# Petition for Writ of Certiorari — Weres v. Weres > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_1056%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2002 - **Citation:** 535 U.S. 931 ## Text 1-104] IN THE Supreme Court of the United States OCTOBER TERM, 2001 OLEH WERES Petitioner, Vv. NANCY WERES Respondent. Petition for Writ of Certiorari to the California Court of Appeal, District 1 PETITION FOR WRIT OF CERTIORARI HAROLD D. MESSNER LYNN S. YOUNG 1021 Nebraska Street Counsel of Record Vallejo, CA 94590 NAPA LEGAL CLINIC (707) 557-8709 812 Third Street Napa, CA 94559 Counsel for Petitioner (707) 257-7333 Oleh Weres November 9, 2001 BBS RR TEER ag i CRESTLINE ONE REL LEAL ELI ELE IODA DELILE LL LLL QUESTIONS PRESENTED The U.S. Court of Appeals, 5" Circuit has ruled that copyrights acquired during marriage are separate property owned and controlled by the artist-spouse, but the net economic benefits therefrom are divisible community property under Louisiana’s community property regime. Most cases on point from several states accords with this decision in application to patents as well as copyrights, commonly apportioning more than half of future benefits to the inventor/ author spouse in recognition of post-marital efforts that may be needed to realize benefits. California courts hold that the patents or copyrights themselves, as well as the benefits flowing from them are community property to be divided equally at dissolution of marriage, giving the other spouse equal powers over the patent or copyright as tenants-in-common and precisely half of the postmarital economic benefits. This principle has been affirmed in the case at bench. Petitioner agrees that his former spouse should receive an equitable portion of future benefits from the marital patents. The questions presented, therefore, are: 1) Should the treatment of patents and copyrights in marriage be uniform nationwide? 2) During marriage and after dissolution, should titular ownership and control of the patent or copyright remain entirely with the inventor/ author? 3) After dissolution, should the spouse receive exactly one-half of the economic benefits flowing from the patent or copyright, regardless of postmarital efforts required of the inventor/author to realize these benefits? 4) May a state court transfer an inventor's obligations before his coinventors to inventor’s former spouse? 5) Should the same rules apply to patents and copyrights? ee (1i) PARTIES TO THE PROCEEDING Oleh Weres, PhD, Petitioner. | Nancy Henning Weres, MD, Respondent. RE a em (iii) TABLE OF CONTENTS Nee chi cae k as eee pan ess enede ee oases 1 ec cuecenveedens 1 CONSTITUTIONAL AND STATUTORY a 8 8 | eR.» 1 SEIS GI BOUEE GPRS ccc ccc crecccuceessvesecs 3 i se a cen ga tesenessdvbes eee 3 2. Proceedings Below ................. np Oe APNE 5 3. Marriage of Worth and California Law ............ 6 4. Decisional Law of Other States .................. 8 iy) PE UTE EPUCEENOOED oc ccc weccccseccecccese 10 6. Federal Questions Presented Below ............. 12 7. Summary and Prayer for Relief ................ 14 REASONS FOR GRANTING THE WRIT .............. 16 I. Certiorari Should be Granted to Promote National Uniformity Governing Ownership of Patents and DG ccbs caReveee ences echsdneeeseecese 17 II Certiorari Should be Granted Because Worth and Lorraine Cannot be Reconciled with Federal Statute III Certiorari Should be Granted Because Worth Favors Decisions that Damage the Value of the Patent Monopoly ....... FOP ETYETETeT TES TY TILE eee 22 (iv) IV Certiorari Should be Granted Because Worth Burdens Pe GD hak ec wesereesnsveeecevs 24 V_ Certiorari Should be Granted Because Worth Works to the Detriment of Third Parties ................. 27 CRE aoe 0-00-0005 cb0b4 0s oendee de eav erin ces 29 APPENDIX DOCUMENT 1 [Petitioner’s] Settlement Offers regarding Intellectual Property prepared July 1, 1999 ...........ccceecess 31 DOCUMENT 2 Notice of Tentative Decision ...............ceeeee 45 DOCUMENT 3 I ie I i ko 9 64s oevbeeckccsdsceseans 48 DOCUMENT 4 Further Judgement on Reserved Issues Setee eae heesAweeeuNeue sees ewhes bo kn Ke wanbaNes 53 DOCUMENT 5 Petitioner's Opening Brief to California Court of Appeals: Sections dealing with Federal Questions ........... 57 DOCUMENT 6 . Decision of the California Court of Appeal ......... 67 DOCUMENT 7 Review Denied by California Supreme Court ....... 82 (v) TABLE OF AUTHORITIES United States Constitution BAA EEEGD sccccdcccsccncscssceveneses 1, 12, 18, 24-26 PA ELEGGEGS cccccccvsvvcseveerceensss 1, 11-13, 18, 20, 23 po. erry errr rr ye ret ee 1, 12, 16, 22 Amend. XIV, § 1, c1.3 ......-cccceccecccceves L122 Federal Statutes pygit tem > |! ere eesdeedeMeeueecsneuneey 10 17 USC. § DOU) ... cc cccccccevecvecccccvcccones 11, 21 28 U.S.C. § 1257 (a) .. 0... cece ccc ccce cece cccccccccccees 1 fil ia) a eererrrrrrerr rr Tr rer rer rs 2,18 EME ois ee 2 Federal Courts Ager v. Murray, 105 U.S. 126 (1881) .....-.---+-+seees: 21 Barrows v. Jackson, 346 U.S. 249 (1953) ...----eseeeeeeee 27 Bonito Boats v. Thunder Craft Boats, 489 U.S. 141 (1989) ... 11, 17-19 (vi) Brown-Forman Distillers Corp. v. New York State Liquor Authority, PU EERE 660s ecccccvescrvevauessetesseeees 25 City or Burbank v. Lockheed Air Terminal Inc., 411 U.S. 624 SE ASKS is 00 4048 6000 600 000449606600055 00 C0NTT aR 18 Cooley v. Board of Wardens, 12 How. 299 (1851) .......... 18 Dean Milk Co. v. City of Madison, Wis., 340 U.S. 349 (1951) eR eeeNR Sha ees 26646808) 6000 t4needevnees oeuave nes 26 Edgar v. MITE Corporation, 457 U.S. 624 (1982) .......... 25 Florida Prepaid Postsecondary Education Expense Board v. College - Savings Bank, 527 U.S. 627 (1999) ....... cc ccc ceeecceeess 21 Hisquierdo v. Hisquierdo, 439 U.S. 572 (1979) ......... 16, 17 Jewett v. Atwood Suspender Co., 100 F. 647 (D.Verm. 1900) ... abate se ebwN +0 urws bu nye 000440495 09560000 0REsENserS 21 Pike v. Bruce Church, Inc., 137 U.S. 137 (1970) ............ 26 Rodrigue v. Rodrigue, 55 F.Supp.2d 534 (E.D.La. 1999) Serre cere re 10-13, 16-19, 21 Rodrigue v. Rodrigue, 218 F.3d 432 (5" Cir. 2000) [“ Rodrigue-2”] Pi eRa Rah aKe se Sexe deeqner end eesens 11-13, 17, 19, 26, 28 Sears, Roebuck & Co. v. Stiffel Company, 376 U.S. 225 (1964) ... Rink bag S hb ons Keke ENS koh saw eee RRL en 17 nics aks Raveou as pee 21 ap atti teil ee ee eS ee Nene as at eee Re (vii) State Statutes California Family Code § 760 ....-----seseeeererrreees 2 California Family Code § 771, subd. (a) ...-.----+++++05 2 California Family Code § 852, subd. (a) ......----+-+- 2,21 California Family Code § 1100, subd. (d) .....------- 2, 28 State Courts Dunn v. Dunn, 148 Utah Adv. Rep. 30, 802 P.2d 1314 (1990) : a es ce te Ed CESS POSSE POSE ELE ES OST OOO Hazard v. Hazard, 833 S.W.2d 911 (Tenn.App. 1991) .. 10, 14 In re Marriage of Heinze, 257 Ill.App.3d 782, 631 N.E.2d 728 OE. cnc crinwesucendectacersacesnsereerestness 9,19 Kinchen, Wife of Howes v. Howes, 436 So.2d 689, (Louis. App.1983) ...-.-++seeeereeeereee renee srteses: 10 Lorraine v. Lorraine, 8 Cal.App.2d 687 (1935) .. 7,8, 13, 16, 17, 19 McDougal v. McDougal, 38 USPQ 2d, 1842 (Mich. Sup. Ct. 1996) oe 3k Kabra aud Ru NHR e REDE SORES WEEN E ORO 9 In re Marriage of Monslow, 259 Kan. 412, 912 P.2d 735 (1996) 9, 14, 19 In re Marriage of Worth, 195 Cal.App.3d 768 (1987) ... passim - (viii) Law Reviews and Treatises McCahey et al.,Valuation and distribution of marital property, ore oer e TTT OPEC ETT TT PeE PCE re 8 F.M. Nevins, Jr., When an Author's Marriage Dies: The Copyright- Divorce Connection, 37 J. Copyright Soc. USA 382 (1990) .. 7 D. Nimmer, Copyright ownership by the marital community: evaluating Worth , 36 UCLA L.Rev. 383 (1988) ...... 7,18, 22 Nimmer on Copyright, §6A.03[C] and n. 50 (1992) ......... 8 M.J. Perlstein, Copyright as Community Property: Questions About Worth Are More Than Merely Trivial, No. 11 Enter. Law Rep. 3 SPUN cd tne van bere sedans Sedeeerneveeriunsvebleceters 7 D. Polachek, The ‘Un-Worth-y’ Decision: The Characterization of Copyright as Community Property, 17 Hastings Comm./Ent. L.J. of RARE eer rr rrr rT yr Terr er ree 8, 20 C.M. Roberts, Worthy of Rejection: Copyright as Community Property, 100 Yale L.J. 1053 (1991) ................. 7, 23-25 l Oleh Weres hereby petitions for a writ of certiorari to review the judgement of the California Court of Appeal in this case. Q?iNIONS BELOW The opinions beiow were not published. They are included in the Appendix as Documents 2,3,4 and 6. JURISDICTION The California Court of Appeal affirmed the decision of the Trial Court on April 23, 2001 in an unpublished decision. The California Supreme Court denied certiorari August 15, 2001. This Court has jurisdiction under 28 U.S.C. § 1257 (a). CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED Article 1, section 8, clause 3 of the Constitution provides: “Congress shall have the power ... to regulate Commerce with foreign Nations, and among the several States ...” Article 1, section 8, clause 8 of the Constitution provides: “Congress shall have the power ... to promote the Progress of Science and the useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their Respective Writings and Discoveries.” Article 6, clause 2 of the Constitution provides: “This Constitution, and the laws of the United States which shall be made in pursuance thereof ... shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” Amendment 14, sect. 1, cl. 3 of the Constitution provides: a neiemeiammemaiiameaatn 2 “...nor shall any State deprive any person of life, liberty, or property, without due process of law ...” 35 U.S.C. §101 provides: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor ...” 35 U.S.C. §261 provides: “... [P]atents shall have the attributes of personal property ... Applications for patent, patents or any interest therein shall be assignable in law by an instrument in writing.” California Family Code §760 provides: “Except as provided by statute, all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property.” California Family Code §771, subd. (a) provides: “The earnings and accumulations of a spouse ... while living separate and apart from the other spouse, are the separate property of the spouse.” California Family Code §852, subd. (a) provides: “A transmutation [from separate to community] of real or personal property is not valid unless made in writing by an express declaration ... by the spouse whose interest in the property is adversely affected.” California Family Code §1100, subd. (d) provides: “ .. [A] spouse who is operating or managing a business ... that is all or substantially all community personal property has the primary management and control of the business ... Primary management and control means that the managing spouse may act alone in all transactions ...” _ WO Bier ica tthe Zo PO eee we ee ees “ 3 STATEMENT OF THE CASE 1. Facts of the Case. Oleh Weres, a chemist, and Nancy Henning Weres, a pediatrician, were married in 1974 and separated February 10, 1996. Respondent was in private practice in Sonoma, California, while Petitioner was, nd continues to be, owner of Sonoma Research Company, located in Napa, California. The only matter tried (commencing July 8, 1999) was disposition of Petitioner’s part interest in certain patents and patent applications. The tec hnology represented by the marital patents was, and remains, neither fully developed nor marketable. Since separation, Petitioner has invested practically his entire efforts in trying to perfect the technology described in the patents and make it economically viable. Evidence and expert testimony presented at the trial indicated that at the date of separation and the date of trial, the patents had no ascertainable pecuniary value. However, Petitioner testified that he intends to keep working on these technologies in the hope and expectation that eventually they 1 The three patents obtained during marriage relate to an electrochemical rocess for purifying wastewater, primarily on Naval vessels and in machine shops (RT 25:18-27:27; 101:2-6;256:22-257:6; CT 216-227). A fourth patent resulted from an application filed just prior to separation; it describes a method for increasing the power output of electric power plants (RT 105:3- 18). A minority community interest in a fifth patent filed two years after separation is also involved (RT 12:9-17; 544:4-545:4). In all cases, Petitioner owns a partial interest in the patents, together with co-inventors who rely on Petitioner to advance and represent their interests as well as his own (RT 82:5-25; 109:2-23; 509:4-19). 