On February 21, 2008, in Atlanta Attachment Co. v. Leggett & Platt, Inc., the United States Court of Appeals for the Federal Circuit analyzed the experimental use exception to the on-sale bar under Section 102(b). The Federal Circuit, reversing an order from the U.S. district court granting summary judgment for the plaintiff on issues of infringement and patent validity, held that the patent-in-suit was invalid under Section 102(b) for being the subject of a commercial offer for sale prior to the critical date. Atlanta Attachment Co. v. Leggett & Platt, Inc., Appeal No. 07-1188, slip op. at 11 (Fed. Cir. Feb. 21, 2008) (majority opinion).
The case involved patent infringement claims by Atlanta Attachment Company, the makers of an automatic gussett ruffler machine used in the manufacturing of mattresses and bedding. The defendants, Leggett & Platt, Inc., denied the infringement allegations and alleged that the patent in question was invalid, in part, based on the on-sale bar. Specifically, Leggett & Platt alleged that more than one year prior to the critical date, Atlanta Attachment sold four prototype machines to mattress manufacturer Sealy, Inc. for purposes of testing and product development. In addition, Atlanta Attachment accompanied each sale of the prototype machines with an offer to sell Sealy production units of these machines if Sealy was satisfied with the utility and function of the prototype machines. Id. at 2-3.
The district court granted summary judgment for the plaintiffs, finding the patent-in-suit valid and infringed. The district court rejected Leggett & Platt’s on-sale bar allegations, finding that the sales of prototype machines by Atlanta Attachment amounted to experimental use. Leggett & Platt appealed the ruling.
The Federal Circuit examined Atlanta Attachment’s prototype sales under the two prong on-sale bar test established in Pfaff v. Wells Elecs, Inc., 525 U.S. 55, 199 S. Ct. 304 (1998). In Pfaff, the U.S. Supreme Court held that in order for a patent to be invalidated by the on-sale bar, the invention must (1) be the subject of a commercial offer for sale before the critical date and (2) be ready for patenting at the time of the offer.
In this case, the Federal Circuit held that the first prong of the Pfaff test was satisfied and not negated by the experimental use doctrine. The court held that, under general contract principles, the third prototype, which the court found to embody each element of claim 32 of the patent, was the subject of a commercial offer for sale because of Atlanta Attachment’s offer to provide Sealy with production units that accompanied the sales of the prototype machines, and because the prototype was actually sold to Sealy for profit. The Federal Circuit also held that the second prong of the Pfaff test was satisfied because, at the time of the commercial offer for sale, the third prototype was physically reduced to practice and thus was ready for patenting.
The Federal Circuit rejected Atlanta Attachment’s allegations that the sales of the prototype machines to Sealy constituted experimental use, thereby rendering the on-sale bar inapplicable. The court held that “experimentation conducted to determine whether the invention would suit a particular customer’s purposes” does not constitute experimental use. The proper analysis, the court stated, focuses on the actions of Atlanta Attachment and not Sealy’s experiments. Atlanta Attachment Co. at 6.
The court also stated that the experimental use doctrine could not be invoked here because Atlanta Attachment did not maintain sufficient control of any experimentation that took place. Furthermore, the court noted that for experimental use to apply the improvements must be made to the elements claimed in the patent. Ultimately, the Federal Circuit concluded that the experimental use doctrine was inapplicable to the facts of this case, and therefore Atlanta Attachment’s patent was invalid due to the on-sale bar.
Joined by U.S. Circuit Judge Timothy Dyk, U.S. Circuit Judge Sharon Prost wrote in a concurring opinion that under the current state of the law, the applicability of the experimental use doctrine vanishes upon reduction to practice – which in the view of Judge Prost limits the “continuing viability of that doctrine” to only the time period in which “an invention is ready for patenting and the time it is reduced to practice.” Such a limitation, according to Judge Prost, would discourage inventors from continuing ongoing product development after an embodiment of their ideas has been reduced to practice. Id. at 2 (Prost, S., concurring).
Judge Prost believes that the Supreme Court in Pfaff intended the experimental use doctrine to be applied more broadly than the limited period with a reduction to practice cutoff. Judge Prost emphasized that the experimental use exception should still be available to an inventor even after the invention has been reduced to practice, despite any commercial benefit gained by the inventor.
With respect to the facts of this case, Judge Prost agreed that, because the third prototype was the subject of a commercial offer for sale prior to the critical date and was a reduction to practice of the invention, the experimental use doctrine was not available to Atlanta Attachment, and that the patent-in-suit was invalid due to the on-sale bar.
The Federal Circuit’s decision in this case, and in particular the concurring opinion, suggests that the interplay between the on-sale bar and the experimental use exception may be ripe for further judicial analysis and development.