«011 GOTER_PROOF -SK.DOCX (DO NOT DELETE) 7/5/2012 1:24 PM The Commercial Exploitation Continuum Phillip W. Goter* I. INTRODUCTION In the realm of ...»
90. Am. Seating Co. v. USSC Grp., 514 F.3d 1262, 1267 (Fed. Cir. 2008) (quoting Invitrogen, 424 F.3d at 1380) (internal quotation marks omitted).
91. Id.; see also Adenta GmbH v. OrthoArm, Inc., 501 F.3d 1364, 1372 (Fed. Cir. 2007) (finding public use in displaying the invention at a trade show prior to the critical date); Eolas Techs. Inc. v. Microsoft Corp., 399 F.3d 1325, 1334 (Fed. Cir. 2005) (determining that a demonstration to two employees of an outside company without executed confidentiality agreements may constitute a public use “[b]ecause the [company’s] employees were under no limitation, restriction or obligation of secrecy to [the inventor]”).
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public uses.92 Under that test, “[t]he totality of the circumstances is considered in conjunction with the policies underlying the public use bar” and includes:
[T]he nature of the activity that occurred in public; the public access to and knowledge of the public use; whether there was any confidentiality obligation imposed on persons who observed the use; whether persons other than the inventor performed the testing; the number of tests; the length of the test period in relation to tests of similar devices; and whether the inventor received payment for the testing.93 In distancing itself from its earlier totality-of-thecircumstances test post-Pfaff, the Federal Circuit nonetheless identified several factors to consider when applying this test to determine public accessibility to the invention.94 For instance, a court may properly consider “the nature of the activity that occurred in public; public access to the use;”95 “confidentiality obligations imposed upon observers;... and the circumstances surrounding testing and experimentation.”96 Regarding confidentiality and control, the absence of an express, written confidentiality agreement is not dispositive, especially where an inventor controls and limits access to the invention to observers with whom the inventor has established a relationship because in those circumstances “an understanding of confidentiality can be implied.”97 Likewise, where an inSinskey v. Pharmacia Ophthalmics, Inc., 982 F.2d 494, 498 (Fed. Cir.
1992); see Pfaff, 525 U.S. at 67.
93. Netscape Commc’ns Corp. v. Konrad, 295 F.3d 1315, 1320 (Fed. Cir.
2002) (“There may be additional factors in a particular case relevant to the public nature of the use or any asserted experimental aspect.”).
94. Invitrogen, 424 F.3d at 1380 (Fed. Cir. 2005).
96. Am. Seating Co. v. USSC Grp., 514 F.3d 1262, 1267 (Fed. Cir. 2008).
97. Id. at 1268. Compare Moleculon Research Corp. v. CBS, Inc., 793 F.2d 1261, 1265–66 (Fed. Cir. 1986) (finding that an inventor’s private use and demonstrations to “a few close colleagues,” including allowing his boss to use the invention in his presence, did not constitute public use because “the personal relationships and other surrounding circumstances were such that [the inventor] at all times retained control over [the invention’s] use as well as over the distribution of information concerning it” and the inventor “never used the puzzle or permitted it[s] use[ ] in a place or at a time when he did not have a legitimate expectation of privacy and of confidentiality”) with Beachcombers Int’l, Inc. v. WildeWood Creative Prods., Inc., 31 F.3d 1154, 1159–60 (Fed. Cir.
