This appeal is from the decision of the Patent and Trademark Office (PTO) Board of Appeals (board) affirming the rejection of claims 11-23, all claims in application serial No. 604,930, filed August 15, 1975, entitled "Programmed Conversation Recording System."
Appellant's invention is a system capable of simulating a conversation with a respondent. The system is programmed with a series of prerecorded statements or questions which are played to the respondent. After hearing each statement, the respondent has an indefinite time in which to give a response which is recorded by the system. The system then responds to the voice or vocal pauses made by the respondent by playing the next statement or question to the respondent and recording the corresponding response until the needed information has been obtained.
Claim 11 is illustrative:
Although one of the principal uses contemplated by appellant for his system is in conjunction with a telephone system wherein the respondent is a telephone caller, the claims are not limited to include telephone apparatus. Appellant's specification states that "the system has a number of applications that do not utilize the telephone system," and cites several examples of non-telephone related applications.
In order to overcome a 35 U.S.C. § 102(a) rejection based upon a patent issued to Winterhalter, cited by appellant in a prior art statement to the PTO, appellant submitted an affidavit under Rule 131 to swear back of that reference.
In response, the examiner entered a rejection under § 102(b), stating:
The critical date, one year prior to the date on which appellant's parent application was filed, is February 4, 1973.
In an attempt to overcome the § 102(b) rejection, appellant submitted three additional affidavits of his own, two affidavits by Buchberger, his engineering assistant, and one affidavit by Mitchel, vice president of Market Facts, Inc. (Market Facts), a recipient of two of the systems.
Appellant's additional affidavits stated that six systems had been offered to customers including Montgomery Ward, J. C. Penney, Market Facts, and Household Finance Corporation, prior to the critical date.
The Mitchel affidavit corroborated that the systems were delivered to Market Facts and installed prior to the critical date. The affidavit further stated that the systems did not function, that appellant expended considerable effort in attempts to get them to work, and that the systems never did function as intended and were disconnected. Accompanying the affidavit were exhibits A, B, and C, copies of correspondence between applicant and Market Facts concerning the acquisition by Market Facts of the systems in question.
The examiner was of the opinion that Exhibits A thru C, submitted with the Mitchel affidavit, evidenced a contract of sale between appellant and Market Facts. In exhibit A, Mitchel states: "The units when installed will not be considered purchased until both are working to the complete satisfaction of Market Facts." In exhibit B, Mitchel states, in toto, "This letter serves as purchase authorization for two Con-Mode [system trademark] units. This purchase is made under the conditions of our letter to you dated December 6, 1972, and your letter to Market Facts dated December 20, 1972." (Emphasis ours.)
Before the board, appellant argued that although the equipment was delivered to various recipients, title to the equipment remained with appellant, and so no "sales" were consummated. He further denied that the systems were on sale because they were used by the recipients for evaluation purposes.
Appellant continued to press his argument that the use of the systems prior to the critical date was experimental in nature. In addition, appellant argued that since the systems were inoperative for their intended purposes, they did not embody the claimed invention. Thus, according to appellant, that which was in use prior to the critical date was not the claimed invention, making the loss of right provision of § 102(b) inapplicable.
The board found that the systems bearing serial Nos. 001-004 were delivered prior to the critical date.
Appellant had urged that the statement in exhibit A (Mitchel's letter of December 6, 1972), viz: "The units when installed will not be considered purchased until both are working to the complete satisfaction of Market Facts," corroborated the statement in the Mitchel affidavit that the systems were delivered for a six-month evaluation period. However, the board viewed this statement as "no more than a demand for a money back guarantee; a warranty, a right of recission or a right to a refund." The board viewed the exhibits as evidence of a contract of sale:
The board held that other evidence of record tended to bolster its conclusion that the system was on sale prior to the critical
Finally, the board relied on a press release, dated January 7, 1973, announcing the system at the National Retail Merchant's Association Annual Retailer's Business and Equipment Exposition, as "strong evidence of an `on sale' status." At this retailer's trade show, appellant had placed a demonstration model on display. The press release concluded:
The board rejected appellant's contention that the activity prior to the critical date was, in the eyes of the law, for test and evaluation purposes. It noted that the Sears and Wards status reports indicated that the field tests in which appellant wanted the system included were for the benefit of the retailers, not appellant, and would not have been under appellant's control. As for the "6 month evaluation" notation on invoices for system serial Nos. 001, 002, 005, and 006, the board found the notation ambiguous, since there was "no indication as to evaluation by whom, for what purpose or for whose benefit [the evaluations were to be conducted] and there is certainly no indication that the equipments were subject to appellant's supervision and control." The board concluded that any evaluation was for the purposes of the recipients of the systems, not appellant.
Regarding the averments in the affidavits of Theis and Buchberger that the systems had been modified and tested virtually every day, the board stated that there was no evidence that this was done for the benefit of appellant. It also pointed out that, according to the affidavits, not all of the systems were subjected to such rigorous procedures.
