No. 04-0756
IN
THE SUPREME COURT
OF
_______________________________________________
EVAN
BROWN, Petitioner
VS.
ALCATEL
USA, INC., Respondent
_______________________________________________
On Appeal from the 199th
PETITION FOR REVIEW
Martin
L. Peterson
Bar
No. 15838600
(254)
435-2993
Attorney for Petitioner
IDENTITY OF
PARTIES & COUNSEL
The following is a complete list of
the names of all parties to the trial court’s final judgment, and the names and
addresses of all trial and appellate counsel.
Parties Trial
Counsel Appellate
Counsel
Evan Brown Not
Represented Martin L.
Peterson
(Pro se)
DSC Communications (1)
Lynn Tillotson Same as
Trial Counsel
Corporation n/k/a Alcatel & Pinker, L.L.P.
USA, Inc. (2)
Eric W. Pinker, P.C.
(3) Scott
M. Garelick
TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL.................................................................................. i
TABLE OF CONTENTS................................................................................................................ ii
INDEX OF AUTHORITIES.................................................................................................. iii-viii
STATEMENT OF THE CASE................................................................................................... 1-2
STATEMENT OF JURISDICTION............................................................................................... 3
ISSUES PRESENTED FOR REVIEW......................................................................................... 3
STATEMENT OF FACTS.......................................................................................................... 3-5
SUMMARY OF THE ARGUMENT......................................................................................... 5-6
ARGUMENT AND AUTHORITIES....................................................................................... 6-20
Regarding
First Issue
Summary judgment was improper because the plaintiff
failed to show that
there were no disputed material facts or that as a
matter of law it was entitled
to judgment in its favor........................................................................................................... 6-17
Regarding
Second Issue
No attorney’s fee should have been awarded, or the
award should be reduced to
a reasonable amount.............................................................................................................. 17-19
Regarding
Third Issue
The record fails to reflect
that the proper court exercised jurisdiction........................... 19-20
PRAYER....................................................................................................................................... 20
CERTIFICATE OF SERVICE..................................................................................................... 21
APPENDIX
INDEX OF AUTHORITIES
Cases
Alexander v. Russell, 682 S.W.2d 370 (Tex.App.– El Paso 1984), rev’d,
699
S.W.2d 209 (
Alexander v. Russell, 699 S.W.2d 209 (
American
10-Minute Oil Change, Inc. v. Metropolitan Nat. Bank-
783 S.W.2d 598 (Tex.App.–
Dallas 1989, no writ).................................................................. 18
Amgen, Inc. v. Chugai Pharmaceutical Co., Ltd., 927 F.2d 1200 (Fed.Cir.
1991) ....... 16
Anderson
Chemical Co. v. Green, 66 S.W.3d 434 (Tex.App.– Amarillo
2001, no pet.) ............................................................................................................................... 9
Andreaggi v. Relis, 171 N.J. Super. 203, 408 A.2d 455 (1979).............................................. 8
Armbruster v.
Memorial Southwest Hosp., 857 S.W.2d 938 (Tex.App.– Houston
[1st Dist.] 1993,
no writ)............................................................................................................... 7
Atlas Brick Co. v. North, 288 S.W. 146 (Tex.Comm.App. 1926, judg.adopted) ........... 14, 15
A. W. Wright
& Assoc., P.C. v. Glover,
993 S.W.2d 466 (Tex.App.–
Houston [14th Dist.] 1999, rev. denied).................................... 12
1982, writ ref’d n.r.e.)................................................................................................................. 18
Burroughs Wellcome Co. v. Barr Laboratories, Inc., 40 F.3d 1223 (Fed.Cir.
1994) ..... 16
Castellow v. Swiftex Mfg. Co., 33 S.W.3d 890 (Tex.App.– Austin 2000, no pet.)............... 13
Cubic Corp. v. Marty, 185 Cal.App.3d 438, 229 Cal.Rptr. 828 (1986)................................ 12
Cuyler v.
Minns, 60
S.W.3d 209 (Tex.App.– Houston [14th Dist.] 2001,
rev. denied)................................................................................................................................... 18
INDEX
OF AUTHORITIES (cont.)
Cases
Dew v.
American Rio Grande Land & Irrigation Co., 13 S.W.2d 474
(Tex.Civ.App.
1929), rev’d on another ground, 25
S.W.2d 603 (
Comm.App. 1930, holdings
approved)...................................................................................... 13
Feldman v. Kohler, 918 S.W.2d 615 (Tex.App.– El Paso 1996, rev. denied)...................... 12
Frazin v. Hanley, 130 S.W.3d 373 (Tex.App.– Dallas 2004, no pet.)................................... 12
Gaspard v.
Gaspard,
582 S.W.2d 629 (Tex.Civ.App.– Beaumont 1979,
no writ)......................................................................................................................................... 19
Gibson v. John
D. Campbell & Co., 624 S.W.2d 728 (Tex.App.– Fort Worth
1981, no writ)................................................................................................................................ 7
Goldwasser v. Smith Corona Corp., 817 F.Supp. 263 (D.
G T I Corp. v. Calhoon, 309 F.Supp. 762 (S.D.
Green Intern., Inc. v. Solis, 951 S.W.2d 384 (
Guth v. Minnesota
Mining & Mfg. Co., 72 F.2d 385 (7th Cir. 1934)
cert. denied, 294 U.S. 711 (1935)................................................................................................. 14
Hallmark v.
Port/Cooper T. Smith Stevedoring
Hallmark
Personnel of Texas, Inc. v. Franks, 562 S.W.2d 933 (Tex.Civ.App.–
Hazelwood v.
