NIES, Circuit Judge.
UMC Electronics Company brought this action, pursuant to 28 U.S.C. § 1498(a), to recover compensation for use of its patented invention by the United States. UMC is the owner of Patent No. 3,643,513, issued February 22, 1972, by assignment from the inventor Preston Weaver. The United States Claims Court, 8 Cl.Ct. 604, 228 USPQ 396 (1985), upheld the validity of all claims (1-4) but dismissed the complaint on the ground of no infringement or, more accurately, no use of the patented invention by the United States. Both parties appeal.
The claimed invention is an aviation counting accelerometer (ACA), a device for sensing and for recording the number of times an aircraft has been subjected to predetermined levels of acceleration.
The patent application which became the patent in this suit ('513) was filed on August 1, 1968. Under 35 U.S.C. § 102(b) the commercial exploitation and the state of development of the invention one year before the filing of the application for the subject invention are critical to resolution of the on-sale issue.
Prior to the late 1960's when UMC first entered this field, the U.S. Navy had procured ACA's from Maxson Electronics Company and from Giannini Controls Corporation. The Navy was dissatisfied with these ACA's because they sometimes recorded data that defied common sense, failed to count accelerations, or counted accelerations that never occurred. In 1966 the Navy contacted Preston Weaver, an employee of UMC, told him of the problems with existing ACA's and informed him of the Navy's interest in buying improved devices. Weaver designed an accelerometer, model UMC-A, and in late 1966, UMC was awarded a contract to supply the Navy with approximately 1600 units.
In early 1967, UMC concluded that its model UMC-A would not meet the Navy's performance specification required by its contract. Like the Maxson and Giannini ACA's, the UMC-A accelerometer utilized, as part of its sensor, an electromechanical transducer to mechanically generate signals that indicate levels of acceleration.
To prevent UMC from losing the ACA contract, Weaver began work to improve the sensor portion of an ACA and conceived his invention which uses an analog transducer in the sensor. An analog transducer electrically generates a varying signal (in contrast to the mechanically produced signal of prior devices) which can be filtered electronically to selectively remove the effects of superimposed vibrations. The Claims Court found that in April-May of 1967 Weaver built and tested an engineering prototype of his ACA containing a commercial analog transducer, a filter, a timing circuit and a voltage sensor that measured one load level. UMC sought to modify the existing contract for ACA's to substitute an analog transducer for the electro-mechanical transducer specified in the contract, but was unsuccessful in negotiating a modification.
In late May, 1967, the Navy issued new specifications and in July, 1967, requested proposals from contractors to deliver ACA's built to the new specification (Mil-A-22145B). Technically, the request for proposals called separately for a certain number of sensor components of an ACA system and a certain number of recorders, the two units being compatible in combination. UMC responded to the request on July 27, 1967, the final date for making a proposal, with an offer to supply $1,668,743 worth of its improved ACA (hereinafter model UMC-B). UMC represented as part of its proposal that the sensor portion "has been constructed and tested in conjunction with voltage sensing and time controlled circuitry." In response to a Navy inquiry, on August 2, 1967, after the critical date, UMC submitted a technical proposal which described the model UMC-B in detail and included test results and schematic drawings. On August 9, 1967, UMC gave a demonstration of its device to the Navy at the UMC facility.
In early 1968 the Navy canceled the request to which the above submission of UMC was directed, and in July 1968, it issued another. The latter request eventually led to a contract with Systron-Donner Corporation, which company has been providing the Navy with ACA's utilizing analog transducers since 1970.
In June, 1980, UMC filed the instant action against the United States seeking compensation (after attempting for a number of years to obtain compensation directly from the Navy) by reason of the Navy's alleged use of its invention in the Systron-Donner ACA's. The Claims Court upheld the validity of the patent claims, which were challenged by the government on a number of grounds, but found that the Systron-Donner ACA's did not fall within the scope of the claims. Both parties appeal: UMC asking for reversal of the Claims Court's finding of no infringement; the government seeking to have the claims in suit held invalid. Since we conclude that the Claims Court erred as a matter of law in holding that the claims of the '513 patent were not invalid under section 102(b), we need discuss only that issue in detail.