2 _Unrefuted testimony at RT 31:10-33:4; 59-17-23; 61:1-5; 64:23-65:4; 74:12- 17; 93:3-20; 99:19-23; 105:19-106:7; 106:25-108:3; 265:22-25. 3 Unrefuted documentary evidence at CT 471-489; CT 490-493. Testimony at RT 41:21-23; 51:16-52:3; 62:12-63:13; 275:4-10; 267:27-268:3. 4 will become commercially viable.‘ The parties agreed and the courts below found that the technology described in the patents could become quite valuable if perfected and successfully commercialized. Petitioner received $373,613 in external funding (mostly from US Government agencies) for research and development related to the technologies before the date of separation, and an additional $924,440 in funding and commitments between the date of separation and date of trial. This funding support documents the faith that expert third parties have placed in Petitioner's abilities to perfect the technologies, and shows that the specific issues in this case are neither moot nor hypothetical. The basic facts of the case summarized above were undisputed. Such “factual” disagreements as there were amounted to speculation about the future,’ imaginative reading of the transcript,’ and simple misstatements of fact.” * Unrefuted testimony at RT 59:24-60:1; 104:22-105:2; 265:26-266:1; 531:25- 532:10; 536:22-537:2. 5 See fn. 10 below. For example, the California Court of Appeal accepted Respondent's contention that “there is substantial evidence in the record that the marital patents could become valuable by the technological advancements of researchers other than Petitioner” (p. 76 in the Appendix). In fact, the testimony cited establishes only that other companies probably are working on different, competing water purification technologies (RT 99:19-100:7), and that some years ago other companies patented distantly similar electrodes that serve entirely different industrial applications (RT 270:19-271:5; 272:4- 16). 7 In her Answer to Petition for [California] Supreme Court Review at p. 27, Respondent asserted she had supported Petitioner while he worked on the patents. This assertion is totally untrue, and conflicts with the record; for example, in 1995 (the last year before separation) Petitioner earned $98,753 (CT 380) while Respondent earned $64,299 (CT 373, 381). 2 In any event, the matters disputed are not dispositive of the federal issues. 2. Proceedings Below. At trial in Napa County Superior Court, Petitioner requested one of two decisions: (1) award the patents to Petitioner and reimburse the community for unreimbursed efforts and expenses invested in developing and patenting the technology during the marriage ($84,482), or (2) awerd the patents to Petitioner and award Respondent a fraction of future benefits arising therefrom commensurate with the community’s contribution to bringing the technology in the patents to the point of realizing benefits. These offers were set forth in detail in a document titled Settlement Offers regarding Intellectual Property which the trial court accepted into evidence and is included in the Appendix to this Petition as Document 1. Respondent asked the Court to divide ownership of the patents and future benefits in kind, give her equal authority over the patents, register her half-interest with the US Patent Office, and leave allocation and distribution of future benefits under the jurisdiction of the Court. The Trial Court found the instant case to be one of first impression where the issues are primarily legal, and the facts little disputed: “Each side has argued the applicable legal principles articulately and the issue, oddly enough in today’s high tech age, appears to be one of first impression.” (Notice of Tentative Decision, p. 46 in the Appendix) ... “Well, are the facts really in dispute here? The impression is that the dispute is really more of a legal dispute over how do you puta value on something that is at this point somewhat intangible.” (RT 14:16-21) ... “I don’t think anybody-is contending that it had any market value. ... And that’s the problem. What do I do with it in a marital dissolution?” (RT 52:22-27) ... “... what I think is primarily a legal issue of how to divide them up?” (RT 257:15-20) On October 13, 1999 the Trial Court issued a Notice of Tentative Decision (Appendix, Document 2), ruling entirely in favor of Respondent. Respondent’s counsel prepared the Statement of Decision (Appendix, Document 3) and the Further Judgement on Reserved Issues (Appendix, Document 4) which were filed January 18, 2000. Each spouse was awarded an undivided half-interest in the patents-and future benefits as tenants-in-common with all provisions as requested by Respondent. Petitioner was given no credit for his post- separation efforts, investments and hardship which continue to be needed to bring the technology in the patents to the point of realizing benefits. The Court reserved “jurisdiction over the valuation and allocation issues until such time as the issue is ripe for adjudication” (Appendix, p. 46). On March 10, 2000, Petitioner filed notice appealing the Court's Decision and Judgement on Reserved Issues. On April 23, 2001, the California Court of Appeal (1* Dist., Div. 1) affirmed the judgement of the Trial Court in its entirety (Appendix, Document 6). Subsequently, Petitioner petitioned the California Supreme Court for certiorari. The California Supreme Court extended the time for deciding the petition by thirty days, but the petition was denied August 15, 2001 (Appendix, Document 7). 3. Marriage of Worth and California Law. In California and the other community property states (Arizona, Idaho, Louisiana, Nevada, New Mexico, Texas and Washington) property acquired during marriage through the efforts of either spouse belongs to the community. In most other states, it becomes “marital property,” which is treated much the same as community property at dissolution. Few cases have dealt with patents or copyrights in relation to marriage. The most influential case on point is In re Marriage of Worth, 195 Cal.App.3d 768 (1987) which has been cited by courts nationwide. In Worth, the California Court of — ee ee 2 7 Appeal (1 Dist., Div.1, the same District and Division as affirmed in the instant case) ruled that copyrights acquired during marriage were community property and so remained if not otherwise allocated in the property settlement. The post- marital benefits issuing from community property copyrights, including proceeds from infringement suits, were found also to be divisible community property, to be divided equally between the spouses. Marriage of Worth is silent regarding control and management of the copyrights, implicitly referring this question to the general principals that govern community property in California; that is, the spouses have equal authority over the copyrights. Earlier, the California Court of Appeal had ruled in Lorraine v. Lorraine, 8 Cal.App.2d 687 (1935) that the patents issuing from applications filed during the marriage were presumed to be community property. Lorraine has also been relied on by courts in other states. Post-separation efforts of the inventor / author spouse were not an issue in either case. The precedential value of both cases is, in fact, tenuous, because the issues actually decided were much narrower than the broad principles that these cases are cited for. In Worth, the parties had agreed by stipulation to divide royalties received for books written during marriage, and the court actually divided only. the contingent proceeds (which never materialized) from a copyright infringement suit. In Lorraine, wife had invested separate property funds in husband's inventive efforts and the parties had agreed to divide contingent future benefits between them. Marriage of Worth has been widely discussed and much criticized in law reviews and treatises, for example: D. Nimmer, Copyright ownership by the marital community: evaluating Worth, 36 UCLA L.Rev. 383 (1988); MJ. Perlstein, Copyright as Community Property: Questions About Worth Are More Than Merely Trivial, No. 11 Enter. Law Rep. 3 (1988); F.M. Nevins, Jr., When an Author's Marriage Dies: The Copyright- Divorce Connection, 37 J. Copyright Soc. USA 382 (1990); C.M. 8 Roberts, Worthy of Rejection: Copyright as Community Property, 100 Yale L.J. 1053 (1991); Nimmer on Copyright, §6A.03[C] and n. 50 (1992); D. Polachek, The ‘Un-Worth-y’ Decision: The Characterization of Copyright as Community Property, 17 Hastings Comm./Ent. LJ. 601 (1995); McCahey et al., Valuation and distribution of marital property, §23.07 (2000). Most of the criticisms are relevant to patents and Lorraine as well as to copyrights and Worth. Petitioner has relied upon and quoted several of the commentaries in his arguments set forth below. Most of these commentators agree that the spouse should receive an equitable share of the economic benefits of a copyright obtained during marriage, but object to giving the spouse equal control over the copyright, during marriage and even more so after dissolution. Proposals for dividing the community interest in the copyright at dissolution include: (i) Award ownership and complete control of the copyright to the author, and compensate the community for the value of the copyright at date of separation, or (ii) Award ownership and complete control of the copyright to the author, and give the spouse a fraction of postmarital income from the copyright that fairly reflects the extent to which effort needed to realize economic benefits was invested during the existence of the marital community. 4. Decisional Law of Other States. The courts of other states have generally agreed that a patent or copyright acquired during marriage belongs to the marital community, and have sometimes relied on Worth and Lorraine. However, most courts outside of California have exercised their discretion in a manner which compensates for Worth’s defects, which were illustrated by the instant case. All analogous cases from other states involving patents or copyrights where the author/inventor spouse’s post-marital efforts were needed to realize benefits were adjudicated following the second approach suggested by the commentators 9 and set forth above: give the inventor/author ownership and complete control of the patent/ copyright, but give the spouse a fraction of the post-marital benefits commensurate with the post-marital efforts that may be required of the inventor / author to realize these benefits. Petitioner’s second proposal to settle the patent issue accords with this approach (Appendix, pp. 38-41). In In re Marriage of Monslow, 259 Kan. 412, 912 P.2d 735 (1996) the Kansas Supreme Court affirmed giving inventor- husband full ownership of patents and 60% of future proceeds from selling or licensing the patents, to be divided after reimbursing him for expenses related to further development, marketing and defense of the patents, with a generous imputed rate of return to compensate him for the large financial risk involved (Id. at 741). The inverse situation was adjudicated in McDougal v. McDougal, 38 USPQ2d 1842 (Mich. Sup. Ct. 1996). When he married, husband owned some patents that had no apparent value. While married, husband, with wife’s help, pursued - infringers, and these efforts resulted in highly beneficial licensing agreements. The Michigan Supreme Court ordered net royalties from the licenses concluded during marriage divided between the parties, but refused to award wife any part of the actual patents or proceeds from licenses that might be concluded after dissolution. In In re Marriage of Heinze, 257 Ill.App.3d 782, 631 N.E.2d 728 the Illinois Court of Appeal awarded husband 25% of net royalty income from five books that