1994) (finding public use where the invention on display to between 20–30 guests at a party hosted by the inventor because the inventor “personally demonstrated the device to some of the guests for the purpose of getting feedback on the device;” and the inventor “made no efforts to conceal the device or keep anything about it secret.... [including] never ask[ing guests] to mainGOTER_PROOF -SK.DOCX (DO NOT DELETE) 7/5/2012 1:24 PM 2012] THE COMMERCIAL EXPLOITATION CONTINUUM 811 ventor disclosed his novel keyboard to “his business partner, a friend, potential investors, and a typing tester” but the keyboard was not configured to be used for its intended purpose (connected as an input device to a computer) except for a one time typing test [to assess typing speed], the invention was not found to be in public use.98 In reversing the district court on the issue of public use, the Federal Circuit looked to evidence that the typing tester had signed a non-disclosure agreement, that no record of continued use existed, and “[a]ll disclosures, except for the one-time typing test, only provided a visual view of the new keyboard design without any disclosure of the [actual invention].”99 Thus, the Federal Circuit found the “disclosures visually displayed the keyboard design without putting it into use” for its intended purpose.100 When an inventor fails to either control or ensure confidentiality of its invention, public-use may be found “regardless of how little the public may have learned about the invention.”101 In the context of an industry collaboration leading to an invention where non-inventor employees of one of the collaborators worked on developing the invention into a commercial system, such access may be considered public use—especially where the “access [to the invention] was not by an inventor and not protected by an obligation of secrecy to [the other industry collaborator].”102 Similarly, use of a drilling method “at a commercial jobsite on public land on the side of an interstate highway” by those other than the inventor—and not under his control—is a public use, even if the claimed method was being performed outside of his control to test another invention (a drill bit) that the inventor did retain control of.103 Equivalent to the on-sale bar, “an inventor’s own prior tain in secrecy any information about the device”).
98. Motionless Keyboard Co. v. Microsoft Corp., 486 F.3d 1376, 1385 (Fed.
101. Metallizing Eng’g Co. v. Kenyon Bearing & Auto Parts Co., 153 F.2d 516, 520 (2d Cir. 1946).
102. Bright Response, L.L.C. v. Google, Inc., 730 F. Supp. 2d 610, 617 (E.D.
103. New Railhead Mfg., L.L.C. v. Vermeer Mfg. Co., 298 F.3d 1290, 1297– 98 (Fed. Cir. 2002) (“It is of crowning importance... that it was only the drill bit claimed in the ‘283 patent, and not the method of the ‘743 patent, that was being tested by [the inventor]. The method was successfully performed numerous times in January with the first prototype of the drill bit....”).
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commercial use, albeit kept secret, may constitute a public use or sale under § 102(b), barring him from obtaining a patent.”104 “However, when an asserted prior use is not that of the applicant, § 102(b) is not a bar when that prior use or knowledge is not available to the public.”105 Also in common with the on-sale bar, the public-use bar requires that “‘the device used in public includes every limitation of the later claimed invention’...
[even though] the public use itself need not be enabling.”106 Simply put, “the public use [must] relate to a device that embodied the invention.”107 Thus, where a claimed invention is openly used by a third party, the patent of a later independent inventor will be invalid for public use—even though the use was of “high-level aspects” of the invention—because the public was already in possession of the invention.108 Revisiting Metallizing Engineering Co., the seminal case on commercial exploitation of a process, Judge Learned Hand
104. Woodland Trust v. Flowertree Nursery, Inc., 148 F.3d 1368, 1370–71 (Fed. Cir. 1998) (citing Egbert v. Lippman, 104 U.S. 333, 336 (1881) (finding an “inventor’s unobservable prior use was a public use”) and TP Labs. v. Prof’l Positioners, Inc., 724 F.2d 965, 972 (Fed. Cir. 1984) (noting that “public use” may bar patentability “if the inventor is making commercial use of the invention under circumstances which preserve its secrecy” but finding no public use where a dentist installed an orthodontic invention in patients to test its efficacy, because “the dentist-patient relationship itself was tantamount to an express vow of secrecy”)).
105. Id. at 1371 (citing W.L. Gore & Assocs., Inc. v. Garlock, Inc., 721 F.2d 1540, 1550 (Fed. Cir. 1983)).
106. Zenith Elecs. Corp. v. PDI Commc’n Sys., Inc., 522 F.3d 1348, 1356 (Fed. Cir. 2008) (quoting Netscape Commc’ns Corp. v. Konrad, 295 F.3d 1315, 1321 (Fed. Cir. 2002)) (citing In re Epstein, 32 F.3d 1559, 1568 (Fed. Cir. 1994) (noting that “there is no requirement for an enablement-type inquiry”)).
107. Id.; see also J.A. LaPorte, Inc. v. Norfolk Dredging Co., 787 F.2d 1577, 1583 (Fed. Cir. 1986) ( “[T]he question is not whether the sale, even a third party sale, ‘discloses’ the invention at the time of the sale, but whether the sale relates to a device that embodies the invention.”).
