CASRIP Newsletter - Fall 1998, Volume 5, Issue 3
Reduction to Practice Unnecessary to Trigger the On-Sale Bar
Pfaff v. Wells Electronics, Inc.
In a decision issued on November 10, 1998, the Supreme Court held that an invention may be subject to the on-sale bar of 35 U.S.C. 102(b) if it was on sale more than one year before the date of its patent application and either if it was reduced to practice or if it could be proved through drawings, descriptions or other evidence that the conception of the invention was complete at the time of the sale. Reduction to practice at the time of the sale was sufficient, but not necessary to show completeness. An invention had to be "complete" and not merely "substantially complete" at the time of the sale.
The petitioner, Wayne Pfaff, filed for a patent on a computer chip socket on April 19, 1982, thus making the critical date for purposes of the on-sale bar April 19, 1981. Texas Instruments had asked Pfaff in November 1980 to develop his device, and he sent the company detailed engineering drawings of the design of the socket in February or March of 1981. On April 8, 1981, Texas Instruments confirmed in writing their previous order for 31,100 of the sockets for $91,155. Pfaff did not make or test a prototype before making this sale; the device was reduced to practice in the summer of 1981. The device received a patent on January 1, 1985.
Pfaff sued Wells Electronics, Inc., for patent infringement, alleging that Wells’ modified socket infringed six of the claims in his patent. Pfaff prevailed on some of the claims when the trial court rejected Wells’s section 102(b) defense because Pfaff had filed the application of his patent less than one year after reduction to practice had occurred.
The Federal Circuit reversed, finding the claims invalid under § 102(b) because the devices had been offered for sale more than one year before the patent application date.1 The Federal Circuit reasoned that as long as the invention was "substantially complete at the time of the sale,"2 "the 1-year period began to run, even though the invention had not yet been reduced to practice."2 The Supreme Court granted certiorari because other circuits held that the on-sale bar did not begin to run until the invention had been reduced to practice3 and also because § 102(b) does not refer to "substantial completion" of an invention.
The Court affirmed the Federal Circuit’s judgment but did not accept its reasoning. Pfaff’s patent was invalid because the invention had been on sale for more than one year prior to his patent application, but the Court held that an invention refers to a concept that is "complete" and not merely "substantially complete," as the Federal Circuit had held.
The Court said the on-sale bar of § 102(b) applies when two conditions are met before the critical date (one year before the filing date): 1) the product must be the subject of a commercial offer for sale and 2) the invention must be ready for patenting. The latter condition may be met in at least one of two ways: "by proof of reduction to practice before the critical date" or "by proof that prior to the critical date the inventor had prepared drawings or other descriptions of the invention that were sufficiently specific to enable a person skilled in the art to practice the invention." Because the Court took the word "invention" in the patent statute to refer to an inventor’s conception rather than to a physical embodiment, the Court did not read the statute to require a reduction to practice before an invention can be patented.
The Court accepted the petitioner Pfaff’s criticisms of the Federal Circuit’s "substantially complete" standard as undermining the law’s interest in certainty. The law should provide inventors with a definite standard for determining when a patent application must be filed. The Court says that "invention" refers to a conception that is "complete" and not merely "substantially complete." But this more definite standard does not require a reduction to practice. The standard may be satisfied if sufficient proof exists through drawings or other descriptions that an invention was complete and ready for patenting. The case at bar provided such an example: the drawings Pfaff sent to the manufacturer in February or March of 1981 fully disclosed the invention. Hence, his invention was both the subject of a sale and ready for patenting more than one year before filing and the Court accordingly affirmed the Federal Circuit’s judgment that his patent was invalid due to the on sale bar of § 102(b).
Additional Comments by Toshiko Takenaka:
This case was decided to remove the conflicting views with respect to the standard to apply the "On Sale Bar" among Federal Circuit panel decisions. The "substantially complete" standard was adopted by the Federal Circuit in UMC Electronics Co.4 but has long been criticized by the patent community for not giving a clear standard. Thus, the Federal Circuit put great effort in distinguishing and avoiding UMC and has been trying to redefine the standard.5
Although dicta, the statement that "the word ’invention’ in the Patent Act unquestionably refers to the inventor’s conception rather than to a physical embodiment of that idea" puzzles those who are familiar with case law on priority and understand the rule that the first to invent is the first to reduce the invention to practice, and an award of priority to the first to conceive is the exception to the rule.6 The rule to give the priority to the first to conceive rather than the first to reduce the invention to practice seems to conflict with the early publication policy repeatedly emphasized by the Supreme Court in cases relating to Section 102(b) and priority.7
Justice Stevens in Pfaff uniformly used the term "reduction to practice" to mean "actual reduction to practice" instead of as a general term including two concepts: the actual reduction to practice through the construction of an embodiment and the constructive reduction to practice through an application with the U.S. PTO. In requiring the preparation of documents to enable one skilled in the art to actually reduce the invention to practice as an alternative condition to the actual reduction to practice, the Court has created the third concept relating to the reduction to practice. The third concept seems to be very similar to the constructive reduction to practice except for the requirement of filing with the patent office, but information to be required for the document might be different from that required for the constructive reduction to practice because the Court deliberately avoided terms used to define the condition for the constructive reduction to practice. This introduces a significant confusion in future case law, and thus it is doubtful the new standard gives more guidelines to applicants than the Federal Circuit’s "substantially complete" standard struck down by the Court.
1. Pfaff v. Wells Electronics, Inc., 124 F3d 1429 (Fed. Cir. 1997). 2. Id. at 1434. 3. Timely Products Corp. v. Arron, 523 F.2d 288, 299-302 (2d Cir. 1975); Dart Industries, Inc., v. E. I. Du Pont de Nemours & Co., 489 F.2d 1359, 1365, n. 11 (7th Cir. 1973). 4. UMC Electronics Co. v. United States, 816 F.2d 647, 2 USPQ2d 1465 (Fed. Cir. 1987). 5. Adelman etc., Cases and Materials on Patent Law, 261 (1998). 6. Chisum on Patents Section 10.03 (1978, Supp. 1998). 7. Pennock v. Dialogue, 27 U.S. 1 (1829); Egbert v. Lippmann, 104 U.S. (14 Otto) 333 (1881).