wife had written during marriage, and explicitly stated that royalties from a sixth book written after the marriage were entirely separate property of the author-wife. The award to husband was limited to 25% in recognition of wife’s continuing efforts to promote sales of the marital books. In Gallo v. Gallo, 184 Conn. 36, 440 A.2d 782 (1981) the Connecticut Supreme Court awarded the wife 20% of royalties 10 from husband's books written during marriage for a period of five years following dissolution (Id. at 788). Hazard v. Hazard, 833 S.W.2d 911 (Tenn.App. 1991) provides the nearest precedent to the instant case. Inventor- husband had licensed a medical device during marriage. The device was successfully test marketed, but had been withdrawn from market after a patient had died (Id. at 913). The Tennessee Court of Appeal affirmed an award of 20% of future royalties to wife. As in the instant case, the invention needed further development to realize royalty income. If the marital patent or copyright is already licensed and generating royalties at date of separation with minimal further effort required of spouse, this approach would give each spouse 50% of net royalties. In Dunn v. Dunn, 148 Utah Adv. Rep. 30, 802 P.2d 1314 (1990) the patents were already licensed. The Utah Court of Appeal allowed husband to be compensated for his postmarital efforts and awarded half of net royalties remaining to wife. The ruling in the instant case accords with one published case only, with very different facts. In Kinchen, Wife of Howes v. Howes, 436 So.2d 689 (Louis.App.1983) the husband had attempted to conceal the existence of the patent from the wife by fraudulent means and the Louisiana courts awarded wife one-half undivided interest in the patents and future royalty payments. In Howes the invention had been licensed shortly after the dissolution and was already earning royalties. 5. The Rodrigue Decisions. In Marriage of Worth, supra 195 Cal.App.3d at 774 the California Court of Appeal recognized that by action of the federal copyright statute (17 U.S.C. §201(a)) a copyright initially vests in the author spouse, but concluded that” ... the copyright is automatically transferred to both spouses by operation of the California law of community property.” [emphasis added] In Rodrigue v. Rodrigue, 55 F.Supp.2d 534 (E.D.La. 1999) © 11 (herein-after Rodrigue-1) the Federal District Court ruled that copyrights obtained by the painter-husband during marriage were his separate property. The District Court agreed with husband’s arguments that federal statute preempts Louisiana's community property law, and relied heavily on this Court's holding in Bonito Boats v. Thunder Craft Boats, 489 U.S. 141 (1989) which emphasized national uniformity as one of the fundamental purposes of the Patent and Copyright Clause In Rodrigue-1 at 542-543 the District Court considered and explicitly rejected the Worth court’s arguments, holding that 17 US.C. §201(e), which prohibits involuntary transfer of a copyright, precludes “ automatic” transfer of a copyright to the community. The Rodrigue-1 court at pp. 543-544 rejected the argument that by living in a community property state the author-spouse implied voluntary transfer of copyrights created during marriage to the community. Finally, the court suggested that Congress act to allow states to treat the economic benefits from a copyright obtained in marriage as divisible community property, while leaving the copyright itself the property of the author spouse, and under his management (Id. at 546-547). Subsequently, Rodrigue-1 was modified in Rodrigue v. Rodrigue, 218 F.3d 432 (5" Cir. 2000) [hereinafter Rodrigue-2] wherein the U.S. Court of Appeal found a way to do just what the District Court had suggested, ruling that copyrights acquired during marriage in Louisiana are separate property completely to be owned and controlled by painter-husband, while the net economic benefits that flow from the copyrights are divisible community property. The Circuit Court ordered ‘this one modification only, and the rest of the Rodrigue-1 decision remains good law. The ruling in Rodrigue-2 accords with case law from several states summarized above, excluding California and Louisiana. The Rodrigue courts did not address the issue of post-marital efforts. The copyrights were already commercially successful 12 at date of separation, and wife had asked the state court to award her 30% of gross proceeds from the marital copyrights, suggesting recognition that husband’s post-marital efforts would be needed to realize benefits." The painter/husband subsequently petitioned this Court for a certiorari review of Rodrigue-2, but his petition was denied (00-1059). 6. Federal Questions Presented Below. Petitioner's arguments at trial relied on California state law grounds only. At that time, Rodrigue-1 was under appeal, and could not be used. Rodrigue-2 issued when the instant case was already under appeal, However, the proposals offered by Petitioner at trial accord with case law from other states and with Rodrigue-2. Arguments based on the Rodrigue decisions, on the Patent and Copyright Clause, on the Supremacy Clause, on the patent statute, and on case law of other states were presented to the California Court of Appeal, and subsequently in Petitioner’s Petition for [California] Supreme Court Review. The Commerce Clause and Due Process Clause were not relied on below, but are implicit in certain arguments that were presented on state law grounds (quoted in the Appendix, pp. 57-60). Those sections of Petitioner’s Appellant’s Opening Brief in the California Court of Appeal which deal with Federal questions are included in the Appendix as Document 5. Most of the cases from other states reviewed above were reviewed in Petitioner’s Appellant’s Opening Brief. The same arguments were presented in Petitioner’s Petition for [California] Supreme Court Review. Thus, the California Court of Appeal and the California Supreme Court were well aware of the federal questions involved and the decisional law of other states, and had ample opportunity to address them. Indeed, Petitioner ° Federal District Court, E.D. Louisiana, Case No. 95-2862 (Rodrigue-/), [Plaintiffs' Original] Complaint, filed August 30, 1995, para. 27 on p. 7. 13 explicitly recommended the instant case to the California courts as an appropriate vehicle to reconcile California decisional law (as set forth in Lorraine v. Lorraine and Marriage of Worth) with the Rodrigue decisions. The California Court of Appeal acknowledged the scholarly critiques of Worth and briefly noted Petitioner's arguments based on the U.S. Constitution, Federal statute, and the Rodrigue decisions, but rejected them, affirming Worth: Finally, Husband invokes federal patent law. He contends that the trial court’s award of one-half interest in the marital patents to Wife violates federal law - specifically, the patents and copyrights clause [sic] ... and the federal patent statutes ... But in the analogous area of community property ownership interests in copyrights, we have previously held that federal law does not preempt California community property law. (In re Marriage of Worth, supra, 195 Cal.App.3d at pp. 776-778.) ... We are persuaded that despite scholarly criticism, Marriage of Worth controls. Federal law does not preempt California community property law regarding the ownership of community property patents under the facts of this case, and a family law court may award an equal, undivided interest in a community property patent to the spouse who did not perfect the patent. Under the unique facts of this case where the value of the patents is unknown, community property interests can coexist with federal patent law under the retained jurisdiction of the trial court. This case does not present a direct and irreconcilable clash between state and federal law warranting preemption. The trial court’s decision does not place stumbling blocks in the way of fostering creative inventiveness. (Appendix, pp. 79-81). 14 The California Court of Appeal discounted case law on point from other, common law, states: In its discretion, the trial court in Monslow awarded complete ownership in the patents to the spouse who perfected them, and awarded the other spouse a share in future income. As we read Monslow, this discretionary division was not an inevitable result of the court’s conclusion that patents could be divided without determination of present value. (Appendix, p. 76, fn. 5) Husband's considerable reliance on Hazard v. Hazard ... is misplaced. ... In affirming, the Court of Appeals of Tennessee ... found the device a marital asset subject to division, and concluded that the 20 percent share of future income was “an equitable method of making a division of this particular asset.” ... [I]t is not even clear from the opinion whether Tennessee is a community property state. As far as we know, it is not. ... In any event, the Tennessee appellate court's terse affirmance of a particular division as “equitable” does not dictate a reversal of the California trial court in the case before us. (Appendix, p. 77, fn. 6) 7. Summary and Prayer for Relief. The decision below comprises five logical elements, all of which were explicitly or implicitly present in Marriage of Worth: 1. Respondent will share in the future benefits from the patents that Petitioner received during the existence of the marital community; 2. Respondent will receive exactly one-half of future | economic benefits from these patents, regardless of how ) much post-marital effort is required of Petitioner to perfect the technologies in them and realize the benefits; 3. Respondent is awarded an undivided half-interest in the | 15 patents as tenant-in-common in perpetuity, and her interest is to be registered with the US Patent and Trademark Office; 4. Respondent and Petitioner are given precisely equal authority over the patents, and Respondent has veto power over anything that Petitioner may wish to do with the patents or the technologies protected by them; and 5. The Trial Court reserves jurisdiction “to allocate and divide any and all benefits that may be received as a result of the ... patents ... or the technologies described therein and/or protected thereby between the parties” (Further Judgement on Reserved Issues, Appendix, p. 56). Petitioner has no quarrel with the first provision which is fair and solidly grounded in state law. However, the other four provisions are extraordinary measures rarely applied to other kinds of assets. The second provision conflicts with Cal. Fam. Code §771, subd.