Solvay v. Honeywell: 102(g) and outsourcing
The result of the CAFC case Solvay (represented by ARTHUR I. NEUSTADT ) v. Honeywell (represented by ROBERT G. KRUPKA ) was "affirmed-in-part, reversed-in-part."
Of interest was analysis of 35 USC 102(g), with Honeywell on the losing end: we conclude that
Honeywell was not a prior inventor for purposes of § 102(g)(2).
The molecule of interest was 1,1,1,3,3-pentafluoropropane (“HFC-245fa”), and
Solvay had a patent for making it, the '817.
There was a dispute over "who invented" a certain process to make make the molecule:
Solvay brought suit against Honeywell in the District
of Delaware, alleging that the Geismar process infringed
claims 1, 5, 7, 10-18, 21, and 22 of the '817 patent. In due
course, Honeywell moved for summary judgment of inva-
lidity of claims 1, 5, 7, 10, and 11 of the '817 patent.
Honeywell moved on the ground that, under 35 U.S.C.
§ 102(g)(2), it was a prior inventor of the claimed inven-
tion. For its part, Solvay cross-moved for summary
judgment of no invalidity on the ground that Honeywell
was not a prior inventor and that, even if it was, Honey-
well had abandoned, suppressed, or concealed its inven-
tion.
Honeywell's work on the molecule had been done initially by
a third party under contract to Honeywell (an outsourcing arrangement):
In early 1994, Honeywell (then AlliedSignal, Inc.) en-
tered into a research contract with the Russian Scientific
Center for Applied Chemistry (“RSCAC”). Pursuant to
the contract, RSCAC engineers performed process devel-
opment studies for the commercial production of HFC-
245fa. See Invalidity Ruling, 591 F. Supp. 2d at 732. (...)
It is undisputed that the process the RSCAC
engineers performed and reported to
Honeywell in July 1994 corresponds to the invention
claimed in Solvay’s '817 patent, and that RSCAC engi-
neers both conceived the invention and reduced it to
practice in Russia.
At the district court level:
Solvay had urged that the invention at issue
was “conceived” abroad by RSCAC’s engineers and that
Honeywell’s “mere reproduction” of a foreign invention in
the United States did not make Honeywell an inventor
because an inventor must be involved in the conception of
the invention. The district court agreed that Honeywell
had to “demonstrate that it ‘conceived’ the invention at
issue,” to qualify as an inventor under § 102(g)(2), so that
“only ordinary skill in the art would be necessary [there-
after] to reduce the invention to practice.” Id. at 738. The
court did not agree, however, that reproduction of an
invention cannot satisfy § 102(g), or that, under
§ 102(g)(2), conception must first occur in the United
States. The court found “no authority” that barred Hon-
eywell from being an “inventor” for purposes of § 102(g)(2)
merely because it derived the invention from RSCAC as
“the original inventor.” In that regard, the court declined“to
read the ‘originality’ requirement of § 102(f) into
§ 102(g),”2 reasoning that “[s]ection 102(g) . . . contem-
plates multiple conceptions, as long as each inventor
‘appreciates’ his invention.” Id. at 739.
The district court concluded that “Honeywell con-
ceived the invention at issue in the United States upon
receipt of RSCAC’s instructions, because it was at this
point that Honeywell possessed a definite and permanent
idea of the complete and operative invention, such that it
appreciated the fact of its invention.” Id. at 738.
At the CAFC level:
Solvay challenges on two grounds the district court’s
ruling that claims 1, 5, 7, 10, and 11 of the '817 patent are
invalid due to prior inventorship.
First, Solvay argues
that Honeywell could not be “another inventor” under 35
U.S.C. § 102(g)(2) because it is undisputed that it did not
invent the claimed process for preparing HFC-245fa but,
rather, derived it from RSCAC, whose engineers invented
it in Russia. Solvay maintains that the court’s conclusion
that Honeywell was an inventor of the Russian invention
is contrary to 35 U.S.C. § 102(f), which provides that a
person shall be entitled to a patent unless “he did not
himself invent the subject matter sought to be patented.”
Honeywell could not be an “inventor” of the Russian
invention, Solvay reasons, because it did not itself invent
the subject matter of the invention. See Appellant’s Br. at
17. According to Solvay, the district court erred when it
“decline[d] to read the ‘originality’ requirement of § 102(f)
into § 102(g).” See Invalidity Ruling, 591 F. Supp. 2d at
739. Solvay thus urges us to reject the district court’s
determination that “Honeywell . . . demonstrated concep-
tion by clear and convincing evidence as it is undisputed
that its receipt of RSCAC’s instructions facilitated Hon-
eywell’s actual reduction to practice of the invention.” Id. at 738.
