Judges: Rader (author), Dyk, Moore [Appealed from D. Or., Judge Aiken]
In Motionless Keyboard Co. v. Microsoft Corp., No. 05-1497 (Fed. Cir. May 29, 2007), the Federal Circuit affirmed a district court’s SJ ruling of noninfringement of two U.S. patents, but reversed the lower court’s rulings of patent invalidity. The Federal Circuit concluded that an embodiment of the patents was not in public use more than one year prior to their filing dates (“the critical dates”) because the embodiment was viewed only by potential investors and a few others, most of whom were subject to nondisclosure agreements and did not use the embodiment for its intended purpose.
The two patents-in-suit, U.S. Patent Nos. 5,178,477 (“the ’477 patent”) and 5,332,322 (“the ’322 patent”), disclose ergonomic keyboard devices requiring only slight finger or thumb movement. The ’322 patent issued as a CIP of the ’477 patent. Motionless Keyboard Company (“Motionless”) sued Microsoft Corporation (“Microsoft”), Nokia Inc. (“Nokia”), and Saitek Industries Ltd. (“Saitek”) for patent infringement. Specifically, Motionless claimed that Microsoft’s “Strategic Commander” game controller infringed the ’477 patent, and that various Nokia telephones, two of Microsoft’s “Sidewinder” controllers, and various Saitek game joysticks infringed the ’322 patent.
Thomas Gambaro is the sole inventor of both patents. In February 1987, Mr. Gambaro developed the Cherry Model 5 keyboard, which embodied the inventions ultimately disclosed in the patents-in-suit. Shortly thereafter, Mr. Gambaro entered into a business partnership and sought financial support to further develop and patent the keyboard technology. In 1987, Mr. Gambaro demonstrated the Cherry Model 5 to potential investors, who signed two-year nondisclosure agreements (“NDAs”).
Mr. Gambaro also demonstrated the Cherry Model 5 to a friend, who did not sign an NDA. None of these people used the device to transmit data to a computer. On July 25, 1990, Mr. Gambaro hired a product tester to conduct typing tests using the keyboard. The typing tester signed an NDA and used the device to transmit data to a computer.
Mr. Gambaro filed the application that resulted in the ’477 patent on June 6, 1991. Thus, the critical date for the ’477 patent is June 6, 1990. The critical date for the ’322 patent is January 11, 1992. Mr. Gambaro eventually assigned both patents to Motionless. After Motionless sued Microsoft, Nokia, and Saitek for infringement, the parties filed cross-motions for SJ. Motionless moved for SJ of infringement against all three defendants. The defendants, in turn, collectively moved for SJ of invalidity of both patents based on public use under 35 U.S.C. § 102(b).
After construing the claims of both patents, the district court entered SJ of noninfringement. In construing claim 1 of the ’322 patent, the district court read the limitations “a concavity in said housing at said key-actuation position, and a thumb-associable cluster of keys forming a keyboard within said concavity” to require “that the concavity must be formed by a depression in the housing of the device, and that all keys comprising the keyboard must be contained entirely within the concave area and sunk below the surface of the housing, so that the thumb movement occurs within the concave area.” Because the district court found that the accused products lacked a concavity in the housing and a keyboard within a concavity, it entered SJ of noninfringement with regard to both patents.
The district court also invalidated both patents based on public use after concluding that the invention entered the public domain prior to the critical dates. The district court also declared the ’322 patent invalid for obviousness in light of a terminal disclaimer filed with the PTO by Mr. Gambaro that made the ’322 patent coterminous with the ’477 patent.
On appeal, Motionless first argued that the district court improperly construed claim 1 of the ’322 patent. Specifically, Motionless argued that “a concavity in said housing at said key-actuation position, and a thumb-associable cluster of keys forming a keyboard within said concavity” means that the tops of the keys can form the concavity. The Federal Circuit disagreed, finding that the patentee defined a depression within the housing of the device and set the keyboard entirely within that depression. Having affirmed the district court’s claim construction, the Federal Circuit went on to conclude that the accused products do not literally infringe the ’322 patent because they lack a concavity in the housing and a keyboard within the concavity. Further, the Court found insufficient evidence of infringement under the DOE. Accordingly, the Federal Circuit affirmed the district court’s SJ ruling of noninfringement of the ’322 patent.
Turning to invalidity, the Federal Circuit concluded that the district court erroneously found that the Cherry Model 5 embodying both patents was placed in public use prior to the critical date of each patent. In concluding that Mr. Gambaro had not disclosed his invention to the public, the Court distinguished the circumstances of this case from those in Egbert v. Lippman, 104 U.S. 333 (1881), and Electric Storage Battery Co. v. Shimadzu, 307 U.S. 5 (1939). In Egbert, the Supreme Court concluded that a corset spring that had been used for years for its intended purpose without confidentiality provisions was a public use. In Electric Storage, the ordinary use of a machine for commercial purposes was found to be a public use. In this case, the Federal Circuit noted that Mr. Gambaro showed the Cherry Model 5 only to a narrow group of people, most of whom were subject to the constraints of an NDA. The Court found that only the product tester used the invention for its intended purpose. Because the other people did not use the keyboard to transmit data, the Court concluded the visual disclosures of the invention to these people did not rise to the level of a public use for the purposes of § 102(b). Further, because the typing test occurred on July 25, 1990, the Court found that it occurred after the critical date of the ’477 patent. Although the typing test occurred before the critical date of the ’322 patent, because the product tester signed an NDA and did not appear to use the Cherry Model 5 after the typing test, the Court concluded that the device was never in public use. Accordingly, the Court reversed the district court’s entry of SJ of invalidity under § 102(b).
The Federal Circuit also reversed the lower court’s finding that the ’322 patent was invalid as obvious under 35 U.S.C. § 103 because the inventor filed a terminal disclaimer to make the ’322 patent coterminous with the ’477 patent. In so doing, the Court noted that a terminal disclaimer is not an admission that a later-filed application is obvious.