(a) because it credits the community with accumulations resulting from Petitioner’s post-separation efforts. The last three provisions conflict with public policy favoring a clean break when a marriage is dissolved. The juxtaposition of these four unusual provisions amounts to promulgation of a state rule specific to patents and copyrights, which damages several Federal interests. Petitioner prays that this Court direct the courts below to revise the instant judgement to accord with the Fifth Circuit's decision in Rodrigue-2 and the several decisions of other state courts cited above: award Petitioner ownership and full control of the patents, and award Respondent a fraction of future benefits commensurate with the community's contribution to realizing these benefits. Or, in the alternative, let Petitioner reimburse the community estate for community efforts and investments sunk in the patents, and be done with it. ae a ae See __—__________ 16 REASONS FOR GRANTING THE WRIT Lorraine v. Lorraine and Marriage of Worth define the status of patents and copyrights in marriage under California's community property regime. In Rodrigue-2 the Fifth Circuit U.S. Court of Appeal ruled that the net economic benefits of a copyright obtained in marriage are divisible community property, but let stand the District Court's decision in Rodrigue- 1 that, for important federal reasons, ownership and management of the copyright must remain with the painter spouse. Petitioner has consistently asked the California courts for a decision that accords with Rodrigue-2 and cases on point from several other states, but the state courts below have affirmed the trial court’s decision, which conflicts with the Rodrigue decisions. Therefore, certiorari should be granted under Rule 10 (b) of this Court. Because patents and copyrights are creatures of the U.S. Constitution and federal statute, laws that govern their ownership are important matters of public policy, and should be uniform throughout the land. This Court has not previously ruled on how patents and copyrights should be treated in marriage and at dissolution, and the conflicting rulings below indicate the need for guidance by this Court. Therefore, certiorari should be granted under Rule 10 (c) of this Court. Petitioner respectfully notes this Court's rule set forth in Hisquierdo v. Hisquierdo, 439 U.S. 572 (1979) wherein California community property law was held preempted by the Railroad Retirement Act: State family and family-property law must do major damage to clear and substantial federal interests before the Supremacy Clause will demand that state law be overridden. (Id. at 581) Specifically in application to patent law, this Court earlier held: These laws, like cther laws of the United States enacted 17 pursuant to constitutional authority, are the supreme law of the land. ... When state law touches upon the area of these federal statutes, it is familiar doctrine that the federal policy may not be set to naught, or its benefits denied by state law. ... This is true, of course, even if the state law is enacted in the exercise of otherwise undoubted state power. (Sears, Roebuck & Co. v. Stiffel Company, 376 USS. 225 (1964) at 229). In Rodrigue-1, supra, 55 F Supp.2d at 538 the District Court applied the rule set forth in Hisquierdo and concluded that Louisiana community property law conflicts with the federal copyright statute and does “major damage to the substantial federal interest in providing exclusive rights to authors,” thereby warranting preemption (Id. at 541). ° Petitioner respectfully submits that Worth and Lorraine, insofar as they divide ownership and management, also do major damage to federal interests related to patents as well as copyrights, warranting preemption and override by this Court. Application of this Court’s well-established balancing tests reinforces the conclusion that Worth should be overridden, because there is, in fact, a less damaging approach available to the state courts below: implement rules that accord with the Rodrigue decisions and cases on point from several other states. I. Certiorari Should be Granted to Promote National Uniformity Governing Ownership of Patents and Copyrights. In Bonito Boats v. Thunder Craft Boats, supra, 489 US. 141 at 162 this Court stressed the need for national uniformity in ° The Rodrigue-2 court rejected George Rodrigue’s claim that dividing net benefits of the copyrights would cause “major damage” for purposes of the Hisquierdo test (218 F.3d at 440). However, the Rodrigue-2 court did not criticize and let stand the District Court’s ruling that ownership and management of the copyrights should remain with George. 18 regards to patents: One of the fundamental purposes behind the Patent and Copyright Clause of the Constitution was to promote national uniformity in the realm of intellectual property. Because the monopoly confirmed by ‘patents and copyrights is coextensive with the United States, they are inherently objects of interstate commerce. Marriage of Worth effectively established a set of rules that apply only to copyrights and patents. This Court has long held: Whatever subjects of this power [to regulate commerce] are in their nature national, or admit only of one uniform system, or plan or regulation, may justly be said to be of such a nature as to require exclusive legislation of Congress. (City or Burbank v. Lockheed Air Terminal Inc., 411 U.S. 624 (1973) at 625, quoting Cooley v. Board of Wardens, 12 How. 299 (1851).) Petitioner submits that the rules governing patents as property “are in their nature national,” whereby Worth and Lorraine should be preempted by a literal construction of 35 U.S.C. 101, at least in regard to titular ownership and management of patents obtained in marriage. Nimmer, supra, 36 UCLA L.R. at 396-397 and other commentators have correctly noted that California’s establishment of rules of ownership (set forth in Marriage of Worth) which apply in one state only threatens “ Balkanization” of the law. A prospective licensee from another state trying to license a copyright or patent from an author/inventor in California would not be sure, for example, if the author/inventor’s spouse need also approve the license. In Rodrigue-1 the Federal District Court quoted Bonito Boats and relied on Nimmer’s arguments in support of its ruling overriding Worth: To deem copyrights to be community property would 19 risk inflicting major damage on the goals of predictability and certainty of copyright ownership, national uniformity, and avoidance of the practical difficulties of determining and enforcing an author’s rights under the differing laws of the various states. (Rodrigue-1 at 546) The California Court of Appeal’s observation that California is a community property state is immaterial to this case. The Fifth Circuit encompasses two community property states, and the Rodrigue decisions explicitly preempted Louisiana’s community property regime. The decisions from common law states cited above all set out from the assumption that a copyright or patent acquired during existence of the marital community is part of the marital estate which is to be divided in the marital property settlement. In Marriage of Heinze, supra, 631 N.E.2d at 730-731 the Illinois Court of Appeal explicitly relied on Marriage of Worth as valid precedent, noting that equal division of “marital property” at dissolution is much the same as division of “community property.” In Marriage of Monslow, supra, 912 P.2d at 744 the Kansas Supreme Court relied on Lorraine v. Lorraine. The distinction between “community property” and “marital property” is immaterial to the questions presented here, and should not stand in the way of national uniformity. II Certiorari Should be Granted Because Worth and Lorraine Cannot be Reconciled with Federal Statute In Bonito Boats v. Thunder Craft Boats, supra, 489 U.S. 141 this Court overruled a Florida statute which granted boat-makers a degree of patent-like protection for their designs, because: [The Florida law] thus enters a field of regulation which the patent laws have reserved to Congress. The patent statute’s careful balance between public right and private monopoly to promote certain creative activity isa scheme of Federal regulation so pervasive 20 as to make reasonable the inference that Congress left no room for the states to supplement it. (Id. at 167) [internal quotes and ellipses deleted] Polacheck, supra, 17 Hastings Comm/Ent L.J. at 620-621, fn. 115 correctly concluded: Applying the reasoning in Bonito Boats to the facts of Worth, preemption of stat@community property law is necessary since fundamental goals of the Constitution, those of fostering incentive for authors to create and enabling national uniformity, are frustrated. California community property law protects the property right of the non-author spouse by vesting both spouses with co-ownership of the copyright. This directly conflicts with Federal law, which states that the author of a work has certain exclusive rights for a period of time. The patent statute provides for transfer- of patent applications and patents, but ordinarily transfer occurs in a manner which upholds the fundamental goals of fostering creativity and promoting effective exploitation of the technology. Commonly, a patent right is transferred by assignment or license for monetary consideration or under the terms of an employment agreement or research contract if the invention is a work for hire. In all cases, the assignee or licensee gains his rights by rewarding the inventor, and the patent right ends up with someone willing and able to exploit the technology. In the instant case, the courts below have relied on Worth to award Respondent one-half of the patent right, whereby equal control and veto power over the patents have passed to a person who is neither able to exploit the technology nor to develop it further. Instead of furthering invention, the courts below have placed an anchor on the inventor's ability to advance the technology and commercialize it. This result is directly contrary to the public policy expressed and embodied in the patent statute and the Patent and Copyright Clause of 21 the Constitution. The Federal District Court in Rodrigue-1 rejected the Worth court’s theory of automatic transfer to the marital community, relying on 17 U.S.C. §201(e) to conclude that ownership of copyright cannot be transferred against the author’s will. An analogous argument applies to patents. Federal courts have consistently held that “since a patent is a creature of federal statutory law, it may be transferred only in the manner provided by such law” (University Patents, Inc. v. Kligman, 762 F.Supp. 1212 (E.D.Pa. 1991) at 1219) “... which the state statutes cannot affect” (Jewett v. Atwood Suspender Co., 100 F. 647 (D.Verm. 1900) at 648). 35 US Code §261 specifies that “applications for patent, patents or any interest therein, shall be assignable in law by an instrument in writing.” California Family Code §852, subd. (a) specifies that a transfer of separate property to the community “... is not valid unless made in writing by an express declaration ...”._ Thus, both Federal and California law bar the “automatic” transfer of a patent to the marital community unsupported by a written instrument executed by the inventor or his legal representative. As with copyrights, a patent obtained in marriage remains separate property of the inventor. This Court long ago concluded that a patent or copyright could be transferred by court order in personam but not in rem, because the patent right is coextensive with the United States and thereby not entirely within the jurisdiction of any court (save this Court) (Ager v. Murray, 105 U.S. 126 (1881) at 130- 131). Because the California community property statute acts in rem (it defines the nature of property obtained in marriage), it cannot affect the automatic transmutation into community property posited in Worth. In Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, 527 U.S. 627 (1999) at 642 this Court recently affirmed the principle that 22 A patent for an invention is as much property as a patent for land. As such, they are surely included within the “property” of which no person may be deprived by a State without due process of law. In principle, a patent might be assigned to the community by signature of an officer of the court acting pursuant to a court order in personam, but it is difficult to see how such a court order might arise without violating Fourteenth Amendment due process. III Certiorari Should be Granted Because Worth Favors Decisions that Damage the Value of the Patent Monopoly The advantages of the patent monopoly are both public and private: the public benefits because the progress of science and the useful arts is promoted, and the inventor benefits by receiving potentially valuable property; that is, a patent. Nimmer, supra, 36 UCLA L.Rev. at 412 asked the state legislature and the courts to develop a legal framework that respects this principle governing copyrights as a species of community property: [T]he goal must be to preserve the rights of authors’ spouses while not impinging on the authors’ ability effectively to exploit their copyrights. Any scheme that lessens the possibility of such exploitation not only harms both the author and the nonauthor-spouse, but also undermines Congress’ purpose in enacting the copyright laws: to encourage authorship. This factor militates once again towards [Federal] preemption. Testimony at trial indicated that the a decision following Marriage of Worth will (1) impair the value of the patents, thereby impairing the private benefit of the patents, and (2) may hinder commercial exploitation of the technology in them, 23 thereby obstructing realization of the public benefit.’