US Rulings Muddle Patent Interference Law1997 – IP Worldwide, January/February 1997, page 11
US Rulings Muddle Patent Interference Law on Corroboration and Reduction to Practice
Federal Circuit Defies Precedents and Logic
by Charles L. Gholz *
Panels of the Federal Circuit are not supposed to change the law. In theory, the law is supposed to be altered only by en banc decisions of the court.1 In practice, however, recent opinions in two important areas of patent interference law 2 strikingly demonstrate that panels of the court are taking positions inconsistent with supposedly binding precedent.
Several decisions have seemed to dramatically lower the requirements for an actual reduction to practice.3 Other decisions have apparently changed the law on whether there must be corroboration for documents allegedly written by an inventor contemporaneously with the making of the invention.
However, since panel opinions theoretically cannot change the law, later panel opinions could ignore those opinions which appear to change the law and go back to the prior law. This has in fact happened recently concerning the corroboration requirement. A subsequent panel of the court went right back to the previously existing precedent-without so much as a nod of the head to the intervening opinions.
The result is confusion for bench and bar on these important patent issues.
The aberrant opinions on actual reduction to practice (ARP) began with Scott v. Finney 4 That panel decision began a line of cases that has drastically diminished the requirements for an ARP.
The invention in Scott was a penile implant to permit the implantee to simulate an erection by manipulation of the implanted device through his skin. The alleged ARP was the implantation of a prototype of the device into an anesthetized patient and the manipulation of the implanted prototype by the surgeon (sex unspecified) while the implantee remained anesthetized.
Not surprisingly, in view of the precedents, a panel of the Board of Patent Appeals and Interferences held this test did not constitute an ARP because it "had not shown utility, i.e., that the device would successfully operate under actual use conditions for a reasonable length of time." 5
On appeal, a panel of the Federal Circuit reversed. According to the court: "Only the hydraulics of a fully self-contained internal prosthesis remained to be tested for workability. [The test on the anesthetized patient]... adequately showed the workability of these features." 6
However, if it was necessary to test only the hydraulics of the fully self-contained internal prosthesis, why was it necessary to put the prototype in the patient at all? Surely the hydraulics could have been tested for workability just as well by manipulating the prototype externally of the patient.
Moreover, the board's requirement for "testing of an implantable medical device under actual use conditions or testing under conditions that closely simulate actual use conditions for an appropriate period of time" 7 is far closer to the spirit (or general thrust) of the court's prior opinions on the subject than this panel's acceptance of such an unrealistic "testing" of the prototype prosthetic. After all, the whole point of the requirement for testing is that a thing that looks like it will work frequently does not work in practice -- or works for less than the period of time for which it will have to work in practice.
Test Not Required
Scott v. Finney has been followed by several opinions which took the lowering of the standards for an ARP even further. The first of the follow-on opinions was In re Asahi/America, Inc. 8
The invention in Asahi was a double-pipe system comprising inner pipe to carry a liquid, an outer pipe to catch leaks, and "restraint couplings" between adjacent lengths of the inner and outer pipes. The problem addressed by Asahi's invention was that, if (a) the inner pipe carried a liquid that was either hotter or colder than ambient temperature and (b) the temperature of the liquid varied over time, the two pipes would expand or contract by different amounts and at different rates. The restraint couplings were designed to absorb that differential movement.
Asahi's own problem was that, although it had built a prototype before the critical date, it had not tested the prototype before the critical date.
Too bad, said the board. No problem, said the court.
According to this panel of the Federal Circuit, the claimed device "ha[d] no moving parts" 9 and accordingly, was so simple that mere construction of the device (without any testing) was sufficient to constitute an ARP.
This, however, is absolute insanity. The whole point of Asahi's invention was to accommodate relative movement of the inner and outer pipes! Although the movement was not gross movement easily visible to the naked eye, l0 this does not mean either that there was no movement or that there was not a possibility that, in an actual test, Asahi's resistant couplings would have failed to accommodate the movement.