Mandrell Industries Co., 596 S.W.2d 204 (Tex.Civ.App.–
Herring v.
Bocquet, 933
S.W.2d 611 (Tex.App.– San Antonio 1996),
rev’d
on another ground, 972 S.W.2d 19 (
Hollister v. Mfg.Co., 113
INDEX OF
AUTHORITIES (cont.)
Cases
Hussong v.
Schwan’s Sales Enterprises., 896 S.W.2d 320 (Tex.App.–
Houtson [1st
Dist.] 1995, no writ).................................................................................................. 16
INAC Corp. v.
Underwriter’s at Lloyds, 56 S.W.3d 242 (Tex.App.– Houston
[14th Dist.]
2001, no pet.) ......................................................................................................... 17
Ingersoll-Rand Co. v. Ciavatta, 216 N.J. Super. 667, 524 A.2d 866 (1987)...................... 14
In re Halliburton Co., 80 S.W.3d 566 (
International
Aircraft Sales, Inc. v. Betancourt, 582 S.W.2d 632 (Tex.Civ.App.–
Corpus Chrisit 1979, writ
ref’d n.r.e.)........................................................................................... 9
[14th Dist.] 1999, no writ); ...................................................................................................... 17
Jamesbury Corp. v. Worchester Valve Co., 443 F.2d 205 (1st
Cir. 1971)............................. 8
JHC Ventures,
L.P. v. Fast Trucking, Inc., 94 S.W.3d 762 (Tex.App.–
San Antonio 2002, no pet.)........................................................................................................... 6
Johnson v.
Breckenridge-Stephens Title Co., 257 S.W. 223 (Tex.Comm.App.
1924, judg. adopted)................................................................................................................... 10
Koehring v. E. D. Etnyre & Co., 254 F.Supp. 334 (N.D.
Light v. Centel Cellular Co., 883 S.W.2d 642 (
Lone Star Gas Co. v. EFP Corp., 92 S.W.3d 417 (
Long Trusts v.
Atlantic Richfield Co., 893 S.W.2d 686 (Tex.App.– Texarkana
1995, no writ).............................................................................................................................. 18
Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572 (Fed.Cir. 1996).................................................. 16
Mariner Financial Group, Inc. v. Bossley, 79 S.W.3d 30 (
INDEX OF AUTHORITIES (cont.)
Cases
Merchants’
Nat’l Bank v. Voudouris, 248 S.W. 810 (Tex.Civ.App.–
Mississippi Glass Co. v.
Franzen,
143 Fed. 501 (3rd Cir.1906)................................................ 7
NCNB
1993, no writ)............................................................................................................................. 17
North Central
Oil Corp. v
(Tex.App.– Houston [1st
Dist.] 2000, rev. denied)................................................................... 16
Pony Express
Courier Corp. v. Morris, 921 S.W.2d 817 (Tex.App.–
1996, no writ)............................................................................................................................. 15
Progressive County Mutual Ins. Co. v. Bailey, 133 S.W.3d 272 (
Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217 (
Rios v. Texas
Commerce Bancshares, Inc., 930 S.W.2d 809 (Tex.App.–
Roberts v.
Ernst, 668
S.W.2d 843 (Tex.App.– Houston [1st Dist.] 1984,
orig. proc.)................................................................................................................................... 19
RP&R, Inc. v. Territo, 32 S.W.3d 396 (Tex.App.– Houston [14th
Dist.] 2000, no pet.)......... 6
Sacks v.
1986, no writ).............................................................................................................................. 13
Sylvester v. Watkins, 538 S.W.2d 827 (Tex.Civ.App.– 1976, writ ref’d
n.r.e.).................... 17
Tenet
Healthcare, Ltd. v. Cooper, 960 S.W.2d 386 (Tex.App.– Houston
[14th Dist.]
1998, writ dism’d w.o.j.)......................................................................................... 12
T. O. Stanley Boot Co. v. Bank of
INDEX OF AUTHORITIES
(cont.)
Cases
Tucker v. Graham, 878 S.W.2d 681 (Tex.App.– Eastland 1994, no writ)............................. 17
77 L.Ed. 1114 (1933)................................................................................................................. 14
Walden v.
Affiliated Computer Services, Inc., 97 S.W.3d 303 (Tex.App.– Houston
[14th Dist.]
2003, no pet.)........................................................................................................... 10
Weitzman v. Steinberg, 638 S.W.2d 171 (Tex.App.– Dallas 1982, no writ)........................ 16
Wiley v. Bertelsen, 770 S.W.2d 878 (Tex.App.– Texarkana 1989, no writ).......................... 16
Wuagneux
Builders, Inc. v. Candlewood Builders, Inc., 651 S.W.2d 919
(Tex.App.– Fort Worth 1983, no writ)....................................................................................
18
Constitutions, Statutes and
Rules
art. V.,
§11.................................................................................................................................... 19
Civil
Practice & Remedies Code
Section
37.009............................................................................................................................ 17
Section
38.001(8)....................................................................................................................... 17
Government
Code
Section
22.001 (a)(2), (3), (6)..................................................................................................... 3
INDEX
OF AUTHORITIES (cont.)
Rules
Rule 47.2(a)................................................................................................................................... 2
Rule 53.7(a)................................................................................................................................... 2
Rule 166a.................................................................................................................... 1,
2, 5, 9, 19
Rule 166a
(a).................................................................................................................................