108. Lockwood v. Am. Airlines, Inc., 107 F.3d 1565, 1570 (Fed. Cir. 1997) (“[T]he public was aware that [a third party] possessed [the claimed multipleinstitution feature] and... had been using [a system with that feature] to make travel reservations from independent travel agencies prior to [the inventor’s] date of invention.”); see also Elec. Storage Battery Co. v. Shimadzu, 307 U.S. 5, 20 (1939) (finding public use where a third-party prior inventor “continuously employed the alleged infringing machine and process for the production of lead oxide powder used in the manufacture of plates for storage batteries which have been sold in quantity” long before the independent inventor’s filing date). “The ordinary use of a machine or the practise [sic] of a process in a factory in the usual course of producing articles for commercial purposes is a public use.” Elec. Storage Battery Co., 307 U.S. at 20.
011 GOTER_PROOF -SK.DOCX (DO NOT DELETE) 7/5/2012 1:24 PM 2012] THE COMMERCIAL EXPLOITATION CONTINUUM 813 held that a patentee’s secret use of a process to manufacture products for sale to the public triggered the public-use bar.109 The Federal Circuit endorsed Metallizing Engineering Co. in D.L. Auld Co. early on by invalidating a patent under the public-use bar where the patentee performed the claimed method to produce samples for prospective customers and provided at least one customer pricing and delivery quotes.110
B. COMMERCIALLY EXPLOITEDThe Federal Circuit has noted that “[c]ommercial exploitation is a clear indication of public use, but it likely requires more than... a secret offer for sale.”111 As a prong of the public-use bar, this commingling with the on-sale bar is unhelpful at best. When it comes to determining whether the invention was commercially exploited, the courts have provided scant guidance and quite circularly list “commercial exploitation” as an additional factor to consider alongside those indicative of public accessibility.
The relatively recent Invitrogen case was a missed opportunity to shed some light on the bounds of commercial exploitation as applied to the public-use bar. Instead, the opinion moved even closer to merging the public-use bar with the onsale bar.112 Prior to the critical date, Invitrogen used its claimed process in its own laboratories “to grow cells to be used in other projects within the company.”113 The district court beMetallizing Eng’g Co. v Kenyon Bearing & Auto Parts Co., 153 F.2d 516, 520 (2d Cir. 1946) (distinguishing trade secrecy from the competitive wrong of effectively extending the patent term through delayed filing).
110. D.L. Auld Co. v. Chroma Graphics Corp., 714 F.2d 1144, 1148 (Fed.
Cir. 1983) (“[A] party’s placing of the product of a method invention on sale more than a year before that party’s application filing date must act as a forfeiture of any right to the grant of a valid patent on the method to that party.
111. Invitrogen Corp. v. Biocrest Mfg., L.P., 424 F.3d 1374, 1380 (Fed. Cir.
2005); see also Elec. Storage Battery, 307 U.S. at 19–20 (“A mere experimental use is not the public use defined by the Act, but a single use for profit, not purposely hidden, is such. The ordinary use of a machine or the practise [sic] of a process in a factory in the usual course of producing articles for commercial purposes is a public use.”) (footnotes omitted).
112. See Invitrogen, 424 F.3d at 1383 (“[T]here is no evidence that Invitrogen received compensation for internally, and secretly, exploiting its cells. The fact that Invitrogen secretly used the cells internally to develop future products that were never sold, without more, is insufficient to create a public use bar to patentability.”).
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lieved that Invitrogen intended this use “to further other projects beyond development of the claimed process... [in order] to acquire a commercial advantage” and found that the use did in fact “generate commercial benefits.”114 The Federal Circuit, however, found no public use, accepting Invitrogen’s argument that “this secret internal use was not ‘public use’... because [Invitrogen] neither sold nor offered for sale the claimed process or any product derived from the process, nor did [Invitrogen] otherwise place into the public domain either the process or any product derived from it.”115 Thus, we are left with an illdefined spectrum of commercial exploitation requiring loose approximation between distinct, factually distant poles— Invitrogen and Metallizing Engineering.