In August Technology Corp. v. Camtek, Ltd., the Federal Circuit stated that an on-sale bar can arise as long as there is an offer for sale and conception of the invention some time prior to the critical date, even if the offer precedes the conception. The court may have gone too far both in addressing an issue that was not germane to its decision, and in overlooking the enablement requirement reflected in its earlier on-sale bar decisions.

The Patent At Issue

The patent at issue was August Tech’s U.S. 6,826,298, directed to systems and methods "for inspecting integrated circuits printed on substrates such as wafers." The patent has a priority date of July 15, 1998, making July 15, 1997 the “critical date” for prior art under 35 USC § 102(b).

The District Court Proceedings

The jury found that Camtek failed to prove that asserted claims 1 and 3 were obvious over two prior art patents, and failed to prove that August Tech’s NSX-80 device was on sale prior to the critical date of the ’298 patent.

The jury found that the accused Camtek device literally infringed the patent and awarded $6.8 million in lost profits.

The district court denied Camtek’s motions for judgment as a matter of law (JMOL) or a new trial on infringement, damages, and obviousness.


The Federal Circuit found that the jury verdict of infringement of one claim element was based on a "flawed" claim construction. The court therefore remanded to the district court for "a limited trial on infringement with respect to [the] claim element" at issue.

While this portion of the Federal Circuit decision raises some interesting claim construction issues, this article focuses on the on-sale bar portion of the decision.

The Offer For Sale Timeline

???? — August Tech was approached by ICS to develop a wafer inspection machine.

Late 1996 — August Tech had "a concept" of what the machine would be and issued purchase orders for NSX-80. ICS agreed to pay 15% on order, 20% on design review, 50% on acceptance at August Tech’s factory, and 15% after acceptance at ICS’s site.

Q1 1997 — August Tech began preliminary hardware design.

July 15, 1997 — Critical Date

September 1997 — First NSX-80 device shipped to ICS

The Offer For Sale Issue

The jury verdict regarding the sale of the NSX-80 device was based on the following jury instruction:

In order to be on "sale" the NSX-80 must also have been ready for patenting at the time the alleged offer for sale is made.

The Federal Circuit examined this instruction and determined that it contained "an erroneous statement of law."

As noted by the Federal Circuit, "[t]he Supreme Court [in Pfaff v. Wells Electronics., Inc.] has explained that the § 102(b) on-sale bar applies when two conditions are met before the critical date:

  1. the product is the subject of a commercial offer for sale, and
  2. the invention is ready for patenting."

The Federal Circuit noted that these requirements can be met at different points in time, and held that the invention need not be ready for patenting at the time of the offer for sale, as long as the invention is conceived prior to the critical date. In essence, the subsequent conception “perfects” the offer for sale, giving rise to an on-sale bar.

In reaching this interpretation of the statute, the Federal Circuit focused on the policy behind §102(b) of "encourage[ing] prompt disclosure of new inventions and in particular limit[ing] commercial exploitation of an invention prior to filing for a patent application." The court also cited its 2001 decision in Robotic Vision Systems, Inc. v. View Engineering, Inc., where the court found that the on-sale bar was "triggered by a prior commercial offer for sale and a subsequent enabling disclosure that demonstrated that the invention was ready for patenting prior to the critical date."

The Federal Circuit notes that an inventor can spare himself these consequences of an early offer for sale by retracting any offer for sale made prior to conception, but warns,

[I]f an offer for sale is extended and remains open, a subsequent conception will cause it to become an offer for sale of the invention as of the conception date.

The Federal Circuit indicated that a remand would be required to resolve the factual issue of whether August Tech had conceived of the NSX-80 device prior to the critical date, but did not order such a remand because it found that even if the NSX-80 device did qualify as prior art, it did not render the asserted claims obvious. The court therefore affirmed the district court's denial of Camtek's motions on obviousness.

A Step Too Far?

My first reaction to the on-sale bar discussion in this case is, "Is it dicta?" Because the court ultimately determined that even if the NSX-80 device did qualify as prior art, the asserted claims were not obvious, the entire analysis is not essential to the decision.

My next reaction was to re-read the Robotic Vision Systems case to see if the court’s views here really were required by that earlier decision. In contrast to the reasoning here, the court in Robotic Vision Systems was careful to clarify that it was not holding that mere conception perfected an offer for sale:

[W]hile it is true that in order for an "invention" to be on sale under § 102(b) there must be a complete conception . . . the test for determining whether that invention is complete also requires proof that the invention was enabled prior to the critical date. . . . Thus, in this case, the district court did not reach the conclusion that Robotic’s invention was ready for patenting merely because the inventor’s internal disclosure proved a complete conception; rather, the court concluded that the invention was ready for patenting because the inventor’s disclosure was also an enabling disclosure, i.e., one that was sufficiently specific to enable his co-worker, who was a person skilled in the art, to practice the invention.

In August Tech, the Federal Circuit skipped over the Robotic Vision Systems requirement for enablement, and cited only Pfaff’s definition of "invention" as ""the inventor’s conception." However, requiring enablement for an on-sale bar is consistent with the §102(b) policy of limiting commercial exploitation prior to filing for a patent application, because a patent application cannot be filed unless and until the inventor is able to provide an enabling disclosure.

Thus, the Federal Circuit in August Tech may have gone to far both in analyzing an issue that was not germane to its decision and in concluding that an invention can be lost to an on-sale bar even if it was not enabled prior to the critical date.