BASF Corp. v. SNF Holding Company, et al.
Docket No. 2019-1243
LOURIE, REYNA, HUGHES
April 8, 2020
Brief Summary: DC decisions finding prior knowledge or use, public use, and on-sale bar reversed and remanded.
Summary: BASF appealed DC decision granted summary judgment (SJ) that claims 1 and 3-7 of US 5,633,329 are invalid as anticipated and that claim 2 is invalid as obvious. The claims relate to processes for preparing polymers “in a tubular reactor which has a conical taper at the end” for use in waste treatment, paper manufacturing, and mining. The DC concluded that a process performed by a third party, Celanese Corp.’s “Sanwet® Process,” evidences prior art knowledge and use of the patented invention under § 102(a), and was a public-use bar and an on-sale bar to the patented invention under § 102(b). The DC case leading to this appeal was stayed during an IPR of this patent filed by SNF, with the PTAB concluding that SNF failed to prove obviousness (IPR2015-00600). After the IPR decision, SNF was granted SJ for anticipation and obviousness based on the use of Celanese’s use of the Sanwet® Process which was licensed from Sanyo Chem. Ind. with a ten year confidentiality provision (employees and subcontractors were required to sign confidentiality agreements). The DC “agreed with SNF that ‘one person’s use or knowledge’ is all that is required for an invention to be ‘known or used’ by others under § 102(a), and ‘whether prior use is secret or confidential is immaterial’”, and granted SJ on both the public-use and on-sale bars of § 102(b)” (pre-AIA).
The FC panel found the DC’s interpretation to be erroneous because, e.g., “[t]his court has uniformly interpreted the ‘known or used’ prong of § 102(a) to mean ‘knowledge or use which is accessible to the public’” (Carella, FC 1986; Woodland Tr., FC 1998; MMM, FC 2002; In re Borst, CCPA 1965; Penncock, US 1829 (public use as a bar); Gayler, US 1850 (“no prior use or knowledge where the prior user ‘had not made his discovery public, but had used it simply for his own private purpose’”, “confers no benefit on the public, and thus does not suffice as a defense under § 102(a)”)). The FC panel agreed with SNF that “[p]rior knowledge and use by a single person is sufficient” (“[t]he number is immaterial”), but it must be public. The FC panel also explained that “the existence of relevant confidentiality agreement and the degree to which they were honored are evidence of whether prior knowledge and use were accessible to the public but are not necessarily conclusive” (Bernhardt, FC 2004).
The FC panel also found the DC erred in its § 102(b) public use analysis because it “applies to uses of the invention ‘not purposely hidden’” and a “use…not successfully concealed or hidden from those who lack any ‘limitation or restriction, or injunction of secrecy’…is a public use within the meaning of § 102(b)” (Shimadzu, US 1939; Egbert, US 1881Motionless Keyboard, FC 2007; Invitrogen, FC 2005; New Railhead, FC 2002; W.L. Gore, FC 1983 (3rd party sale of product made by secret process does not create a bar to another inventor of the process); City of Elizabeth, US 1877 (“experimental use is not public use”); Dey, FC 2012 (relevant factors in public use analysis)).
The FC panel also reversed the DC’s grant of SJ based on the § 102(b) on-sale defense (Pfaff, US 1998) because “[t]he invention itself must be sold or offered for sale as defined under the UCC (Medicines Co., FC 2016 (en banc)). “[A] process may be sold in a manner which triggers the on-sale bar” (e.g., Metallizing, 2d Cir. 1946 (upon which In re Borst, CCPA 1965 relied)), as is the “sale of a product made by his later-patented process, i.e., the Metallizing rule” (D.L. Auld, FC 1983). The FC panel explained that In re Kollar (FC 2002) stands for the “well-established principle that the grant of a license to practice a patented invention, with or without accompanying technical information, does not itself create an on-sale bar” (Minton, FC 2003; Quanta, US 2008 (“where a product ‘embodie[s] essential features of [the] patented invention,’…a sale of that product is tantamount to a sale of the process performed by that product and thus creates an on-sale bar to the process claims as well”)). But here the FC panel found the agreement between Celanese and Sanyo “was not a sale of the Sanwet® Process” (e.g., “the essential features of the claimed process here were not embodied in a product sold or offered for sale before the critical date”).