The Claims Court Decision
The Claims Court analyzed the on-sale bar under the following three-part test set out in In re Corcoran, 640 F.2d 1331, 1333-34, 208 USPQ 867, 870 (CCPA 1981), taken from Timely Prods. Corp. v. Arron, 523 F.2d 288, 302, 187 USPQ 257, 267-68 (2d Cir.1975)
Proceeding through the Timely Products requirements in reverse order, the Claims Court first noted that UMC had admitted that its offer to the Navy was for profit, not for experimentation. The court then found that the invention of the '513 patent had been reduced to practice before the critical date by Weaver's tests of the engineering prototype of the ACA in April-May, 1967, because Weaver admitted that as a result of those tests he was satisfied that his invention would serve its intended purpose. 8 Cl.Ct. at 620, 228 USPQ at 403-04. However, the court found the first requirement that the complete invention must be embodied in the thing offered for sale was not met because the engineering prototype did not include all elements of the claims. The court found that the evidence established that the inventor had not built a physical embodiment of the invention including all limitations of the claims before the critical date.
The court then construed the decision of this court in Barmag Barmer Maschinenfabrik AG v. Murata Mach., Ltd., 731 F.2d 831, 221 USPQ 561 (Fed.Cir.1984). It interpreted Barmag as making an exception to the physical embodiment requirement where "commercial benefits outside the allowed time have been great." Because UMC "never produced its ACA," the court found it "reaped no commercial benefits." Based on those findings, the court held that the invention of the '513 patent was not on sale within the meaning of section 102(b).
The court also held that the invention would not have been obvious from the prototype, which the court considered to be the thing offered for sale. 8 Cl.Ct. at 620, 228 USPQ at 404. This was error in the court's analysis, the prototype not being the thing offered for sale. The subject matter of the offer for sale is admittedly the claimed invention.
The government maintains that, properly interpreted, all three Timely Products requirements had been met, namely, (1) there was an offer to sell model UMC-B accelerometers which embodied the invention of the claims, (2) the invention had been reduced to practice, and (3) the offer to sell was for profit, not experimentation. Thus, per the government, the Claims Court erred as a matter of law in not holding the claims barred under section 102(b). UMC counters that because the inventor never built a physical embodiment containing all elements of the claims, the Claims Court erred in finding a reduction to practice of the invention, but that the court's error was cancelled out by its separate requirement for a physical embodiment.
As an initial matter, UMC is correct in pointing out the inconsistency between the Claims Court's conclusion that the claimed invention was "reduced to practice" before the critical date and its separate finding that no physical embodiment of the invention existed at that time. It is not sufficient for a reduction to practice
The clarification of that issue, however, does not resolve the precise dispute here. Per the government, UMC's substantial attempted commercial exploitation of the claimed invention contravenes the policies of the on-sale bar despite the absence of a complete embodiment and, thus, raises an on-sale bar under section 102(b). For this proposition the government relies on the decision of this court in Barmag. On the other hand, UMC maintains that, as a matter of law, there is no on-sale bar unless the claimed invention had been reduced to practice before the critical date, and urges that we here reject the contrary suggestion in Barmag. Thus, we address first the issue whether reduction to practice of the claimed invention before the critical date is required to invoke the on-sale bar, and conclude, for reasons that follow, that reduction to practice is not always a requirement of the on-sale bar.
Whether a reduction to practice is a requirement of the on-sale bar of 35 U.S.C. § 102(b) requires a review of our precedent.
In Barmag, the court went out of its way to reserve the question whether a physical embodiment should be a requirement of the on-sale bar in all cases. 731 F.2d at 836-37, 221 USPQ at 565. Without a physical embodiment, as stated above, there can be no reduction to practice.
