Solvay – Whether a foreign invention can constitute prior art if reduced to practice in the U.S. by others.

Tempo – An example of improper use of extrinsic evidence in claim construction.

Solvay S.A. v. Honeywell International, Inc., Fed. Cir. No. 2012-1660 (2/12/2014)

In a split decision the Circuit held that an invention conceived by a foreign inventor and reduced to practice in the U.S. by others can qualify as prior art under 35 U.S.C. ‎§102(g)(2)‎. That section provides, “[a] person shall be entitled to a patent unless . . . before such person’s invention thereof, the invention ‎was made in this country by another inventor who had not abandoned, suppressed, or concealed it.” While ‎§102(g) was eliminated in the AIA, that amendment only affects patents having a filing date of March 16, 2013 or later, so ‎§102(g) cases are still very relevant.

The district court granted Solvay’s motion for summary judgment that Honeywell’s process infringed. After an appeal on other issues, the case proceeded to trial where a jury determined that the invention was disclosed in a Russian patent application, and was then presented to Honeywell personnel in the U.S., who reduced the invention to practice before Solvay’s priority date. The court therefore determined that Solvay’s patent was invalid under ‎§102(g)(2)‎. ‎

The case deals with the doctrine of “inurement.” Because Honeywell personnel were following the teachings of the Russians, they could not be considered “inventors” who made the invention in this country prior to the invention by Solvay. Therefore, Honeywell needed to convince the court that its work in the U.S. “inured to the benefit of the Russians,” who then would be considered to have made the invention in the U.S. prior to Solvay’s invention. For the Honeywell work to inure to the benefit of the Russian’s work, the parties disagreed on whether this required the Russians to expressly ask the Honeywell researchers to perform further work on the process, or whether an implicit request was adequate.

The court distinguished one case in which there was no inurement where the reduction to practice was performed by a rival, but noted another case in which inurement was found where the inventor knew nothing of the subsequent work but those working to reduce the invention to practice thought they were acting in accordance with the inventor’s wishes. The court also cited another case in which inurement was allowed where an inventor offered his invention to the U.S. government, which turned the invention over to an employee who reduced it to practice. The court therefore concluded that the process invented by the Russians was “made in this country” when Honeywell reduced the process to practice because the Russians authorized Honeywell to practice the invention, and contemplated that they would do so.

Judge Newman dissented, arguing that the case creates a new class of secret prior art, holding that a privately-performed experiment, without publication, public knowledge, use, sale, or inclusion in a U.S. patent application, is invalidating prior art. According to Judge Newman, the new rule contravenes the policy and letter of patent law, in which inventors are charged only with knowledge of what is known or knowable, subject to very limited exceptions.

Judge Newman pointed out that unpublished private activity in a foreign country is not prior art. Foreign inventions may be ‎the subject of a U.S. patent, and the benefit of a foreign filing date may be obtained pursuant ‎to 35 U.S.C. ‎§119, but here there was no U.S. patent application. The Russian application ‎was published eighteen months after filing but that was after Solvay’s priority date. Whether ‎or not Honeywell’s secret duplication of the Russian’s process inured to the Russians, it could ‎not, according to Judge Newman, convert the unpublished Russian application, or its unpublished evaluation by Honeywell, ‎into prior art.‎

In the earlier appeal of this case, the court confirmed that Honeywell’s repetition of an invention conceived and reduced to practice in Russia was not “an invention made in the U.S.” Judge Newman noted that for the majority to accept Honeywell’s new argument that its work in the U.S. is a reduction to practice of the Russian process is an inappropriate enlargement of the scope of secret prior art. The secret duplication of a prior invention does not convert either the prior invention or its duplication into prior art. Whether or not Honeywell’s work with the Russian process in the United States “inured” to the Russians, it ‎could not, per Judge Newman, convert the unpublished Russian application, or its unpublished evaluation in the United States, ‎into prior art.‎

When two entities are working on a joint development, we are always careful to allocate ownership of invention rights but this case teaches us that when we have a client performing work with a foreign entity or based on work previously performed by a foreign entity, we should be particularly cautious about making sure to document that the work in the U.S. is being performed with the authorization and encouragement of the foreign entity. If the documentation was clearer in this case, it might not have made it to the Federal Circuit. If the documentation was entirely absent, Honeywell would have lost the case.

Tempo Lighting, Inc. v. Tivoli, LLC, Fed. Cir. No. 2013-1140, (2/13/2014)

In a decision authored by Chief Judge Rader, a unanimous panel affirmed the Patent Trial and Appeal Board’s reversal of an examiner’s claim construction that had improperly relied on extrinsic evidence, but vacated the Board’s determination that an inter partes reexamination requester had waived its right to present an invalidity argument by not cross appealing a PTO Office action.

This litigation was initiated ten years ago and the case was stayed nine years ago after the filing of an inter partes reexamination. As part of the reexam, an issue arose regarding the construction of the term “inert to light.” Relying on a dictionary definition, the examiner determined that the phrase meant “a material that either does not react, e.g. by degrading, when exposed to light or a material that does not react because it has been treated with or includes some additive, which inhibits degradation of the material when exposed to light.” The Board reversed this construction, determining that Tivoli had indicated in arguing an amendment during prosecution of the original application that “inert to light” meant “. . . nonphotoluminescent and not activated to glow by absorbing ambient light.”

The panel affirmed the Board’s construction, noting that extrinsic evidence is of “relatively little probative value” especially where, as here, it is inconsistent with the intrinsic evidence. The panel also supported the Board’s rejection of the argument that the examiner was construing the claims with an eye to preserving their validity under § 112, noting that this was a doctrine of “limited utility.” Thus, even in the unlikely event that it adopted a construction for “inert to light” that might render the claims invalid under §112, the Board did not err in reaching that meaning based on the intrinsic evidence.

In its appeal to the Board, Tempo presented an invalidity argument that the Board determined Tempo could not present because it had not cross appealed the PTO ruling. However, the PTO rule forming the basis of the Board’s ruling states that “a requester who has not filed a notice of appeal may file a notice of cross appeal with respect to any final decision favorable to the patentability.” 37 C.F.R. § 41.61(b). (emphasis added by the court). Thus, one of the threshold conditions for a cross appeal is a final decision favorable to patentability. In this case, the examiner rejected all the claims. Thus, the record presented no decision favorable to patentability for Tempo to appeal. Moreover, the rule does not require a cross appeal, but merely says that the requester “may” file a cross appeal.

The panel thus affirmed the Board’s construction of “inert to light” but vacated the Board’s conclusion that Tempo waived certain arguments regarding invalidity. The panel also urged the PTO to provide a speedy resolution of this case as envisioned by 35 U.S.C. § 314(c) since it has been in reexamination for over nine years.

We all know to comb through the claims and the specification to find language supporting the claim construction we are advocating, but this case serves as a reminder that the prosecution history can be helpful as well, even when the definition is presented as part of an amendment that does not explicitly state that the term is being defined.

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