David Ruschke, chief judge for the Patent Trial and Appeal Board (Courtesy photo)

The chief judge of the Patent Trial and Appeal Board is suing his former employer, Medtronic Inc., alleging the company wrongfully terminated him because of his sexual orientation and a heart condition.

David Ruschke's 34-page complaint, which also names longtime Medtronic Chief Patent Counsel Michael Jaro as a defendant, was filed in California state court last fall but recently removed to federal court in Oakland. It alleges that Medtronic terminated Ruschke without notice or cause in a single-person reduction in force in November 2015, despite 12 productive years with the company.

The layoff was “mere pretext,” Ruschke alleges, for “a pattern and practice of unlawful sexual orientation discrimination” against him as an openly gay man. Medtronic also failed to engage with him about accommodating a heart condition that required treatment during 2015 and 2016.

Medtronic and Jaro are represented by Winston & Strawn partner Laura Petroff and associate Raquel Mason. They filed an answer in April denying each allegation and called the suit a “frivolous, unfounded, and unreasonable action.” They're requesting attorneys' fees under California law.

Ruschke is represented by Dow Patten of Los Angeles' Smith Patten.

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Ruschke brought a prestigious background to the role of chief judge when he was hired in May 2016. The PTO introduced him as the manager of patents at Medtronic's Coronary and Structural Heart business unit. He also was secretary of the board of the American Intellectual Property Association at the time. It was not widely known that he'd been laid off from Medtronic.

The PTAB has been under fire for years from patent owners, who've called it a “death squad” that mows down patent rights. But Ruschke himself hasn't been the focus of much criticism. Under his leadership, patent owners have statistically fared somewhat better than under his predecessors.

In his complaint, Ruschke claims to have “singlehandedly identified defects in certain competitors' patents” that saved Medtronic $50 million in royalty payments, while protecting Medtronic patents that generate more than $30 million in annual revenue. Overall, he claims his efforts “resulted in well over $100 million to the bottom line of Medtronic.”

But the complaint goes on to detail a litany of corporate politicking that allegedly cost Ruschke his job. The trouble seems to have started around 2012, when an attorney Ruschke describes as “a polarizing figure” was added to his team. Ruschke complained to HR that his supervisor and HR were undermining his authority and creating a hostile work environment for him as a manager. The employee was eventually dismissed, but not before a meeting with Jaro and other supervisors that left him feeling the work environment “was becoming increasingly hostile.”

Jaro and Ruschke's new supervisor, Betsy Van Hecke, confronted Ruschke during his July 2015 performance review about being noncommunicative, but Van Hecke allegedly could provide only a single example, the complaint alleges.

“After Ms. Van Hecke left the room visibly angry and waving her finger at Dr. Ruschke, Mr. Jaro fist-bumped Dr. Ruschke and said that he had done a great job of defending himself,” the complaint states. Nevertheless, Jaro informed him that his annual bonus would be reduced 10 percent, the complaint states.

Jaro did not respond to an email sent to the address he has registered with the State Bar of California.

Afterward, Ruschke was issued a warning about his delayed reporting of expenses, and a memo detailing expectations regarding response time to emails, attendance at “coordination meetings” with other supervisors and the like, all of which were to be addressed in his annual review objectives.

Ruschke complained to HR that the restrictions were “so unprecedented and out of the ordinary for someone of Dr. Ruschke's experience and performance, that Dr. Ruschke could only conclude that they were being imposed because of his sexual orientation.” An HR rep abruptly stopped the conversation, but the department never conducted an investigation, the complaint alleges.

Instead, Jaro and HR told Ruschke in November he was being let go to free up money for other positions. “This 'reduction in force' apparently applied to a single person—Dr. Ruschke—which in and of itself is highly suspect,” the complaint states. It goes on to contend that Ruschke's business unit had already achieved substantial cost savings by terminating one attorney and by accepting a poor performer from Jaro's group whom Jaro allegedly didn't want to fire because she was an Asian-American woman.

Ruschke's complaint outlines a history of heart trouble, including a 1999 stroke and subsequent surgery to replace a faulty aortic valve. Around 2013, he began experiencing renewed difficulties, and in January 2015 he was told he'd need a second open-heart surgery.

“Medtronic knew at all relevant times that Dr. Ruschke was disabled, yet it failed to take any action whatsoever to engage with Dr. Ruschke to accommodate his disabilities after becoming aware of them,” the complaint alleges.

Medtronic let Ruschke remain on its payroll for two months following the RIF, the complaint states, but served out-of-office voice and email messages indicating that he'd left the company. “These actions caused Dr. Ruschke to be portrayed as having fallen off the face of the earth or abandoned his job,” the complaint states. “Such a no-notice departure would be highly out-of-character for such a distinguished patent counsel.”