4
Rule 166a
(c)................................................................................................................................. 4
Rule 215.2...................................................................................................................................... 6
Secondary
Sources
Restatement (Second) of Contracts (A.L.I. 1981)
§45................................................................................................................................................ 12
§73, comment a........................................................................................................................... 12
Words and Phrases (West 1958).................................................................................................. 16
S. Cherensky, A
Penny for Their Thoughts: Employee Inventors,
Preinvention
Assignment Agreements, Property, and Personhood,
81 Cal.L.Rev. 595 (1993)....................................................................................................... 14
A. Bartow, Inventors
of the World, Unite! A Call for Collective Action by
Employee-Inventors, 37
No.
IN
THE SUPREME COURT
OF
_______________________________________________
EVAN
BROWN, Petitioner
VS.
ALCATEL
USA, INC., Respondent
________________________________________________
On
Appeal from the 199th
PETITION FOR REVIEW
TO THE
HONORABLE SUPREME COURT OF
Statement of the Case
The
judgment appealed from was signed by the Honorable Curt B. Henderson. The
case was
assigned for trial to the 199th District Court of Collin County. The
trial court granted the plaintiff’s motions for summary judgment and granted
injunctive relief and awarded attorneys’ fees as requested. The parties in the Court of Appeals for the Fifth District
(sitting in
who
participated in the decision in the Court of Appeals (whereby the judgment of
the trial court was affirmed) were Martin Richter (author of the opinion),
Douglas Lang and Carolyn Wright. Their opinion appears and may be cited as
follows: 2004 Tex.App. LEXIS 5687; 2004 WL 1432541.
Alcatel
USA, Inc. (then known as DSC Communications Corp.) instituted this suit in 1997
alleging Petitioner had breached an agreement to disclose to it certain
inventions which he might make or conceive while an Alcatel employee. It sought a preliminary mandatory injunction
to require Brown to reveal information about the invention, declaratory relief,
and an award of attorneys fees.
Ultimately, the court granted the plaintiff’s
motions for summary judgment upon certain of its claims and Alcatel abandoned
the remainder of its claims and the court dismissed Brown’s counterclaims. (2nd
Supp.C.R. at 238 )
The court divested Brown of any
interest in his so-called “solution” to a computer software problem (including
any further advances made in its development) and required Brown to pay
$332,000 in attorney’s fees to Alcatel.
By a timely appeal, Brown challenged the final judgment and an earlier
sanction order. In what it designated as a memorandum opinion[1]
delivered on June 28, 2004, the Court of Appeals panel affirmed the decision of
the trial court. Brown timely filed a
motion for rehearing by the panel, which was denied by order dated August 2,
2004. This petition is timely filed on
or before September 16, 2004 pursuant to Tex.R.App.P.
53.7(a).
Statement of Jurisdiction
This court
has jurisdiction of the subject matter (questions of law presented) under
§22.001 (a)(2), (3), and (6) of the Government Code.
Issues Presented[2]
First: Did the trial
court err in granting Alcatel summary judgment upon its claim for a breach of
an invalid contract that never occurred?
Second: Did the trial court err in
awarding a judgment for Respondent’s attorney’s fees against Petitioner even
though Respondent recovered no damages nor anything of value? Should such award
in any event be reduced to reflect a reasonable amount?
Third: Is the judgment void because it
does not show to have been rendered in the 199th District Court?
Statement of Facts
In
April, 1997, Respondent (“Alcatel”) filed this suit alleging that Petitioner
(hereafter “Brown”) had recently “conceived” computer programming which would
make possible an automated translation of the computer code in an older Z8000
language used in much of Alcatel’s equipment to the new C or C++
languages. In relevant part, an
“Employment, Copyright, and Proprietary Information Agreement” (hereinafter
“agreement”) which Brown had signed in 1987 just after he became an employee of Alcatel, provided that Brown
would
communicate to an officer of [Alcatel] promptly and
fully all inventions (including but not limited to . . . computer programs . .
.) made or conceived by [Brown] . . . from the time of entering [Alcatel’s]
employ until [he leaves], (1) which are along the lines of the business, work
or investigations of the Company or [subsidiaries] at the time of such
inventions, or (2) which result from or are suggested by any work which [Brown
might] do for or on behalf of the Company. (C.R. I at 81).
Alcatel asserted a right to
exclusively control any further development or use of the programming and
demanded that Brown supply it with full information concerning his “invention”
so that it could obtain for itself the sole use or the complete economic
benefit thereof [3]. Alcatel asked for (and received) a
preliminary mandatory injunction whereby the court would force Brown to comply
with the disclosure provisions of the contract.
Ultimately, even after such
disclosure, Alcatel convinced the trial court (purportedly as a matter of law
under Tex.R.Civ.P. 166a (a)(c))
that the agreement was legally enforceable and that Brown had breached it. This
latter conclusion was reached even though by that point it had turned out that
his method did not, in fact, make possible any easier translation of computer
codes.[4]
Summary of the Argument
Resolving the case based solely upon
“summary judgment evidence” was wrong for several reasons:
1.
Material facts– necessary to establish that the contract in question had
been breached– were shown to remain in dispute. These included whether Brown’s
idea qualified as an invention[5] or
had been “conceived” during the period of Brown’s employment. The agreement did not grant Alcatel a
mortgage on Brown’s pre-invention thoughts.
2. Similar contracts have been held
void for want of consideration or as being in violation of public policy or
unconscionable. Although not previously
applied in
3.
Upon examination of the proceedings below and the summary judgment
evidence, the Court can determine as a matter of law either that the amount of
attorney’s fees awarded was not “reasonable” in light of the services actually
necessary or that no award of fees was justified.
4.
The record reflects that the judgment is void because it was rendered by
a court which did not have jurisdiction.
