United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER GRANTING IN PART AND DENYING IN
PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
STEPHEN J. MURPHY, III United States District Judge.
case concerns a dispute between a former student at the
University of Michigan and his faculty advisor. Plaintiff
Eugene Daneshvar alleges that Defendant Daryl Kipke stole and
patented Daneshvar's idea for a device used to facilitate
deep brain stimulation. Neuronexus Technologies-a company
founded by Kipke that researches and patents medical
devices-is a co-defendant. Daneshvar brought an action for
correction of inventorship and also raised three tort claims:
fraud, breach of fiduciary duty, and unjust enrichment.
Defendants raised a counterclaim seeking a declaratory
judgment that Daneshvar is not an inventor of the disputed
patent, and Kipke raised a counterclaim for defamation.
Mediation was attempted and failed and Defendants now move
for summary judgment. The Court will grant the motion in part
and deny it in part.
Intellectual Property at the University of Michigan
amounts of intellectual property are created at the
University of Michigan and the various colleges within it.
Accordingly, the University has a host of rules, policies,
and institutions to determine ownership of the property and
facilitate its transfer. The Board of Regents governs the
University as a whole and sets its rules and policies. ECF
134-2, ¶¶ 5-6, 8. The Regents adopted or approved
two documents relevant to the case: the Bylaws of the Board
of Regents and the University of Michigan Standard Practice
Guide ("SPG"). Id. ¶¶ 6, 8.
Section 3.10 of the Bylaws governs the ownership of patents
and other property and SPG Number 303.4 ("the
Policy") implements Section 3.10. ECF 134-4, PgID 6518.
University's Office of Technology Transfer
("OTT") administers the Policy and periodically
updates it. Id. For instance, one version of the
Policy took effect January 1, 2007, and another version was
issued in 2009. ECF 134-2, ¶¶ 8-9. The Policy
"is applicable to all units of the University including
its colleges, schools, departments, centers, institutes, and
hospitals, and to all of its Employees." ECF 134-4, PgID
6518. The Policy defines an "employee" as:
a person who receives a salary or other consideration from
the University for performance of services, part-time or full
time. A University employee with less than a full year (e.g.,
9-month) appointment shall be considered an
“Employee” for acts during a period of
appointment. A student that is compensated (e.g., financially
through a stipend, tuition, etc., including graduate student
research assistants and graduate student instructors) is
considered an Employee under this Policy.
Id. at 6522-23. A "student" is defined as
"a person enrolled in University courses for credit
except when that person is an Employee." Id. at
Policy also defines "intellectual property" and
"inventor." Intellectual property under the Policy
means "inventions, processes, compositions, life forms,
computer software, copyrighted works, mask works, research
tools and data, certain defined trade and service marks,
Tangible Materials, and legal rights to the same."
Id. at 6523. In the patent context, an
"inventor" is "an Employee who has made an
inventive contribution to the Intellectual Property as
defined under U.S. patent laws, meaning that an Inventor must
have contributed to the conception of ideas claimed in a
the Policy explains what intellectual property is owned by
the University and the steps creators of intellectual
property should take. On ownership, it states:
Intellectual Property made (e.g., conceived or first reduced
to practice) by any person, regardless of employment status,
with the direct or indirect support of funds administered by
the University (regardless of the source of such funds) shall
be the property of the University, except as provided by this
or other University policy. Funds administered by the
University include University resources, and funds for
employee compensation, materials, or facilities.
Id. at 6518. In regard to intellectual property
created by students, the Policy also notes that, although the
University "will not generally claim ownership of
Intellectual Property created by Students, " it
"does claim ownership of Intellectual Property created
by students in their capacity as Employees or with direct or
indirect support of funds administered by the
University." Id. at 6519. In those cases,
"students shall be considered to be Employees for the
purposes of this Policy." Id. Employees are
directed to disclose their creations and co-inventors to OTT
even when they believe the creations are not owned by the
section IV of the Policy addresses commercialization of
intellectual property. That section contemplates that the
University will sometimes transfer ownership of its
intellectual property and explains who makes transfer
decisions. Pursuant to the Policy, OTT, "[i]n
consultation with Inventors, . . . [has] authority for
decisions concerning the route of commercializing or
transferring a particular Intellectual Property, as well as
the selection and use of outside resources, including outside
legal counsel, to assist in commercialization."
Id. at 6520. OTT also has the "authority for
those agreements that are primarily transfer of
University-owned . . . patent rights[.]" Id.