Contrary to the Claims Court's interpretation, Barmag did not suggest that an embodiment might not be required only in instances where there had been actual sales of goods. An offer to sell a later-claimed invention may be sufficient to invoke the bar whether the offer is accepted or rejected. King Instrument Corp. v. Otari Corp., 767 F.2d 853, 860, 226 USPQ 402, 406 (Fed.Cir.1985), cert. denied, ___ U.S. ___, 106 S.Ct. 1197, 89 L.Ed.2d 312 (1986); In re Caveney, 761 F.2d 671, 675, 226 USPQ 1, 3 (Fed.Cir.1985); Barmag, 731 F.2d at 836-37, 221 USPQ at 565; D.L. Auld Co. v. Chroma Graphics Corp., 714 F.2d 1144, 1147, 219 USPQ 13, 18 (Fed.Cir.), cert. denied, ___ U.S. ___, 106 S.Ct. 83, 88 L.Ed.2d 68 (1985); General Electric, 654 F.2d at 60, 211 USPQ at 872; In re Theis, 610 F.2d 786 at 791, 204 USPQ at 192; Gould, Inc. v. United States, 579 F.2d 571, 583-84, 198 USPQ 156, 167 (Ct.Cl.1978).
In Western Marine Elecs., Inc. v. Furuno Elec. Co., 764 F.2d 840, 844, 226 USPQ 334, 337 (Fed.Cir.1985), the argument was made that the patented invention, a gravity stabilized sonar device used on fishing boats, had not been reduced to practice and, thus, had not been on sale before the critical date. Because the device had not been mounted on a boat, it was argued, the device had not been sufficiently tested and, thus, had not been reduced to practice. In holding the invention to be on sale, the court did not directly answer that issue, stating that the "totality of the circumstances" determined whether the device was on sale. It reiterated:
Accord J.A. LaPorte Inc. v. Norfolk Dredging Co., 787 F.2d 1577, 1580 n. 4, 229 USPQ 435, 437 n. 4 (Fed.Cir.1986), cert. denied, ___ U.S. ___, 107 S.Ct. 274, 93 L.Ed.2d 250 (1986); King Instrument, 767 F.2d 853, 226 USPQ 402; In re Caveney, 761 F.2d 671, 226 USPQ 1.
In Shatterproof Glass Corp. v. Libbey-Owens Ford Co., 758 F.2d 613, 622-23, 225 USPQ 634, 638-40 (Fed.Cir.), cert. dismissed, ___ U.S. ___, 106 S.Ct. 340, 88 L.Ed.2d 326 (1985), this court approved a jury instruction that "the section 102 bar applies to `a completed invention that has been shown to be commercially useful for the purpose intended'" on the ground that "[t]he jury instruction focused attention on the factual question critical to this case, that is, whether the offers of sale involved `functional machines and processes.'" This court concluded that the on-sale bar was not satisfied, because "a reasonable jury could have found that the apparatus and method of the claims were not functional" by the critical date. Id. As in Dybel, the Shatterproof Glass court never specifically mentioned "reduction to practice."
In Great Northern Corp. v. Davis Core & Pad Co., 782 F.2d 159, 164-65, 228 USPQ 356, 358 (Fed.Cir.1986), this court employed the following analysis:
782 F.2d at 165, 228 USPQ at 358 (citations omitted).
A full reading of the Dybel, Shatterproof Glass, and Great Northern decisions makes it apparent that the parties did not raise and the court did not squarely address the issue of whether reduction to practice is an indispensable requirement of the on-sale bar. In General Electric and Barmag, consideration of the issue was dicta, however well considered. In Western Marine, the court did not explicitly hold that there was or was not a reduction to practice of the claimed invention. It, therefore, cannot be said that this court has taken a definitive position either way on the issue we address here. Cf. NLRB v. Boeing Co., 412 U.S. 67, 72, 93 S.Ct. 1952, 1955, 36 L.Ed.2d 752 (1973) (premise assumed in earlier cases is rejected when court was, at last, "squarely presented with the issue"); Lear, Inc. v. Adkins, 395 U.S. 653, 663, 89 S.Ct. 1902, 1907, 23 L.Ed.2d 610, 162 USPQ 1, 5 (1969) (Court receded from earlier endorsements of "licensee estoppel" as not "considered").