The court also granted improper
interlocutory relief.[6] But, the only part thereof which Brown asked
the Court of Appeals to review was the so-called discovery abuse sanction
whereby it is anticipated Alcatel might still assert some claim to Brown’s
ideas. See JHC Ventures, L.P. v. Fast
Trucking, Inc., 94 S.W.3d 762, 776 (Tex.App.– San Antonio 2002, no pet.).
This issue was, however, not reached by the intermediate court because it
became moot. If the judgment is set
aside, then this case should be remanded to the Court of Appeals for
consideration of the validity of the sanction order. E.g., Progressive
Argument and Authorities under First Issue Presented
Genuine
Issue as to Material Fact Remained
To prove it
was entitled to recover as a matter of law, Alcatel had to prove something had
been invented. In its motion, all Alcatel could say was that “Brown [had] claimed that he had developed a method . . . that would
automatically convert DSC’s legacy software into newer portable, higher-level
programming languages”. (1st Supp.C.R. at 3, 8).[7]
“[A] mere mental conception, not
tested or reduced to practice, nor followed by any embodiment of the idea, is
not an invention.” Mississippi Glass Co.
v. Franzen, 143 Fed. 501, 506 (3rd Cir. 1906). Despite the claim
he made in 1996, by 2001 it became evident to all that Brown’s method is still
not developed to the extent that it would fall within the agreement. (C.R. II at 508).[8]
Even if one assumes there is still
some hidden knowledge residing in Brown’s brain, it would not belong to
Alcatel. The court dealt with a similar situation in Koehring v. E. D. Etnyre & Co., 254 F.Supp. 334 (N.D.
Analogous to Alcatel’s stance here,
the court characterized Koehring’s position as:
tantamount to an assertion that an employee, upon
terminating his employment, must search his mind for all thoughts relating to
the business of his employer and set these down for the employer’s reference
and that thereafter, he is forever precluded from employing such thoughts in a
competitive enterprise.
The court tersely responded that “[t]he absence of
merit in this assertion is patent.” 254 F.Supp at 355.
It
later explained:
An agreement requiring an employee to disclose all
improvements, discoveries, and inventions developed by him while employed and
specifying that such matter becomes the property of the employer does not give
an employer a mortgage on all thoughts occurring to the employee, but is
limited to those thoughts which . . . can in fact be deemed an improvement,
discovery or invention and are sufficiently concrete to be considered a
‘development’ or ‘conception’. Ideas
which are disclosed to an employer but do not meet these standards do not
become the property of the employer.
254 F.Supp. at 362.
The language of the agreement must
be construed to require that the idea be put into practice or be embodied in
some tangible form before it would qualify as an “invention”. Jamesbury Corp. v. Worchester Valve Co.,
443 F.2d 205, 213 (1st Cir. 1971); cf. Andreaggi v. Relis, 171 N.J. Super. 203, 408 A.2d 455, 464
(1979). This had not occurred at the time Brown’s employment was
terminated. While stating it understood
evidence favorable to the nonmovant must be
taken as true, the Court of Appeals treated Brown’s initial description of his
idea like a judicial admission[9] and discounted all else as not “credible”. If its purpose is to be preserved, Tex.R.Civ.P.
166a cannot be allowed to operate in that fashion. Lone Star Gas Co. v. EFP Corp., 92 S.W.3d 417 (
Lack of Consideration
“Consideration”
is a fundamental element of every valid contract that must be distinguished
from the mere motive that induced the execution of the agreement. International
Aircraft Sales, Inc. v. Betancourt, 582 S.W.2d 632, 636 (Tex.Civ.App.–
Corpus Chrisit 1979, writ ref’d n.r.e.).
Despite the illusory nature of its
promise when made[10], Alcatel argued and the Court
of Appeals
found that Brown ultimately received consideration because he had been
permitted to work and was paid a salary. Because this would not have occurred
but for Brown having offered to assign his inventions, the court found Alcatel
had performed under the contract in reliance on Brown’s offer. Apparently, the court considered Alcatel to
have suffered a detriment in the process.
Normally, such conduct does “not
serve to render valid for any future time a contract originally not binding for
its lack of consideration.” Johnson v.
Breckenridge-Stephens Title Co., 257 S.W. 223, 227 (Tex.Comm.App. 1924,
judg. adopted). “While from the very nature of a unilateral contract, mutuality
of obligation is not essential, such is the case only where some other
consideration for the option passed to the promisor at the time of making the
promise.” Johnson, 257 S.W. at 225.
Brown received no “equitable”
consideration, only that which was already promised to him before the agreement
was ever drafted, namely, his wages (once earned) and the other benefits
commonly received by Alcatel employees in his position. “[I]f one party merely
agrees to do what he is already bound to do, there is no consideration.” Merchants’ Nat’l Bank v. Voudouris, 248
S.W. 810, 813 (Tex.Civ.App.– Austin 1923, no writ); Walden v. Affiliated Computer Services, Inc., 97 S.W.3d 303, 319
(Tex.App.– Houston [14th Dist.] 2003, no pet.).
In its Motion for Summary Judgment
(1st Supp.C.R. at 8, 15), Alcatel argued that “in exchange for”
Brown’s promise it “offered Brown [continued] employment” and that Brown then
“consented” to the new burdens being attached to such employment. It also
argued that the agreement became enforceable when it “rendered full performance
of its obligations under the
contract.” Of course, it had no
obligations under the contract and that is the very reason there was nothing
for it to “perform”.
To support its contrary conclusion,
the Court of Appeals cited In re
Halliburton Co., 80 S.W.3d 566 (Tex. 2002).
But the explanation there provided by this court (80 S.W.3d at 569) serves rather to elucidate why there was no new detriment suffered by Alcatel.
