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Henryk Oleksy v. General Electric Company

May 23, 2011


The opinion of the court was delivered by: Judge Robert W. Gettleman


Plaintiff Henryk Oleksy has sued General Electric Company ("GE," or "defendant") for infringement of U.S. Patent No. 6,449,529 (the "'529 Patent"). Defendant has counterclaimed for breach of a Patent, Proprietary Information and Waiver Agreement (the "Waiver Agreement") that plaintiff executed after a wholly owned subsidiary of defendant purchased the company for which plaintiff worked. Defendant has moved for summary judgment on the issues of ownership and "shop rights" in the patent in suit. For the reasons explained below, that motion is denied.


Plaintiff worked in various capacities at the Preferred Machine and Tool Products Corporation ("Old Preferred") plant in Bedford Park, Illinois from 1989 through 2000. On December 11, 1997, Granite Services, Inc., (a wholly owned subsidiary of defendant) formed Preferred Machine and Tool Products Corporation (formerly Preferred Machine Services, Inc.), a Delaware corporation ("New Preferred"). On January 5, 1998, New Preferred acquired the assets of plaintiff's employer, Old Preferred, an Illinois corporation, in exchange for $27 million cash. The cash for the purchase was provided to Granite by defendant immediately prior to the acquisition. Granite sold all of the outstanding shares of capital stock of New Preferred to defendant for $27 million in September 1999. As of December 31, 2000, defendant transferred all outstanding shares of New Preferred capital stock to General Electric Energy Services, Inc. ("Services"), another of defendant's wholly owned subsidiaries. Defendant or one of its subsidiaries has owned all of the outstanding shares of capital stock of New Preferred since March 30, 1998.

Sometime in 1997, plaintiff began developing a computer numerical controlled dovetailing process for importing precise curvature on the "holding hooks" of pine-tree style steam turbine blades made at the Bedford Park plant. Plaintiff continued developing this process into 1998. He developed the process while at work, using Old Preferred time, machines, software, computers and other equipment, presumably with the knowledge and consent of his employer. Plaintiff continued with development, and use of company time and equipment, after January 5, 1998, when New Preferred became the owner of the plant.

Sometime between 1997 and April 23, 1998, plaintiff "offered" his process and ideas to his employer. On April 23, 1998, Richard Harvey, then president of New Preferred, sent plaintiff a memorandum indicating, "I am advising that you are free to take your manufacturing conceptual ideas to whomever would be most beneficial to you. We are not currently in a position to make the necessary changes to accommodate your process."

When New Preferred acquired the Bedford Park plant on January 5, 1998, all the Old Preferred employees were required to sign and return new personnel forms. Included among those forms was the Waiver Agreement. That Agreement provides in pertinent part:

A. Invention and Records

I will disclose and assign to GE as its exclusive property, all inventions and technical or business innovations developed or conceived by me solely or jointly with others during the period of my assignment: (1) that are along the lines of businesses, work or investigations of GE or its affiliates to which my assignment relates or as to which I may receive information due to my assignment, or (2) that results from or are suggested by any work which I may do for GE; or (3) that are otherwise made through the use of GE time, facilities or materials. I will execute all necessary papers and otherwise provide proper assistance (at GE's expense), during and subsequent to my assignment [to] enable GE to obtain for itself or its nominees, patents, copyrights, or other legal protection for such inventions or innovations in any and all countries. I will make and maintain for GE adequate and current written records of all such inventions or innovations.. . .

D. Employment Status

I recognize that for the period of my Assignment, I shall be and remain an employee of my employer and shall not for any purpose whatsoever be considered an employee of GE or eligible for participation in any GE employee benefits, plans or programs, except for those benefits, plans or programs for which I may be eligible as a function of my previous employment with GE.

This Agreement supercedes and replaces any existing Agreement between GE and me relating generally to the same subject matter. I[t] may not be modified or terminated, in whole or in part except in writing signed by an authorized representative of GE. Discharge of my understanding in this Assignment shall be an obligation of my executors, administrators, or other legal representatives or assigns.

Concerned about his rights in the process he developed, rather than sign the Waiver Agreement when it was presented to him, plaintiff took it to his attorney for review. Plaintiff also had some conversations in the Spring and Summer of 1998 with LeRoy Jewett, who had replaced Harvey at the Bedford Park shop, about New Preferred implementing plaintiff's process. Jewett decided not to use plaintiff's computerized process. On September 23, 1998, plaintiff's attorney, Leon Edelson, wrote to Jewett (sent by fax and mail) seeking to memorialize plaintiff's rights in what he termed the "bucket manufacturing process." In that letter, Edelson indicated that plaintiff thought he had a verbal agreement with Jewett that plaintiff could retain the patent rights in the process. According to the letter, plaintiff and Jewett met on July 13, 1998, at which meeting plaintiff informed Jewett that Harvey had granted a complete release of any claim of right by New Preferred to the process. Jewett apparently re-affirmed the release of patent rights but indicated an intent to retain a shop right in the process. Finally, Edelson's letter asked for Jewett to confirm that understanding by signing and returning a copy of the letter before plaintiff began the patent process. Jewett never signed the letter and, in a declaration filed in support of defendant's motion for summary judgment, states that he does not recall seeing it.

Receiving no response to his letter, in early November 1998 Edelson telephoned Robert Lampe, defendant's patent counsel, to confirm defendant's release of plaintiff's invention. According to Edelson, Lampe attempted to retract Harvey's April 23, 1998, memorandum. Edelson indicated that plaintiff would consider granting rights in the process to New Preferred if an agreement could be reached. Lampe indicated that he would propose language that would "satisfy all parties." On December 4, 1998, having received nothing from Lampe, Edelson sent him a follow-up letter stating, "to date we have not ...

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