° By favoring decisions that damage both the public and the private advantages of the patent monopoly, Worth frustrates the intent of the patent statute and the Constitution. Roberts, supra, 100 Yale L.J. at 1062 correctly noted that Worth acts as a disincentive to further creativity by denying authors full control over how to best exploit their works. The instant case illustrates the problem, because the decision below has given Respondent veto power over Petitioner’s exploitation of the technologies protected by the marital patents, which is the focus of his business and his work. Roberts also noted that the divided authority over marital copyrights favored under Worth can seriously hurt the value of the artist’s post-separation works, and limit his post-separation earnings; basically, the spouse can be expected to maximize her benefits from the marital copyrights, even if it hurts the value of future, separate property copyrights that may follow (Id. at 1064). This possibility is especially dire in relation to patents, as the instant case shows. Petitioner’s ongoing research is likely to generate additional, cumulative patents (RT 63:24-64:5) as usually happens when new technology is being developed. In order to license his future separate property patents, Petitioner will need Respendent’s agreement to license the marital patents as well (RT 64:6-22). Thereby, the decision below has granted Respondent power over Petitioner’s future efforts related to the marital patents until they expire: in 2012 and 2016. In order to maximize her benefits from the marital 10 A patent attorney/expert witness testified that the reaction of a potential licensee to joint ownership of the patents by Petitioner and Respondent would be negative (RT 82:26-83:12). Petitioner agreed, noting that having Respondent's name on title to the patents registered with the US- PTO would raise questions and complicate negotiations (RT 541:5-11). This evidence was uncontroverted. 24 patents, Respondent may choose to exercise her veto power in a way that decreases Petitioner's earnings from his future separate property patents, effectively transferring post- separation earnings from the separate estate to the community estate. Continuing disputes between Petitioner and Respondent are likely to interfere with commercial exploitation of the technologies protected. This unhappy result is entirely in keeping with Worth.” IV Certiorari Should be Granted Because Worth Burdens Interstate Commerce Roberts, supra, 100 Yale L.J. at 1066-1072 noted that Worth effectively regulates and interferes with the orderly transfer of copyrights in interstate commerce: By declaring a community property interest in copyright ownership, California forces citizens of other states [who have licensed or acquired copyrights from California residents], doing business with other non- California residents, to alter their method of doing business at substantial cost in order to protect '!' The courts below recognized the potential problems outlined above, but gave them little credence: Moreover, there is no reasonable basis to assume deadlock. As the trial court observed, Husband’s assumption of Wife’s obstructionism “is the one weak leak in the argument, . . . that you are attributing to her a motive to veto or cause problems . . . There is no common sense or evidence, nor would there be any motive that I can see, why she would want to do anything to interfere with the commercial viability. To the contrary, I would think she would want to do everything to make it a success. That is the whole point of this.” (California Court of Appeal quoting the Trial Judge, Appendix at p.75). This rosy prediction is based on the unrealistic assumption that former spouses will be able to function amicably as business partners. 25 themselves from the regulatory effect of the statute as interpreted in Worth. The community property statute also burdens non-California citizens who have co- authored works with California residents and wish to do business involving their works with other non- California residents. Moreover, buyers dealing with Californians may have to pay more to secure the nonauthor spouse’s approval; therefore, California essentially makes buyers pay a premium to California nonauthor spouses. When one state treats copyright ownership as community property, those whose business includes the transfer of copyrights must take precautions in drafting their contracts to try to avoid the potential problems created by that treatment. The community property law of California discriminates against interstate commerce because married inventors and authors will find it easier to deal with potential licensees domiciled in California to avoid the conflict of laws. The fact that California is the largest state in population and economy, relatively isolated geographically, and pre-eminent in technology as well as entertainment creates a predisposition to disregard the other states, compromising the internal political checks which might otherwise incline California courts to pay more heed to persuasive authority from other states and the Fifth Circuit. In Edgar v. MITE Corporation, 457 U.S. 624, 640 (1982) and again in Brown-Forman Distillers Corp. v. New York State Liquor Authority, 476 U.S. 573, 579 (1986) this Court has ruled that a state cannot directly regulate interstate commerce. Roberts, supra, argues that this corollary of the Commerce Clause must preempt Worth, just as it preempted certain laws of Illinois and New York in Edgar and Brown-Forman, because Worth “reaches out” and forces persons outside of California to conduct their business affairs in a certain way, if a copyright or patent created by a married citizen of California is involved. 26 If the regulatory impact of Worth upon interstate commerce is considered merely incidental, the balancing test set forth by this Court in Pike v. Bruce Church, Inc., 137 U.S. 137 (1970) properly applies: Where the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits ... [T]he extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities. (Id. at 142) In Dean Milk Co. v. City of Madison, Wis., 340 U.S. 349 (1951) this Court formulated this principle in a manner most directly applicable to the instant case. This Court ruled that, even in the exercise of an unquestioned state power [to protect public health], a state cannot discriminate against interstate commerce or burden it, “if reasonable nondiscriminatory alternatives, adequate to conserve legitimate local interests, are available.” (Id. at 354). In relation to a patent or copyright obtained in marriage, the legitimate state interest is to ensure that the marital community is equitably reimbursed for its efforts and investments related thereto. This legitimate interest can surely be satisfied by a reasonable alternative with a lesser impact on interstate commerce: the general approach that is set forth in Rodrigue-2 and generally followed by the courts of other states. For this reason, the onerous provisions of the decisions below, which follow Marriage of Worth, should be overridden. /// 27 V_ Certiorari Should be Granted Because Worth Works to the Detriment of Third Parties The instant case illustrates how Marriage of Worth can work to the detriment of third parties. Under the agreements with his coinventors (Exhibit 22/V, RT 105:6-18, RT 109:2-23) Petitioner is responsible for managing the patents for mutual benefit of all of the inventors. Petitioner’s relatively large ownership share of the four patents and one patent application under the terms of these agreements (80:20, 80:20, 80:20, 34:22:22:22 and 55:20:20:5) was fixed on the assumption that he would bear the primary responsibility for promoting and commercializing the technologies protected. Petitioner's coinventors retain a large stake in the future success of the marital patents; if Petitioner’s ability to exploit the patents is -hindered, they will suffer as well. This question is especially acute in relation to Petitioner’s coinventors on the power plant patents, because they are citizens and residents of Ukraine and thereby totally dependent upon Petitioner to manage these US patents for their benefit as well as his own (RT 105:3-25). By giving Respondent equal authority and veto power in all matters related to the patents, the courts below have effectively assigned part of Petitioner’s obligations before his coinventors to Respondent. As there is no evidence nor reason to believe that Respondent (a pediatrician) can fulfill any part of Petitioner’s obligations toward his coinventors, this action is to their detriment. In light of Respondent's equal authority and veto power over the patents, Petitioner’s coinventors cannot be assured of Petitioner's effective management of the patents on their behalf which they bargained for. Certainly, the courts have the power under equity to reform a contract between private parties, but the legality of such court order presupposes Fourteenth Amendment procedural due process. In the instant case, Petitioner's coinventors were deprived of what they bargained for without due process. In Barrows v. Jackson, 346 U.S. 249 (1953) this 28 Court set forth the conditions that would permit a party appearing before this Court to plead violation of the Constitutional rights of a third person (Id. at 255-257), and these conditions are satisfied in the instant case: 1. The decision of the courts below was to the detriment of Petitioner as well as to the detriment of his coinventors, and 2. It would have been difficult if not impossible for Petitioner’s coinventors to assert their case before the Trial Court, which was, after all, adjudicating a division of community property that procedurally and logically involved Petitioner and Respondent alone. During marriage, problems of this sort are largely avoided by virtue of Cal. Family Code §1100, subd. (d) which grants a spouse operating a community property business effectively complete control of the business and its assets. The same statutory provision interacts perversely with Marriage of Worth to create just such problems when the marriage is dissolved. There is no question that Petitioner had full authority to conclude the agreements with his coinventors, and had a free hand to fulfill his responsibilities thereunder without interference from Respondent while married. But following dissolution of the marriage, the courts below relied on Worth to grant equal authority and veto power over the patents to Respondent, compromising Petitioner's ability to perform under the agreements to the detriment of his coinventors. This Court can correct this problem by setting forth rules governing patents and copyrights in marriage which accord with Rodrigue and the decisional law of the other states, whereby the inventor/ author spouse will have unclouded title and full authority to manage the marital patents/ copyrights after dissolution as well as during marriage, while sharing the benefits of the patent/ copyright with ex-spouse in an equitable manner. 