UMC Electronics Co. v. U.S. (901422128)

Read for 2/23/11

Reading Notes

• UMC sued US for infringement
  • Claims court help patent valid but not infringed
  • CAFC help patent invalid because it had been on sale for more than one year
• CAFC find the invention was not on sale but also affirm the judgement in favor of the government on different ground
• Invention is an aviation counting accelerometer
• Application filed August 1, 1968
  • Commercial exploitatoin and state of development one year prior are critical
• In April 1967 he built and tested a prototype
  • UMC was unable to negotiate a contract for the new ACA
  • UMC requested on July 27, 1967 to supply a certain number of new ACAs
• After the critical date, UMC submitted detailed descriptions, test results, and gave a demonstration
• Filed action in 1980 saying the Navy used its invetion in another company's ACA
  • Claims court found patent valid but not infringed
• Finding of timely products
  • Admitted offer to Navy was commercial not experimental
  • Had been reduced to practice before the critical date
  • The prototype did not include all elements of the claims (requirement 1 not met)
• Claims Court found that the inventor had not built a physical embodiment before the critical date
  • Also said they technically never reaped commercial benefit
• The error in the Claims court was to consider the prototype being the thing offered for sale which it was not, the subject matter of the offer is the claimed invention
• Government holds all three requirements have been met
  • UMC counters that the inventor never built a physical model with all the claims
• Not a reduction to practice
• However, the substantial attemp at commercial exploitation raises the on-sale bar under 102b
  • Reduction to practice is not always required
• Meaningless to talk about "reduction to practice" of what was sold as it relates only to the precise invention
• Claims Court was not factually wrong, just need to apply the proper rule of law - no remand

Statutory Bars

• Three part "on sale" test (Timely Products requirements)

(1) The complete invention claimed must have been embodied in or obvious in view of the thing offered for sale.... Complete readability of the claim on the thing offered is not required because whatever is published (or on sale) more than one year prior to the filing of a patent application becomes part of the prior art over which the claim must be patentable....

(2) The invention must have been tested sufficiently to verify that it is operable and commercially marketable. This is simply another way of expressing the principle that an invention cannot be offered for sale until it is completed, which requires not merely its conception but its reduction to practice....

(3) Finally, the sale must be primarily for profit rather than for experimental purposes....

• Precedents say there cannot be a reduction to practice with a physical embodiment with all claims
• Only two cases directly adress the reduction to practice requirement
  • Barmag did not suggest that an embodiment might not be required only where there had been actual sales
• Rigid standards are not good for this bar when the policies underlying it define it
  • Declined to adopt the above test for all cases
• Do not intend to attack patents on the ground that the inventor offered the mere concept of the envention

Dissenting Judge

• The majority strained an issue that was neither raised nor beiefed by the parties
• Should be bound by precedent
  • The majority threw these out
• They all agreed there was not reduction to practice and therefore the patent should be valid
• History shows that reduction to practice has always been a minimum legal standard
• It is the "thing offered" which must have been reduced to practice
• 102 was not intended to force inventors in the system prematurely
• He agrees with the Claims Court