Moreover, how sweeping is this supposed exception for inventions "ha[ving] no moving parts"? Most electrical and chemical inventions do not have "moving parts" - in the sense that the movement of the parts is visible to the naked eye. Does the holding in Asahi mean that these inventions, too, do not have to be tested to have an actual reduction to practice?
The next opinion in this series was Mahurkar v. C.R. Bard, Inc. 11 The invention at issue was a double-lumen catheter designed to simultaneously remove blood from and restore blood to a human body during a transfusion. To accomplish its mission, the catheter had to be flexible.
Dr. Mahurkar's alleged ARP consisted of tests in his kitchen (!) using a polyethylene prototype. He used glycerine to simulate blood.
According to the panel of the Federal Circuit: "These tests showed, to the limit of their design, the utility of his claimed invention." 12 The panel added that: "Dr. Mahurkar designed these tests to show the efficiency of his structure knowing that polyethylene catheters were too brittle for actual use with humans. But, he also knew that his invention would become suitable for its intended purpose by simple substitution of a soft, biocompatible material." 13
Interestingly, the opinion later implied that the substitution of "a soft, biocompatible material" was anything but simple, since the panel also held (in support of an alternative holding) that Dr. Mahurkar had established continuous diligence from late 1980 through early 1981 by "continuously... [seeking] to locate companies capable of extruding his tubing [which was the component of his catheters in issue] with the soft, flexible materials necessary for human use."14 Moreover, the opinion did not indicate Dr. Mahurkar offered any evidence to prove that glycerine was conventionally used to simulate blood in this field of endeavor -- or in any other field of endeavor.
In sum, these three cases apparently indicate that it is much easier to prove an ARP than it used to be. However, the key word is "apparently," because (a) none of these three opinions was decided en banc, (b) two of these opinions were delivered by Circuit Judge Rader, and (c) the third of these opinions was delivered by a senior circuit judge for a panel that included Circuit Judge Rader. These facts create considerable room for doubt about all the other judges of the Federal Circuit will follow Judge Rader's lead.
Starting with Price v. Symsek, 15 several recent cases have cast doubt on whether it remains necessary to corroborate documents allegedly written by an inventor contemporaneously with the making of the invention.
In Price, the issue was whether a drawing by the inventor submitted to show conception of the invention had been adequately corroborated by a declaration from the inventor's secretary. This declaration stated in relevant part that: "Exhibit  attached hereto is a true and accurate copy of Drawing No. PI-578-795 dated March 20, 1982. It is the regular practice of Price Industries to make and maintain drawings such as Exhibit . I recall seeing Exhibit  on or around March 20, 1982." 16
A panel of the Board of Patent Appeals and Interferences held that this declaration did not corroborate Exhibit 13 because the declarant did "not attribute the drawing to the applicant Price" 17 (i.e., there was only Mr. Price's testimony that the drawing reflected his conception of the invention). In addition, the declarant did not "indicate that she had any understanding of its content" 18 (i.e., the declarant had no basis for believing that the drawing was unchanged from the time that she saw it "on or around March 20, 1982" to the time that it was introduced into evidence).
Ignoring clear precedents, 19 a panel of the Federal Circuit reversed the board's holding on corroboration. The court reasoned that: "The board erred in its understanding that what a drawing discloses invariably needs to be supported by corroborating evidence. . ..Exhibit 13 is [sic: was] before the board for the board to make its own determination as to what this piece of evidence discloses." 20
The court added that: "Only the inventor's testimony requires corroboration before it can be considered. . ..While evidence as to what the drawing would mean to one of skill in the art may assist the board in evaluating the drawing, the content of Exhibit 13 does not itself require corroboration." 21
Before this decision, the standard legal advice was that it was inadequate corroboration to merely get a laboratory notebook witnessed by someone on the night cleaning crew. After Price, this advice seems obsolete. In fact, Price suggests that no corroboration is required of documents allegedly written by an inventor contemporaneously with the making of the invention.
No Reason to Lie
The rule in Price was recently followed in Mahurkar v. C.R. Bard, Inc., 22 which has been discussed above.
