After some court wrangling, the matter ended up in federal district court. The other side got the district court to bifurcate the inventorship issue from state law claims of fraud, unjust enrichment, and tort. "The court ordered that the inventorship cause of action be tried to the court before the state law claims were tried to a jury." Shum lost, and appealed.

Frank T. Shum v. Intel, Lightlogic, and Jean-Marc Verdiell (CAFC 2006-1249)

On appeal, Shum argues that under Beacon Theatres, Inc. v. Westover, 359 U.S. 500 (1959), the district court’s decision to bifurcate the claims and to conduct a bench trial on the inventorship issue prior to a jury trial on the state law claims violated his constitutional right to a jury. According to Shum, his inventorship claim and state law claims share common factual issues that are “inextricably intertwined,” and thus a jury trial should have preceded a bench trial. Shum further argues that the court committed numerous errors in reaching its conclusions with regard to the inventorship determination. Additionally, Shum asserts that summary judgment should not have been granted on the state law claims because the court’s erroneous inventorship decision had a dispositive impact on those claims, and also because the district court committed numerous errors in reaching its decision.

We first address Shum’s arguments concerning his right to a jury trial. A court has broad discretion with regard to trial management. Federal Rule of Civil Procedure 42(b) provides:

The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any claim, cross-claim, counterclaim . . . always preserving inviolate the right of trial by jury as declared by the Seventh Amendment to the Constitution or as given by a statute of the United States.

Fed. R. Civ. P. 42(b) (emphasis added). As the rule acknowledges, the court’s discretion is not without limits. When deciding whether issues should be separately tried, trial courts must ensure that a litigant’s constitutional right to a jury is preserved. “Maintenance of the jury as a fact-finding body is of such importance and occupies so firm a place in our history and jurisprudence that any seeming curtailment of the right to a jury trial should be scrutinized with the utmost care.” Dimick v. Schiedt, 293 U.S. 474, 486 (1935).

In Beacon Theatres, the Supreme Court addressed the importance of the order in which legal and equitable claims are to be tried in one suit. While recognizing that “the same court may try both legal and equitable causes in the same action,” the Supreme Court held that “only under the most imperative circumstances . . . can the right to a jury trial of legal issues be lost through prior determination of equitable claims.” Id. at 508, 510-11. The Court concluded that the trial court erred by conducting a bench trial on the equitable claim at issue, thereby precluding a jury trial on the legal claims, when the equitable claim resolved factual issues that were “common” to the legal claims. Thus, under Supreme Court precedent, when legal claims involve factual issues that are “common with those upon which [the] claim to equitable relief is based, the legal claims involved in the action must be determined prior to any final court determination of [the] equitable claims.” Dairy Queen, Inc. v. Wood, 369 U.S. 469, 479 (1962). Accordingly, in order to resolve the issue presented to us, we must determine whether this case involves both equitable and legal claims, and if so, whether those claims share common factual issues.

We agree with Shum that this case does involve both equitable and legal claims, that his inventorship claim and at least one of his state law claims share common facts, and thus that he was improperly denied a jury trial on the facts underlying his state law claims.

Vacated, reversed, and remanded.

The decision was 2-1: Newman and Lourie in the majority; Judge Friedman dissenting. Friedman wants to construe Beacon Theatres narrowly, also citing Dairy Queen, Inc. v. Wood, 369 U.S. 522 (1962), to to different interpretation, as Friedman would have denied Shum a jury trial on the inventorship issue.

I know of no authority—and the parties have cited none—showing that at the end of the 18th century, a suit could have been maintained in England to correct the inventorship shown on an issued patent or, if such a suit were permissible, it would have been tried before a jury. It follows that if Shum’s attempt to correct inventorship under 35 U.S.C. § 256 had been his only claim in this case, he would not have been entitled to a jury trial of that issue. The question, therefore, is whether Shum was entitled to a jury trial because he combined that claim with state-law claims that concededly would have been tried before a jury. Unlike the court, in the circumstances of this case I answer that question “no.”

As Hal Wegner gently put it: "a careful reader should see that if there is to be a departure from precedent that it should be done by the court en banc. [In Shum, t]he majority defies the logic of Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996), as well as Gardco Mfg., Inc. v. Herst Lighting Co., 820 F.2d 1209 (Fed. Cir. 1987). Just days earlier - in the same week - the en banc court swept aside the embarrassment of an aberrant panel opinion in Echostar in the prompt, efficient and unanimous Seagate case. While removing one bad apple, new low hanging fruit has been placed on the certiorari tree in Shum v. Intel."