Center for Advanced Study & Research on Innovation Policy


CASRIP Newsletter - Winter/Spring 1999, Volume 5, Issue 4

Federal Circuit's Interpretation of "On Sale" under Pfaff

Weatherchem Corp. v. J.L. Clark1

In Weatherchem, the Federal Circuit gave up its long-established totality-of-circumstances test and applied the newly introduced two-part test in Pfaff2 to determine the beginning of the one-year grace period during which the inventor has not reduced his/her claimed invention to practice. The two patents-in-suit held by Weatherchem were concerned with an improvement of the two-flap plastic caps used for containers for spices and other condiments. The patentee originally developed the caps for its customer and showed the customer several drawings of the cap designs until the customer issued a purchase order for 500 caps on February 19, 1985. That order was based on drawings submitted on February 8, 1985. Both of these dates were well before the critical date of the earlier patent of the two patents-in-suit, October 17, 1985. However, Weatherchem's development activities did not stop upon the receipt of the purchase order. Until an application was filed on October 17, 1986, Weatherchem continued to make adjustments to the cap in preparation for the mass manufacturing process.

After the two patents issued on the plastic cap, Weatherchem sued the defendant for infringement. Defendant counterclaimed for a declaratory judgement of invalidity, unenforceability, and non-infringement. The district court granted a declaratory judgement for defendant. The declaratory judgement was supported by a finding that the patent was invalid, under 35 U.S.C. 102(b), because of an early application that put the claimed plastic cap on sale more than one year prior to the filing date.

On appeal by Weatherchem, the Federal Circuit applied the Supreme Court's two-part test from Pfaff to determine the beginning of the one-year grace period, instead of the totality-of-circumstances test that the Federal Circuit had consistently applied in the past. With respect to the first part of the test, asking whether the product was subjected to a commercial offer for sale, the court affirmed the district court's finding that there had been actual sales because Weatherchem received the benefit of at least three commercial transactions before the critical date. The court also noted that the absence of records on actual delivery of the products or exchange of money is immaterial in determining whether the test was met.

The Federal Circuit found that the second part of the test, asking whether the invention was ready for patenting, was also met. Although Weatherchem argued that the claim limitation of a "sealing" ledge was missing from the cap depicted in the drawings given to the customer before the critical date, expert testimony indicated that the ledge was described on the drawings submitted to the customer before the critical date. The court thus concluded that the drawings included sufficiently specific information regarding all claim limitations to enable one skilled in the art to practice the invention.

Other evidence before the district court indicated Weatherchem's confidence that the invention would work as expected and that its continued works were refinements for mass production, instead of for completing the invention. The court particularly put weight on the fact that the customer ordered a commercial quantity of the invention. This indicates that the customer was confident that the invention was complete and operative. Further, to support its conclusion that the second part test was met, the court relied on the similarity of the facts in Pfaff and this case, citing the Supreme Court's statement that "the manufacturer was able to produce the invention using the detailed drawings and specification demonstrating this fact." After rejecting Weatherchem's attempt to characterize the arrangement with its customer as a development project, the court concluded that the district court's finding that the early patent was invalid was proper and adequately supported by the evidence.

Because analysis of the on-sale bar is fact-oriented, one case alone cannot give a clue as to how the Federal Circuit will clarify the newly introduced test regarding whether the invention is ready for patenting. Without any precedent, the Federal Circuit's analysis in Weatherchem focused on the similarity of the facts involved in this case and Pfaff. The significance of the Pfaff test will be clarified only through the Federal Circuit's case-by-case application of the test to particular facts.

An important point of the Weatherchem case is that the Federal Circuit no longer applies the totality-of-circumstances test in examining the on-sale bar. Because that test has also been applied in the context of the experimental-use exception to examine whether the invention is in public use, one wonders if the Federal Circuit also will abolish the totality-of-circumstances test in that context. The answer awaits a decision by the Federal Circuit.

Toshiko Takenaka

  1. 163 F.3d 1326, 49 U.S.P.Q.2d 1001 (Fed. Cir. 1998).
  2. Pfaff v. Wells Electronics, Inc. 142 L.Ed. 2d 216, 119 S. Ct. 304 (1998).

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