that he would be paid $2,000 for each patent application and $10,000 for each successful issuance of a patent.

3. While employed at MCHI, Draim also performed work for affiliated Castiel companies (e.g., Defendant Virtual Geosatellite Holdings, Inc. and Ellipso, Inc.) (collectively the "Castiel entities").

4. At some point during Draim's employment, the bonus for filing a patent application increased from $2,000 to $2,500, and the bonus for the issuance of a patent increased from $10,000 to $12,500.

5. In May 2000, Draim terminated his employment and began working for a company named VGS, Inc. ("VGS"), which later became known as Space Resource America Corporation ("SRA").

6. At the time Draim terminated his employment with the Castiel entities, there were numerous outstanding patent applications in which he was a named inventor. These applications have since resulted in the issuance of eleven patents. The patents name various Castiel entities as the assignees. In some of these patents Draim is listed as the sole inventor, and in some he is listed as one of three or four inventors.

7. Draim has not been paid a bonus for the issuance of any of these eleven patents.

8. When the patent office decides that a patent application should be divided into multiple patents, the resulting patents are called "divisional patents." Two of these eleven patents were divisional patents.

9. In February 2000, three months before Draim resigned, Draim and Castiel filed a provisional patent application for an invention that the parties referred to as the "168 slot" invention. In this provisional application, Castiel and Draim were listed as co-inventors. Provisional applications function as "place holders" and are generally not reviewed by the patent board. The applicant has one year from filing the provisional application to file the actual patent application.

10. In November 2000, SRA filed an "interfering" patent application for the "168 slot" invention, naming Draim as the sole inventor. Subsequently, in February 2001, Castiel filed an application for the "168 slot" invention, but did not name Draim as an inventor. Ultimately, the patent was issued to Virtual ...


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