Center for Advanced Study & Research on Innovation Policy


CASRIP Newsletter - Winter 1997, Volume 4, Issue 1

Who Should Decide Public Use and Experimental Use Exception

On January 2, the Federal Circuit refused to grant en banc review in the case of Lough v. Brunswick1. This case is significant because it involved the question of whether public use and experimental use under 35 U.S.C. are issues of law or of fact. Four judges wrote dissenting opinions in the decision, further expanding the debate within the Federal Circuit over the proper role of judges, juries, and appellate courts in patent infringement litigation.

The majority refused to review a panel opinion which found that public use and experimental use were issues of law. Judge Lourie, who also wrote the panel decision, gave a concurring opinion. Judges Newman, Plager, and Rader wrote dissenting opinions of varying scope and approach. However, all three judges argued that experimental use negation of public use should be considered an issue of fact. Judge Michel also dissented, but wished to review the case en banc to affirm that public use and e xperimental use were issues of law. He wanted the court to establish clear standards of control that would be required before experimental use could be used to negate a finding of public use under 35 U.S.C. § 102(b).

Steven Lough worked as a repairman for a boat dealership at a Florida marina. While repairing Brunswick inboard/outboard motors, he determined that the upper seal in the stern drives often failed due to corrosion caused by contact between the annular se al and the bell housing aperture. In an effort to prevent the corrosion, he designed a new upper seal assembly which isolated those two parts. He made six prototypes on his grandfather's metal lathe in the spring of 1986. He installed one in his boat, one in the boat of the marina owner, and one in the boat of a marina customer. Lough gave the other three prototypes to his friends for installation on their boats. He did not charge anyone for the prototypes. The panel opinion stated that Lough did no t ask for or receive any comments about the operability of the prototypes for over a year following their installation. Lough filed a patent application for his invention on June 6, 1988. His patent issued in 1989.

After learning of Lough's solution to the corrosion problem, Brunswick designed its own new seal assembly which included an additional feature. Brunswick incorporated this assembly into a new boat model and also sold it as a replacement part. Lough sue d Brunswick for infringement of his patent, and Brunswick counterclaimed for a declaratory judgment of patent noninfringement, invalidity, and/or unenforceability. After a seventeen day trial, a jury unanimously found that Brunswick had failed to prove t hat Lough's invention had been in public use before the critical date. The jury also found that Brunswick had infringed Lough's patent, both literally and under the doctrine of equivalents. The jury awarded Lough $1,500,000 in lost profits. Brunswick m ade a motion for a judgment as a matter of law which was denied by the district court judge. Brunswick appealed.

In a 2-1 decision, the Federal Circuit reversed the decision of the district court. Judge Lourie, joined by Judge Clevenger, stated that both public use and experimental use were questions of law. The court held that the jury had no legal basis to conc lude that the uses of Lough's prototypes were experimental and that the prototypes were not in public use prior to the critical date. The court concluded that the district court judge erred in not granting Brunswick's JMOL motion. In dissent, Judge Plag er argued that a determination of whether a challenged use is experimental involves a blending of law and fact in which the jury fully participates. He did not believe the district court should be reversed because there was more than enough evidence to s upport a jury finding that Lough was testing and perfecting his invention before the critical date.

Following the panel decision, Lough petitioned for an en banc rehearing. His request was denied, but four judges wrote dissenting opinions. The extensive arguments of these four judges, combined with Judge Lourie's concurrence supporting the majority's decision resulted in an opinion much longer than the original panel decision.

Judge Lourie disagreed with the dissenting arguments that public use and experimental use should be questions of fact subject to deference to the jury. He stated that he would not counter-analyze all the case law cited by the dissents, but would give a few brief comments. Judge Lourie stated that the reason the question of public use under 35 U.S.C. § 102(b) is a question of law is because it is a statutory term that requires the exercise of judgment and the taking into account of facts in light of the policies behind the statute. He did acknowledge, however, that there were underlying factual determinations to be made which were subject to deference. He stated that the references in the case law to issues of fact related to those underlying fact s rather than establishing the question of public use itself as one of fact.

Judge Lourie next turned to experimental use. He stated that since it is a judge-made concept, it is appropriately decided by a judge without deference to a jury. In addition, he argued that since it is a negation of public use, and hence on the same c onceptual level involving subordinate facts and policy considerations, it is also properly a question of law. Judge Lourie also argued that precedent was on the side of the majority by stating that City of Elizabeth, the principal Supreme Court c ase on public and experimental use, clearly considered the ultimate question of experimental use to be one of law. He also discounted any arguments that leaving the question of public use and experimental use in the hands of judges would make for more di fficult prediction of outcomes. He stated that juries are at least as difficult to predict as judges or panels of judges.

