Quest Integrity USA, LLC v. Cokebusters USA Inc. - 924 F.3d 1220 (Fed. Cir. 2019)

Rule:

35 U.S.C.S. § 102(b) prevents a person from receiving a patent if, more than one year prior to the date of the application for patent in the United States, the invention was on sale in the United States. This is known as the "on-sale bar." The date exactly one year prior to the date of the patent application is known as the critical date. The on-sale bar seeks to prevent any attempt to use the claimed invention for a profit, and not by way of experiment, for more than one year before filing for a patent application. And it is a condition upon an inventor's right to a patent that he shall not exploit his discovery competitively after it is ready for patenting; he must content himself with either secrecy, or legal monopoly. The sham affidavit doctrine precludes a party from creating a genuine dispute of material fact by filing an affidavit disputing his or her own sworn testimony without demonstrating a plausible explanation for the conflict.

Facts:

Plaintiff Quest Integrity USA, LLC owned the '874 patent. The patent related to a system and method for displaying inspection data collected from certain commercial furnaces used in a refinery. The patent explained that a furnace was generally comprised of several hundred to several thousand feet of serpentine tubing that was characterized by straight tube segments interconnected by angled bends. The patent attempted to improve upon how these prior art systems displayed the collected inspection data, but it did not purport to improve upon how furnace inspection data was collected or the type of data that was collected. One category of claims at issue on appeal was claims 12, 24, and 33. Claims 12 and 33 were method claims and claim 24 was a computer-readable medium claim. Claims 12 and 33 each recite a method for displaying furnace inspection data similar to the method performed by the computer-readable medium of claim 24. There was another category of asserted claims at issue: claims 30 and 40. Claims 30 and 40 recite additional limitations. The patent distinguished between inspection data and sensor data. Unlike the other asserted claims, claim 40 required the analysis of sensor data to generate data markers. Plaintiff filed suit against defendant Cokebusters USA Inc. alleging infringement of the patent. Defendant offered furnace cleaning and inspection services. Plaintiff alleged that defendant makes, uses, offers for sale, or sells products that infringe the patent including the defendant Merlin Tube Inspection PIG with Roxtail Software.  Defendants defended on the ground that the claims were invalid under 35 U.S.C. § 102(b) because there was a commercial sale of services that used the claimed methods, computer-readable media, and system for more than one year. For claims 30 and 40, the court granted summary judgment as to their invalidity. The district court subsequently entered judgment under the Federal Rule of Civil Procedure 54(b) in favor of the defendant. Plaintiff appealed. 

Issue:

Did the district court err in holding all the claims as invalid?

Answer:

Yes.

Conclusion:

The court affirmed the district court's summary judgment of invalidity under 35 U.S.C.S. § 102(b) as to certain of the patent claims because based on the district court's proper construction of the claims, the claimed invention was offered for sale more than one year prior to the filing of the patent application. However, the court ruled that as to two other patent claims, the district court erred in disregarding declarations of the inventors under the sham affidavit doctrine and, with consideration of those declarations, the patentee raised a genuine issue of material fact as to the validity of the claims. The court found that the declarations did not contradict earlier testimony and, as to one declarant, the detailed explanation in the declaration and corroborating evidence took the declaration out of the sham affidavit doctrine. Thus, the judgment of invalidity for claims 30 and 40 were reversed and remanded for further proceedings.