522 RLS DRS NIN ANE ata fee = & 29 CONCLUSION In addition to the several Federal questions and Constitutional issues argued above, there is an entirely practical reason why certiorari should be granted in this case. Congress recognized that the law of copyrights and patents is a complex field properly entrusted to specialists. Federal District Courts have original jurisdiction over cases under the copyright and patent statutes, and patent case appeals are restricted to the Federal Circuit and this Court. Patent attorneys must be specially trained, tested and registered with the Patent and Trademark Office. However, any member of the state bar, and any Family Court judge can litigate and adjudicate the disposition of copyrights and patents ina marital dissolution. While the state bar and state bench are highly skilled and experienced in relation to their accustomed subject matter, most of them have no training in intellectual property law, don’t own a book on the subject, and encounter a case that deals with copyrights or patents once in a decade, if that often. In the instant case, the Trial Judge plainly expressed his expectation of appellate review and his desire to facilitate the work of the appellate court.” Petitioner respectfully asks this Court to provide the state courts with the guidance they need regarding patents and copyrights in marriage. The instant case provides this Court with a vehicle to build upon the work of the Fifth Circuit, and to institute a sensible and Constitutionally correct rule, 2 “.,, to be perfect honest, I’m sort of looking upward in this case because it’s acase that’s somewhat unusual. I won’t say it’s completely novel, but it’s unusual and I could well see whatever part[y] is dissatisfied with the Court’s ruling wanting to have the appellate court have a good report is important and I think probably at this point oral argument might be appropriate. I think it would be more helpful for the reviewing court to get your thoughts ...” (RT 551:3-17) Also see the quotations on pp. 5-6. 30 uniform throughout the land. Respectfully submitted, HAROLD D. MESSNER 1021 Nebraska Street Vallejo, CA 94590 (707) 557-8709 LYNN S. YOUNG Counsel of Record NAPA LEGAL CLINIC 812 Third Street Napa, CA 94559 (707) 257-7333 31 A ndi H DOCUMENT 1 [Petitioner's] Settlement Offers regarding Intellectual Property prepared July 1, 1999 (Explanatory Note: This document was admitted into evidence at the trial, and was appended to Petitioners “Appellant's Opening Brief” to the California Court of Appeal. Throughout this document, the designations “Respondent” and “Petitioner” have been reversed to make the usage consistent with the Petition.) Introduction Petitioner is joint owner of record with others of the US Patents and US patent applications identified in Table 1. Table 1. US Patents partly owned by Petitioner Patent No. Filing | Issue |Expiration See Date Date Date Note (a) Electrochemical 5,364,508 3-16-94 |11-15-94 |11-12-12 100 5,419,824 2-10-94 {5-30-94 11-12-12 100 5,439,577 11-10-94 |8-8-95 |11-12-12 100 Power plant 5,735,125 1-22-96 |4-7-98 {1-22-16 100 US Pat.Appl. |3-10-98 |pending |1-22-16 25 09/037,902 (a) Percent of Petitioner's Interest Belonging to Community when filed 32 The number of hours of Research & Development (R&D) effort that Petitioner has invested in the development of these patents are set forth in Table 2. Table 2 also sets forth the best estimates of additional R&D effort that will need to be invested by Petitioner in order to bring the technologies to the point of delivering benefits, as defined below. Table 2. Summary of R&D Effort by Petitioner (man-hours) invested in the technologies needed to bring them to the point of delivering benefits Electro- | Power | Aggre- chemical | Plant gate Preseparation Pr tion ] 2,707 149 2,856 (32%) 1 (30%) Postseparation Date of Separation (2-10-96) {3,050 365 3,415 to 5-31-99 Additional R&D effort 1,652 288 1,940 reliably budgeted Estimate of further effort [1,042 288 1,330 needed to bring technologies to the point of delivering benefits Postseparation totals 2,744 1941 6,685 Total hours of R&D effort {8,451 1,090 9,541 required of Petitioner 33 The numbers in Table 2 are based on the most complete and accurate time card records, financial records, and c contract files in Petitioner’s possession. Settlement Offer No. 1 Petitioner estimates that the aggregate value of community monies and unreimbursed efforts invested prior to February 10, 1996 in developing and obtaining the patents and patent application identified in Table 1 and any related intellectual property totaled approximately $84,482. In consideration of the community’s investment in developing this intellectual property, Petitioner offers to transfer to Respondent Independent Retirement Account monies in the amount of $42,241, and Respondent shall therefor drop any and all claims to ownership of these patents and any related intellectual property that may be owned by Petitioner and to any benefits related to said patents or related intellectual property that may accrue to Petitioner. This settlement offer is consistent with the Court's ruling in In re Marriage of Zaentz (1990) 218 CA 3 154 which had to do with the community’s interest in a successful film (Amadeus) which the husband had produced. At the time of separation, the film project was approaching completion. Husband had spent two years working on the film, and in addition to having served as producer, had put community assets up as collateral to secure a $6,000,000 bank loan, and had served as “completion bonder”; that is, the person responsible for finding financing needed to complete the project. Husband had been compensated $300,000 for his efforts plus per diem. At the time of trial approximately two years after separation, the movie had grossed $50,000,000 and the net profit was variously estimated at between $8,000,000 and $14,000,000. Evidence had been presented in trial court to the 34 effect that the husband’s stock in his company had gained substantial value as a result of the movie by the time of trial. Husband’s nephew who performed legal and tax work for husband’s company estimated that husband’s company would realize a profit of nearly $2.6 million from its share of “Amadeus”, and would also received some $3.2 million in interest and deferred rental fees. Expert witnesses testified that the husband’s fee for producing the movie was well below industry standards, and that just his role as “completion bonder” warranted an additional consideration of $500,000. The Appeals Court affirmed the trial court’s decision that the community was entitled to additional compensation for the husband's efforts and the risks borne by the community in making the movie, stating: “ ... the [trial] court found ... that the community was entitled to be reimbursed for husband’s production duties and financing contribution in the amount of $600,000 over and above the $300,000 and per diem paid to husband. Whether or not the movie was completed and receiving income at the time of separation, the time and artistic energies expended occurred in some appreciable degree during the marriage. Husband devoted the better part of two years during the marriage working only on the production of ‘Amadeus’. Thus, the community would be entitled to at least an equitable portion of the income generated as a result thereof. ... The evidence showed that all of the filming and nearly one-third of the editing, and execution of some of the distribution agreements, were completed by November 1983. Accordingly, the amount of profits aggregating through 1985 was an appropriate circumstance for the trial court to consider in arriving at its factual determination.” 35 In Zaentz the court did not try to prorate husband’s gains from the film according to his efforts before and after separation; in fact, the trial court supported the wife’s demand that the community receive adequate compensation for husband's efforts during the marriage. While the trial court failed to document it’s calculation supporting award of $600,000 additional compensation to the community, the Appeals Court judged this award reasonable, and, in fact, this amount was consistent with expert witness testimony which held that husband’s declared compensation of $300,000 was low by industry standards, and that just his role as “completion bonder” would warrant compensation of in the amount of $500,000. The fact of large profits generated by the movie after separation and before trial was considered by the Appeals Court only to the extent of deciding that an award of additional $600,000 to the community was reasonable, and that, in fact, husband had the money to share with his ex-wife. In Van Camp vs. Van Camp (1921) 53 CA 17 the court came to a conclusion similar to the Zaentz court's regarding the community’s share of husband’s income and capital appreciation from a company that had been a successful, ongoing concern since before the marriage. The Appeals Court ruled that an executive salary that might have been paid to another doing husband’s job in his place was adequate compensation to the community. (Adams & Sevitch interpret Zaentz and Van Camp similarly in § G.83 and suggest factors to be documented and considered to establish equitable compensation.) Petitioner's case is, of course, very distinct from Zaentz in that the economic success of his technologies is nowhere near assured near to time of trial, and income from the patents is $0, not $50,000,000. It is not contested that during the marriage and prior to separation Petitioner expended effort to finance, develop, and 36 attempt to market the technologies described in the patents with the expectation of future returns. Most of this effort was compensated to the community as an equitable salary paid to Petitioner directly and indirectly from assorted government grants, but some $84,482 of effort and expenses were not compensated to the community. If it is assumed that eventually these long-term endeavors on Petitioner’s part bear fruit, Zaentz suggests that the community should be compensated in the same amount. Such compensation to the community would also accord with the Van Camp approach. If, on the other hand, Petitioner’s efforts ultimately come to naught, it might be proper for the community to be compensated for efforts and resources “imprudently invested and lost” - again $84,482. In contrast to the husband in Zaentz, prior to separation Petitioner did not guarantee large loans with community funds or take any extraordinary risks which would warrant compensation to the community above and beyond and equitable salary and actual uncompensated cash outlays. Definitions related to Settlement Offers 2 and 3 below. It is recognized that since the Date of Separation (February 10, 1996) Petitioner has had continuing out-of-pocket expenses related to the patents and patent applications identified in Table 1, including various US Patent Office fees (for example, filing fees, issue fees and maintenance fees), international filing fees, and legal fees related to obtaining these patents and protecting against infringement or misappropriation. It is also recognized that Petitioner has obligations to pay third parties a portion of royalties or other benefits that he may receive in the event that the patents are licensed or exchanged for stock. In case royalties or other benefits are received by Petitioner related to these patents and patent applications, the out-of- pocket expenses shall first be reimbursed to Petitioner and the monies paid as royalties or otherwise to third parties shall be subtracted, and then a part of the net royalties or other benefits 37 remaining shall be transferred to Respondent as set forth in Settlement Offers 2 and 3 presented below. In all cases, percentage of royalties or other benefits offered to Respondent are percentages of net royalties or net other benefits that are received by Petitioner after out-of-pocket expenses and royalties due to third parties have been subtracted. The patents identified in Table 1 related to one or the other technology (electrochemical or power plant) shall be deemed to have reached the point of “delivering benefits” when one of the following conditions has been satisfied: (a) At least one of the patents related to the given technology has been sold, (b) at least one of the patents related to the given technology has been licensed and royalties of at least ten thousand dollars have been received by the inventors, or (c) at least one of the patents related to the given technology has been exchanged for publically traded stock. The two technologies are to be considered separately for the purposes of this paragraph; for example, if the electrochemical patents are licensed and at least ten thousand dollars has been received in royalties, the electrochemical technology shall be deemed to have reached the point of delivering benefits, but no such determination