The case law of other courts regarding the on-sale bar is not uniform. Some courts have rejected any rigid rules for the operation of the statutory bar, focusing, as much of our precedent does, on the policies of the statute. Chief Judge Wright's comments in Philco Corp. v. Admiral Corp., 199 F.Supp. 797, 815, 131 USPQ 413, 428-29 (D.Del.1961), are as apt today as when made in 1961:
The regional circuits that have considered the question have given lip service to a requirement of reduction to practice as
Adoption of a "sufficiently" reduced-to-practice requirement is in fact an abandonment of reduction to practice as that term is used in other contexts. This court observed in Barmag, 731 F.2d at 838 n. 6, 221 USPQ at 567 n. 6, that our case law does not support a variegated definition of reduction to practice. At this point, we point out that "reduction to practice" is a term of art which developed in connection with interference practice to determine priority of invention between rival claimants. See note 6, supra. In that context Judge Rich has said: "There are no degrees of reduction to practice; either one has or has not occurred." Wolter v. Belicka, 409 F.2d 255, 262, 161 USPQ 335, 340 (CCPA 1969) (Rich, J., dissenting). It can only cause confusion in interference law, with its special technical considerations, and in operation of the on-sale bar, which is guided by entirely different policies, to adopt modifiers in connection with "reduction to practice," whatever the context.
Moreover, since reduction to practice is a term of art under this court's precedent, any specific ruling in one context on whether there is or is not a "reduction to practice" necessarily carries over into the other. For example, a holding here, like the trial court's, that there can be a reduction to practice without an embodiment containing all elements of the claim would have a major unintended impact on interference law. Conversely, by invoking reduction to practice as developed in interference law, an inventor might be able to escape the on-sale bar simply through deft claim draftsmanship.
Finally, a major flaw in reduction to practice as a per se requirement of the on-sale bar in all cases is disclosed by a close analysis of Timely Products, the leading case which purports to adopt that requirement. A significant development with respect to the scope of section 102(b) occurred in a series of decisions beginning with those of another of our predecessors, the Court of Customs and Patent Appeals, when it recognized the operation of the bar in conjunction with the obviousness determination under section 103. In In re Foster, 343 F.2d at 988, 145 USPQ at 173, that court held:
Accord Argus Chem. v. Fibre Glass-Evercoat, 759 F.2d 10, 14, 225 USPQ 1100, 1103 (Fed.Cir.1985); In re Kaslow, 707 F.2d 1366, 1374, 217 USPQ 1089, 1095 (Fed.Cir.1983); In re Corcoran, 640 F.2d at 133, 208 USPQ at 869.
Implicit in the operation of a sections 102(b)/103 bar is the absence of reduction to practice of the claimed invention as a requirement for the bar to operate. The invention, i.e., as claimed with all elements, is not the subject of the sale. If it were, section 103 would not be involved. With respect to non-claimed subject matter of the sale in a sections 102(b)/103 situation, it is meaningless to speak of "reduction to practice" of what was sold. "Reduction to practice" relates only to the precise invention expressed in a claim. Thus, the second requirement of Timely Products, reduction to practice of the claimed invention, is inherently inconsistent with the first requirement under which the bar is applicable if the claimed invention is merely "obvious in view of the thing offered for sale."
In view of all of the above considerations, we conclude that reduction to practice of the claimed invention has not been and should not be made an absolute requirement of the on-sale bar.
