Shutterstock_172988921The latest from the Federal Circuit teaches that a transfer of ownership rights in intellectual property doesn't necessarily bar the transferor from using the IP.

The case involved an ex-employee of Energy Recovery, Inc., Leif J. Hauge. ERI had sued Mr. Hauge over who owned IP relating to "pressure exchangers", which relate somehow to "reverse osmosis". They settled on the basis that ERI had all ownership rights in patents as well as "all other intellectual property and other rights relating to pressure exchanger technology". The district court signed an order enforcing the settlement.

Years later, Mr. Hauge started making and selling pressure exchangers through Isobaric Strategies, Inc. ERI sued him again, claiming that his company's manufacture and sale of pressure exchangers violated the previous order and constituted civil contempt. The district court agreed.

The Federal Circuit begged to differ. "The Agreement only required Mr. Hauge to transfer ownership", the panel noted. Energy Recovery, Inc. v. Hague, No. 13-1515, slip op. 8 (Fed. Cir. Mar. 20, 2014). "Nothing in the 2001 Order expressly precludes Mr. Hauge from using any manufacturing process." Id.