This Court carefully noted that with respect to the arbitration agreement
tacked on as a new condition of Myers’s employment by Halliburton, both parties became bound to use the
arbitration procedure even after
termination of the employment. In
contrast, all of Alcatel’s promises in the agreement were dependent on Brown’s
continued employment and it could suffer no detriment after the employment
ended.
In addition, “[t]o form such a
unilateral contract (1) the performance must be bargained-for so that it is not
rendered past consideration.” Light v.
Centel Cellular Co. of
Light illustrates the distinction
between what happened here and the formation of a unilateral contract. The court said that if an employer promised
some new or additional benefit to an employee or to incur some additional
detriment (e.g. to share a trade secret) in return for the employee’s promise
to protect such secret, that the employee could become bound to his promise
once the employer performed (incurred the detriment). Merely giving the employee work to do or a
salary, however, would not be enough because although it could perhaps be
construed as a detriment (i.e. the employer must then reduce its earnings or profits), all the employer truly
“bargained for” was the services and there was no additional detriment
associated with the additional benefit it seeks. A promise (i.e. offer to perform) is accepted
(becomes binding) by the invited
performance of the offeree (in reliance thereon). Restatement
(Second) of Contracts (A.L.I. 1981), §45. “If the
performance was not in fact bargained for and given in exchange for the promise, . . . there is no
consideration.” Restatement (Second) of Contracts §73, comment a; Tenet Healthcare, Ltd. v.
Cooper, 960
S.W.2d 386, 389 (Tex.App.– Houston[14th Dist.] 1998, writ dism’d w.o.j.); Wilson
& Wilson Tax Services, Inc. v. Mohammed, 131 S.W.3d 231, 242 (Tex.App.–
Houston [14th Dist.] 2004) (“A contract in which there is no
consideration moving from one party or no obligation upon him . . . is . . .
unenforceable.”)
If Alcatel approached its
employee and said: “you can continue to work here (if you so choose) and
receive what we have already agreed as your compensation, but you must now give
me something more, i.e. your home”, it would not be bargaining for the
home. Such a bargain only imposes a
detriment upon the employee without any valid consideration.
Other Reasons the Contract was Invalid [11]
While an employer should have some control
over or interest in its employees’ inventions,
the interests of the employee must be balanced against those of his employer
so that the best interest of the public is ultimately served. See Castellow v. Swiftex Mfg. Co., 33
S.W.3d 890 (Tex.App.– Austin 2000, no pet.); Sacks v. Dallas Gold & Silver Exch., Inc., 720 S.W.2d 177, 180
(Tex.App.– Dallas 1986, no writ). Each
case must be considered separately. Dew
v. American Rio Grande Land & Irrigation Co., 13 S.W.2d 474, 476
(Tex.Civ.App. 1929), rev’d on another
ground, 25 S.W.2d 603 (Tex.Comm.App. 1930, holdings approved). Whether an agreement contravenes the public
good is judged according to its possible or probable effect on the public
rather than its actual effect on, or the motives of, the parties in making it. Hazelwood v. Mandrell Industries Co.,
596 S.W.2d 204, 206 (Tex.Civ.App.– Houston [1st Dist.] 1980, writ
ref’d n.r.e.).
The
contract in question is too broadly worded.
It requires transfer of ownership (all of the economic value) of: (1) “all inventions” suggested by any work Brown might do for Alcatel, as well as (2) of
those inventions which are merely “conceived” during the period of his
employment so long as they “are along the lines of the business, work or
investigations of” Alcatel or its subsidiaries, even though such conception has no tangible form or known value or
use at the time he ceases employment.
Alcatel
sought to appropriate Brown’s thoughts or inventive skill (which was defined in
Hollister v. Mfg.Co., 113 U.S. 59,
72, 5 S.Ct. 717, 724, 28 L.Ed. 901, 905 (1885) as “that intuitive faculty of the mind put forth in the search for new
results, or new methods, creating what had not before existed”). There is simply no need for a business entity
to acquire its employees’ inventive skill to protect its own legitimate
interests. Guth v.
Minnesota Mining & Mfg. Co., 72 F.2d 385, 386-8 (7th Cir.
1934), cert. denied, 294 U.S. 711
(1935). See also G T I Corp. v. Calhoon, 309 F.Supp. 762, 768 (S.D.
An employee cannot be deprived of the right to use
his general skills and knowledge * * * Beyond . . . trade secret, confidential
information, and Patent Act protection . . . the employer’s interests must give
way to an employee’s right to leave his job and use elsewhere those skills and
that knowledge of the trade or industry he has acquired during his employment.
Ingersoll-Rand
Co. v. Ciavatta, 216 N.J. Super. 667, 524 A.2d 866, 872 (1987).
Until the decision in this case, the
law in
In the words of the court:
This is so because the employee may perform all the
duties properly assignable to him, and during the same period independently
exert his conceptive faculties, ‘with the assurance that whatever invention he
may thus conceive and perfect is his individual property.’
North, 288 S.W. at 147.
Furthermore,
at least in
[t]he efficiency and skills which an employee
develops through his work belong to him and not to his former employer, and the
employee is not obligated to forego the exercise of his inventive powers even
if his exercise was gained in the performance of his contractual duties.
Hallmark
Personnel of Texas, Inc. v. Franks, 562 S.W.2d 933, 936 (Tex.Civ.App.– Houston [1st
Dist.] 1978, no writ).
