By Jason Rantanen
The Fox Group, Inc. v. Cree, Inc. (Fed. Cir. 2012) Download 11-1576
Panel: Newman, O'Malley (dissenting-in-part) and Wallach (author)
In The Fox Group, the Federal Circuit substantially expands the scope of prior art under 35 U.S.C. § 102(g). There are two main components of this expansion: the panel's unanimous interpretation of the reduction to practice requirement as not necessitating repeatability and the majority's sharp narrowing of what constitutes abandonment, suppression or concealment.
While Section 102(g) will be eliminated as a category of prior art for patents based on applications filed on or after March 16, 2012, it will continue to apply to a large number of patents for many years to come.
Background: In 1995, Cree grew a low defect silicon carbide (SiC) crystal and sent a sample to a university scientist for analysis. The scientist advised Cree that there was an exceptionally low defect area in this sample. That same year, a Cree researcher showed a cropped image of the sample and described its low defect nature, stating that it had an area with less than 1,000 dislocations per square centimeter and no micropipes. The researcher also described the high quality of the sample in an article published in 1996 that included an image of an X-ray topograph of the crystal. The article did not describe how the crystal was created and there was no evidence in the record that Cree took any steps towards commercialization prior to 2004.
Fox is the assignee of Patent No. 6,562,130, filed on May 4, 2001. The '130 patent claims a low defect SiC crystal having, among other properties, a density of dislocations per square centimeter of less than 104 and a density of micropipes of less than 10 per square centimter. Fox sued Cree for infringement of the '130 patent in 2010 and Cree responded by arguing that its prior invention rendered the '130 patent invalid under 102(g). The district court granted summary judgment in favor of Cree and Fox appealed.
Under 35 U.S.C. § 102(g)(2), a person is not entitled to a patent if:
before such person’s invention thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it. In determining priority of invention under this subsection, there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other.
There are two core requirement for 102(g) prior art. First, the challenger must establish that the alleged prior inventor reduced its invention to practice first or, alternately, was the first party to conceive of the invention and then exercised reasonable diligence in reducing that invention to practice. Second, the prior inventor must not have abandonned, suppressed, or concealed the invention. The court's opinion addresses both.
Reduction to Practice: The court found that Cree satisfied the first element of prior inventorship by reducing the invention to practice in 1995 by (1) creating the crystal sample (which met all the limitations of the asserted claims of the '130 patent) and (2) recognizing that it was a low-defect crystal. In reaching this conclusion, the CAFC rejected Fox's argument that reduction to practice of a product invention requires that the the prior inventor "must prove repeatabliity to prove that it had reduced the invention to practice." Slip Op. at 9. In other words, it was sufficient that Cree had created the crystal once; there was no requirement for it to prove that it could be done again.
Suppresssion or Concealment: The more significant aspect of the opinion relates to the issue of suppression or concealment. Here, Fox argued that Cree suppressed or concealed its invention because it (1) did not file a patent application for its Kyoto Wafer, (2) did not present proof of commercialization that would allow for reverse engineering, and (3) did not otherwise provide adequate disclosure because it failed to reveal the details of the growth conditions under which boule G0259 was made." Slip Op. at 10.
In rejecting Fox's argument, Judges Wallach and Newman concluded that disclosure of an product invention to the public requires only that the inventor make the existence of its invention known to the public. (Note: the majority does not actually use the word "existence of"; however, in my view that's the only logical way to read the opinion, given that this is the only information that Cree disclosed). Provided that general details about the invention are given to the public, it is irrelevant whether or not an invention is commercialized or a patent is filed. "Filing a patent application and commercializing a product are only two convenient ways of proving an invention has been disclosed to the public." Slip Op. at 11. Here, it was sufficient that Cree sent samples of its boule for testing by Dr. Dudley, an outside evaluator, the product itself (though not the process used to make it) was described in a published paper, and knowledge of the product was disseminated outside of the company in the Kyoto presentation." Id. The crux of the majority's reasoning:
The purpose of § 102(g) is to bar an inventor from receiving a patent on an invention that has already been invented and was not abandoned, suppressed, or concealed. Apotex, 254 F.3d at 1038-39. If the patent claimed a process, then a prior inventor would have to prove prior invention of the process which had not been abandoned, suppressed, or concealed, to invalidate the patent under § 102(g). “Cree promptly and publicly disclosed its findings concerning the low defect properties of the SiC material from which the [Kyoto Wafer] was cut through a presentation at the 1995 International Conference and a published paper on the subject.” Fox Group, 819 F. Supp. 2d at 535. Accordingly, Cree promptly made its invention, a SiC material with low defect densities, known to the public. Fox has not produced sufficient evidence raising any genuine issues of material fact to show that Cree suppressed or concealed its invention.
Writing in dissent, Judge O'Malley emphatically disagreed with the majority on this issue:
Because Cree made the fact of its invention known to the public, the majority, like the district court before it, concludes that Fox can never establish abandonment, suppression, or concealment. Under the majority’s approach, an inventor could publicly announce that it made a product, with no explanation as to how it did so, and then hide it away in a closet indefinitely. As long as the inventor describes a product in general terms, the inventor cannot, according to the majority, be accused of abandoning, suppressing, or concealing the invention.
The majority’s approach cannot be the law. If a prior inventor could disclose the mere existence of a product and take no further action for nine years, the concept of abandonment, suppression, or concealment would be rendered meaningless. Consistent with our prior case law, where there is no enabling written disclosure, there must be evidence that the prior inventor timely made its
invention available to the public in some other way – e.g., through public use, commercialization, or filing a patent application claiming the invention. Such a requirement is consistent with § 102(g)’s general goal of giving the public the benefit of the invention. See Checkpoint, 54 F.3d at
761 (Section 102(g) “encourages prompt public disclosure of an invention by penalizing the unexcused delay or failure of a first inventor to share the ‘benefit of the knowledge of [the] invention’ with the public after the invention has been completed.” (citation omitted)).
Judge O'Malley further pointed out that this case was before the court on a grant of summary judgment of invalidity; in light of this posture, it was especially inappropriate to hold that Cree had not suppressed or concealed the invention. In particular, Judge O'Malley pointed to evidence indicating that Cree had a broad policy of concealing its production methods, and in light of that policy took specific steps to avoid enabling its competitors to make the invention.
Comment: In my view, the majority erred in concluding that merely disclosing general information about the invention suffices to preclude any subsequent inventor from obtaining a patent. In addition to Judge O'Malley's reasoning why this cannot be correct (including an analysis of why it is inconsistent with the CAFC's precedent), the effect of the majority's holding is to cause 102(g)(2) to swallow much of the remainder of Section 102. Under the majority's reasoning, any disclosure about an invention, no matter how superficial or non-enabling, becomes potential prior art as long as there is secret information about a reduction to practice of the invention. The effect of the court's opinion is to incentivize lower quality, non-enabling disclosures of information as, in the near term at least, this is all that is apparently necessary to defeat patentability.