By Sophie F. Wang
In July 2012 the Superior Court of Massachusetts at Suffolk dismissed a doctor’s action against a hospital at which he had privileges over ownership of inventions in Grocela v. General Hospital Corporation, No. SUCV2011-00991-BLS1, 2012 Mass. Super. LEXIS 206 (Mass. Super. Ct. July 18, 2012). The plaintiff, Dr. Grocela, sued the Massachusetts General Hospital (“MGH”), claiming (1) that the hospital’s IP Policy, as applied to him, was an unenforceable restrictive business covenant on ordinary competition; (2) that MGH had breached his right to privacy under Mass. Gen. Lass c. 214, §1B; and (3) that because the IP Policy was unenforceable, he was owed restitution for MGH’s retention of royalty rights for three inventions that he had previously disclosed to MGH.
Dr. Grocela was a physician with staff privileges at MGH with a surgical specialty in urology. As a condition of his application for reappointment to the MGH staff, he was required to certify his understanding that the ownership of all inventions was to be decided in accordance with MGH’s IP Policy (the “IP Policy”). The IP Policy states that (1) MGH shall own all staff inventions “that arise out of or relate to the clinical, research, educational or other activities of the Inventor at [MGH],” (2) MGH’s Research Ventures & Licensing Department (the “RVL Department”) administers the IP Policy and is responsible for determining whether MGH owns the disclosed invention, and (3) all invention disclosures submitted to the RVL Department are considered confidential.
Dr. Grocela had disclosed over his tenure at MGH many inventions, two which were based upon his personal experiences. One invention (the “2004 Invention”) was influenced by Dr. Grocela’s childhood experience, while another (the “2005 Invention”) had been tested on himself in treating a medical condition with which he was afflicted. Dr. Grocela had included this information in the invention disclosures he gave to MGH, and had also disclosed his medical condition in a letter to the president of MGH and a mutual friend. To attract business partners, the RVL Department had publicized the 2005 Invention, naming Dr. Grocela as the inventor and advertising that it had been “tested on a single patient with promising results.” Id. at *14. It also applied for a patent on the 2005 Invention.
In 2010, Dr. Grocela conceived of a “voice box invention,” a device for voice training that could, among other things, be used to enable mute patients to phonate. While this invention did not expressly relate to his practice of urology, Dr. Grocela admitted that the invention utilized or incorporated knowledge that he acquired in the course of his engagement at MGH.
In dismissing Counts I and III relating to the enforceability of MGH’s IP Policy, the Superior Court upheld the well-established principle than an employee inventor may properly contract away his ownership of an invention to his employer. See id. at *10 n3 (though Dr. Grocela was technically not an employee of MGH, “a formal notice of appointment is the equivalent of an employment contract”) (internal citation omitted). Dr. Grocela argued that the IP Policy improperly covered inventions that were created outside the hospital and “on his own time,” and that such coverage was an unreasonable restriction on competition. The court first found that the plain language of the IP Policy required Dr. Grocela to assign his rights to an invention to MGH if the invention “arises out of or relates to Dr. Grocela’s clinical, research, education or other activities at the hospital.” Id. at *10. The court paid little attention here to Dr. Grocela’s focus on inventions made “on his own time” that did not relate directly to his urology practice. Instead, the court noted that with respect to the voice box invention, “Dr. Grocela himself does not dispute that it arose out of his activities at MGH.” Id. at *10. As such, he was bound by the terms of the agreement because he had willingly signed it.
The court next held that the IP Policy did not restrict competition. Citing to the Supreme Judicial Court’s decision in National Dev. Co. v. Gray, 55 N.E.2d 783 (Mass. 1944), the court concluded that even absent an express contract, an invention that was prepared in the employee’s home and on his own time nonetheless came within the scope of his employment if (1) the employer contemplates the discovery of an invention, and (2) the employee reasonably understood that such inventions resulting from his employment would belong to his employer. Again, the court emphasized the plain language of the IP Policy, which established both that MGH contemplated the discovery of inventions by its employees related to their activities at MGH, and that Dr. Grocela understood that ownership of his inventions would be subject to MGH’s decisions under the IP Policy.