If nothing else, as a matter of
equity, the trial court should have refused to grant specific performance of
the agreement because of its overall one-sidedness or the gross one-sidedness
of some of its terms and the lack of any legitimate commercial reasons
therefor. Wade v. Austin, 524 S.W.2d 79, 86 (Tex.Civ.App.– Texarkana 1975, no
writ); Pony Express Courier Corp. v. Morris, 921 S.W.2d 817, 821
(Tex.App.– San Antonio 1996, no writ).[12]
In drafting
the agreement, Alcatel sought to obtain the right to as much of the
intellectual abilities of its employees as it possibly could. But, as the facts presented illustrate, the
provisions “invention”[13] and
“conceived [14]
from the time of entering the Company’s employ until I leave” and “which result
from or are suggested by any work which I may do for or on behalf of the
Company” are ambiguous. Thus, the
contract was not sufficiently definite in its terms that the courts could
understand what the promisor undertook. T.
O. Stanley Boot Co. v. Bank of
The agreement leaves reasonable
doubt as to what the parties intended or what the court would be called upon to
enforce. The parties could reasonably
misunderstand the terms. Cf. Wiley v. Bertelsen, 770 S.W.2d 878,
883 (Tex.App.– Texarkana 1989, no writ). It does not describe the subject
matter of the rights being assigned to Alcatel with sufficient precision to
thereafter enable the courts to determine the obligations of the parties. Weitzman
v. Steinberg, 638 S.W.2d 171, 175 (Tex.App.– Dallas 1982, no writ). It is
also important to recognize that “[w]here the contract contains an ambiguity,
the granting of a motion for summary judgment is improper because the
interpretation of the instrument becomes a fact issue.” Hussong v. Schwan’s Sales Enterprises, 896 S.W.2d 320, 324
(Tex.App.– Houtson [1st Dist.] 1995, no writ).
Argument and Authorities under Second Issue
Presented
Respondent
did not recover any damages or even anything of value. Therefore, it was not entitled to recover any
attorneys’ fees. Green Intern., Inc. v. Solis, 951 S.W.2d 384, 390 (
In any event, this dispute involved
fairly simple factual determinations and the interpretation and application of
just a few sentences of a contract. The
plaintiff considered it straight-forward enough to warrant requesting a
“summary” judgment. What could have been accomplished in relatively little
time, instead apparently took the plaintiff’s attorneys hundreds of hours.
It is preposterous to think that
$332,000 can be a “reasonable” fee for someone to have to pay for the services
of legal counsel in obtaining a summary judgment. Assuming it could recover its
attorney’s fees under §38.001(8) of the Civil Practice and Remedies Code[16],
Alcatel was entitled only to a reasonable
amount, which was not necessarily the amount it had expended.
Unless the summary judgment is set aside[17], Brown will likely bear the brunt of the rule
that an award of attorney’s fees will be overturned only if the award must be
characterized as being an abuse of discretion. Long Trusts v. Atlantic Richfield Co., 893 S.W.2d 686, 688
(Tex.App.– Texarkana 1995, no writ). Yet, an abuse of discretion by Judge
Henderson is exactly what this Court should find because the amount awarded
does not bear a logical relationship to the amount in controversy ($0) nor the
complexity of the issues. Cf. Herring v.
Bocquet, 933 S.W.2d 611, 615 (Tex.App.– San Antonio 1996), rev’d on another ground, 972 S.W.2d 19 (
The summary judgment concerning
attorney’s fees must stand on its own merits.
Rhone-Poulenc, Inc. v. Steel,
997 S.W.2d 217, 223 (
Argument and Authorities under Third Issue Presented
The final
judgment purports on its face to have originated in the 219th
District Court. It is therefore void
because the 219th District Court had no jurisdiction over the case.
While 219th District Judge Henderson had authority to act in the
case, such power derived from an order assigning him to serve in the stead of
the regular judge of the 199th District Court (where the case was
filed and pending). Judge Henderson could thus act as the presiding judge in
the case, but not as or for the 219th
District Court. Where the record fails
to reflect that the proper court exercised jurisdiction, its orders are void. Alexander v. Russell, 699 S.W.2d 209 (
This was not a situation where Judge
Henderson was merely exchanging benches or hearing a case (“holding court”) for
another court in
Apparently without any exception for
clerical error, this court declared that
when “the record does not show that the court with . . . jurisdiction
was actually the court which exercised jurisdiction . . ., the cause must be reversed and remanded.” This is because “a judge is not the court . .
. the persons by whom judicial functions are to be exercised are essential to
complete the idea of a court”. Alexander
v. Russell, 682 S.W.2d 370, 376 (Tex.App.– El Paso 1984), rev’d, 699 S.W.2d 209 (
Prayer
Wherefore,
Petitioner prays that the Court will grant review to protect the jurisprudence
of the state and provide authoritative answers to the important questions
presented. He asks the Court: (1) to set aside the judgment below, in whole or
in part, and that judgment will be rendered by this Court that Respondent is
entitled to recover nothing from him for breach of contract or under the
attorneys fee statutes, or (2) that the judgment will be set aside as void. In
either event, he further asks the Court to remand this cause to the court of
appeals for consideration of the propriety of the sanction order of January 19,
2000, and, if necessary, to remand this case to the 199th District
Court for trial..