Second, Solvay argues that, even if Honeywell does
qualify as “another inventor” under § 102(g)(2), the stat-
ute does not operate to render claims 1, 5, 7, 10, and 11
invalid because Honeywell suppressed and concealed both
the Russian invention and the invention claimed in its
own '706 patent.
The CAFC defined some terms:
Conception is the “forma-
tion, in the mind of the inventor, of a definite and perma-
nent idea of a complete and operative invention, as it is
hereafter to be applied in practice.” Hybritech, Inc. v.
Monoclonal Antibodies, Inc., 802 F.2d 1367, 1376 (Fed.
Cir. 1986), quoting 1 Robinson on Patents 532 (1890);
Coleman v. Dines, 754 F.2d 353, 359 (Fed. Cir. 1985); see
also Burroughs Wellcome Co. v. Barr Labs., Inc., 40 F.3d
1223, 1228 (Fed. Cir. 1994) (“Conception is complete only
when the idea is so clearly defined in the inventor’s mind
that only ordinary skill would be necessary to reduce the
invention to practice, without extensive research or
experimentation.”). Actual reduction to practice requires
that the claimed invention work for its intended purpose,
Hybritech, 802 F.2d at 1376, while constructive reduction
to practice occurs when a patent application on the
claimed invention is filed. Id.; Frazer v. Schlegel, 498
F.3d 1283, 1288 (Fed. Cir. 2007); Hyyatt v. Boone,
146 F.3d 1348, 1352 (Fed. Cir. 1998).
Honeywell lost:
The question thus
becomes whether Honeywell conceived of the invention at
issue and reduced it to practice in the United States, such
that Honeywell is “another inventor” of the process
claimed in the '817 patent under § 102(g)(2).
Honeywell is not “another inventor” under § 102(g)(2).
That is clear from the facts set forth above, which are
undisputed. As noted, working pursuant to RSCAC’s
research contract with Honeywell, Russian engineers
conceived of the process for making HFC-245fa in Russia.
Thereafter, in July 1994, RSCAC sent a report to Honey-
well in the United States relating to the developmental
work the RSCAC engineers had performed. In the report,
RSCAC described the liquid phase synthesis of HFC-
245fa from HCC-240fa and the resulting product yield.
The report also contained a diagram of the equipment
that RSCAC had used to carry out the process. Finally, in
the report, RSCAC stated that it had carried out a reac-
tion of HCC-240fa and HF in the presence of an antimony
pentachloride catalyst using temperatures between 80-
130 degrees Celsius and pressures between 2-40 bar. In
the words of the district court, “it is uncontested that the
Russian engineers, working under contract with Honey-
well manufactured HFC-245fa from HCC-240fa using a
continuous process in May 1994 and disclosed that work
to Honeywell in a July 1994 report sent to the United
States.” See Invalidity Ruling, 591 F. Supp. 2d at 736.
(...)
Conception is “the formation in the mind of the inven-
tor, of a definite and permanent idea of the complete and
operative invention, as it is hereafter to be applied in
practice.” Burroughs Wellcome Co. v. Barr Labs., Inc., 40
F.3d at 1228 (quoting Hybritech Inc. v. Monoclonal Anti-
bodies, Inc., 802 F.2d at 1376. The test for conception is
whether the inventor had an idea that was definite and
permanent enough that one skilled in the art could un-
derstand the invention. Burroughs Wellcome, 40 F.3d at
1228. In this case, Honeywell did not have, or formulate,
a definite and permanent “idea” of its own capable of
being reduced to practice. Rather, it reproduced the
invention previously conceived and reduced to practice by
RSCAC in Russia. Such reproduction cannot be concep-
tion because, if it were, the result would be that one who
simply followed another inventor’s instructions to repro-
duce that person’s prior conceived invention would, by so
doing, also become an “inventor.” Although the district
court declined to read the “originality” requirement of 35
U.S.C. § 102(f) into § 102(g), originality is, nevertheless,
inherent to the notion of conception.4 The definition and
test of conception employed in Burroughs Wellcome, which
speaks to the formation of an idea in the mind of the
inventor, necessitates that the conception of an invention
be an original idea of the inventor.5
The CAFC rejected Honeywell's arguments about other
cases. Of the Dow Chemical case:
Similarly unhelpful to Honeywell is its reliance on
Dow Chemical Co. v. Astro-Valcour, Inc. for the proposi-
tion that “someone qualifies as a prior inventor under
§ 102(g)(2) if the person made the invention in the United
States and ‘appreciated the fact of what he made.’” See
Appellee’s Br. at 29. In Dow Chemical, Astro-Valcour,
Inc. reduced to practice a process for producing plastic
foam in the United States by following, and then improv-
ing upon, the teachings of a U.S. patent. 267 F.3d at 1341
n.5. This court held that Astro-Valcour, Inc. “recognized
and appreciated” its new process such that it qualified as
a “prior inventor” under § 102(g)(2) even if it was unaware
that it had created a legally patentable invention, and
was not the first inventor to appreciate the patentability
of the invention. 267 F.3d at 1341. Unlike the party
seeking the benefit of § 102(g)(2) in Dow Chemical, who
actually conceived the pertinent invention, Honeywell did
not conceive the invention at issue in this case. Dow
Chemical simply held that, outside the priority context,
an individual can have conceived the invention, and be an
inventor, even though he did not appreciate what he had invented.