The board further observed that nowhere in the invoices or correspondence had appellant indicated that any limitations or restrictions or injunctions of secrecy had been imposed upon the users of the systems during the six-month evaluation period, citing In re Blaisdell, 44 CCPA 846, 242 F.2d 779, 113 USPQ 289 (1957). Also, the board found no evidence that the recipients of the systems undertook to supply test or operational data to appellant.
Finally, the board rejected appellant's argument that the systems delivered prior to the critical date did not function for their intended purpose and thus could not have embodied the claimed invention, since the claims required that the system function properly in "conversing" with a respondent. Appellant had relied for this proposition on Kayton, Patent Law Perspectives § A.3 at A449-A451 (1967-68 Annual Review). The board found that many of the problems encountered by appellant with the systems were caused by the interface with telephone equipment when the system was used in conjunction with a telephone system.
Before this court, appellant continues to urge that the loss of right provision of § 102(b) cannot apply since the devices delivered prior to the critical date were "inoperative" until long after the critical date. He cites Illinois Tool Works, Inc. v. Solo Cup Co., 179 USPQ 322 (N.D.Ill.1973), and other cases for the proposition "that a device which is inoperative for its normal and intended purpose has `absolutely no prior art status' even if it is `on sale or in public use' more than one year prior to the effective filing date of a patent application."
Also, appellant continues to argue that the devices delivered prior to the critical date were the subject of bona fide experimentation and thus exempt from § 102(b). He relies on the notation "6 month evaluation" on several of the invoices, and further on the fact that the systems did undergo major modifications while in use at their respective locations before they were usable for their intended purpose.
Finally, appellant argues that public policy considerations demand that he be allowed to properly perfect his invention before being required to apply for a patent. He states that the actions of the PTO in this case work an unnecessary hardship on inventors by forcing them to file their applications before they can make a reasonable determination that their inventions are worth the time and expense of seeking patent protection.
An inventor loses his right to a patent if he has placed his invention "on sale in this country, more than one year prior to the date of the application for patent in the United States." 35 U.S.C. § 102(b). Even a single, unrestricted sale brings into operation this bar to patentability. Consolidated Fruit-Jar Co. v. Wright, 94 U.S. 92, 94, 24 L.Ed. 68 (1876); In re Blaisdell, 44 CCPA 846, 851, 242 F.2d 779, 783, 113 USPQ 289, 292 (1957).
Appellant makes three main contentions. He disputes the finding that the systems were "on sale" prior to the critical date, although he admits that as many as six systems may have been delivered prior to that date. He asserts that § 102(b) cannot apply because his devices were inoperative and thus did not embody the claimed invention, and that any activity prior to the critical date was bona fide experimentation, exempting him from the effect of § 102(b) on the authority of cases such as Elizabeth v. Pavement Co., supra. We shall deal with these contentions in order.
a. The "On Sale" Issue
We think the board had ample evidence by which it could properly conclude that at least one sale took place prior to the critical date. In the absence of an exception to the statutory bar, this would suffice to bar appellant from a patent. Consolidated Fruit-Jar v. Wright, supra. Although it is not clear from the record that delivery of the systems to Market Facts actually took place prior to the critical date, delivery is not the crucial event.
For § 102(b) to apply, it is not necessary that a sale be consummated. It suffices that the claimed invention, reduced to practice, was placed on sale, i. e., offered to potential customers, prior to the critical date. Akron Brass Co. v. Elkhart Brass Manufacturing Co., 353 F.2d 704, 709, 147 USPQ 301, 305 (7th Cir. 1965). Even if no
The record shows that, as early as December 6, 1972, almost two months prior to the critical date, appellant was negotiating with Market Facts in an attempt to sell his systems. We agree with the board that the correspondence between appellant and Mitchel (exhibits A-C accompanying the Mitchel affidavit) appears to constitute a contract of sale for a presently available system.
The Market Facts invoice does not indicate that the delivery was for an evaluation period. Neither the board nor this court consider that the Mitchel exhibits provide any support for the contention that Market Facts was to evaluate the system for appellant's benefit. Thus the board was correct in refusing to give weight to the statement in the Mitchel affidavit that the transaction was for experimental purposes. See Robbins Co. v. Lawrence Manufacturing Co., 482 F.2d 426, 433-34, 178 USPQ 577, 582-83 (9th Cir. 1973).
