## Facts

- Between 1983 and 1988, Klaus Schroeder worked for AEL Industries, Inc. (AEL).
- As consideration for employment, Schroeder signed an invention agreement stating he would assign to AEL his rights in inventions he conceived, except for inventions he specifically identified as excluded.
- Schroeder later identified nine or 10 pre-employment, non-patented techniques related to pair-antenna technology.
- While employed, Schroeder offered AEL an antenna design for use as an improvement to one of AEL’s product lines.
- Schroeder filed two patent applications covering the antenna design: one in 1987 and another in 1988.
- The first patent (the “’000 patent”) issued in June 1988.
- The second patent (the “’167 patent”) issued in 1990, after Schroeder was terminated.
- In 1996, AEL was acquired by or merged with Tracor, Inc. (Tracor).
- In 1997, Schroeder sued AEL and Tracor for infringing the ’000 and ’167 patents based on continued use of the patented technology.
- AEL and Tracor asserted a shop-right defense and moved for summary judgment.
- In an earlier court pleading, Schroeder stated his first demand for royalties occurred shortly after the ’000 patent issued in 1988.
- In opposing summary judgment, Schroeder asserted he had repeatedly demanded royalties for AEL’s use of the design.
- The district court granted summary judgment for AEL and Tracor, and Schroeder appealed.

## Issues

1. Whether AEL (and Tracor as AEL’s successor) was entitled to summary judgment on the ground that it possessed a nonexclusive, royalty-free shop right to practice Schroeder’s patented antenna technology.
2. Whether Schroeder’s later claim of repeated royalty demands created a genuine dispute of material fact sufficient to defeat summary judgment in light of his earlier pleading stating that his first royalty demand occurred in 1988.

## Decision

- The Federal Circuit affirmed the district court’s grant of summary judgment for AEL and Tracor.
- The court held that, based on Schroeder’s employment relationship and his conduct in offering the design for AEL’s use in its business, AEL obtained a royalty-free shop right to use the inventions covered by the asserted patents.
- The court concluded that Schroeder could not avoid summary judgment by contradicting his earlier statement about the timing of his first royalty demand without a satisfactory explanation creating a triable fact dispute.

## Legal Principles

- A shop right is an implied, nonexclusive, royalty-free license that allows an employer to use an employee’s patented invention when the invention was developed in the employment setting and the employer’s use occurred with the employee’s knowledge and permission.
- A shop right functions as a defense to infringement for the employer’s internal use of the invention in its business.
- In deciding whether a shop right exists, courts look to the facts showing the employee’s consent or acquiescence to the employer’s use, including conduct surrounding disclosure and use of the invention.
- A party opposing summary judgment generally may not create a genuine issue of material fact by taking a later position that conflicts with a prior clear statement made in court filings, absent an adequate explanation.

## Conclusion

In *Schroeder v. Tracor*, the Federal Circuit affirmed summary judgment for AEL and its successor, Tracor, concluding that the employer had a royalty-free shop right to practice Schroeder’s patented antenna technology and that Schroeder’s later, conflicting assertions about earlier royalty demands did not create a triable factual dispute.


Schroeder v. Tracor, 1999 U.S. App. LEXIS 30386 (1999)