Judge Newman, with whom Judge Rader joined, stated that the panel's treatment of the case was squarely in conflict with precedent. She stated that the removal of experimental use from the jury was a manipulation of the law-fact doctrine. She quoted Pro fessor Clarence Morris, who stated, "the law is the general principle, stated in advance, while the fact is a case-specific inquiry based on evidence." Then, in direct contrast to Judge Lourie, Judge Newman argued that the finding of experimental use in City of Elizabeth was not a matter of law, but was a case-specific finding _ a finding of fact. She also argued that since the trier of fact must weigh and balance all of the evidence in order to determine whether the primary purpose of the activi ty was experimental, the determination was surely not a matter of law. Judge Newman then presented some of the testimony from the trial record that could have supported the jury's decision. Lough had testified that he wanted to put the assembly in a different boat because the boat sat in the water all of the time, while his boat was on a trailer. He also testified that he took pictures of the seal assembly in the boat of a customer of the marina to show that it was working properly. Other witnesses testified that they knew the seal was a new creation, that no payment was made, that the seal's performance was being evaluated, and that they had received it to "try it out." In addition, the owner of the marina testified that when the tow boat at the marina was pulled out of the water every three to six months, Lough's seal was checked. Judge Newman argued that the panel majority, in reaching a different balance than did the jury, must have disbelieved the testimony that the purpose was to "try out" the seal assembly, and must have disbelieved the testimony describing the d isassembly and inspection of the seals, because the court had explicitly found that Lough did not monitor the use of the prototypes and had not received comments concerning their operability. Judge Newman argued that the trial process should not be ignor ed. The appellate court still has full authority to correct jury verdicts not supported by substantial evidence, but when the jury verdict is sustainable on the evidence, she believed the appellate role is fulfilled.

Judge Plager's dissent, which Judge Rader also joined, emphasized that whether an inventor was simply experimenting is entirely fact-driven. Judge Plager argued that it is an issue that involves intent, purpose, behavior, the nature of the invention, t he environment in which testing was done, the experience and training of the inventor, and perhaps the extent of advice available to the inventor. He argued that the conclusion of whether the inventor's activities placed the invention in public use canno t be separated from the factual underpinnings on which the answer stands. The conclusion results from the total experience presented to the fact finder rather than from some independent basis of judgment or knowledge. Judge Plager argued that the case should have been taken en banc to clearly state the rule that accords the fact finder proper deference when the issue is whether the experimental use counter-defense has been successfully established as a fact in response to alleged public use under § 102.

Judge Michel wanted to review the case en banc, but argued that public use and experimental use are issues of law. He wished to take the case en banc so that certain indicia of control could be identified, such as record keeping or secrecy agreements, p roof of which would be required before a claim of experimental use could be used to defeat a potentially barring public use. He argued that some cases which suggest that public use turns on a "totality of the circumstances" suggest that all of the circum stances are merely factors, and nothing is a controlling issue. He argued that this leads to unpredictability because business people and lawyers can only guess about the invalidity of a patent until a court has ruled. He wanted to clarify this situatio n. He argued that certain indicia of control should be required before experimental use could be found to negate public use, rather relying entirely on an ambiguous "totality of the circumstances" standard.

Judge Michel argued that reclassifying pub lic use as an issue of fact would increase unpredictability because different juries could render different verdicts in the face of similar facts. He also stated that redesignating public use as an issue of fact may create confusion, and that in order to be consistent, other issues involving both legal and factual issues, such as obviousness, may need to be reclassified as well. In agreement with Judge Lourie, Judge Michel also argued that precedent favored classifying public use as an issue of law. He stated that the Supreme Court in City of Elizabeth had considered the statutory standard of public use to be reviewable as an issue of law. Judge Michel considered any thoughts of reclassifying the public use bar to have been foreclosed by that d ecision.

Judge Michel advocated a more complex standard of review in which judges would leave a jury's resolution undisturbed in cases where the facts regarding public use could support only one result. However, in cases where the facts could support either res ult, the judge should redecide the issue based on the underlying facts found by the jury. He stated that the jury's role could be further protected by encouraging the use of special verdict forms or written interrogatories.

Judge Rader argued that the Supreme Court has held in many decisions that public use is predominantly a question of fact and that factual inquiry drives § 102(b) issues. Judge Rader then traced the Federal Circuit's departure from this binding prece dent. He was particularly upset that the reviewing panel had not given deference to the trial jury's findings of fact in making its decision. He argued that the court had abandoned factual inquiry and made a decision entirely of law without giving defer ence to the jury's determination of underlying facts. Judge Rader stated that the panel majority had listed a number of indicia of experimentation that should be considered in making an experimental use determination, but then failed to consider all of t hem. In addition, Judge Rader argued that those factors the court did consider could have been found differently by a jury. Moreover, he argued that other cases have used additional factors which the court did not even consider. Those other factors inc lude tests for durability, careful tailoring of tests to the nature of the invention, and the hidden nature of an experiment. He argued that some of these factors could have been relevant to the jury's finding. Judge Rader also mentioned in a footnote t hat early treatises uniformly acknowledged that public use was a question of fact.

- Tim Danskin

1103 F.3d 1317, 41 U.S.P.Q. 2d 1223, (Fed Cir 1997)

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