shall apply to the power platted technology in this case. By “related patents or other related intellectual property” we mean any patent or other intellectual property developed by Petitioner or otherwise coming into his possession after February 10, 1996 which is protected by at least one claim of at least one of the patents or the patent pending identified in Table 1. /// 38 Settlement Offer No. 2 Settlement Offer No. 2 recognizes that the ultimate future value of the patents identified in Table 1 will be the result of Petitioner's efforts begun prior to the Date of Separation, and continuing long beyond the Date of Separation. Therefore, benefits ultimately received by Petitioner might reasonably be apportioned according to the amount of effort invested before versus after the Date of Separation. The hours of R & D effort devoted by Petitioner to developing the two technologies are summarized in Table 2. Two other apportioning rules were considered (uncompensated efforts and expenses invested; total investments, including grants and contracts as well as unreimbursed efforts and investments); apportionment by hours of R & D effort gives the result most favorable to Respondent. (1) In recognition of the fact that 32% (thirty-two percent) of Petitioner’s R&D effort needed to bring the electrochemical technology described in US Patents 5,364,508 and 5,419,824 and 5,439,577 to the point of delivering benefits was invested prior to the Date of Separation (February 10, 1996), Petitioner agrees to transfer to Respondent 16% (sixteen percent) of net royalty payments received by Petitioner for licensing these patents and/or 16% (sixteen percent) of net money received by Petitioner for selling or assigning them, if that should occur. If the patents are exchanged for publically traded stock, Respondent shall receive 16% (sixteen percent) of stock received by Petitioner. Respondent shall be responsible for related income and/or capital gains taxes. The same terms shall apply to net royalty payments or proceeds from selling the Japanese patent pending which is derived from US Patent 5,364,508. Petitioner’s obligations under this paragraph shall end when these three US Patents expire on November 12, 2012. For example, 39 0.50 Fraction of Community’s share due to Respondent x 32% Percentage of value of these three patents at point of delivering benefits due to preseparation efforts of Petitioner 16% Percentage of net benefits received by Petitioner being offered to Respondent (2) In recognition of the fact that 14% (fourteen percent) of Petitioner's R&D effort needed to bring the power plant technology disclosed in US Patent 5,735,125 to the point of delivering benefits was invested prior to the Date of Separation (February 10, 1996), Petitioner agrees to transfer to Respondent 7% (seven percent) of net royalty payments received by Petitioner for licensing this patent and/or 7% (seven percent) of net money received by Petitioner for selling or assigning it, if that should occur. If this patent is exchanged for publically traded stock, Respondent shall receive 7% (seven percent) of stock received by Petitioner. Respondent shall be responsible for related income and/or capital gains taxes. The same terms shall apply to net royalty payments or proceeds from selling the Russian patent pending which is derived from US Patent 5,735,125. Petitioner's obligations under this paragraph shall end when this US Patent expires on January 22, 2016. For example, 0.50 Fraction of Community’s share due to Respondent x14% Percentage of value of this patent at point of delivering benefits due to preseparation efforts of Petitioner 7% Percentage of net benefits received by Petitioner being offered to Respondent 40 (3) In recognition of the facts that (a) 14% (fourteen percent) of Petitioner’s R&D effort needed to bring the power plant technology disclosed in US Patent Application 09/037,902 to the point of delivering benefits was invested prior to the Date of Separation (February 10, 1996), and (b) the Community’s interest in said US Patent Application comprises 25% of Petitioner’s total interest in it, Petitioner agrees to transfer to Respondent 1.75% (one and three-quarter percent) of net royalty payments received by Petitioner for licensing the patent expected to issue from this Patent Application and/or 1.75% (one and three-quarter percent) of net money received by Petitioner for selling or assigning it, if that should occur. If this patent is exchanged for publically traded stock, Respondent shall receive 1.75% (one and three-quarter percent) of stock received by Petitioner. Respondent shall be responsible for related income and/or capital gains taxes. Petitioner’s obligations under this paragraph shall end when the patent expected to issue from this US Patent Application expires on January 22, 2016. For example, 0.50 Fraction of Community’s share due to Respondent 0.25 Community’s interest in this patent application x14% Percentage of value of this patent application at point of delivering benefits due to preseparation efforts of Petitioner 1.75% Percentage of net benefits received by Petitioner being offered to Respondent (4) Ownership of the patents shall remain with Petitioner and Petitioner’s coinventors under the terms and conditions set forth in the Joint Owners’ Agreements between them. Consistent with the community’s relatively small interest in the patents set forth in Table 2, Petitioner and Petitioner’s heat POLST AE LA GAOL LER IDS SNL ALE PAT g i ? : 41 coinventors shall have the right to sell or license the patents as they see fit, without prior approval of Respondent. However, Petitioner shall inform Respondent of any such transaction within ten days of its execution, and shall remit to Respondent her portion of monies received within ten days of receiving them. Petitioner acknowledges a fiduciary responsibility to Respondent to negotiate and execute any such transactions in the same manner and on the same terms as though Respondent were not in the picture, and Petitioner’s net benefits were entirely his own. (5) This agreement applies only to division of future royalties and/or sales proceeds that Petitioner may receive which are derived from US Patents 5,364,508 and 5,419,824 and 5,439,577 and _ 5,735,125, US Patent Application 09/037,902, and the related Japanese and Russian patents pending that are identified above. (6) The products and benefits of all Research and Development efforts expended after February 10, 1996 are acknowledged to be the separate property of Petitioner. Settlement Offer No. 3 Settlement Offer No. 3 is a variation of Settlement Offer No. 2 which addresses Respondent's concern that if Petitioner licenses or sells the patents in a bundle with other related patents or related intellectual property, he may arrange the deal to undervalue the original patents in which the Community has an interest in order to deny Respondent her fair share. In this settlement offer, Respondent is granted a smaller percentage of benefits from the entire bundle which includes the original patents together with related patents and other related intellectual property developed after the Date of Separation. (1) Petitioner anticipates that the electrochemical patents shall be licensed or sold in a bundle together with additional related patents and other intellectual property developed after 42 the Date of Separation which are therefore Petitioner’s separate property. Petitioner estimates that the value of the original three electrochemical patents (US Patents 5,364,508 and 5,419,824 and 5,439,577) will represent no more than 25% of the value of the entire bundle. (2) Petitioner agrees to transfer to Respondent 4% (four percent) of net royalty payments received by Petitioner for licensing any bundle including one or more of US Patents 5,364,508 and 5,419,824 and 5,439,577 and/or 4% (four percent) of net money received by Petitioner for selling or assigning such a bundle, if that should occur. Ifa bundle of technology including at least one of these patents is exchanged for publically traded stock, Respondent shall receive 4% (four percent) of stock received by Petitioner. Respondent shall be responsible for related income and/or capital gains taxes. The same terms shall apply to net royalty payments or proceeds from selling the Japanese patent pending which is derived from US Patent 5,364,508. Petitioner’s obligations under this paragraph shall end when these three US Patents expire on November 12, 2012. For example, 0.50 Fraction of Community’s share due to Respondent 0.25 Fraction of the value of the entire bundle licensed, sold or exchanged corresponding to the original three patents x 32% Percentage of value of original three patents at point of delivering benefits that is due to preseparation efforts of Petitioner 4% Percentage of net benefits received by Petitioner being offered to Respondent Rotate aE tee a E 7 = ¥ f : % : 7 43 (3) Petitioner anticipates that the power plant patents shall be licensed or sold in a bundle together with additional related patents and other intellectual property developed after the Date of Separation which are therefore Petitioner’s separate property. Petitioner estimates that the value of the original power plant patent and the community’s share of the patent application pending (US Patent 5,735,125 and US Patent Application 09/037,902) will represent no more than 40% of the value of the entire bundle. (4) Petitioner agrees to transfer to Respondent 2.8% (two and eight tenths percent) of net royalty payments received by Petitioner for licensing any bundle including US Patent 5,735,125 or the patent which issues from US Patent Application 09/037,902 and/or 2.8% (two and eight tenths percent) of net money received by Petitioner for selling or assigning these patents, if that should occur. If these patents are exchanged for publically traded stock, Respondent shall receive 2.8% (two and eight tenths percent) of stock received by Petitioner. Respondent shall be responsible for related income and/or capital gains taxes. The same terms shall apply to net royalty payments or proceeds from selling the Russian patent pending which is derived from US Patent 5,735,125. Petitioner's obligations under this paragraph shall end when these US Patents expire on January 22, 2016. For example, /// /// 44 Fraction of Community's share due to Respondent 0.40 Fraction of the value of the entire bundle licensed, sold or exchanged corresponding to the original patent plus the Community’s 25% interest in the patent application pending x14% Percentage of value of the original patent plus Community’s share of the application at point of delivering benefits that is due to preseparation efforts of Petitioner Percentage of net benefits received by Petitioner 2.8% being offered to Respondent (5) Ownership of the patents identified in Table 2 and any related patents or other related intellectual property shall remain with Petitioner and Petitioner’s coinventors under the terms and conditions set forth in the Joint Owners’ Agreements between them. Consistent with the community’s relatively small interest in the patents set forth in Table 2, Petitioner and Petitioner’s coinventors shall have the right-to sell or license the patents as they see fit, without prior approval of Respondent. However, Petitioner shall inform Respondent of any such transaction within ten days of its execution, and shall remit to Respondent her portion of monies received within ten days of receiving them. Petitioner acknowledges a fiduciary responsibility to Respondent to negotiate and execute any such transactions in the same manner and on the same terms as though Respondent were not in the picture, and Petitioner’s net benefits were entirely his own. (6) The products and benefits of Research and Development efforts expended after February 10, 1996 which are not related to the patents identified in Table 1 are acknowledged to be the separate property of Petitioner. 