We hasten to add, however, that we do not intend to sanction attacks on patents on the ground that the inventor or another offered for sale, before the critical date, the mere concept of the invention. Nor should inventors be forced to rush into the Patent and Trademark Office prematurely. On the other hand, we reject UMC's position that as a matter of law no on-sale bar is possible unless the claimed invention has been reduced to practice in the interference sense.
We do not reject "reduction to practice" as an important analytical tool in an on-sale analysis. A holding that there has or has not been a reduction to practice of the claimed invention before the critical date may well determine whether the claimed invention was in fact the subject of the sale or offer to sell or whether a sale was primarily for an experimental purpose. A holding that there is a reduction to practice of the claimed invention "may, of course, lighten the burden of the party asserting the bar." General Electric, 206 USPQ at 271. Thus, we simply say here that the on-sale bar does not necessarily turn on whether there was or was not a reduction to practice of the claimed invention. All of the circumstances surrounding the sale or offer to sell, including the stage of development of the invention and the nature of the invention, must be considered and weighed against the policies underlying section 102(b). See In re Brigance, 792 F.2d 1103, 1107-08, 229 USPQ 988, 991 (Fed.Cir.1986); Western Marine, 764 F.2d at 845, 226 USPQ at 337.
The above conclusion does not lend itself to formulation into a set of precise requirements such as that attempted by the Timely Products court. However, we point out certain critical considerations in the on-sale determination and the respective burdens of proof which have already been established in our precedent. Thus, without question, the challenger has the burden of proving that there was a definite sale or offer to sell more than one year before the application for the subject patent, and that the subject matter of the sale or offer to sell fully anticipated the claimed invention or would have rendered the claimed invention obvious by its addition to the prior art. Cf. D.L. Auld, 714 F.2d at 1150, 219 USPQ at 17 (102(b) only). If these facts are established, the patent owner is called upon to come forward with an explanation of the circumstances surrounding what would otherwise appear to be commercialization outside the grace period. See Smith & Griggs Mfg. Co. v. Sprague, 123 U.S. 249, 8 S.Ct. 122, 31 L.Ed. 141 (1887); D.L. Auld, 714 F.2d at 1150, 219 USPQ at 17; In re Dybel, 524 F.2d at 1400, 187 USPQ at 598, and cases cited therein. The possibilities of such circumstances cannot
The issue of whether an invention is on sale is a question of law. Barmag, 731 F.2d at 836-37, 221 USPQ at 565-66. Because the Claims Court's factual findings are not disputed, and the issue may be resolved by application of the proper rule of law to those findings, we need not remand. Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709, 106 S.Ct. 1527, 1530, 89 L.Ed.2d 739 (1986); Panduit Corp. v. Dennison Mfg. Co., 810 F.2d 1561, 1565, 1 USPQ 2d 1593, 1595 (Fed.Cir.1987).
UMC made a definite offer to sell its later patented UMC-B accelerometer to the Navy more than one year prior to the date of the application for the patent in suit. In its bid, UMC specified a price of $404.00 for each sensor component of the ACA and $271.00 for the compatible recorder component. The total contract price was in excess of $1.6 million. This written offer which revealed use of the analog transducer in the ACA was supplied on July 27, 1967. UMC admits that the offer it made was for profit, not to conduct experiments.
UMC's activities evidence, at least prima facie, an attempt to commercialize the invention of the '513 patent by bidding on a large government contract more than one year prior to the filing of the underlying application and thereby to expand the grace period in contravention of the policies underlying the statute. See Gould Inc. v. United States, 579 F.2d 571, 583, 198 USPQ 156, 167 (Ct.Cl.1978).
Countering the prima facie case, UMC offers only the purely technical objection that no complete embodiment of the invention existed at the time of the sale. In this case, that circumstance is unavailing when we look at the realities of the development of this invention. While UMC asserts that its improved ACA required further "development," as evidenced by its seeking a waiver of the liquidated damages provision in the RFP, that fact might weigh in UMC's favor if UMC had sought by convincing evidence to prove that the primary purpose of the sale was for experimental work. However, the contract was not a research and development contract, and UMC admits that the offer it made was for profit, not to conduct experimental work.