There was other independent evidence before the board which justifies the conclusion that the system was "on sale" prior to the critical date. Appellant's correspondence with Sears, and the status reports concerning Sears and Wards, as well as the press release for the National Retail Merchant's Association trade show were considered by the board to be "strong evidence" on this point.
b. The Experimental Exception Issue
Appellant argues that loss of right under § 102(b) should not apply here because the system was the subject of bona fide experimentation prior to the critical date. Since we have agreed with the board that appellant's system was "on sale" prior to the critical date, appellant must show that he comes under the Elizabeth v. Pavement Co. experimental use or sale exception by proof which is "full, unequivocal, and convincing." Smith & Griggs Manufacturing Co. v. Sprague, 123 U.S. 249, 264, 8 S.Ct. 122, 31 L.Ed. 141 (1887); In re Dybel, 524 F.2d 1393, 1400, 187 USPQ 593, 598 (CCPA 1975); In re Blaisdell, 44 CCPA at 851-52, 242 F.2d at 784, 113 USPQ at 293.
Appellant's argument must fail. We agree with the analysis made by the board. The notation "6 month evaluation" on several of the invoices is equivocal. It is not clear on the face of the invoices who is to benefit from the evaluation. It is as likely that the evaluation was for the benefit of the customer, who would want to know if the system suited his purposes, as for the benefit of appellant. Such "market testing" does not fall within the experimental use exception, Cataphote Corp. v. DeSoto Chemical Coatings, Inc., 235 F.Supp. 936,
It is settled law that the experimental sale exception does not apply to experiments performed with respect to nonclaimed features of an invention. Minnesota Mining & Manufacturing Co. v. Kent Industries, Inc., supra. It appears from the record that most of the "experimenting" done on the systems was done for the purpose of correcting problems with the telephone interface. The claims do not require that the system be used with a telephone system. Thus, any work done to improve the operation of the system as it is used with telephone equipment does not aid appellant's experimental use argument.
Although appellant has alleged that other problems, not related to the telephone system, were encountered with his system, we do not believe that his efforts to correct those problems, in the context of all of the facts developed in the record, warrant a reversal of the board's decision. We agree with the board that the problems associated with the pause timing, spurious noise from radio interference and other nearby equipment, drifting filters, and arcing relay contacts were solvable by routine debugging, setup, and installation adjustments.
The context in which all of appellant's activities in the period immediately preceding the critical date exist is clearly that of an attempt at market penetration. Even if there is a bona fide experimental purpose, an inventor may not commercially exploit his invention for more than one year prior to the filing of his patent application. In re Dybel, supra, 524 F.2d at 1400, 187 USPQ at 598, and cases cited. The experimental exception applies only if the commercial exploitation is merely incidental to the primary purpose of experimentation to perfect the invention. Smith & Griggs Mfg. Co. v. Sprague, supra, 123 U.S. at 256, 8 S.Ct. 122; Cali v. Eastern Airlines, Inc., 442 F.2d 65, 70, 169 USPQ 753, 757 (2d Cir. 1971). On the strength of the evidence of record, the board was correct in holding that the primary motivation behind appellant's activities was commercial, and that the experimental use or sale exception should not apply in this case.
c. The Inoperativeness Issue
Appellant also relies on the theory that the bar of § 102(b) should not apply because, at the time prior to the critical date when Market Facts and others were using the systems, the systems were "inoperative." It appears that appellant argues the views appearing in the treatise, Patent Law Perspectives (PLP). The theory is that during the period when the invention is not yet operative it does not exist since it
We find this argument wanting because appellant has failed to show that the claimed invention was inoperative. As pointed out by the board, the chief cause of the alleged inoperativeness of appellant's systems in the hands of users was telephone line interface problems. In view of the fact that the claims do not require the use of telephones, these problems could not have prevented a reduction to practice under the PLP analysis because the invention claimed is independent of telephones and can be reduced to practice without them.
Furthermore, with respect to the other problems referred to in the affidavits, we view them as minor and not precluding actual reduction to practice in the eyes of one of ordinary skill in the art.
One further argument pressed by appellant with regard to this issue deserves comment. In his brief here, appellant states that it is the law "that a device which is inoperative for its normal and intended purpose has `absolutely no prior art status' even if it is `on sale or in public use' more than one year prior to the effective filing date of a patent application." For this proposition, he cites, inter alia, Illinois Tool Works, Inc. v. Solo Cup Co., supra.
Appellant's reliance on this case is misplaced. Prior art is not involved in this case. Here appellant has lost his right to a patent by attempting to commercially exploit his invention for a period longer than Congress allows. This is not the same as refusing to treat a defective reference as prior art, which is what was involved in the Illinois Tool Works case. In the former situation, an inventor, by delay, forfeits a right he would otherwise enjoy; in the latter situation a defective reference is disregarded because it does not work.
Appellant argues that public policy demands that he be given time to adequately develop his invention before being forced to file a patent application. All we have to say is that the law gives him a year. He cannot expand it.
The decision of the board is affirmed.
The system bearing serial No. 005 was delivered to Household Finance Corporation on February 9, 1973; however, the invoice indicates that the order was taken on October 12, 1972. According to the Theis affidavit dated February 3, 1978, system serial No. 006 was delivered to Montgomery Ward in Houston sometime in February, 1973.