Policy matters were discussed, but Honeywell misunderstood
what was at issue in the case:
Finally, Honeywell argues that, as a matter of policy,
it would contradict the purpose of § 102(g)(2) to allow
Solvay to have a patent covering subject matter that
Solvay was not the first to invent. The problem with this
argument is that it misstates the issue before us. The
issue before us is not whether Solvay was the first to
invent the subject matter of the '817 patent. Rather, the
issue is whether Honeywell established its defense that
the invention claimed in the '817 patent was conceived
and reduced to practice by it, as “another inventor” in the
United States, before Solvay. The uncontested facts make
it clear that Honeywell did not establish its § 102(g)(2)
defense.
Whether this holding ignores the realities of global-
ization and outsourcing by modern-day research compa-
nies, as Honeywell contended at oral argument, is not the
question before us. The question before us is whether,
under the undisputed facts, Honeywell qualifies as “an-
other inventor” under 35 U.S.C. § 102(g)(2). Because
Honeywell did not itself conceive the RSCAC process of
making HFC-245fa, under 35 U.S.C. § 102(g)(2), as this
court has construed the statute, it is not “another inven-
tor” of the subject matter claimed in the '817 patent.
The outsourcing argument failed.
Of interest was analysis of 35 USC 102(g), with Honeywell on the losing end: we conclude that
Honeywell was not a prior inventor for purposes of § 102(g)(2).
The molecule of interest was 1,1,1,3,3-pentafluoropropane (“HFC-245fa”), and
Solvay had a patent for making it, the '817.
There was a dispute over "who invented" a certain process to make make the molecule:
Solvay brought suit against Honeywell in the District
of Delaware, alleging that the Geismar process infringed
claims 1, 5, 7, 10-18, 21, and 22 of the '817 patent. In due
course, Honeywell moved for summary judgment of inva-
lidity of claims 1, 5, 7, 10, and 11 of the '817 patent.
Honeywell moved on the ground that, under 35 U.S.C.
§ 102(g)(2), it was a prior inventor of the claimed inven-
tion. For its part, Solvay cross-moved for summary
judgment of no invalidity on the ground that Honeywell
was not a prior inventor and that, even if it was, Honey-
well had abandoned, suppressed, or concealed its inven-
tion.
Honeywell's work on the molecule had been done initially by
a third party under contract to Honeywell (an outsourcing arrangement):
In early 1994, Honeywell (then AlliedSignal, Inc.) en-
tered into a research contract with the Russian Scientific
Center for Applied Chemistry (“RSCAC”). Pursuant to
the contract, RSCAC engineers performed process devel-
opment studies for the commercial production of HFC-
245fa. See Invalidity Ruling, 591 F. Supp. 2d at 732. (...)
It is undisputed that the process the RSCAC
engineers performed and reported to
Honeywell in July 1994 corresponds to the invention
claimed in Solvay’s '817 patent, and that RSCAC engi-
neers both conceived the invention and reduced it to
practice in Russia.