We do not attempt here to formulate a standard for determining when something less than a complete embodiment of the invention will suffice under the on-sale bar. However, the development of the subject invention was far beyond a mere conception. Much of the invention was embodied in tangible form. The prior art devices embodied each element of the claimed invention, save one, and that portion was available and had been sufficiently tested to demonstrate to the satisfaction of the inventor that the invention as ultimately claimed would work for its intended purpose. Thus, we conclude from the unchallenged facts with respect to the commercial activities of UMC, coupled with the extent to which the invention was developed, the substantial embodiment of the invention, the testing which was sufficient to satisfy the inventor that his later claimed invention would work, and the nature of the inventor's contribution to the art, that the claimed invention was on sale within the meaning of section 102(b).
Accordingly, we hold all claims of the '513 patent invalid. That issue being determinative of the case, we vacate the remainder of the Claims Court opinion.
AFFIRMED ON DIFFERENT GROUNDS.
This panel majority opinion ignores the issues raised in these cross-appeals, and which were decided in the Claims Court, in order to frame its own question whether a reduction to practice should be required for application of the on-sale bar provided in section 102(b). It then proceeds to answer its own question in the negative. The trial judge and all parties herein had proceeded, as have countless parties and judges before them, on the premise that reduction to practice is so required. The Claims Court held that under such precedent law of this circuit, there was a reduction to practice, but that for other reasons the on-sale bar did not apply and the '513 patent was not invalid under section 102(b). The Claims Court also held that the '513 patent was not invalid for obviousness under section 103. Finally, the Claims Court held that the charge of infringement would not prevail because the Government did not make use of the device covered by appellant's '513 patent.
The panel majority does not even reach the issues of infringement and obviousness, presented at length by the parties. Having strained the issues that are on appeal into a form of issue neither raised nor briefed by the parties, the panel majority then interprets prior cases in this court and its predecessor courts as only "appearing" to assume the requirement of reduction to practice but not having "specifically," or "explicitly," or "squarely" addressed the question the panel majority itself raised sua sponte. Voila! Two judges of the court are now free to disembody a fundamental principle of patent law which a respectable body of precedent holds to exist.
Why must we do this in this way? Is our ruling in South Corporation v. United States
In light of the panel majority opinion, the questions being decided today are in reality whether a 3-judge panel is bound by our own precedent, and whether the precedent jurisprudence of this court requires a reduction to practice by the critical date. The answer to both questions is "yes."
The objective of the South Corporation holding is disserved by strained and unnecessary interpretations in lieu of in banc action.
Since South Corporation was decided, that case has frequently received its 1-line citation and 1-sentence description as having adopted the jurisprudence of our predecessor courts, which jurisprudence can not be overruled except by the court sitting in banc. We may not yet have arrived where it should be necessary to repeat in full the opinion of South Corporation in a footnote or appendix so that its significance will be conveniently remembered, but it is appropriate at this point to recall that decision more fully in order to emphasize its real force and effect.
On the merits, South Corporation involved in part the imposition of a duty on foreign repairs costing $98.40 to the motor vessel "North Seal." A minimum of perspicacity is required to observe that the principle of stare decisis in this court is in much greater danger of slipping beneath the waters as a result of this panel majority opinion than was the good ship North Seal. Once before I protested that our precedent, even if ready for change, was being allowed to slip silently into the backwaters of the law simply by ignoring it.
Procedurally, South Corporation deals with the importance which attaches to stability of the law, with which everyone, including the majority, agrees. That opinion contains language which all of us should recall from time to time. Especially the words of the Supreme Court, quoted therein, should be remembered:
Our past decisions consistently have held, as a threshold requirement for the section 102(b) on-sale bar, that a device must be in existence and shown to work for its intended purpose (the classical definition of reduction to practice) before the on-sale bar can apply.
