The Overriding Concern of the On-Sale Bar is Commercialization Beyond the Statutory Term

Atlanta Attachment Company v. Leggett & Platt, Incorporated, [2007-1188] (February 21, 2008) [MAYER, Dyk, Prost] The Federal Circuit reversed summary judgment that Leggett & Platt infringed claim 32 of U.S. Patent No. 6,834,603, and that the patent was neither invalid because of the on-sale bar of 35 U.S.C. § 102(b), obviousness, or a violation of the best mode and written description requirements, nor unenforceable due to inequitable conduct, finding that the patent was invalid because of the on-sale bar.
SIGNIFICANCE: The Federal Circuit says that the experimental use exception does not apply where there has been a commercial sale or offer for sale, which begs the question.
BRIEF: The Federal Circuit began by noting that our patent laws deny a patent to an inventor who applies for a patent more than one year after making an attempt to profit from his invention by putting it on sale. 35 U.S.C. § 102(b). The Federal Circuit said that an invention is so barred when it was both the subject of a commercial offer for sale before the critical date and ready for patenting at the time of the offer. The overriding concern of the on-sale bar is an inventor’s attempt to commercialize his invention beyond the statutory term.
To meet the first, commercial offer, prong, the offer must be sufficiently definite that another party could make a binding contract by simple acceptance, assuming consideration. Neither profit, revenue, nor even an actual sale is required for the use to be a commercial offer under section 102(b) – an attempt to sell is sufficient if it rises to an offer upon which a contract can be made merely by accepting it. Although the third prototype was never actually delivered to Sealy, it was indeed sold to Sealy because Atlanta Attachment sent Sealy an invoice for the machine (an offer), and Sealy paid for the machine (an acceptance).
Atlanta Attachment argued that its sales to Sealy were experimental, because they were prototypes submitted to determine if the invention fit Sealy’s requirements. The Federal Circuit said that experimentation conducted to determine whether the invention would suit a particular customer's purposes does not fall within the experimental use exception. The Federal Circuit also noted that Atlanta Attachment did not retain control over the prototype. While not the lodestar test in all cases, we have also said that it is important, and sometimes dispositive.
Atlanta Attachment was not experimenting within the contemplation of the experimental use doctrine when it sold its invention to Sealy because Sealy performed the testing and because Atlanta Attachment did not have control over the alleged testing to establish experimentation.
The Federal Circuit further found that a quotation to provide the product in commercial quantities quotation constitutes an offer for sale that cannot avoid the on-sale bar via the experimental use exception. An offer to mass produce production models does not square with experimentation under any standard; it is commercial exploitation.
Regarding the second prong of the Pfaff test, the Federal Circuit said that there are at least two ways to meet the ready for patenting prong: prior to the critical date the device was reduced to practice, or there is proof that prior to the critical date the inventor had prepared drawings or other descriptions of the invention that were sufficiently specific to enable a person skilled in the art to practice the invention. The Federal Circuit said that an invention is reduced to practice when it works for its intended purpose, and an invention is said to work for its intended purpose when there is a demonstration of its workability. The Federal Circuit found that the third prototype demonstrated the workability and utility of the invention as claimed. The Federal Circuit rejected Atlanta Attachments arguments that it was still developing the claimed invention, noting that later refinements do not preclude reduction to practice, and thus it is improper to conclude that an invention is not reduced to practice merely because further testing is being conducted. The Federal Circuit said that while improvements were possible and ultimately manufactured in the fourth prototype, these deficiencies in the third prototype did not prevent reduction to practice of the invention actually claimed. Therefore, because the third prototype was both the subject of a commercial offer for sale before the critical date and was reduced to practice at the time, the claim is invalid due to the on-sale bar of section 102(b).