At the district court level:
Solvay had urged that the invention at issue
was “conceived” abroad by RSCAC’s engineers and that
Honeywell’s “mere reproduction” of a foreign invention in
the United States did not make Honeywell an inventor
because an inventor must be involved in the conception of
the invention. The district court agreed that Honeywell
had to “demonstrate that it ‘conceived’ the invention at
issue,” to qualify as an inventor under § 102(g)(2), so that
“only ordinary skill in the art would be necessary [there-
after] to reduce the invention to practice.” Id. at 738. The
court did not agree, however, that reproduction of an
invention cannot satisfy § 102(g), or that, under
§ 102(g)(2), conception must first occur in the United
States. The court found “no authority” that barred Hon-
eywell from being an “inventor” for purposes of § 102(g)(2)
merely because it derived the invention from RSCAC as
“the original inventor.” In that regard, the court declined“to
read the ‘originality’ requirement of § 102(f) into
§ 102(g),”2 reasoning that “[s]ection 102(g) . . . contem-
plates multiple conceptions, as long as each inventor
‘appreciates’ his invention.” Id. at 739.
The district court concluded that “Honeywell con-
ceived the invention at issue in the United States upon
receipt of RSCAC’s instructions, because it was at this
point that Honeywell possessed a definite and permanent
idea of the complete and operative invention, such that it
appreciated the fact of its invention.” Id. at 738.
At the CAFC level:
Solvay challenges on two grounds the district court’s
ruling that claims 1, 5, 7, 10, and 11 of the '817 patent are
invalid due to prior inventorship.
First, Solvay argues
that Honeywell could not be “another inventor” under 35
U.S.C. § 102(g)(2) because it is undisputed that it did not
invent the claimed process for preparing HFC-245fa but,
rather, derived it from RSCAC, whose engineers invented
it in Russia. Solvay maintains that the court’s conclusion
that Honeywell was an inventor of the Russian invention
is contrary to 35 U.S.C. § 102(f), which provides that a
person shall be entitled to a patent unless “he did not
himself invent the subject matter sought to be patented.”
Honeywell could not be an “inventor” of the Russian
invention, Solvay reasons, because it did not itself invent
the subject matter of the invention. See Appellant’s Br. at
17. According to Solvay, the district court erred when it
“decline[d] to read the ‘originality’ requirement of § 102(f)
into § 102(g).” See Invalidity Ruling, 591 F. Supp. 2d at
739. Solvay thus urges us to reject the district court’s
determination that “Honeywell . . . demonstrated concep-
tion by clear and convincing evidence as it is undisputed
that its receipt of RSCAC’s instructions facilitated Hon-
eywell’s actual reduction to practice of the invention.” Id. at 738.
Second, Solvay argues that, even if Honeywell does
qualify as “another inventor” under § 102(g)(2), the stat-
ute does not operate to render claims 1, 5, 7, 10, and 11
invalid because Honeywell suppressed and concealed both
the Russian invention and the invention claimed in its
own '706 patent.
The CAFC defined some terms:
Conception is the “forma-
tion, in the mind of the inventor, of a definite and perma-
nent idea of a complete and operative invention, as it is
hereafter to be applied in practice.” Hybritech, Inc. v.
Monoclonal Antibodies, Inc., 802 F.2d 1367, 1376 (Fed.
Cir. 1986), quoting 1 Robinson on Patents 532 (1890);
Coleman v. Dines, 754 F.2d 353, 359 (Fed. Cir. 1985); see
also Burroughs Wellcome Co. v. Barr Labs., Inc., 40 F.3d
1223, 1228 (Fed. Cir. 1994) (“Conception is complete only
when the idea is so clearly defined in the inventor’s mind
that only ordinary skill would be necessary to reduce the
invention to practice, without extensive research or
experimentation.”). Actual reduction to practice requires
that the claimed invention work for its intended purpose,
Hybritech, 802 F.2d at 1376, while constructive reduction
to practice occurs when a patent application on the
claimed invention is filed. Id.; Frazer v. Schlegel, 498
F.3d 1283, 1288 (Fed. Cir. 2007); Hyyatt v. Boone,
146 F.3d 1348, 1352 (Fed. Cir. 1998).
Honeywell lost:
The question thus
becomes whether Honeywell conceived of the invention at
issue and reduced it to practice in the United States, such
that Honeywell is “another inventor” of the process
claimed in the '817 patent under § 102(g)(2).
Honeywell is not “another inventor” under § 102(g)(2).
That is clear from the facts set forth above, which are
undisputed. As noted, working pursuant to RSCAC’s
research contract with Honeywell, Russian engineers
conceived of the process for making HFC-245fa in Russia.
Thereafter, in July 1994, RSCAC sent a report to Honey-
well in the United States relating to the developmental
work the RSCAC engineers had performed. In the report,
RSCAC described the liquid phase synthesis of HFC-
245fa from HCC-240fa and the resulting product yield.
