• Put It in Writing: Records of Technological and Business Developments Can Come in Handy in A Patent Infringement Suit, Even If The Company Keeping The Records has No Intention of Filing for A Patent
  • June 18, 2003 | Author: Michael J. Sacksteder
  • Law Firm: Fenwick & West LLP - San Francisco Office
  • Groucho: Well, your word's good enough for me. Now then, is my word good enough for you?

    Chico: I should say not.

    Groucho and Chico Marx, negotiating a contract in A Night at the Opera

    When the issue is whether an accused patent infringer came up with an invention before the inventor named on the patent, courts typically prefer Chico's approach to Groucho's. The otherwise unsupported word of even a large number of witnesses is usually insufficient to invalidate an issued patent based on prior sale, public use or invention of the product or method claimed in the patent. Something more tangible is needed, and this requirement can create frustrating scenarios for accused infringers.

    Imagine a company's chagrin if it were found to infringe a patent that should have been found invalid as "anticipated" -- if only the company could have proven it -- because the allegedly infringing company invented the patented technology first and sold or demonstrated it publicly more than a year before the patent's filing date. It happens more often than one might think: An accused infringer's failure to introduce sufficient corroboration of what could be anticipating prior art dooms the accused infringer's invalidity defense to defeat.

    A recent example of this scenario occurred in Juicy Whip, Inc. v. Orange Bang, Inc., 292 F.3d 728 (Fed. Cir. 2002), decided in the summer of 2002 by the United States Court of Appeals for the Federal Circuit. Juicy Whip's patent covered a juice drink dispenser of the type found at carnival food stands and department store snack bars. The invention's twist was that the visible, see-through bowl showing what appears to be the drink being dispensed is not the source of the drink at all -- it's just there for show. The real drink is mixed from containers of water and syrup hidden under the counter, avoiding the need to clean the bowl and preventing bacterial contamination of the beverages actually sold to customers.

    At trial, the accused infringer, Orange Bang, argued that the patent was invalid under section 102(b) of the Patent Act because someone else -- namely Orange Bang's owner -- had placed such dispensers in public use more than one year before the filing of the patent. No fewer than six witnesses, including Orange Bang's owner, distributors and employees, testified that they had either seen or used the patented invention long before that date in such public places as the snack bar at the Staten Island Zoo. The jury believed them and found the patent invalid. But on appeal, the Federal Circuit, which hears all patent appeals in the United States, considered the six witnesses' testimony about as valuable as a bowl full of bacteria-laden Pineapple Cooler because of a lack of corroborating evidence.

    The only pieces of documentary evidence of the alleged prior public use that Orange Bang introduced were a diagram drawn years after the fact in the deposition of one of the witnesses, and an invoice for the glass bowls used in one of the allegedly anticipating dispensers, which contained no description of how the bowls were used. Relying heavily on a 110-year-old case in which the Supreme Court refused to invalidate a patent in spite of the testimony of no fewer than 24 apparently disinterested witnesses as to the prior public display of a patented type of barbed wire, the Federal Circuit noted that courts have "historically looked with disfavor upon finding anticipation with only oral testimony." In Juicy Whip, it did not help that "[n]one of the six witnesses can be said to be disinterested."

    The need for strong (generally written) corroboration can be traced to the architecture of the country's patent laws. Under the Patent Act, an issued patent is presumed valid and cannot be proven invalid without clear and convincing evidence of the facts underlying the invalidity contention. The unsupported testimony of witnesses interested in the outcome seldom rises to this high level of proof.

    Even if the alleged prior inventor is to all appearances a disinterested third party with no stake in the outcome of the litigation, there must be some corroboration of the alleged prior inventor's testimony. Such witnesses, according to the 1999 Federal Circuit opinion Finnegan Corp. v. International Trade Commission, 180 F.3d 1354 (Fed. Cir. 1999), "can be expected to derive a sense of professional or personal accomplishment in being the first in the field" and thus cannot be fully trusted without some further evidence to corroborate their testimony.

    Once some corroborating evidence is introduced, courts apply an eight-factor test endorsed by the Federal Circuit to determine whether that corroboration is sufficient to constitute clear and convincing evidence. The corroborating evidence may be circumstantial, and it may conceivably even be the oral testimony of another witness. However, courts generally look askance at such evidence in the absence of some kind of contemporaneous written documentation, especially in light of the "ubiquitous paper trail of virtually all commercial activity" that the Federal Circuit, in Juicy Whip, says exists in modern times: "It is rare indeed that some physical record . . . does not exist."

    The trick, then, is to make sure that this "ubiquitous paper trail" actually does exist with regard to activities that may someday land one's company in court for infringing someone else's patent. That is admittedly a broad field for documentation. The Supreme Court has stated that "anything under the sun that is made by man" falls within the subject matter of patent protection, and in the past few years, the Patent and Trademark Office has granted a slew of patents for everything from the most complex semiconductor circuitry to methods for selling products on the Internet. In view of this trend, the potential prior art is often something that others believed was so well known or commonplace as to not merit any documentation.

    Nevertheless, care and precautions can help minimize the chances that the type of disastrous outcome discussed above will occur. The key is to thoroughly document any new idea or direction the company takes -- even if it does not seem like something one would typically consider a traditional scientific or technological invention. Even a novel but relatively simple method of doing business may be subject to patent protection.

    The documentation should, to the extent possible, include at least the following pieces of crucial information:

    • A description of the idea, in the greatest amount of detail possible. Courts sometimes find a failure of corroboration of an alleged anticipating invention when a single, key element of the patented invention is missing from the corroborating documentation.

    • When the idea was "conceived" -- that is, when it was fully formed in the mind of the person who thought of it -- and when it was "reduced to practice," or made into a working embodiment. These two dates (sometimes they are the same date) are crucial in arguments over priority of invention.

    • Evidence of diligence in taking the idea from conception to reduction to practice. This information affects whether the first person to conceive of a patentable idea is treated as the inventor when someone else is first to reduce the idea to practice.

    • Evidence clearly establishing the earliest date on which the invention was sold publicly, was in public use and/or was known to members of the public.

    • The identity of every person who was involved in all of the acts listed above.

    Much of this information is routinely kept when the intention is to file a patent application on the technology in question. But it's also important to keep such records even if a patent is unlikely to be sought. One company, IBM, reduced this concept to an art form many years ago. For decades, IBM published descriptions of inventions its engineers had made, but that were not quite worth the trouble of patenting, in a series of "Technical Disclosure Bulletins." These defensive publications enabled Big Blue to deter infringement suits by later inventors of similar technologies and incidentally created a vast treasure trove of prior art for other parties to use in defense against infringement suits.

    It is not necessary, however, to go to such an extreme. Less ambitious forms of documentation can be equally effective. Such documentation includes thorough engineering notebooks, preferably contemporaneously attested to by another person; detailed descriptions of product attributes and business methods; and sufficient records to prove when the products were first placed before the public and what exactly was shown. Maintaining such records could prevent a great deal of grief in cases when a prior inventor's word is not good enough for the court.