According to the panel in Mahurkar, the requirement for corroboration of an inventor's testimony "arose out of a concern that inventors testifying in patent infringement cases would be tempted to remember facts favorable to their case by the lure of protecting their patent or defeating another's patent." 23 That concern, according to the court, does not apply to allegedly contemporaneous documents generated by a named inventor. In other words, the panel apparently believed that there is a conclusive presumption that, prior to litigation (i.e., either a patent infringement case or an interference), an inventor has no reason to lie!
Despite Price and Mahurkar (and, in fact, only six weeks after the decision in Mahurkar), a different panel of the Federal Circuit reaffirmed in Schendel v. Curtis 24 that corroboration is required where a party seeks to prove an ARP through the use of allegedly contemporaneous documents and physical exhibits.
The board initially ruled against Schendel, finding (a) he had failed to prove the ARP of his invention and (b) he had provided insufficient corroboration for his contemporaneous statements of alleged reduction to practice. In a two-to-one vote, a panel of the Federal Circuit affirmed simply on the basis that Schendel had failed to prove his asserted ARP. The court also discussed the corroboration issue, but it is unclear whether this discussion constituted dictum or an alternative holding.
Contemporaneously with his alleged invention, Schendel had given three of his corroborating witnesses samples that he had labeled or otherwise identified as being the fusion protein at issue in the case. These witnesses had tested the samples given to them by Dr. Schendel, and they had obtained results consistent with the samples' being what Dr. Schendel said they were.
The problem, according to the court, was that "none of these declarants had any first-hand knowledge of the composition or structure of the proteins contained in Schendel's samples; they all derived their understanding from Schendel's labeling of the samples as fusion proteins." 25 According to the majority, "there... [was] no proof that any of these declarants knew what was actually in the samples provided to them by Schendel." 26
Judge Newman's dissenting opinion did not expressly discuss the corroboration issue. She did assert that "Dr. Schendel's declarations describing the various procedures involved, and notebook records showing the experiments that he conducted... are in evidence." 27 But it is noteworthy that she failed to mention there was no direct corroboration that Dr. Schendel had actually carried out the experiments his notebook records said that he had conducted.
State of Confusion
How can one reconcile the Price, Mahurkar and Schendel decisions? Unless one is to draw a distinction between corroboration of evidence of conceptions (not required per Price and Mahurkar) and corroboration of evidence of ARPs (required per Schendel), the law is in a state of hopeless confusion on whether corroboration is needed for documents and physical exhibits allegedly contemporaneously produced by an inventor.
What is the Board of Patent Appeals and Interferences to do in future cases concerning ARPs or corroboration? The Board is, of course, supposed to follow the precedent of the Federal Circuit; but what should the Board do when those precedents are in hopeless confusion?
According to South Corp. v. United States, 28 the Board is supposed to follow the older precedents until the court straightens things out in an en banc ruling. However, in view of the court's strong distaste for going en banc, it may be years before the court straightens things out in that fashion - if it ever does.
In the meantime, the present state of the law has at least one advantage for members of the interference bar. No matter which side of these issues one is on, it is easy to find a precedent to support one's position.
Published in IP Worldwide, January/February 1997, page 11.
* Mr. Gholz is a partner in the Arlington, VA office of Oblon, Spivak, McClelland, Maier & Neustadt, P.C., and a specialist in interference law. He is a frequent author and lecturer on topics relating to interference law.
(1) South Corp. v. United States, 690 F.2d 1368, 215 U.S.P.Q.2d 657 (Fed. Cir. 1982) (en banc). In the US Circuit Courts of Appeal, three judges are required to constitute a regular quorum. Most cases are heard by these three-judge panels. On important cases, however, the bench is expanded to a larger number and the court is said to be sitting "en banc."
The Federal Circuit has a special statute permitting it to sit in expanded panels that are less than en banc. As a result of this statute, the Federal Circuit Court usually sits in expanded panels of five judges.
(2) Interferences were originally proceedings to decide which of two or more rival inventors made an invention first. Today, however, interferences determine validity as well as priority issues.
