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Federal Circuit Affirms EDVA Judge’s Interpretation of 35 U.S.C. 102(g)(2)

In a somewhat controversial decision (see Patently-O’s analysis here), the Federal Circuit has affirmed a decision by Judge Rebecca Beach Smith of the Eastern District of Virginia granting summary judgment of invalidity under 35 U.S.C. 102(g)(2).  The Fox Group, Inc. v. Cree, Inc., No. 2011-1576, 2012 U.S. App. LEXIS 24614 (Fed. Cir. Nov. 28, 2012) (found here).  Our earlier discussion of Judge Smith’s decision can be found here.  

Section 102(g)(2) provides that a patent is invalid if the invention has been made by another inventor and the prior inventor has not abandoned, suppressed or concealed the invention.

There are two ways to prove prior invention: (1) by being the first to reduce the invention to practice; or (2) by being the first to conceive of the invention and then exercising reasonable diligence to reduce it to practice.

Reduction to Practice

In The Fox Group, the invention was a silicon carbide crystal with certain properties.  The patentee, Fox, argued that “conception” necessarily included a requirement that creation of the invention be repeatable.  The Federal Circuit rejected this argument where a prior inventor proves reduction to practic, holding that “[a]n alleged prior inventor would need to prove conception only if the alleged prior inventor had not successfully reduced the invention to practice.”  Since it was undisputed that the challenger, Cree, reduced the invention to practice before the critical date, it did not need to prove conception.

Fox also argued that Cree did not appreciate that its invention met the claimed purpose of the patent’s claims.  As Judge Smith found below, the Federal Circuit held that “the prior inventor does not need to ‘establish that he recognized the invention in the same terms as those recited in the patent claims.’”

Abandonment, Suppression or Concealment

More controversially, the Federal Circuit ruled that a prior inventor need not make an enabling disclosure of the invention to establish a lack of abandonment, suppression or concealment.

In The Fox Group, Cree had sent the crystal to an outside evaluator for analysis, had described the crystal (but not how to produce it) in a published paper and had announced the discovery of the crystal at a public conference where it described the crystal as “breakthrough.”

Fox claimed that these public disclosures were inadequate because Cree did not file a patent application, did not commercialize the crystal and did not publicly reveal the details of the conditions under which the crystal was made. 

The Federal Circuit held, though, that filing a patent application or commercializing an invention were only two ways of proving public disclosure, not the only ways.  While there is Federal Circuit case law holding that a public disclosure must be enabling, all of those cases involved process claims, not claims directed to a product.  Quoting Judge Smith, the Federal Circuit pointed out that Cree promptly and publicly disclosed its findings at a public conference and a published paper, and so there was no genuine issue of material fact to show that Cree had suppressed or concealed its invention.

Criticism of the Decision

In dissent, Judge O’Malley pointed out that “[u]nder the majority’s approach, an inventor could publicly announce that it made a product, with no explanation as to how it did so, and then hid it away in a closet indefinitely” rendering the concept of abandonment, suppression or concealment meaningless.  Judge O’Malley would require some evidence that the prior inventor timely made its invention available to the public in some way.  

Patently O joined in Judge O’Malley’s criticism of the majority decision, interpreting the Federal Circuit’s holding to require that an inventor only disclose “the existence of” its invention.  According to Patently-O, “the majority erred in concluding that merely disclosing general information suffices to preclude any subsequent inventor from obtaining a patent.”  “[T]he effect of the majority’s holding is to cause 102(g)(2) to swallow much of the remainder of Section 102.  Under the majority’s reasoning, any disclosure about an invention, no matter how superficial or non-enabling, becomes potential prior art as long as there is secret information about a reduction to practice of the invention.”

The impact of the Federal Circuit’s decision in The Fox Group is not likely to be as dramatic as Patently-O predicts.  It will be the rare case in which there is evidence of a prior invention that has been reduced to practice and meets all the elements of an asserted patent claim that does not also meet the requirements of § 102(a) or § 102(b).  The lack of a requirement that the public disclosure of a prior invention be enabling should not significantly expand the scope of invalidating prior art under § 102(g)(2). 

Invalidity of Unasserted Claims

Finally, the Federal Circuit did reverse one part of Judge Smith’s ruling.  Judge Smith held that all of the claims of the patent were invalid under § 102(g)(2).  While Fox alleged infringement of “one or more claims” of the patent in its Complaint, by the time of summary judgment, both parties “were on notice” that Fox only asserted infringement of two claims.  As a result, there was no case or controversy as to infringement of the other claims of the patent, and so Judge Smith did not have jurisdiction over a counterclaim for invalidity relating to the unasserted claims.

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