Thursday, August 15, 2013

On-sale bar discussed in Hamilton Beach v. Sunbeam

On the law of the on-sale bar, from the CAFC decision in Hamilton Beach v. Sunbeam:

The on-sale bar applies when two conditions are satisfied
before the critical date: (1) the claimed invention
must be the subject of a commercial offer for sale; and (2)
the invention must be ready for patenting. Pfaff v. Wells
Elecs., Inc., 525 U.S. 55, 67 (1998). An actual sale is not
required for the activity to be an invalidating commercial
offer for sale. Atlanta Attachment Co. v. Leggett & Platt,
Inc., 516 F.3d 1361, 1365 (Fed. Cir. 2008). An attempt to
sell is sufficient so long as it is “sufficiently definite that
another party could make a binding contract by simple
acceptance.” Id. (citing Netscape Commc’ns Corp. v.
Konrad, 295 F.3d 1315, 1323 (Fed. Cir. 2002)). “In determining
such definiteness, we review the language of the
proposal in accordance with the principles of general
contract law.” Id.

An invention is “ready for patenting” when prior to
the critical date: (1) the invention is reduced to practice;
or (2) the invention is depicted in drawings or described in
writings of sufficient nature to enable a person of ordinary
skill in the art to practice the invention. Id. The on-sale
bar is a question of law based on underlying factual
findings. See Grp. One, Ltd. v. Hallmark Cards, Inc., 254
F.3d 1041, 1045–46 (Fed. Cir. 2001); see also Leader
Technologies, Inc. v. Facebook, Inc., 678 F.3d 1300, 1305
(Fed. Cir. 2012) (“Whether a patent is invalid for a public
use or sale is a question of law, reviewed de novo, based
on underlying facts, reviewed for substantial evidence
following a jury verdict.”); Electromotive Division of
General Motors Corp. v. Transportation Systems Division
of General Electric Co., 417 F.3d 1203, 1209-10 (Fed. Cir.
2005) (“Whether an invention was on sale within the
meaning of § 102(b) is a question of law that we review de
novo based upon underlying facts, which we review for
clear error.”).

Of relevance to this case:

At the outset, there are three important points to
note. First, while the trial court found that the relevant
critical date for the ’928 patent was June 4, 2009, because
the patent included new matter—a finding which would
clearly invalidate that patent under § 102(b)—it alternatively
found that the on-sale bar applied even if the ’928
patent was entitled to the ’831 patent’s critical date, i.e.,
March 1, 2005. Because we do not address the trial
court’s new matter finding, we employ the earlier critical
date in our § 102(b) analysis, a date more favorable to
Hamilton Beach. Second, there is no “supplier exception”
to the on-sale bar. See Special Devices, Inc. v. OEA, Inc.,
270 F.3d 1353, 1355 (Fed. Cir. 2001). Thus, it is of no
consequence that the “commercial offer for sale” at issue
in this case was made by Hamilton Beach’s own supplier
and was made to Hamilton Beach itself. Finally, a commercial
offer for sale made by a foreign entity that is
directed to a United States customer at its place of business
in the United States may serve as an invaliding
activity. In re Caveney, 761 F.2d 671, 676–77 (Fed. Cir.
1985). It is undisputed that Hamilton’s Beach’s foreign
supplier directed its activity to Hamilton Beach within
the United States.


As such, even if the parties
had not entered into a binding contract when the supplier
responded to the purchase order, the response, nevertheless,
was a commercial offer for sale that Hamilton Beach
could have made into a binding contract by simple acceptance.
This was enough to satisfy Pfaff’s first prong
without the need for a binding contract. Grp. One Ltd.,
254 F.3d at 1046; see also Lacks Industries, Inc., 322 F.3d
at 1348; Dana Corp., 279 F.3d at 1377. To the extent the
parties and the district court read Linear Tech to require
more, they were wrong.


A product is “ready for patenting” for purposes of the
on-sale bar under § 102(b) if the claimed invention is: (1)
reduced to practice; or (2) depicted in drawings or other
descriptions “that were sufficiently specific to enable a
person skilled in the art to practice the invention.” Pfaff,
525 U.S. at 67–68; see also Weatherchem Corp. v. J.L.
Clark, Inc., 163 F.3d 1326, 1332–34 (Fed. Cir. 1998)
(holding that drawings depicting and samples of the
claimed invention were sufficiently definite to enable a
person of skill in the art to practice the invention). The
district court explained that Hamilton Beach held precritical
date meetings with many of its retail customers’
buying agents and presented detailed descriptions and
depictions of the Stay or Go® slow cooker. At these
meetings and presentations, Hamilton Beach showed and
distributed Computer Aided Design (“CAD”) drawings
depicting the Stay or Go® slow cooker. The district court
found that these detailed drawings and descriptions from
Hamilton Beach’s meetings, coupled with the communications
with its supplier, demonstrated that the invention
was ready for patenting.


Based on the foregoing, we affirm the district court’s
finding that claims 1 and 3–7 of the ’928 patent are invalid
under 35 U.S.C. § 102(b) because the claimed invention
was the subject of a commercial offer for sale prior to
the critical date. Accordingly, we need not reach the other
issues addressed by the district court and addressed by
the parties in the briefing before this court.

Judge Reyna dissented:

My greatest concerns involve the implications this
case will have for future innovators, most notably small
enterprises and individual inventors who lack in-house
prototyping and fabricating capabilities. Cf. Monon Corp.
v. Stoughton Trailers, Inc., 239 F.3d 1253, 1258–61 (Fed.
Cir. 2001) (reversing summary judgment of invalidity and
concluding that the sale was non-commercial where the
patentee had a third-party test its patented trailer because
it lacked in-house testing capabilities). Whenever
the development process requires those entities to manufacture
working prototypes or pre-mass-production samples,
they often have no choice but to reach out to thirdparty
suppliers. Under the majority’s holding in this case,
a single offer to buy for purely experimental purposes may
trigger the on-sale bar, and the experimental-use exception
will offer them no salvation. It is from this evisceration
of the experimental-use exception that I respectfully


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