"Responsibility for patent administration, including the
retention of patent counsel, is shared by OTT and the Offices
of the Vice President for Research and the General
NeuroNexus and its Patents
the creation of intellectual property at the University
results in spin-off companies. For example, NeuroNexus
"was formed in 2004 to commercialize neural probe
technologies that were developed in the College of
Engineering at Michigan." ECF 134-28, PgID 6695. Prior
to 2007, Kipke and others at NeuroNexus secured various
patents in the neural-probe field. See generally ECF
134-16, PgID 6576-88.
patents would sometimes build on their previous work.
According to Jamille Hetke, a NeuroNexus employee, in 2005
the NeuroNexus team was in the early stages of developing
what it called a "Deep Brain Mapping Array" or
"DBMA." ECF 134-16, ¶ 14. That work led to
another idea, the "Deep Brain Stimulating Array" or
"DBSA, " in 2006. Id. ¶ 19. The DBSA
is a "neural interface system" where the electrode
sites are arranged circumferentially and axially around and
along a cylindrical carrier. ECF 134-29.
February 26, 2007, members of the NeuroNexus team filed a
patent application for the DBSA concept, which was assigned
number 60/891, 641 (the '641 application). ECF 134-28.
The '641 application would lead to the issuance of Patent
No. 8, 731, 673 (the '673 patent) seven years later, ECF
134-29, but a great deal happened in the interim. Summer
2007: Daneshvar Has An Idea and Shares It In 2006 and
early 2007, Eugene Daneshvar was a student pursuing a
master's degree in Biomedical Engineering from the
University of Michigan College of Engineering. ECF 65-10,
PgID 3482; ECF 140-2, PgID 8984-85. During that time, he
worked as a graduate research assistant in the Neural
Engineering Lab. ECF 65-10, PgID 3477-78. Daryl Kipke was a
professor in the school's Department of Engineering and
was serving as Daneshvar's faculty advisor. ECF 20-1,
¶¶ 7-8. Daneshvar's degree was conferred in May
of 2007, but he continued to work in the lab through
September of that year. ECF 135-10, PgID 8219. During the
summer of 2007, he was admitted into a Ph.D. program at the
of that year, Daneshvar had an idea for a neural probe
technology. He described his idea, along with some drawings,
on the pages of a notebook, each dated 6/13/07. See
ECF 68-2, PgID 3984-85. At the bottom of each page were the
signatures of Daneshvar (indicated as the inventor) and one
Duna Raoof (indicated as witness); both signatures were dated
Novel Idea This novel idea of incorporating
conductive polymers onto neural probes, both rigid-like
silicon substrates and flexible polymers substrates, for
movement guidance and manipulation has occurred to me. I have
not seen any application such as this before. I have seen
applications of conductive polymers being used to bend
substrates such as in "micromussels" work. I wish
to apply this technology to neural probes in order to
manipulate placement of the probes in-vivo.
Id. The pages then described how the idea would
benefit surgeons and aid in "the quest for determining
whether neurons 're-wire' themselves or surrounding
neurons die etc." They went on:
The idea is that when that site is stimulated it would cause
the conductive polymer to excite and bend the probe at that
location. Having more than one of the bands would allow more
degrees of freedom. . . . I believe to achieve this effect we
could use an ordinary probe (current probe from NeuroNexus)
and develop a preliminary mask to selectively sputter metal
on top. Then we could apply PEDOT coating or PPY coating to
the deposited metal and actuate.
Id. Some simple diagrams illustrating the concept
accompanied the descriptions. Id. Daneshvar now
calls the ideas conceived on that day the "Pivot
Probe" and the "Pivot Electrode." ECF 135-18,
explained his ideas to Kipke later that month, on June 21,
2007, in one of the University's buildings. Id.;
ECF 65-10, PgID 3527, 3531. He sent an email to Kipke the
same day, in which he confirmed their conversation, mentioned
that he "would like to develop this idea as a start
toward my PhD work, " and stated the idea's
potential applications. ECF 68-2, PgID 3987. Also that day,
Kipke allegedly agreed to become Daneshvar's Ph.D.
advisor. ECF 140-2, PgID 8985.
7, 2007, Daneshvar visited Kipke in his office and struck up
a conversation; Daneshvar recorded it and later had it
transcribed. See ECF 23-1, PgID 195-97. Daneshvar
seems to have raised concerns about protecting intellectual
property prior to the conversation, and sought advice about
how to talk about his work when seeking assistance from
others at the University. Kipke offered some reassurances:
[H]ere's how I see what you're facing . . .
