ANALYSIS BY THE LAW OFFICE OF THOMAS L. ADAMS
In Private Practice for 30 Years

Note the following considerations may often be superceded by the new "First to File" regime instituted under the America Invents Act.
Therefore inventors should file as soon as possible to preclude another from filing first and barring others from filing for the same invention.

WHEN TO FILE THAT PATENT APPLICATION

    To ensure that inventors promptly file their patent applications, the U.S. patent law, (35 U.S.C. 102(b)) requires that a filing be made within one year of the date an invention is placed in public use or on sale in the U.S. Unfortunately, the judicial standards for an "on sale" bar can be difficult to apply and inventors may be uncertain as to their deadline for filing a patent application.

    The uncertainty seems to be a teetering between decisions of the Court of Appeals for the Federal Circuit (CAFC) and corrective decisions from the U.S. Supreme Court. Before 1998 the CAFC was ruling that the one year grace period did not begin until the invention had been sufficiently developed, taking into account the "totality of the circumstances." The U.S. Supreme Court perceived this standard as too uncertain, and in 1998 swept away the old test and specified that an invention would be in jeopardy if either (1) the invention was "reduced to practice" (usually requiring a relatively high degree of development), or (2) "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." This second criteria, preparation of enabling drawings or descriptions, certainly offered the benefit of increased certainty.

    However, the CAFC may be increasing uncertainty by focusing on the experimental use exception (more properly, negation by experimental use).

    An invention is never in jeopardy from public use or from a proposed sale if the activity is fundamentally experimental and not commercial exploitation. Unfortunately, often the first sale is made under circumstances where parties can debate whether the transaction is truly commercial exploitation.

    For example, in the recent case of EZ Dock, Inc. v. Schafer System, Inc., 276 F.3d 1347 (Fed Cir. 2002), the CAFC vacated a summary judgement of invalidity due to an on sale bar. There, a modular boat dock was first sold without any plan or obligation to test the dock when in the customer's possession. In fact, the customer could remove or sell the dock at anytime. While the inventor claimed that the sale was motivated by a desire to learn how the product would perform in the relatively demanding water conditions at the customer's site, the CAFC noted that the inventor's subjective intent was of little relevance.

    On the other hand, the inventor did reserve the right to inspect and repair the dock, and did in fact exercise that right. Also, the inventor improved defects in the dock design after this first sale, but apparently not as a result of anything learned from the use of the unit first sold.

    In the EZ Dock case the court cataloged a number of criteria for determining whether an activity is experimental or merely commercial exploitation: "(1) the necessity for public testing, (2) the amount of control over the experiment retained by the inventor, (3) the nature of the invention, (4) the length of the test period, (5) whether payment was made, (6) whether there was a secrecy obligation, (7) whether records of the experiment were kept, (8) who conducted the experiment, and (9) the degree of commercial exploitation during testing, ... (10) whether the invention reasonably requires evaluation under actual conditions of use, (11) whether testing was systematically performed, (12) whether the inventor continually monitored the invention during testing, and (13) the nature of contacts made with potential customers."

    With such a large number of criteria, the inventor and accused infringer seem to have ample opportunity to raise almost any issue having a bearing on the activity in question. One might reasonably conclude that the cumulative effect of weighing all these factors is not much different from the allegedly discredited "totality of the circumstances" test. For now, unless a sale or public use is clearly non-experimental, patent owners will have relatively broad opportunities to negate public use and on sale bars with a wide spectrum of arguments that the challenged activity was experimental.

Return to Home Page

2004 Adams Law Office