Oracle Corp. v. Click-to-Call Technologies LP

Addressing the evidentiary threshold to show diligence in constructive or actual reduction to practice between the date of a prior art reference and the date the invention was reduced to practice, the U.S. Patent and Trademark Office Patent Trial and Appeal Board (PTAB) rejected a patent owner’s attempt to antedate prior art, finding that in order to show diligence the patent owner must explain in detail the activities that occurred during the critical period, and that even a short period of inactivity may be sufficient to defeat a claim of diligence.  Oracle Corp. v. Click-to-Call Technologies LP, Case No. IPR2013-00312 (PTAB, Oct. 28, 2014) (Zecher, APJ).

Patent owner Click-to-Call (CTC) owned a patent directed to establishing anonymous telephone communications.  After the petitioner was accused of infringing the CTC patent, it filed a petition for inter partes review arguing that the claims of the patent were anticipated or obvious in view of a prior art patent (Dezonno).  In response, the patent owner did not argue against the asserted anticipation and obviousness contentions.  Rather, the patent owner attempted to show a date of invention before the effective date of the Dezonno prior art.  However, the PTAB found that the patent owner was not diligent in reducing the invention to practice between a time immediately before Dezonno’s earliest effective filing date and the date CTC’s invention was either constructively or actually reduced to practice.

For patent applications filed under the “first to invent” system (i.e., before the effective date of the America Invents Act), a prior art reference dated less than one year before the earliest effective filing date of the patent application may be antedated by showing invention of the claimed technology before the date of the reference, and diligence in reducing the claimed technology to practice between immediately before the date of the reference and the date the claimed technology was reduced to practice.  Reduction to practice may either be constructive (filing a patent application) or actual (building a system that implements the technology).

In the instant case, the PTAB did not reach the issue of whether the inventor of the CTC patent conceived of the invention before Dezonno’s effective date, but rather focused on the issue of diligence towards reduction to practice.  The Dezonno reference issued on April 21, 1995.  CTC showed that a constructive reduction to practice of its claim invention occurred on the filing of its patent application on August 9, 1995, and that an actual reduction to practice occurred on August 15, 1995, i.e., when a system implementing the invention was built.  Thus, in connection with its diligence proofs, the patent owner needed to show either diligence in preparing the patent application from a time immediately before April 21, 1995, up to August 9, 1995, or diligence in building the system implementing the invention from a time between immediately before April 21, 1995, up to August 15, 1995.

Regarding constructive reduction to practice, the patent lawyer who drafted the application testified that he prepared a draft of the patent application leading to the patent just prior to April 21, 1995, and personally revised this draft between April 21 and May 9, 1995.  The inventor testified that between May 9, 1995, and July 17, 1995, he “continued to make progress on the preparation of my patent application.”  The PTAB found that the testimony of the two individuals did not demonstrate diligence because there was no evidence of what work was performed between May 9, 1995, and July 17, 1995.  The PTAB noted that more specific details concerning the work that was done during these dates would be necessary to support a finding of diligence.

Regarding diligence in actual reduction to practice, the inventor testified that he worked with three software developers—ICS, ProDesign and SofTel—in reducing the patented technology to practice.  However, the PTAB found that neither the inventor nor any of the software developers was diligent between May 15, 1995, and June 15, 1995.  Regarding the inventor’s personal efforts, he testified that between April 20, 1995, and August 15, 1995, he worked 12 hours a day, seven days a week, to diligently reduce the technology to practice.  However, the PTAB found that the inventor did not provide any details as to what he did, and only stated a legal conclusion.

Regarding the work of ICS, the inventor’s company showed that it had made payments to ICS on May 15, 1995, and on July 1, 1995.  However, there was no testimony about the work actually performed during this time.  Thus, the PTAB found that there was insufficient evidence to satisfy the diligence requirement between May 15, 1995, and July 1, 1995.

The work of the two other vendors, ProDesign and SofTel, started too late in time to help the patent owner establish activities during the diligence period.