You've come up with a, you know, a clever idea. We've
identified this problem need and you've come up with a
clever idea . . . and you know, you have to kinda figure out
how to how to do it actually how to do the work. This is a
university environment, it's open, it has to be open. The
minute we, we kind put our IP blinders on in a university
environment, the whole thing sorts to crumble. We don't
do that. The . . . but what you do do is proceed in an
intelligent manner by keeping a good lab notebook. Ok? . . .
You don't have to hide anything, there's nothing to
hide. . . . In saying that, you also don't have to . . .
[s]pill the beans. Cause it's actually not even relevant
for the discussion, you know the technical discussion.
Id. at 196.
2007: NeuroNexus Files the Application
September 17, 2007, the NeuroNexus team submitted an
invention disclosure to its attorney. ECF 140-22; ECF 140-21.
According to Defendants, the invention disclosed in that
document led to NeuroNexus's filing of provisional patent
application 60/980, 657 (the '657 application) on October
17, 2007. ECF 140, PgID 8950; ECF 135-7. The '657
application later led to the issuance of U.S. Patent No. 8,
565, 894 (the '894 patent) on October 22, 2013. ECF
135-1. The listed inventors of the '894 patent are Rio
Vetter, Daryl Kipke, and Jamille Hetke, and the sole assignee
is NeuroNexus Technologies, Inc. Id. The nature of
the patent is described infra.
The Pursuit to Patent the Pivot Probe
October 20, 2008-a little more than a year after Daneshvar
initially shared his idea with Kipke-Daneshvar, Kipke, and
post-doctoral researcher Mohammad Abidian submitted an
Invention Disclosure (numbered 4204) to OTT that disclosed
the "Pivot Probe." ECF 134-9. According to
Daneshvar, Kipke had advised him to submit the disclosure and
had added that NeuroNexus "was interested in licensing
Daneshvar's invention." ECF 20-1, ¶ 13.
Daneshvar also claims that "[o]n November 4, 2008, Kipke
advised Daneshvar that a NeuroNexus lawyer would draft a
provisional patent for Daneshvar's pivot probe
invention." Id., ¶ 14.
after that alleged conversation, Daneshvar, Kipke, and
Abidian met with Robin Rasor, the OTT Director of Licensing.
ECF 134-7, ¶ 5. She claims to have warned them that
publication of concepts prior to applying for a patent could
result in the loss of patent rights. Id. She also
claims she explained to them "what constituted a
publication" and instructed them to notify OTT before
sending abstracts or presenting concepts at public venues.
Id. She followed up the meeting with a brief email,
explaining that she intended to engage Jeffrey Snyder, an
attorney at the Harness Dickey law firm, and she did so on
December 2, 2008. ECF 136-1; ECF 134-7, ¶ 6. In her
declaration, Rasor explained that Snyder's role was
"to evaluate the patentability of any concepts disclosed
in the [Pivot Probe disclosure] and, if any material was
determined to be patentable, to potentially prepare any
patent application based on it." ECF 134-7, ¶ 6.
Snyder would also assist "in determining whether it
would be worthwhile to spend additional University funds to
file and prosecute a patent application covering concepts in
the [Patent Probe disclosure]." Id. ¶ 9 .
sent an email to an attorney at Harness Dickey on November 6,
2008. ECF 140-3. She attached the 4204 Disclosure, along with
other documents, and briefly mentioned some of the challenges
they faced in patenting the technology. She ended: "So,
take a look and then let's talk before we plan the
application. Kipke's company has an IP counsel so we may
also have them do some heavy lifting down the road and have
you review and file." Id. Daneshvar was not a
party to the email.
What Happened to the Pivot Probe IP
months that followed, Daneshvar corresponded with Snyder in
an effort to prepare a patent application. ECF 65-10, PgID
3567-68, 3575, 3584. On February 20, 2009, Rasor emailed
Kipke, Daneshvar, and Abidian and relayed Snyder's
conclusion that it would be better to further develop the
Pivot Probe concept before applying for a patent.