(3) As part of proving that it was the first to make the invention at issue, the party to an interference can introduce evidence that, prior to filing its patent application on the invention, it had actually reduced the invention to practice.
(4) 34 F.3d 1058, 32 U.S.P.Q.2d 1115 (Fed. Cir. 1994) (opinion delivered by Circuit Judge Rader for a panel that also consisted of Circuit Judges Lourie and Schall).
(5) Id. at 1060, 32 U.S.P.Q.2d at 1117.
(6) Id. at 1063, 32 U.S.P.Q.2d at 1120.
(7) Id. at 1060-61, 32 U.S.P.Q.2d at 1117.
(8) 68 F.3d 442, 37 U.S.P.Q.2d 1204 (Fed. Cir. 1995) (opinion delivered by Senior Circuit Judge
Smith for a panel that also consisted of Circuit Judges Rader and Schall). This case involved a 37 C.F.R. 1.131 declaration rather than an interference. However, the panel cited interference opinions and appeared to treat the issue of proving an ARP in a 37 C.F.R. 1.131 declaration and proving an ARP in an interference as identical.
(9) 68 F.3d at 1446, 33 U.S.P.Q.2d at 1923.
(10) According to counsel for Asahi/America Inc., the movement of the pipes is in fact plainly visible to the naked eye. However, the panel's opinion does not mention that movement.
11) 79 F.3d 1572, 38 U.S.P.Q.2d 1288 (Fed. Cir. 1996) (opinion delivered by Circuit Judge Rader for a panel that also consisted of Chief Circuit Judge Archer and Circuit Judge Michel). This case was an appeal from a district court infringement action, not an appeal from a decision of the board in an interference. The issue was whether the patentee could ante-date a 35 U.S.C. §102(a) reference, not which of two rival inventive entities was entitled to priority. Nevertheless, the court expressly applied interference law to this situation.
(12) Id. at 1578, 38 U.S.P.Q.2d at 1291-92.
(13) Id. at 1578, 38 U.S.P.Q.2d at 1292.
(14) 79 F.3d at 1579, 38 U.S.P.Q.2d at 1292.
(15) 988 F.2d 1187, 26 U.S.P.Q.2d 1031 (Fed. Cir. 1993) (opinion delivered by Chief Circuit Judge Nies for a panel that also consisted of Circuit Judges Archer and Mayer).
(16) Id. at 1195, 26 U.S.P.Q.2d at 1037 (interpolations by the court).
(19) E.g., Hahn v. Wong, 892 F.2d 1028, 1033-34, 13 U.S.P.Q.2d 1313, 1318 (Fed. Cir. 1985); Reesev. Hurst, 661 F.2d 1222, 211 U.S.P.Q. 936 (C.C.P.A. 1989); Mikus v. Wachtel, 542 F.2d 1157, 1161, 191 U.S.P.Q. 571, 575 (C.C.P.A. 1976).
(20) 988 F.2d at 1195, 26 U.S.P.Q.2d at 1037.
(21) Id. at 1995-96, 26 U.S.P.Q.2d at 1037.
(22) 79 F.3d 1572, 38 U.S.P.Q.2d 1288 (Fed. Cir. 1996) (opinion delivered by Circuit Judge Rader for a panel that also consisted of Chief Circuit Judge Archer and Circuit Judge Michel).
(23) Id. at 1577, 38 U.S.P.Q.2d at 1291 (emphasis added).
(24) 83 F.3d 1399, 38 U.S.P.Q.2d 1743 (Fed. Cir. 1996) (majority opinion delivered by Circuit Judge Lourie and joined by Circuit Judge Bryson; dissenting opinion delivered by Circuit Judge Newman).
(25) 83 F.3d at 1403, 38 U.S.P.Q.2d at 1746-47 (emphasis in the original).
(26) Id. at 1403, 38 U.S.P.Q.2d at 1747.
(27) Id. at 1407, 38 U.S.P.Q.2d at 1750.
(28) 690 F.2d 1368, 215 U.S.P.Q.2d 657 (Fed. Cir. 1982) (en banc).