Action Before the Critical Date is, Well, Critical

Plumtree Software, Inc., v. Datamize, LLC., [06-1017](December 18, 2006)[DYK, Newman, Friedman]
SIGNIFICANCE: To be on sale, there must be an express offer to perform the method before the critical date, or the method must actually be performed before the critical date.
BRIEF: The Federal Circuit sustained the district court’s denial of a motion to dismiss for lack of subject matter jurisdiction, but vacated and remanded summary judgment that the patent in suit was invalid under the on sale bar. As to jurisdiction, the Federal Circuit reiterated its test for declaratory judgment jurisdiction: There must be both an explicit threat or other action by the patentee, which creates a reasonable apprehension on the part of the declaratory plaintiff that it will face an infringement suit, and (2) present activity which could constitute infringement or concrete steps taken with the intent to conduct such activity. With respect to the on sale bar, Under Pfaff Plumtree had to show that the product was the subject of a commercial sale or offer for sale, and that the invention was ready for patenting. At issue was the first prong of the Pfaff test – whether there was a commercial offer for sale of the claimed method. The Federal Circuit said that Plumtree could show a commercial sale or offer for sale if either (1) before the critical date there was a commercial offer to perform the patented method (even if the method was not performed until after the critical date, or (2) before the critical date, the patented method was actually performed for a promise of future consideration. The Federal Circuit found that there was a commercial offer, but that the record did not provide a basis to conclude that the patented method was required to be performed. Nor was there evidence that the claimed method was actually practiced before the critical date. The Federal Circuit reversed summary judgment of invalidity.