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On-sale bar cannot be avoided by experimentation conducted by patentee's customer
February 25, 2008
In a decision Thursday, the Federal Circuit provided additional guidance on the on-sale bar of § 102(b). In the case, the patentee developed a series of prototypes that were then sold to its customer, who then experimented with the prototypes and requested modifications to the prototypes. The prototypes were also accompanied by offers to sell production models of the prototypes. The court was clear in that the experimental use exception only concerns the actions of the inventors and their agents, not another party doing experimental testing for a particular purpose. As a result, despite the fact that the customer was experimenting with the prototypes, that experimentation could not negate the on-sale bar of § 102(b).Two of the panel's three judges also filed a concurring opinion. In that opinion, Judges Prost and Dyk "point out the confusion" in Federal Circuit law when it comes to the interaction between experimental use and the on-sale bar. While this case is not the proper vehicle, it's safe to add this issue to the list of near-future en banc issues for the court.More detail of Atlanta Attachment Co. v. Leggett & Platt, Inc. after the jump.This case involved commercial sewing machine manufacturer Atlanta Attachment Company ("Atlanta") and its patent for an invention related to an automatic gusset ruffler machine for sewing the tops of pillow-top mattresses. Atlanta developed prototypes for the invention based on a business agreement with mattress manufacturer Sealy to ultimately seek patents on the inventions. Atlanta and Sealy kept all agreements and developmental plans confidential.Various prototypes and improvements were made by Atlanta and then sent for further testing to Sealy, who notably made no commercial products with the machines. Sealy provided verbal comments about improvements to be made upon the prototypes. A final prototype was ultimately delivered to Sealy on April 10, 2001 (after the critical statutory bar date of March 5, 2001). This prototype was substantially similar to earlier prototypes, with limited improvements. While Atlanta was paid for the prototypes, it claimed that it did not earn any profit from those prototypes. Sealy ultimately decided not to purchase machines from Atlanta, who then began selling to other customers. On August 15, 2002 Atlanta filed its patent application that led to the patent-in-suit. The application claimed priority to a provisional application filed March 5, 2002, meaning the critical date was March 5, 2001. The lawsuit at issue was initiated by Atlanta filing a patent infringement suit against Leggett & Platt alleging infringement of claim 32 of its patent. Leggett responded claiming non-infringement and counterclaiming invalidity of the patent due to on-sale bar, failing to meet best mode and written description requirements, obviousness, and unenforceability due to inequitable conduct. The district court granted summary judgment in favor of Atlanta, finding infringement and no invalidity based on the on-sale bar, obviousness, or the best mode or written description requirements, and no inequitable conduct took place. Leggett & Platt appealed.The Federal Circuit's review of the district court's grant of summary judgment focused on the counterclaim of invalidity due to on-sale bar under § 102(b). The statute prevents a patentee from applying for a patent more than one year after making any attempt to profit from an invention by putting it on sale.The court's analysis applied the Supreme Court's ruling in Pfaff. There, the Court held that two requirements must be met to show an invalidating sale under § 102(b): (1) the invention must be the subject of a commercial offer for sale, and (2) it must be ready for patenting. There was no real dispute about the first prong, as the third prototype was admittedly sold to Sealy, and that is sufficient even if no profit was earned. Atlanta also included an offer for sale with the prototype, so even if the actual sale was insufficient, the offer to produce the machines commercially was sufficient to meet the first prong of Pfaff. The court also rejected Atlanta's argument that the sale was primarily for experimentation, and therefore should not be barring. The commercial nature of the sale and the offer for sale provided evidence that the sale was not for experimental purposes. Further, while testing to determine whether the invention will work for its intended purpose can be indicative of experimentation, testing done to determine whether the invention will suit a particular customer's needs (as was done here) is not experimental. Finally, the most important fact was that the alleged experimentation was not conducted by the patentee or its agent, but instead by one of its customers. As a result, "[t]he fact that Sealy experimented with the prototypes is immaterial because the experimental use exception only concerns the actions of inventors and their agents, and Sealy was no under the inventors' control." The issue of control was "dispositive" on the experimental use issue.Turning to the second prong of the Pfaff test, the court also found the third prototype to be "ready for patenting." This can be shown by either evidence that the invention was actually reduced to practice (meaning that it works for its intended purpose), or by showing "the inventor had prepared drawings or other descriptions of the invention that were sufficiently specific to enable a person skilled in the art to practice the invention." The court determined the third prototype was a reduction to practice of the claimed invention, and therefore the invention was ready for patenting as the invention worked for its intended purpose. The Federal Circuit reversed the district court's determination that the third prototype was not reduced to practice and ready for patenting, explaining that an invention can be considered reduced to practice "even though it may later be refined or improved." Further, because the claim did not require various improvements subsequently made to the machine, such improvements also did not result in the third prototype being continued experimental use.Because the Federal Circuit determined that the third prototype was both the subject of a commercial offer for sale and was reduced to practice at the time, claim 32 was invalid under the on-sale bar of § 102(b). Judges Prost and Dyk joined in a concurring opinion to address the confusion in Federal Circuit case law regarding applicability of experimental use and the two prong test for the on-sale bar. They noted the Supreme Court's decision in Pfaff redefined the on-sale bar test, affecting the experimental use doctrine's application to alleged instances of invalidating prior use. They further distinguished "ready for patenting" under Pfaff from reduction to practice, asserting it is improper for the court to limit the experimental use doctrine from the time an invention is ready for patenting to the time it is reduced to practice, as this severely limits the rights of inventors to conduct on-going work on an invention:
Assuming a complete invention, ready for patenting, inventors should be able to continue to privately develop any claimed aspect of that invention without risking invalidation, if they conduct developmental activities in a way that is neither public nor simply commercial, even if there is some commercial benefit to the inventor in connection with the experimental use. Such development should fall under the post-Pfaff application of the experimental use doctrine, and should be protected if it satisfies the first prong of Pfaff—i.e., it is neither a simply commercial offer for sale nor a public use.
The concurring opinion agrees that experimental use doctrine is inapplicable in the present case as Atlanta did not demonstrate experimental, rather than commercial, purposes for the sale. The concurrence further agrees that the additional improvements to the third prototype did not constitute experimental use, as they did not concern the claimed features. To read the full decision in Atlanta Attachment Co. v. Leggett & Platt, Inc., click here.
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