The report also contained a diagram of the equipment
that RSCAC had used to carry out the process. Finally, in
the report, RSCAC stated that it had carried out a reac-
tion of HCC-240fa and HF in the presence of an antimony
pentachloride catalyst using temperatures between 80-
130 degrees Celsius and pressures between 2-40 bar. In
the words of the district court, “it is uncontested that the
Russian engineers, working under contract with Honey-
well manufactured HFC-245fa from HCC-240fa using a
continuous process in May 1994 and disclosed that work
to Honeywell in a July 1994 report sent to the United
States.” See Invalidity Ruling, 591 F. Supp. 2d at 736.
(...)
Conception is “the formation in the mind of the inven-
tor, of a definite and permanent idea of the complete and
operative invention, as it is hereafter to be applied in
practice.” Burroughs Wellcome Co. v. Barr Labs., Inc., 40
F.3d at 1228 (quoting Hybritech Inc. v. Monoclonal Anti-
bodies, Inc., 802 F.2d at 1376. The test for conception is
whether the inventor had an idea that was definite and
permanent enough that one skilled in the art could un-
derstand the invention. Burroughs Wellcome, 40 F.3d at
1228. In this case, Honeywell did not have, or formulate,
a definite and permanent “idea” of its own capable of
being reduced to practice. Rather, it reproduced the
invention previously conceived and reduced to practice by
RSCAC in Russia. Such reproduction cannot be concep-
tion because, if it were, the result would be that one who
simply followed another inventor’s instructions to repro-
duce that person’s prior conceived invention would, by so
doing, also become an “inventor.” Although the district
court declined to read the “originality” requirement of 35
U.S.C. § 102(f) into § 102(g), originality is, nevertheless,
inherent to the notion of conception.4 The definition and
test of conception employed in Burroughs Wellcome, which
speaks to the formation of an idea in the mind of the
inventor, necessitates that the conception of an invention
be an original idea of the inventor.5
The CAFC rejected Honeywell's arguments about other
cases. Of the Dow Chemical case:
Similarly unhelpful to Honeywell is its reliance on
Dow Chemical Co. v. Astro-Valcour, Inc. for the proposi-
tion that “someone qualifies as a prior inventor under
§ 102(g)(2) if the person made the invention in the United
States and ‘appreciated the fact of what he made.’” See
Appellee’s Br. at 29. In Dow Chemical, Astro-Valcour,
Inc. reduced to practice a process for producing plastic
foam in the United States by following, and then improv-
ing upon, the teachings of a U.S. patent. 267 F.3d at 1341
n.5. This court held that Astro-Valcour, Inc. “recognized
and appreciated” its new process such that it qualified as
a “prior inventor” under § 102(g)(2) even if it was unaware
that it had created a legally patentable invention, and
was not the first inventor to appreciate the patentability
of the invention. 267 F.3d at 1341. Unlike the party
seeking the benefit of § 102(g)(2) in Dow Chemical, who
actually conceived the pertinent invention, Honeywell did
not conceive the invention at issue in this case. Dow
Chemical simply held that, outside the priority context,
an individual can have conceived the invention, and be an
inventor, even though he did not appreciate what he had invented.
Policy matters were discussed, but Honeywell misunderstood
what was at issue in the case:
Finally, Honeywell argues that, as a matter of policy,
it would contradict the purpose of § 102(g)(2) to allow
Solvay to have a patent covering subject matter that
Solvay was not the first to invent. The problem with this
argument is that it misstates the issue before us. The
issue before us is not whether Solvay was the first to
invent the subject matter of the '817 patent. Rather, the
issue is whether Honeywell established its defense that
the invention claimed in the '817 patent was conceived
and reduced to practice by it, as “another inventor” in the
United States, before Solvay. The uncontested facts make
it clear that Honeywell did not establish its § 102(g)(2)
defense.
Whether this holding ignores the realities of global-
ization and outsourcing by modern-day research compa-
nies, as Honeywell contended at oral argument, is not the
question before us. The question before us is whether,
under the undisputed facts, Honeywell qualifies as “an-
other inventor” under 35 U.S.C. § 102(g)(2). Because
Honeywell did not itself conceive the RSCAC process of
making HFC-245fa, under 35 U.S.C. § 102(g)(2), as this
court has construed the statute, it is not “another inven-
tor” of the subject matter claimed in the '817 patent.
The outsourcing argument failed.
posted by Lawrence B. Ebert at 6:41 AM
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