Respectfully
submitted,
_____________________________
Martin
L. Peterson
Bar
No. 15838600
(254)
435-2993
Attorney for Appellant
Certificate
of Service
I hereby
certify that a true copy of the foregoing Petition for Review was served by
mail upon Mr. Eric W. Pinker, Attorney for Respondent, at Lynn Tillotson &
Pinker, L.L.P.,
__________________________
[1] In its view, the Court of Appeals found all of the dispositive issues to be clearly settled in the law in favor of the Respondent. In fact, as will be demonstrated, the court refused to recognize or follow a decision of this court material to the enforceability of the contract at issue and misapplied Tex.R.Civ.P. 166a to the facts. That the case involves legal issues of continuing public interest which are important to the jurisprudence of the state (and a matter of first impression) should not be overlooked merely because of the designation assigned by the Court of Appeals under Tex.R.App.P. 47.2(a). The case has spawned articles in The Texas Lawyer, The New York Times, Time, the Journal of Computer & Information Law, and numerous other newspapers, magazines and journals worldwide.
[2] As preserved for appellate review in the trial court (where necessary) and assigned as error in the Court of Appeals.
[3] The only proof offered to show that such “invention” existed at any time
was an overly optimistic statement made in a memorandum, dated April 19, 1996,
which Brown had submitted to Alcatel. (C.R.III at 802). In it he said: “I have developed a method of
converting machine executable binary code into a high level source code form .
. . to take existing executable programs and ‘reverse engineer’ the
intelligence from the programs and ‘re-code’ [it] into a portable high level
language.” Brown later claimed his “idea . . . solves the problem of converting
executable machine code into a specified high level language. The process involves extracting logic flow
and data references from the executable machine code. These references are then used to produce a
high level language source code.” Memo to Larry Sewell, dated June 28, 1996.
Fully automated “decompilation” is commonly
considered to be impossible because of the nature of the compilation
process. No two compilers act exactly
alike, so designing a single tool that can successfully reverse-engineer the
object code generated by a compiler is theoretically impossible. Current decompilation techniques rely on
external information, such as the type of compiler originally used to generate
the machine code, and generally require human input at various stages of the process.
Brown sent the letter for the purpose of securing a commitment from Alcatel as to the meaning or scope of the agreement, which might in turn permit him to pursue development of his idea free from any threat of interference from the company. Alcatel instead interpreted it as evidence that Brown had breached, or was threatening to breach, his obligations under the contract (though it initially offered to purchase Brown’s idea from him).
[4] Obviously, the trial judge and the plaintiff had very little means of knowing the true contents of Brown’s mind and thus the plaintiff could only operate on assumptions in protecting its perceived interests. But, that difficulty alone should not alter the requirements of Tex.R.Civ.P. 166a or, indeed, the quantum of proof required at trial. Without any proof that Brown or anyone else has ever actually performed an automated translation of computer languages or that his idea was as good as a working software program, it can only be said that Alcatel and the trial court jumped the gun. While it is certainly true that Brown could have purposely provided less information about his “algorithm” than he possesses, in order to say that his conduct constitutes a breach of the contract one must say that the term “conceived invention” reaches the mere memory of the human brain– a rather remarkable conclusion and one without support in the prior case law.
[5] A true invention must possess elements of novelty and utility in kind and measure different from and greater than that already available or known that is useful and advantageous in a pursuit of life and capable of adding to the enjoyment of mankind.
[6] This included assessment of monetary sanctions and the transfer of a 20% interest in Brown’s idea, supposedly as a sanction under Tex.R.Civ.P. 215.2 (5th Supp. C.R. at 2 ), as well as the entry of an injunction (C.R. I at 48) which required disclosure of Brown’s ideas to Alcatel prior to any determination Alcatel had any interest therein under the agreement (i.e., which granted Alcatel essentially the full relief it sought in the suit based solely on a finding of probable right of recovery). Cf. RP&R, Inc. v. Territo, 32 S.W.3d 396, 400-1 (Tex.App.– Houston [14th Dist.] 2000, no pet.) (temporary mandatory injunction requires that it be clearly established that the party seeking such relief is threatened with an actual irreparable injury or will experience extreme hardship if the injunction is not granted).
[7] Where the ultimate conclusion to be drawn from uncontradicted evidence would not necessarily be the only conclusion possible to be made from the same evidence by reasonable minds, such conclusion would be a conclusion of fact (precluding summary judgment), and not a conclusion of law. Gibson v. John D. Campbell & Co., 624 S.W.2d 728, 732 (Tex.App.– Fort Worth 1981, no writ). A movant’s own summary judgment evidence may establish existence of a genuine issue of material fact. Armbruster v. Memorial Southwest Hosp., 857 S.W.2d 938, 941(Tex.App.– Houston [1st Dist.] 1993, no writ).
[8] Throughout the litigation Brown consistently argued
over and over again that the solution was a mere intangible idea stored in his
brain. See e.g. C.R. I at 200-01, 203; 1st
Supp. C.R. at 113-14. Brown’s testimony
was only that his idea reached the stage that he decided he “wanted to pursue
it”. (1st Supp.C.R. at 62).
In his affidavit Brown stated:
The idea which I have developed is only in
my mind. There is no computer program,
computer model or any other tangible representation of [it]. Moreover, I have not written the idea down on
paper. * * * The idea needs a great
deal of further development and refinement before there is any chance of it functioning. It must be
meticulously documented and thoroughly tested
before I can even determine if my theory
will work in practice. At this point, I
have nothing more than an abstract idea to a perplexing problem.” (C.R. II at
682-3).
In
his response to Alcatel’s motion, Brown pointed out that his “idea does NOT
work and contains no new methods or algorithms” and asserted his idea “does NOT
meet the definition of ‘conceived’” and specifically observed that “DSC has FAILED
to product [sic] any evidence that Defendant’s idea qualifies as an invention.”
(1st Supp.C.R. at 97-8). Furthermore, after he spent many more hours
trying to put the idea into a tangible, useful form in an attempt to comply
with court-ordered “discovery”, he acknowledged that his idea was still just a
dream and certainly nowhere near the status of an “invention”. (1st
Supp. C.R. at 90). In the words of Alcatel: “Defendant admitted that the
Solution did not work . . . that he had run into an issue . . . and that his
idea for solving it had failed”. (C.R.
