Delano Farms Co. v. California Table Grape Comm’n

Addressing the issue of public use under 35 U.S.C. § 102(b) in the context of an unauthorized use open to the public, the U.S. Court of Appeals for the Federal Circuit affirmed a district court’s finding that the actions of third parties who obtained samples of two patented plant varieties in an unauthorized manner and planted them in their farms did not constitute a public use, finding that the plants were not accessible to the public.  Delano Farms Co. v. California Table Grape Comm’n, Case No. 14-1030 (Fed. Cir., Jan. 9, 2015) (Bryson, J.).

The United States Department of Agriculture (USDA) patented table grape varieties known as the Scarlet Royal and Autumn King; it then exclusively licensed the two patents to the California Table Grape Commission (Commission), a California public agency that sublicenses the patents to California grape growers.  The three plaintiffs, California grape growers who purchased grapevines covered by the patents through signed license agreements with the Commission, brought suit challenging the validity and enforceability of the plant patents.

Prior to the critical date for the public use bar under § 102(b), the USDA held an experimental variety open house at California State University, Fresno.  Only mature fruit from the varieties were on display and visiting growers were not allowed to take any plant material relating to the unreleased varieties.  Two grape growers, Jim and Larry Ludy, attended the open house and requested plant material for the Scarlet Royal and Autumn King from a USDA employee, Rodney Klassen.  Even though he was not authorized to do so, Mr. Klassen subsequently met with the Ludys and gave them plant material for the Scarlet Royal and Autumn King (and others). Mr. Klassen advised the Ludys that the plant material should be kept secret and they were not to sell any of the resulting grapes until the varieties were commercially released.  However, prior to the critical date for the subject patents, the Ludys grew the plants.  Based on these findings, the district court found that the plaintiffs had not established by clear and convincing evidence that the Ludys’ use of the unreleased varieties constituted public use that invalidated the patents under § 102(b).  The plaintiffs appealed.

The Federal Circuit rejected the plaintiffs’ argument that the Ludy’s sharing and growing of the plants with each other constituted public use, stating that secret or confidential third-party uses do not invalidate later-filed patents.  Rather, such use must still be publicly accessible.  Here, the findings of the district court clearly established that both Ludys knew that they were not authorized to have the plants and that they needed to conceal their possession of the plants.  The Federal Circuit explained that an explicit confidentiality agreement is not required—only an evaluation of whether there were “circumstances creating a similar expectation of secrecy.”  Additionally, while the Ludys grew the plants in locations that were visible from public roads, the Federal Circuit noted that the general public would not have been able to discern these plants from others growing on their fields because the unreleased varieties were not labeled and were of extreme limited populations in comparison to the total cultivation on the Ludy farms.  The Federal Circuit concluded that the district court correctly held that the patents were not invalid under § 102(b) because the Ludys’ use of the plant varieties at issue was not public, even apart from the fact that the Ludys obtained the plant material in an unauthorized manner.