Thursday, January 15, 2015

CAFC addresses public use in DELANO FARMS COMPANY case

gets into nuances "prior public use".

As to public use

Our case law defines the contours of what it means to
be “accessible to the public.” The principal policy underlying
the statutory bar is to prevent “the removal, from the
public domain, of inventions that the public reasonably
has come to believe are freely available.” Tone Bros. v.
Sysco Corp., 28 F.3d 1192, 1198 (Fed. Cir. 1994). The
question in a case such as this one is thus whether the
actions taken by the inventor (or, as in this case, a third
party) create a reasonable belief as to the invention’s
public availability.

Factors that we have previously identified as being
helpful in analyzing that question include “the nature of
the activity that occurred in public; the public access to
and knowledge of the public use; [and] whether there was
any confidentiality obligation imposed on persons who
observed the use.” Bernhardt, L.L.C. v. Collezione Europa
USA, Inc., 386 F.3d 1371, 1379 (Fed. Cir. 2004), quoting
Allied Colloids Inc. v. Am. Cyanamid Co., 64 F.3d 1570,
1574 (Fed. Cir. 1995). The last factor captures “the commonsense
notion that whether an invention is ‘accessible
to the public’ . . . depends, at least in part, on the degree
of confidentiality surrounding its use: ‘[A]n agreement of
confidentiality, or circumstances creating a similar expectation
of secrecy, may negate a public use where there is
not commercial exploitation.’” Dey, L.P. v. Sunovion
Pharm., Inc., 715 F.3d 1351, 1355 (Fed. Cir. 2013), quoting
Invitrogen, 424 F.3d at 1382.

The analysis is similar when the allegedly public use
is performed by an unaffiliated third party rather than
the inventor. “Third party prior use accessible to the
public is a section 102(b) bar.” Eolas Techs. Inc. v. Microsoft
Corp., 399 F.3d 1325, 1334 (Fed. Cir. 2005). In
order to be invalidating, such use must still be publicly
accessible; “secret or confidential third-party uses do not
invalidate later-filed patents.” Dey, 715 F.3d at 1355.
The adequacy of any confidentiality guarantees are measured
in relation “to the party in control of the allegedly
invalidating prior use.” Id. at 1358. The actions of an
unaffiliated third party acting in secret are evaluated as if
he stood in the place of the inventor.

Yes, Egbert v. Lippmann is cited:

The appellants first argue that Jim Ludy’s provision
of plant material to his cousin Larry Ludy resulted in
public use. This argument relies primarily on the Supreme
Court’s nineteenth century decision in Egbert v.
Lippmann, 104 U.S. 333 (1881). In that case, the Court
ruled that the inventor of a type of corset steel who gave
two of the corset steels to a friend for use 11 years before
applying for a patent on the device had put the invention
into public use, resulting in the invalidation of the patent.
The Court held in that case that “[i]f an inventor, having
made his device, gives or sells it to another, to be used by
the donee or vendee, without limitation or restriction, or
injunction of secrecy, and it is so used, such use is public,
even though the use and knowledge of the use may be
confined to one person.” Id. at 336


To the extent that the appellants’ argument as to Larry
Ludy is based on the lack of an explicit confidentiality
agreement between the cousins, “[w]e have never required
a formal confidentiality agreement to show non-public
use.” Dey, 715 F.3d at 1357; see also Moleculon, 793 F.2d
at 1266 (“[T]he presence or absence of [an express confidentiality]
agreement is not determinative of the public
use issue.”). Instead, we evaluate whether there were
“circumstances creating a similar expectation of secrecy.”
Invitrogen, 424 F.3d at 1382.

The Supreme Court’s decision in Egbert turned on the
inventor’s lack of any effort to maintain control over the
use of his invention. The facts of this case, by contrast,
show that Jim Ludy sought to maintain control of the
plants he obtained from Mr. Klassen.


The circumstances under which the disclosure to Mr.
Sandrini occurred weigh against the application of the
public use bar. In similar cases, we have held that the
nature of the disclosure did not give rise to a “public use.”
For example, in American Seating Co. v. USSC Group,
Inc., 514 F.3d 1262 (Fed. Cir. 2008), we affirmed the
district court’s decision that demonstration of a prototype
to “friends and colleagues” was not invalidating because
the evidence supported the existence of “a general understanding
of confidentiality.” Id. at 1267-68. Similarly, in
Bernhardt, L.L.C. v. Collezione Europa USA, Inc., we
vacated a district court decision finding an invalidating
public use where “access was tightly controlled,” “there
was an industry-wide understanding [of confidentiality],”
“a breach of confidence could have serious consequences
for an attendee,” and “there was no effective means for
the attendees to divulge the designs they viewed.” 386
F.3d at 1380-81.


Finally, the appellants argue that the lack of secrecy
with which the Ludys cultivated the unreleased varieties
mandates a finding of public use. The appellants are
correct that the district court found that both Ludys
grafted the plants and grew them in locations that were
visible from public roads
. However, the appellants ignore
the district court’s finding that grape varieties cannot be
reliably identified simply by viewing
the growing vines
alone. The plantings of the unreleased varieties were
extremely limited in comparison to the total cultivation of
the Ludys’ farms. The unreleased varieties were not
labeled in any way, and the appellants introduced no
evidence that any person other than the Ludys and Mr.
Sandrini had ever recognized the unreleased varieties. As
this court explained in the Dey case, 715 F.3d at 1359, “a
reasonable jury could conclude that if members of the
public are not informed of, and cannot readily discern, the
claimed features of the invention in the allegedly invalidating
prior art, the public has not been put in possession
of those features.” In this case, the district court, sitting
as the trier of fact, came to exactly that conclusion, and
the evidence supports the court’s conclusion.

Note also

In addition, because the evidence at trial was sufficient
to support the district court’s finding that the patented
plant varieties were not in public use prior to the
critical date, we need not address the question whether
use of invention by one who has misappropriated that
invention (or obtained it through other improper means)
can ever qualify as an invalidating public use. The district
court properly ruled that the Ludys’ use of the plant
varieties at issue in this case was not public, even apart
from the fact that the Ludys obtained the plant material
in an unauthorized manner.


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