II at 513, 1st Supp. C.R. at 18)
Thus, even if the language of his letter could be construed to mean
Brown had invented a working computer program, other evidence showed it was no
more than an unproved intangible idea. At a minimum, the lower courts should
have recognized there existed a question about the extent to which Brown had
“disclosed” his ideas. The completeness
of his disclosure became a genuine issue of material fact.
[9] Even quasi-admissions are not treated as conclusive unless they were deliberately made, are clear and unequivocal, and a hypothesis of mistake or mere slip-of-the-tongue is eliminated. See Rios v. Texas Commerce Bancshares, Inc., 930 S.W.2d 809, 817 (Tex.App.– Corpus Christi 1996, rev. denied).
[10] Indeed, the agreement concluded by
making clear that it did “not constitute a contract of employment and that . .
. the company . . . can terminate the employment relationship at any time . .
.” See also Anderson
Chemical Co. v. Green, 66 S.W.3d 434, 438 (Tex.App.– Amarillo 2001, no
pet.).
[11] The Court of Appeals determined the “issues” of whether the contract violated public policy or was unconscionable or ambiguous were not properly raised by Brown’s responses to the motion for summary judgment and thus could not be considered as grounds for reversal (and thus need not be considered at all). Such issues are merely interrelated facets of whether the contract was valid– something which Alcatel had to show as a matter of law. E.g., Frazin v. Hanley, 130 S.W.3d 373, 376 (Tex.App.– Dallas 2004, no pet.). For example, a contract becomes unconscionable when one party receives insufficient consideration. Hence, even if not addressed in Brown’s responses (a point which he disputes), the “issues” were necessarily raised by Alcatel. A non-movant may always attack the legal sufficiency of grounds expressly presented to the trial court by the movant’s motion and the “precision” of legal arguments may be honed upon appeal so long as an entirely new theory is not involved. See Feldman v. Kohler, 918 S.W.2d 615, 626-7 (Tex.App.– El Paso 1996, rev. denied). What Brown seeks to have reviewed was part and parcel of the plaintiff’s cause of action, particularly since it cited in its motion (p. 15, fn. 61)cases in which these issues are discussed: Cubic Corp. v. Marty and Goldwasser v. Smith Corona Corp.. It cannot be gainsaid that this case involves the interpretation of the contract or the meaning of the words “conceived” and “invention” as used therein. See Hallmark v. Port/Cooper T. Smith Stevedoring Co., 907 S.W.2d 586, 590 (Tex.App.– Corpus Christi 1995, no pet.); see also A. W. Wright & Assoc., P.C. v. Glover, Anderson, Chandler & Uzick, L.L.P., 993 S.W.2d 466, 470 fn. 3 (Tex.App.– Houston [14th Dist.] 1999, rev. denied). In any event, the concerns about to be expressed must be taken into account in determining whether the contract was supported by consideration.
[12] In her article Inventors of the World, Unite! A Call for Collective Action by
Employee-Inventors, 37
[b]ecause
employee-inventors may themselves invest extraordinary amounts of time,
education, training, intellect, energy, and waking and sleeping thought to the
innovative and complex ideas they originate and reduce to practice, and because
such employee-inventors may not be able to secure any employment in their areas
of expertise unless they sign pre-invention assignment agreements. * * * it is
unjust that an employer reaps all of the rewards of a valuable patent * * * but
an employee-inventor who has also made a substantial investment in the invention
process * * * may not benefit at all.
[14] “Conceived” has been construed to mean at least “the formation in the mind of the inventor of a definite and permanent idea of the complete and operative invention”. Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572, 1577 (Fed.Cir. 1996). “Conception requires both the idea of the invention’s structure and possession of an operative method of making it.” Amgen, Inc. v. Chugai Pharmaceutical Co., Ltd., 927 F.2d 1200, 1206 (Fed.Cir. 1991). In other words, “conception is complete only when the idea is so clearly defined in the inventor’s mind that only ordinary skill would be necessary to reduce the invention to practice, without extensive research or experimentation.” Burroughs Wellcome Co. v. Barr Laboratories, Inc., 40 F.3d 1223, 1228 (Fed.Cir. 1994). Obviously, to reach the current result in this case a markedly different definition of this term is at work.
[15] Ambiguity can become an issue even if the parties were
to assert there was no ambiguity. North
Central Oil Corp. v.
[16] Alcatel alternatively sought (and might have been awarded) its fees under §37.009 of the Civil Practice and Remedies Code. But this statute even more pointedly provides that such an award must be equitable and just. Furthermore, it is clear Alcatel was merely seeking declaratory relief as an affirmative ground of recovery to revise or alter the parties contractual rights or legal relations and thus should have been denied any such relief . Jackson v. Houston Ind. Sch. Dist., 994 S.W.2d 396, 402-3 (Tex.App.– Houston [14th Dist.] 1999, no writ); Tucker v. Graham, 878 S.W.2d 681, 683 (Tex.App.– Eastland 1994, no writ); Sylvester v. Watkins, 538 S.W.2d 827, 831 (Tex.Civ.App.– 1976, writ ref’d n.r.e.). In any event, Alcatel’s declaratory judgment action overlapped with the relief sought under its breach of contract claims, precluding recovery of attorney’s fees under §37.009. INAC Corp. v. Underwriter’s at Lloyds, 56 S.W.3d 242, 256 (Tex.App.– Houston [14th Dist.] 2001, no pet.).