Finally, the court found that the IP Policy was not unreasonable. The policy merely established a common quid pro quo whereby an employee agrees to contract away certain rights in exchange for the benefits of the clinical resources, office space, access to doctor-patient relationships and professional prestige offered by the hospital. Furthermore, nothing in the IP policy prevented Dr. Grocela from practicing medicine at a place other than MGH, had he chosen not to sign the agreement. Finally, the court found that any speculative restraint on competition was outweighed by MGH’s legitimate public interest in freely sharing staff inventions to further research and benefit patients.
The court also determined that MGH did not owe any payments to Dr. Grocela based on its retention of royalty rights for the 2004, 2005 and 2008 Inventions. Even though MGH had relinquished the rights to those inventions back to Dr. Grocela in 2010, the IP Policy nonetheless allows MGH to require the inventor to pay royalties “on sales of products or services covered by the relinquished Invention.” Id. at *14. Because Dr. Grocela, a sophisticated professional, had agreed to be bound by the IP Policy, and the Policy was found enforceable, the court dismissed the royalty rights count of his complaint.
Invasion of Privacy
In Count II of his complaint for invasion of privacy, Dr. Grocela asserted that MGH violated his privacy by (1) retaining information regarding his medical condition in its records in violation of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and (2) advertising that he was the inventor of the 2005 Invention and that “the device has been tested on a single patient with promising results.” Id. at *14. Such advertising, he argued, made it possible for others to infer that he was the single patient afflicted with the medical condition at issue.
The court first found that HIPAA was designed to protect the privacy interests of patients receiving treatment, not the privacy interests of employees of the hospital. The court disagreed with Dr. Grocela’s claim that HIPAA creates an affirmative duty not to disclose his personal health information without advance notice to him. Rather, HIPAA expressly excluded from the definition of protected health information “employment records held by a covered entity in its role as employer.” Id. at *15-16. Furthermore, the court reiterated that HIPAA does not create a private right of action.
Second, the court found that Dr. Grocela did not meet the elements of an invasion of privacy claim under Mass. Gen. Laws ch. 214, §1B. To prevail under §1B, a plaintiff must prove that a defendant “unreasonably, substantially and seriously interfered with his right to privacy by disclosing facts of highly personal or intimate nature” and that the defendant “had no legitimate reason for doing so.” Id. at *16. While the court must balance interests of the employer in disclosing the information against the substantiality of the intrusion on the employee’s privacy, where there is evidence to support only a de minimis intrusion of privacy, dismissal is appropriate.
Even assuming that the medical information about Dr. Grocela was highly personal or intimate, the court found that Dr. Grocela had disclosed his medical condition on the invention disclosure forms even though MGH had not required such information. In fact, he had also disclosed his condition in a letter he sent to the president of MGH and a mutual friend. There was nothing in the record to indicate that MGH had disseminated his information to the public, and the advertisement stating that the 2005 invention had been tested on “a single patient” did not mean that MGH had named him as the patient.
Finally, the court reiterated its previous belief that MGH had a legitimate interest in maintaining and sharing information regarding staff inventions with a limited group of persons, especially in the pursuit of patents. And, MGH’s substantial interest in furthering research and supporting inventions to benefit its patients outweighed any possible intrusion into Dr. Grocela’s privacy. As such, the court dismissed the claim.
Grocela marks a continuation in the line of Massachusetts cases where an employee’s inventions made on his own time and at his own expense could nonetheless be owned by his employer, so long as the employer contemplated the discovery and the employee “reasonably understood” that his inventions would belong to his employer. In particular, Grocela emphasizes that an employer’s IP policy, voluntarily agreed to as a condition of employment, may be sufficiently broad as to encompass all inventions that “arise out of or relate to” the clinical, research, educational or other activities of the employee, including inventions resulting from knowledge gained through the course of employment.
Sophie F. Wang is an associate at Choate Hall & Stewart LLP, where she assists in representing leading life sciences and technology corporations and institutions in complex patent infringement, trade secret litigation and commercial litigation.
Ms. Wang received her JD, cum laude, from Washington University School of Law and her BA from Wellesley College. While in law school, she was awarded the Dean’s Book Award for outstanding leadership and service, the Judge Amandus Brackman Moot Court Award, and was Primary Editor of the Washington University Journal of Law & Policy.
Ms. Wang is a member of the Boston Bar Association and the American Bar Association.