Of course the 2-judge majority does not overrule this court's precedent. At best it can muddy the water for similar fact situations.
SECTION 102(b) AND THE '513 PATENT
There is clear precedent that the on-sale bar requires, 1 year prior to the filing of a patent application: (1) the complete invention claimed must be embodied in or obvious in view of the thing offered for sale; (2) the thing offered for sale must be reduced to practice; and (3) there must be a definite sale or offer for sale, primarily for profit rather than for experimental purposes.
The panel majority correctly holds that the thing offered for sale by UMC was not reduced to practice by the critical date. That should be the end of the inquiry. The law is clear, and the parties agree, that the on-sale bar cannot be invoked without a reduction to practice. The panel majority, however, without being asked by the parties, asks whether reduction to practice "should" be required for the on-sale bar, and concludes that there should be no such requirement, notwithstanding the binding precedent to the contrary.
HISTORY OF SECTION 102(b)
As in statutes of limitation generally, the start of a statutory bar must be reasonably clear at the time it occurs. Although statutes of limitation are inflexible, courts have
It was never the purpose of section 102(b) to force premature entry into the patent system upon inventors who are still developing their inventions. The public interest is not served by a system that wastes the resources of inventors:
or by "the waste of Patent Office resources in processing halfbaked inventions."
The variety of situations which have arisen under section 102(b) required early judicial attention, from which evolved the present minimum standard. Courts had early turned to the interference concept of reduction to practice
Reduction to practice was thus recognized as a minimum legal standard:
This requirement for an operable invention is in tune with the purpose of the patent system to encourage and patent useful inventions, not bare ideas.
Even after an invention was reduced to practice in the interference sense, courts recognized that the invention still may not have reached the stage at which a section 102(b) bar could fairly attach: "The work of the inventor must be finished, physically as well as mentally. Nothing must be left for the inventive genius of the public * * *."
Constant throughout this history is the minimum requirement that a device be shown to work for its intended purpose before the bar starts to run. All of this precedent describes reduction to practice as a minimum requirement, not as a superfluous one. Any change should be well considered. Such change cannot be effected by treating the requirement as if it has never existed.
I agree with the panel majority that, for purposes of sections 102(b)/103, it is not required that the claimed invention must be reduced to practice and offered for sale. It is sufficient that the claimed invention "must have been embodied in or obvious in view of the thing offered for sale."
In In re Corcoran,
In In re Foster,
The difficulty postulated by the panel majority, that sections 102(b)/103 could not be applied if the thing offered must be reduced to practice, fails to materialize in real life. The first inquiry is whether the thing offered has been reduced to practice by the critical date and, thus, become prior art under section 102(b). Reduction to practice has occurred if one of the "things" offered has ever been completed or built and shown to work. Only then is it necessary to compare the claims to the prior art
In the present case, the Claims Court applied a prototype as prior art against UMC's claimed invention, but held that the claimed invention would not have been obvious in view of the prototype. Similarly, if the thing offered on July 27 had been reduced to practice, the thing offered would have been available as prior art against UMC's claimed invention under sections 102(b)/103. However, the thing offered was not reduced to practice by the critical date, and it did not become part of the prior art under sections 102(b)/103.
BINDING PRECEDENT: NO REDUCTION TO PRACTICE; ON-SALE BAR REJECTED
I must respectfully differ with the panel majority in the interpretation of several cited cases in our prior jurisprudence, in which the requirement of a reduction to practice was a critical element in the decision to apply or not apply the on-sale bar.
In In re Dybel,
In Shatterproof Glass Corp. v. Libbey-Owens Ford Co.,
In Great Northern Corp. v. Davis Core & Pad Co.,
BINDING PRECEDENT: REDUCTION TO PRACTICE; ON-SALE BAR APPLIED
In In re Theis,
The CCPA rejected the applicant's contention that the thing offered for sale was "inoperative," affirming the board's finding that the claimed invention had been reduced to practice prior to the critical date.
