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The United States Court of Appeals for the Federal Circuit Unanimously Enters Judgment in Favor of Pacific Surf Designs and Reverses Lower Court Decision by Invalidating an Illegal Invention Assignment Provision.

SAN DIEGO–(BUSINESS WIRE)–#adg–Pacific Surf Designs, Inc. (“PSD”), the premier custom-designed surf simulator company, wins its appeal against Whitewater West Industries, Ltd. (“Whitewater”). In that appeal, the Federal Circuit found the assignment provision in an employment agreement void, and further awarded PSD its costs.

Based on a prior employment agreement involving one of PSD’s owners, COO Richard Alleshouse, the lower court ordered PSD to assign three of its patents to Whitewater in early 2019. On appeal, PSD challenged the employment agreement’s assignment provision as invalid under California Business and Professions Code § 16600, which states “…every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” Both PSD and Whitewater accepted two facts: (i) the inventions in the patents were not conceived until after Mr. Alleshouse left Wave Loch (acquired by Whitewater); and (ii) Mr. Alleshouse did not use any trade secret or any other confidential information belonging to Wave Loch in arriving at the patented inventions.

In its 27-page opinion which will serve as precedent, the Federal Circuit concluded that the assignment provision was invalid under § 16600 and completely reversed the prior judgment, including Whitewater’s inventorship claim against another one of the inventors of the patents, CEO Yong Yeh.

According to Manuel de la Cerra, the lead appellate attorney, “By its decision, the Federal Circuit has saved thousands of California employees from certain unemployment. Who would hire you if anything you invented had to be assigned to your former employer — FOREVER? Ebay would have stopped its former employees from creating YouTube. Google would have stopped its former employee from creating Instagram. This is not how California became the economic and technological powerhouse it is today. Pacific Surf Designs alone created and patented advance technologies for water rides and nobody should have the right to steal the hard work of its inventors, Richard Alleshouse and Yong Yeh.”

Whitewater and its controlled entities have not prevailed in any of the 5 lawsuits they have filed against PSD over the past 6 years. This does not include a pending case where PSD alleges violations of the Federal Sherman Anti-Trust Act and the Federal RICO Act against Whitewater, Whitewater’s CEO, Geoffrey Paul Chutter, Flowrider, Inc., Flowrider’s President, Marshall Myrman, Aquatic Development Group, ADG’s VP, David Keim, and Thomas Lochtefeld, CEO of Surf Loch LLC and Wave Loch, Inc. That suit alleges unlawful monopolistic conduct, unlawful agreements to restrain trade, illegal racketeering, and conspiracy.

About Pacific Surf Designs

PACIFIC SURF DESIGNS, INC. design, manufactures, and installs the highest quality custom-designed surf simulators. Guinness World Record holder for tallest standing wave.


Yong Yeh, CEO

e: [email protected]
p: 858.633.6009


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