Federal Circuit Review - Issue 39
Unaffiliated third party use must be publicly accessible to invalidate later-filed patents under 102(b).
Delano Farms Co. v. Cal. Table Grape Comm’n., No. 2014-1030, 2015 U.S. App. LEXIS 346 (Fed. Cir. Jan. 9, 2015) (Bryson, J.).
California grape growers challenged the validity of two plant patents for certain grape varieties, Scarlet Royal (U.S. Pat. No. PP 16,229) and Autumn King (U.S. Pat. No. PP 16,284). The plaintiffs alleged that the patented grape varieties were in public use more than one year before the September 28, 2004 filing date of the patents. After the bench trial, the district court held that the plaintiffs failed to show by clear and convincing evidence that the prior use was a public use under 35 U.S.C. § 102(b). The plaintiffs appealed.
The court held that the alleged use must be “publicly accessible” to be invalidating. The “actions of an unaffiliated third party acting in secret are evaluated as if he stood in the place of the inventor.” This implicates factors such as: “the nature of the activity that occurred in public; the public access to and knowledge of the public use; and whether there was any confidentiality obligation imposed on persons who observed the use.”
The Federal Circuit concluded that there was no public use bar under § 102(b). The third party who obtained the unreleased plant varieties maintained control over them, despite providing them to his cousin and his long-time marketer. The circumstances “weigh against the application of the public use bar.” All three parties “had incentives to keep [their] possession secret, creating an environment of confidentiality, [and] [e]ach maintained tight control over who knew about the Scarlet Royal and Autumn King vines and their use.” The facts related to the cultivation of these grapes did not support a finding of public use. Even though the grape vines were visible from public roads, the varieties were not identifiable and the unreleased varieties were not labeled in any way. Therefore, “the public has not been put in possession of [the features of the claimed invention,” namely the Scarlet Royal and the Autumn King grape varieties.
Federal Circuit applied the de novo standard of review to the objective prong of the willfulness inquiry and affirmed the district court’s finding of willfulness.
Bard Peripheral Vascular, Inc. v. W.L. Gore & Ass., Inc., No. 2014-1114, 2015 U.S. App. LEXIS 473 (Fed. Cir. Jan. 13, 2015) (Prost, C.J.) (Hughes, J., concurrence) (Newman, J., dissent).
In 2003, BPV and Goldfarb sued Gore for infringement of U.S. Pat. No. 6,436,135, which covered prosthetic vascular grafts made of highly expanded polytetrafluoroethylene (ePTFE). A jury found the patent valid and willfully infringed. Gore appealed, and the Federal Circuit panel affirmed. The en banc court granted rehearing on the willfulness issue. The panel remanded, holding that “the objective determination of recklessness, even though predicated on underlying mixed questions of law and fact, is best decided by the judge as a question of law subject to de novo review.” The district court then found that Gore “could not have realistically expected its defenses to succeed.”
Gore appealed again and argued that neither Goldfarb nor BPV had standing to sue. The Federal Circuit determined that it was bound by the prior panel’s implicit determination of standing and jurisdiction, because Gore raised no new facts and argued the same standing theory that failed to succeed below. According to Gore, inventor Goldfarb granted substantial rights in the patent to Bard in a virtual assignment, when Bard transferred its interest to BPV. Because Bard failed to memorialize the transfer in a written instrument, BVP’s rights were deficient, including its right to sue. However, the Federal Circuit found no basis to conclude that Goldfarb had transferred “all substantial rights” to Bard. In addition, the transfer of interest between Bard and BPV was memorialized later and well before the suit was filed.
Regarding willful infringement , Gore argued that its infringement was not willful because it believed the patent was invalid for non-joinder of an inventor, Peter Cooper, who “supplied the particular ePTFE tubing that Goldfarb used in making his successful vascular graft.” Under Federal Circuit law, the court asked: (1) what constitutes the “definite and permanent idea” of the invention at issue and (2) whether Cooper and Goldfarb acted in concert to jointly arrive at that idea.
The court determined that the invention “was not merely the use of ePTFE in vascular grafts” but the “dimensions of fibril length that are essential for the successful graft.” Also, Cooper “had not yet conceived the invention” when he provided the tubing, and “he was not aware of the fibril lengths of the material he was sending to Goldfarb.” Even after Cooper conceived the invention, he “had ‘minimal contact’ with Goldfarb on the subject of the fibril length limitation.” Based on this record, the Federal Circuit held that Cooper and Goldfarb “independently conceived of the fibril length limitation.” In other words, “Cooper and Goldfarb did not collaborate, communicate, nor in any way jointly arrive at the recognition that fibril length was significant for graft success.” Reviewing the record under the de novo standard, the Federal Circuit affirmed the district court’s conclusion that Gore’s defense on inventorship grounds was not susceptible to a reasonable conclusion that the patent was invalid.
In a concurring opinion, Judge Hughes agreed with the majority regarding the outcome of the case, but he urged the full court to review the law on willfulness in light of the recent Supreme Court decisions, Highmark Inc. v. Allied Health Management Sys., Inc., 134 S. Ct. 1744 (2014) and Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014), which called into question the Federal Circuit’s two-part test for determining willfulness and de novo standard of review. He believed that “a more deferential standard of review” is better for reviewing mixed questions of law and fact, as suggested by the Supreme Court in Highmark.
Judge Newman dissented, and accused the majority of not undertaking a de novo review according to precedent. The majority “[did] not review the evidence and apply the law objectively” but “merely searche[d] for and recite[d] adverse evidence.” The question of willful infringement is not “whether the district court’s decision of law can be found supported by substantial evidence” but “whether the accused infringer raised a substantial question of invalidity or unenforceability regarding the ‘135 patent.” According to the dissent, as a matter of law, the patent owner’s required showing of objective recklessness for willful infringement is not met “when the patent is reasonably subject to challenge,” which occurred in this case. Judge Newman argued that Gore raised several substantial questions of validity and enforceability and credited Gore’s inventorship defense as “quite viable” and “raise[d] a substantial question of validity.”
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