Judges: Gajarsa, Linn (author), Moore [Appealed from the Board]

In Henkel Corp. v. Procter & Gamble Co., No. 06-1542 (Fed. Cir. May 11, 2007), the Federal Circuit vacated the Board’s denial of Henkel Corporation’s (“Henkel”) Substantive Motion No. 4, the dismissal as moot of The Procter & Gamble Company’s (“Procter & Gamble”) motions, and the entry of judgment against Henkel.

Henkel and Procter & Gamble both developed detergent tablets, known as “ring tabs,” which are comprised of a “compressed” region and a “solidified solution or melt” region, in which the compressed region dissolves at a faster rate than the solidified region. Procter & Gamble obtained U.S. Patent No. 6,399,564 (“the ’564 patent”) directed to the ring-tab technology, while Henkel claimed the same subject matter in its U.S. Patent Application Nos. 09/446,434 (“the ’434 application”) and 09/446,578 (“the ’578 application”).

The Board declared an interference between Procter & Gamble’s ’564 patent and Henkel’s ’434 and ’578 applications, designating Procter & Gamble the senior party based on its priority date of November 26, 1997, and Henkel the junior party with a priority date of December 30, 1997. Henkel argued that it was entitled to priority based on its development of the ring tabs before Procter & Gamble’s priority date. By April 1997, Dr. Thomas Holderbaum, a named inventor on Henkel’s ring-tab applications, had conceived of a melt-filled ring tab and directed a technician, Thomas Schliwka, to perform testing of a ring tab that included a compressed region filled with a melt composition identified through previous work.

During testing, Schliwka visually observed that the melt region of the tablet “does not dissolve in the prewash cycle” of the dishwasher, whereas the compressed region lost 8 grams out of 29 grams, and recorded these observations in a laboratory notebook. Holderbaum testified that he “supervised [another technician] and Mr. Schliwka and conferred with them on virtually a daily basis and was well aware of their activities and results.” Slip op. at 2. Also, in April 1997, another Henkel employee performed additional testing of several tablets, including ring tabs like those tested by Schliwka.

These tests showed that the ring tabs lost a smaller percentage of their weight than those without a melt region during a prewash cycle. These results were reported at a meeting attended by three inventors of Henkel’s applications in late April or May 1997.

The sole count of the interference was directed to a tablet comprising a compressed region and a solidified solution or melt region, the compressed region having a faster dissolution rate than the solidified region. The one disputed aspect of the construction of the interference count was over the meaning of the term “dissolution rate.” Procter & Gamble argued that in order to measure the comparative dissolution rates of the compressed and noncompressed regions, samples of each had to be apportioned into equal weights and tested at a constant temperature in separate compartments. Henkel argued that it was only necessary to demonstrate that a greater weight of the compressed region dissolved than of the melt region, referred to as a “weight-by-weight basis.”

The Board applied Henkel’s methodology, but concluded that Henkel failed to carry its burden of showing it had conceived the invention and reduced it to practice before Procter & Gamble. Specifically, the Board held that Henkel failed to show that its inventors appreciated their invention contemporaneously with their conception and reduction to practice. Consistent with this finding, the Board awarded priority to Procter & Gamble. Henkel appealed.

The Federal Circuit held that the Board correctly accepted Henkel’s position on the scope of “dissolution rate” because the interference count did not require specific ranges of dissolution rates. Instead, the correct requirement of the count simply called for a showing that the dissolution rate of the compressed region be “greater” than that of the other region. However, the Court held that the Board improperly held Henkel to a more stringent standard by requiring a showing that its inventors appreciated specific dissolution rates.

The Court held that Schliwka’s observation that the tested ring tab had a compressed region that dissolved faster than the melt region was sufficient to demonstrate that Henkel made a tablet meeting the limitations of the count by April 1997. Moreover, Schliwka’s observations, coupled with his interactions with inventor Holderbaum, demonstrated that Holderbaum appreciated that the compressed region had a faster dissolution rate than the melt region.

Although Holderbaum did not explicitly testify that the inventors appreciated the specific limitation at the time of Schliwka’s experiments, “such a formulaic affirmation is unnecessary” because the limitation in question was directly observed by a technician working under the close supervision of an inventor. Id. at 10. The Court noted that the law does not require a “junior party in an interference demonstrate that it recognized the exact language of the ultimate count—only the subject matter of the invention.” Id. at 9.

The Federal Circuit also addressed the requirement for an inventor in an interference proceeding to put forth objective evidence corroborating his subjective beliefs about the invention, observing that there must be “evidence that the junior party timely interpreted or evaluated the results, and understood them to show the existence [of] the invention.” Id. at 10 (alteration in original) (internal quotation marks and citation omitted). Here, the Court found that because Henkel’s technician recorded in a laboratory notebook his direct visual observation that the tablets met the limitations of the count, there was no need for additional interpretation or evaluation of the test results. The recording was objective evidence sufficient to confirm the testimony of the Henkel technicians and inventor Holderbaum that the named inventors appreciated the disputed limitation before the critical date.

Finding that the Board erred in holding that Henkel failed to demonstrate that the inventors appreciated a detergent tablet having a compressed region that dissolved faster than a noncompressed region, the Federal Circuit vacated the Board’s judgment and remanded to the Board for further proceedings.