CAFC Denies Outsourcing of Inventorship to Foreign Countries

CAFC Denies Outsourcing of Inventorship to Foreign Countries

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On October 13th, the Federal Circuit held in Solvay v. Honeywell International that, in order for prior invention to invalidate a patent under 35 U.S.C § 102(g)(2), the prior invention must have been conceived in the United States.  The precedential decision (here) relates to ozone friendly fluorocarbons commonly used in refrigeration and heat storage systems.  At issue in the appeal was whether or not Honeywell's reproduction of technology, conceived by a Russian contractor, invalidated Solvay's patent claims under 102(g)(2).[1] 

In reversing the district court's finding of invalidity under 35 U.S.C § 102(g)(2), the CAFC concluded that Honeywell's employees did not qualify as "another inventor" under section (g)(2) because (1) they were not involved in the conception of the technology and (2) those who had conceived the invention were outside of the United States.

102(g)(2) requires prior invention in the U.S. In contrast, 102(g)(1), which governs patent interferences, allows for prior invention in foreign countries as permitted by 35 U.S.C. § 104.  So would there have been a different outcome given the facts reported in the decision if this dispute had occurred in a patent interference?

No, for at least two reasons.  Consider sections (g)(1) and (g)(2):

A person shall be entitled to a patent unless ... (g)(1) during the course of an interference ..., another inventor involved therein establishes, to the extent permitted in section 104, that before such person's invention thereof the invention was made by such other inventor..., or (g)(2) before such person's invention thereof, the invention was made in this country by another inventor....

So, because the hypothetical interference would have involved Honeywell and Solvay, but not Honeywell's Russian contractor, the contractor's employees would not constitute "another inventor" involved in the interference.  Further, and perhaps more interestingly, because Russia is neither a NAFTA country nor a WTO member, even if the Honeywell owned patent application named the true Russian inventors any conception which occurred in Russia could not be relied upon in the interference to prove a date of invention. 

Honeywell argued that (g)(2) ignores globalization realities, but the CAFC wisely countered:

Whether this holding ignores the realities of globalization and outsourcing by modern-day research companies, as Honeywell contended at oral argument, is not the question before us.

Until Russia steps up to the plate and joins the WTO, U.S. companies outsourcing research to Russia has definite draw-backs!


[1] As a matter of candor, I wish to point out that Solvay is represented by my firm, Oblon Spivak.

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