A district court has a de novo standard of review of a priority determination made by the PTO in an interference action, and the district court can consider additional evidence. In order to reduce an invention to practice, an inventor must possess the subject matter of the invention and show that it was known to work for its intended purpose.
This case was on appeal from a district court decision of priority of invention in an action brought under 35 U.S.C. § 146. In an interference in front of the PTO, the Board of Patent Appeals and Interferences (“the Board”) awarded priority to the junior party, an employee of Research & Diagnotic Systems, Inc. (“R&D”). Streck, which had previously prevailed in the District of Nebraska in an infringement suit against R&D for the invention, filed a 35 U.S.C. § 146 action to decide the priority of invention in the same Nebraska district court. Contrary to the PTO’s determination of priority of invention, the district court awarded priority to the Streck inventors, Ryan and Scholl, which R&D appealed to the Federal Circuit.
On appeal, R&D argued that the district court was incorrect in making de novo findings and was required to accept the findings of the Board if they were supported by substantial evidence in the PTO record. The Federal Circuit affirmed the district court’s de novo review because the opportunity to receive additional evidence, as well as to hear and see witnesses at trial, can facilitate findings having depth beyond that available from a cold record of the PTO. In other words, the nature of the administrative proceeding limited the scope of the Board’s inquiry to documentary, declaration, and deposition evidence and potentially the accuracy of the finding. Thus, de novo review by the district court was appropriate. The Federal Circuit also rejected R&D’s argument that the district court applied the wrong burden of proof and found that R&D, the junior party with the later application date, has the burden of overcoming the earlier filing date.
The technology at issue in this priority determination is a blood cell control combining two different types of blood cells, reticulocytes and white blood cells, used to test the accuracy of equipment that measures blood samples. Prior controls were unable to combine these two types of blood cells to due to interference between the blood components to test the accuracy of the equipment. There was no dispute that the Streck inventor Ryan was the first to conceive of the invention, and R&D’s factual dispute on appeal was that R&D inventor Johnson was the first to reduce the invention to practice while Ryan had not shown diligence in reducing the invention to practice. The district court found that inventor Johnson had not reduced the invention to practice because the evidence did not support that the control was able to work for its intended purpose, accurately measuring the separate components of the blood. The district court found that the evidence of record of Johnson’s experiments were instead directed toward the stability of the combined components. The Federal Circuit affirmed the district court’s findings that R&D had not established evidence of a reduction to practice for failure to show the invention works for its intended purpose.
A copy of the opinion can be found here.