Id. at 3585; ECF 136-3. Daneshvar did not respond to
the email. ECF 134-7, ¶ 11; ECF 65-10, PgID 3578.
months later, Daneshvar "submitted his work on pivot
probes to be included in a conference presentation." ECF
20-1, ¶ 15. OTT learned of the presentation more than a
year and a half later, in November 2010. ECF 134-7, ¶
12. Snyder concluded that Daneshvar's submission to the
presentation would preclude the patentability of the Pivot
Probe as laid out in the 4204 Disclosure, and Daneshvar
agreed. Id., ¶ 13. Consequently, OTT's
efforts to patent the Pivot Probe ceased. Id.
then asked the University to assign to him its rights to the
4204 Disclosure and on November 17, 2011, the Regents
approved the reassignment. ECF 140-11, PgID 9061, 9072. Next,
Daneshvar sought and received the patent rights to the Pivot
Probe from the NIH, confirmed by a letter dated May 14, 2012.
2010-2012: Efforts Concerning the Pivot Electrode
OTT's efforts to patent the Pivot Probe ceased in late
2010, a new effort began. According to Rasor, during the
November 2008 meeting that kicked off the effort to patent
the Pivot Probe, Daneshvar had also shared the concept of the
"Pivot Electrode." ECF 134-7, ¶ 14. She
reasoned that since the Pivot Electrode had not been part of
Daneshvar's submission to the April presentation, it
might still be patentable, so she instructed Snyder to look
into it. Id. OTT assigned a new number (4204.1) to
the Pivot Electrode concept and directed Snyder to file a
provisional patent application for it in March 2011.
Id. ¶ 15. Snyder did so and the U.S. Patent
Office assigned serial number 61/449, 913 to the application.
next year, however, OTT had "determined it would not
pursue a non-provisional patent application for the
'Pivot Electrode' because the potential market and
value did not justify further investment in the patent
application." Id. ¶ 17. Because the
National Institute of Health ("NIH") "had
sponsored the research that led to the pivot electrode
disclosure 4204.1 and the 61/449, 913 application . . . OTT
waived and released to the NIH its interests in the
provisional patent application serial number 61/449, 913 on
or about March 6, 2012." ECF 134-2, ¶¶ 22-23;
ECF 140-4, PgID 9041.
claim that Daneshvar sought and secured the rights to the
patent application from NIH, but later abandoned the effort
to secure a patent. ECF 134, PgID 6496. Daneshvar does not
dispute the point.
to Daneshvar, it was not until August of 2011, "while
researching prior art relating to the pivot electrode, "
that he discovered the '657 application. ECF 20-1, ¶
19. He later discovered three other patents-Nos. 13/236, 973,
11/932, 903, and 12/848, 828-and claims that these patents
include his ideas for "spatial 3D placement."
Id. Daneshvar believes the application and patents
contain his ideas.
The Sale of NeuroNexus
February 2012, a company called Greatbatch, Inc. acquired
NeuroNexus, allegedly including "all of the intellectual
property at issue in this lawsuit." Id. ¶
20; ECF 17, ¶ 20.
The '894 Patent
much of the case concerns the '894 Patent, a brief
description is pertinent. The invention contained within the
'894 patent is described as a "three dimensional
system of electrode leads, " ECF 135-1, PgID 7157, and
utilizes the concept from the '673 Patent by essentially
marrying three of the '673 arrays into a single,
three-pronged unit. The diagram included in the '894
Patent depicts three prongs, called "subsystems, "
that are joined together. These subsystems are connected to
"guiding elements" that allow a user to move and
manipulate each subsystem. According to the patent, the
carrier in each subsystem is "rigid." Id.,
patent explains that a guiding element is "preferably
one of several variations, " id., col.2, and
describes two variations. In the first variation, the guiding
element contains several "joints or connections"
that a user can manipulate by using "a system of cables
or robotics, " or may be guided "remotely and/or
wirelessly or in any other suitable fashion with any suitable
combination of elements." Id. The second
variation does not use joints, but rather, is "biased,
" meaning it has a particular, fixed shape but is made
of a "material with shape memory or high
elasticity." Id. In that variation, the biased
subsystems are sheathed in a tube to keep them straight, but
when the tube is pulled back, the subsystems spread out or
otherwise re-arrange themselves. The patent further explains:
[t]he material of the biased guiding element  is preferably
an elastic material such as metal or plastic, or shape memory
material such as nitinol. The material may alternatively be
made from any suitable material. The shape memory material
may change shape due to temperature, electrical stimulus, or
any other suitable mechanism.
judgment is proper if there is "no genuine dispute as to
any material fact and the movant is entitled to judgment as a
matter of law." Fed.R.Civ.P. 56(a). A fact is material
for purposes of summary judgment if its resolution would
establish or refute an "essential element of a cause
of action or defense asserted by the ...