45 DOCUMENT 2 Notice of Tentative Decision ENDORSED Filed 10-13-99 Jose O. Guillen Court Executive Office M. OELLIEN Deputy IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF NAPA In Re the Marriage of: Petitioner: NANCY WERES and No. 76505 Respondent: OLEH WERES NOTI F TENTA ISION This matter initially came before the court for trial commencing July 8, 1999 and concluding July 26, 1999. The matter was deemed submitted as of that date. The sole contested issue submitted to the court for decision is the proper method of dividing the community interest in certain patents which respondent perfected during the marriage. The patents involve a unique process for treating wastewater (in the case of the electrochemical patents) and for obtaining extra energy out of steam from power plants (in the case of the 46 power plant patent). None are currently commercially viable yét all could have huge value if future research and technology lead to a commercially viable application of the process they embody. The difficulty in dividing and valuing is that these assets have little or no market value at the time of trial and will require post separation research and development on the part of respondent (or others) to ever have significant value. Respondent contends that the court should either find pursuant to Family Code section 2552(a) that the patents have no value at the time of trial or alternatively that the court apply the reasoning of In re Marriage of Zaentz, 218 CA 3% 154 and compensate the community for efforts expended by the respondent during the marriage. Valuation according to this approach would range between a low of “0” and a high of approximately $80,000. Respondent has extensively analyzed the valuation issue in various settlement proposals which were introduced into evidence at trial. Petitioner on the other hand would like to share in the future potential value of these patents rather than “cash out”. She argues that In Re Marriage of Biddle, 52 CA 4" 396 and Zaentz, supra, as she construes the case, strongly suggest that the court should divide these assets “in kind”. Each side has argued the applicable legal princip'es articulately and the issue, oddly enough in today’s hie’ In its discretion, the trial court in Monslow awarded complete ownership in the patents to the spouse who perfected them, and awarded the other spouse a share in future income. As we read Monslow, this discretionary division was not an inevitable result of the court’s conclusion that patents could be divided without a determination of present value. 77 community. (See Lorraine v. Lorraine, supra, 8 Cal.App.2d at p. 701; Matter of Marriage of Monslow, supra, 912 P.2d at pp. 744- 747, and cases cited therein; cf.. In re Marriage of Worth, supra, 195 Cal.App.3d at pp 774-775 [copyright obtained during marriage is intangible community property asset].) Husband contends at some length that the trial court should have used one of the methods of computing an equalizing payment to Wife that Husband outlined in his “Settlement Offers” document. But the court acted well within its discretion and was not obligated to use any particular form of division proffered by Husband. Moreover, the authorities cited by Husband to support his argument are based on unique facts (see, e.g., In re Marriage of Zaentz (1990) 218 Cal.App.3d 154), involve methods of valuation of community assets not pertinent to the present case, or are otherwise not substantially instructive. No case cited by Husband shows the trial court in this case abused its discretion.° ? Husband's considerable reliance on Hazard v. Hazard (Tenn.App. 1991) 833 S.W.2d 911, is misplaced. In that case the husband, a medical doctor, had “designed and developed” a medical device which had been taken off the market due to a patient death, and whose “future economic value . . .[was]} not at present ascertainable.” (833 S.W.2d at p. 913.) The trial court awarded the wife 20 percent of the royalties, licenses and sales of the device. (Ibid.) In affirming, the Court of Appeals of Tennessee — in a very brief discussion — found the device a marital asset subject to division, and concluded that the 20 percent share of future income was “an equitable method of making a division of this particular asset.” (833 S.W.2d at P. 916.) It is not clear from the opinion whether the husband had obtained a patent on the device. Furthermore, although the trial court divided the value of the husband's medical practice in half, it is not even clear from the opinion whether Tennessee is a community property state. As far as we know, it is not. (See Rodrigue v. Rodrigue (5" Cir. 2000) 218 F.3u 432, 441 &. fn. 42 [identifying eight states — Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington — as“ presently hav[ing] some version of [community] property regimes”].) In any event, the Tennessee appellate court's terse affirmance of a particular division as “equitable” does not dictate a reversal of the California trial court in the case before us. 78 Next, Husband makes three related arguments. He complains the trial court improperly reserved jurisdiction for an indefinite period; that the court failed “to make a clean break between the parties”; and that the court has unduly limited Husband's “authority over his business.” While a court may not reserve open-ended jurisdiction to divide a community asset at some later date (see In re Marriage of Bergman, supra, 168 Cal.App.3d at pp. 755-757, 755 fn. 10; see also In re Marriage of Kilbourne, supra, 232 Cal.App.3d at p. 1525), that is not what the trial court did in this case. The court divided the community assets of the four patents, and reserved jurisdiction only to divide the benefits of those interests — i.e., income from the patents should commercial viability be achieved — at a future date. This procedure is appropriate. (See In re Marriage of Bergman, supra,168 Cal.App.3d at p. 755, fn.. 10, 758.) By the same token the court’s proper reservation of jurisdiction cannot be assailed as a failure “to make a clean break” among the parties. Husband apparently objects to boilerplate provisions in the trial court’s ruling which prevent either party from, inter alia, transferring or disposing of any interest in the marital patents, and which require the parties to exchange certain information regarding any licensing of the patents, and to cooperate to sign the appropriate documents to register their joint ownership interests with the United States Patents Office. These provisions are standard, proper and well within the trial court's discretion. If respondent were to impede the development of these community assets, the court has the power to take appropriate action. The trial court has not interfered with the operation of Husband's business. As we have noted, the award to Wife of the one-half share of the community patents in no way affects the present operation or management of Husband’s research lab. There is no indication the Wife’s co-ownership affects Husband’s relationship with other inventors who are working 79 with him on the patents — if only for the reason that Husband’s current work, by definition, is leading to new technology which will result in new patents, and which will by Husband’s own testimony not alter or affect the rights protected by the marital patents.’ Finally, Husband invokes federal patent law. He contends that the trial court’s award of one-half interest in the marital patents to Wife violates federal law — specifically, the patents and copyrights clause (U.S. Const., art. I, § 8, cl. 8) and the federal patent statutes (35 U.S.C. § 1 et seq.). The premise of Husband's argument is that under federal patent law he would be regarded as the sole owner of the community property patents. But in the analogous area of community property ownership interests in copyrights, we have previously held that federal law does not preempt California community property law. (In re Marriage of Worth, supra, 195 Cal.App.3d at pp. 776-778.) While seemingly acknowledging the validity of the Worth holding Husband claims that the trial court's ruling has “destroy[ed] the advantages of the monopoly” created by the patents and thus fallen afoul of federal patent law. (See Farmland Irrigation Co. v. Dopplmaier (1957) 48 Cal.2d 208, 220.) Husband claims the co-ownership impairs the value of the patents and may hinder commercial exploitation of their technology. To the contrary, there is no evidence of impairment of value and little but speculation to support 7 Inhis opening brief, appellant briefly argues he “should be given full authority to manage the patents.” We can find nowhere in the record any explicit request by Husband that, should the trial court award Wife an undivided one-half interest in the patents, Husband be given full managerial control. In any case Husband's appellate request for management of the patents is coupled with a request that “Wife’s name not be added to [the] title[s]” of the patents, a claim which is tantamount to a derogation of Wife’s ownership interest, which interest we now uphold. 80 Husband's claim that Wife’s co-ownership of the present patents will frustrate the commercial development of his future work.® Husband relies on Rodrigue v. Rodrigue (E.D.La. 1999) 55 F.Supp.2d 534, 536, which held that federal copyright law preempted Louisiana community property law regarding copyright ownership. The federal district court noted there is substantial commentary critical of the Worth decision. (55 F.Supp.2d at 537, fn. 2; see, e.g., Polacheck, The “Un-Worth-y Decision: The Characterization of a Copyright as Community Property” (1994) 17 Hastings Comm/Ent L.J. 601, 614-626; 1 Nimmer et al., Nimmer on Copyright (2000) §§ 6A.03[B], 6A.03[C], 6A.04, pp. 6A-17 - 6A-30.) The court ruled that federal law preempted state community property law. (55 F.Supp.2d at pp. 546-547.) But the district court was reversed by the Fifth Circuit, which held that federal law did not preempt all community ownership interests, and the non- authoring spouse was entitled to an undivided half-interest in all the economic benefits of community copyrights. (Rodrigue v. Rodrigue, supra, 218 F.3d at pp. 439-440, 442-443.) We are persuaded that despite scholarly criticism, Marriage of Worth controls. Federal law does not preempt California community property law regarding the ownership of community property patents under the facts of this case, and a family law court may award an equal, undivided interest in a community property patent to the spouse who did not perfect the patent. Under the unique facts of this case where the value of the patents is unknown community property . Husband apparently believes the “negative” attitude of a prospective licensee toward co-ownership may hinder the licensing of a packet of the present patents with any new ones. But beyond the general notion that a prospective licensee would rather deal with one owner than two, there is no substantial evidence that co-ownership would in fact hinder or prevent such licensing — particularly if Husband develops lucrative technologies with major commercial applications. 81 interests can coexist with federal patent law under the retained jurisdiction of the trial court. This case does not present a direct and irreconcilable clash between state and federal law warranting preemption. The trial court’s decision does not place stumbling blocks in the way of fostering creative inventiveness. In conclusion, we see no error in the trial court's ruling, and find none of Husband’s contentions persuasive. III. DISPOSITION The judgment is affirmed. Marchand, J. We concur: Stein, Acting PJ Stager, J. In re Marriage of Weres, A090448 82 DOCUMENT 7 Review Denied by California Supreme Court Court of Appeal, First Appellate District, Division One - No. A090448 S098045 IN THE SUPREME COURT OF CALIFORNIA EN BANC SUPREME COURT FILED AUG 15 2001 Frederick K, Ohirich Cler] DEPUTY In re the Marriage of NANCY WERES NANCY WERES, Respondent, v. OLEH WERES, Appellant. Petition for review DENIED. George, C.J., and Werdegar, J., were absent and did not participate. CHIN Acting Chief Justice --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_1056%3A1. Public record. Not legal advice.