In In re Caveney,
In In re Brigance,
In Western Marine Electronics, Inc. v. Furono Electric Co.,
In General Electric Co. v. United States,
In Barmag Barmer Maschinenfabrik AG v. Murata Machinery, Ltd.,
In D.L. Auld Co. v. Chroma Graphics Corp.,
In King Instrument Corp. v. Otari Corp.,
EFFECT OF ELIMINATING THE REDUCTION TO PRACTICE REQUIREMENT
It is the users of the patent system who will suffer the impact of the panel majority decision. The question is not theoretical; it is of great practical importance.
Those inventors who have sought financing, or who have contacted potential customers, or who have engaged in other normal business activities before they have made a workable device will not know how the time limit for filing a patent application will be measured or where the line will be drawn between raw idea and proved invention. Inventors do not normally try to patent something they have not yet found workable. The patent law, and particularly section 112, does not favor it. Most inventors do not hire a patent lawyer until they know they have something that works, by which time, according to the panel majority, it may be too late.
The panel majority does not seem troubled by the prospect that, in accordance with its view, a concept barred under section 102(b) before the invention has been completed is forever foreclosed from the patent system. In its zeal to prevent such inventors from salvaging even narrow patent rights by "deft claim draftsmanship," the majority removes the minimum standard by which courts have heretofore measured the on-sale bar. It is not clear why this change is being wrought on the community of inventors and on the public without providing some alternative measure of certainty. The "all circumstances" rule evoked by the panel majority means that the critical question in more and more cases can only be answered with finality by a judicial determination in which there is no further appeal.
As the technology community will attempt to cope with this decision, it perforce will file more "paper patents": patents on sketchy concepts, before they have been reduced to practice and before the inventor knows whether or how the invention will work, or whether it is worth developing.
It is the details of how to make and use an invention that are of value in the patent
The UMC patent at issue was described by the Claims Court as a "paper patent." This attribute, which the panel majority will now encourage, was held against the patentee in the Claims Court's finding of noninfringement. This is a "Catch 22" situation.
Further, we have held that a "paper patent," if insufficient under section 112, cannot provide priority for a continuation-in-part (CIP) application. Thus, even a paper patent may not save an inventor who recognizes the UMC trap and tries to cope with it by premature filing.
The section 102(b) bar was not intended to force inventors into the patent system prematurely. It was intended to force the inventor to file, if at all, within a reasonable time (1 year) after the inventor starts to profit from or discloses or uses the invention. The moving of the time bar does not speed up the invention development process; it merely entraps the inventor.
Industry does not commit time and money to the development of a technological idea without some marketplace investigation. Many businesses, especially small ones, seek customers for future delivery, before or while they are working out the technological details. The patent system should accommodate the ways of the real world, not place new pitfalls in the way of normal business pursuits.
This court, its predecessor courts, and numerous other courts, have held there is not an on-sale bar where the thing offered for sale was not reduced to practice by the critical date. When the courts have applied an on-sale bar, they have required that the thing offered for sale must be reduced to practice by the critical date. The precedent law cannot be read as merely "appearing" to assume the requirement in question. The panel majority does not write on a tabula rasa. The majority ignores binding precedent when it makes the conflicting holding that an on-sale bar may be applied without a reduction to practice.
I respectfully submit that precedent alone is sufficient reason to hold that an on-sale bar was not triggered by UMC's July 27, 1967, offer because the thing offered was not reduced to practice 1 year prior to the filing of UMC's patent application. I would affirm the Claims Court's holding that the UMC patent is not invalid under section 102(b) or sections 102(b)/103, and I would decide the other issues presented on appeal.
General Elec. Co. v. United States, 206 USPQ 260, 271 (Ct.Cl.Tr.Div.1979), aff'd on other grounds, 654 F.2d 55, 211 USPQ 867 (Ct.Cl.1981) (en banc).