The Fox Group, Inc. v. Cree, Inc. , 700 F.3d 1300 ( 2012 )

United States Court of Appeals
for the Federal Circuit
__________________________
THE FOX GROUP, INC.
Plaintiff-Appellant,
v.
CREE, INC.,
Defendant-Appellee.
__________________________
2011-1576
__________________________
Appeal from the United States District Court for the
Eastern District of Virginia in Case No. 10-CV-0314,
Judge Rebecca Beach Smith.
__________________________
Decided: November 28, 2012
__________________________
CHRISTOPHER B. MEAD, London & Mead, of Washing-
ton, DC, argued for plaintiff-appellant. With him on the
brief was LANCE A. ROBINSON.
DAVID C. RADULESCU, Quinn Emanuel Urquhart &
Sullivan LLP, of New York, New York, argued for defen-
dant-appellee. With him on the brief were RAYMOND N.
NIMROD and ROBIN M. DAVIS.
__________________________
FOX GROUP v. CREE INC 2
Before NEWMAN, O’MALLEY, and WALLACH, Circuit
Judges.
Opinion for the court filed by Circuit Judge WALLACH.
Opinion concurring-in-part, dissenting-in-part filed by
Circuit Judge O’MALLEY.
WALLACH, Circuit Judge.
The Fox Group, Inc. (“Fox”) appeals from the decision
of the United States District Court for the Eastern Dis-
trict of Virginia granting Cree, Inc.’s (“Cree”) motion for
summary judgment of invalidity of U.S. Patent No.
6,562,130 (filed May 4, 2001) (“the ’130 patent”). Fox
Group, Inc. v. Cree, Inc., 819 F. Supp. 2d 524, 537 (E.D.
Va. 2011). We find that the district court did not err in
granting summary judgment in Cree’s favor based upon
the invalidity of claims 1 and 19 of the ’130 patent under
35 U.S.C. § 102(g). However, because there was no case
or controversy at the time of the judgment over the re-
maining claims of the ’130 patent (“unasserted claims”),
the district court erred in holding the unasserted claims of
the ’130 patent invalid. Accordingly, we affirm-in-part
and vacate-in-part.
BACKGROUND
Fox is the assignee of the ’130 patent, entitled Low
Defect Axially Grown Single Crystal Silicon Carbide,
which claims a low defect silicon carbide (“SiC”) crystal
and relates to a method and apparatus of said crystal.
’130 patent col. 3 ll. 15-27. The ’130 patent claims priority
from application No. PCT/RU97/00005, filed on January
22, 1997. Id. at col. 1 ll. 6-10. “SiC crystal is a semicon-
ductor material grown via man-made methods and used
in high-temperature and high-power electronics such as
light sources, power diodes, and photodiodes. To be viable
as a semiconductor, SiC material must contain a rela-
3 FOX GROUP v. CREE INC
tively low level of defects.” Fox Group, 819 F. Supp. 2d at
526-27.
Fox argues that Cree infringes claims 1 and 19 of the
’130 patent. Claim 1 recites:
A silicon carbide material comprising an axial re-
gion of re-crystallized single crystal silicon carbide
with a density of dislocations of less than 104 per
square centimeter, a density of micropipes of less
than 10 per square centimeter, and a density of
secondary phase inclusions of less than 10 per cu-
bic centimeter.
’130 patent col. 8 ll. 6-11. Claim 19 is very similar, but
requires a seed crystal and requires a region of axially re-
crystallized silicon carbide initiated at the growth surface
of the seed crystal. Id. at col. 9 l. 37–col. 10 l. 6. Claim 19
states:
A silicon carbide material, comprising:
a single crystal silicon carbide seed crystal, said
single crystal silicon carbide seed crystal hav-
ing a growth surface; and
a region of axially re-crystallized silicon carbide,
said region of axially re-crystallized silicon car-
bide initiating at said growth surface of said
single crystal silicon carbide seed crystal, said
region of axially re-crystallized silicon carbide
having a density of dislocations of less than 104
per square centimeter, a density of micropipes
of less than 10 per square centimeter, and a
density of secondary phase inclusions of less
than 10 per cubic centimeter.
Id.FOX GROUP v. CREE INC 4
Cree has engaged in research to grow low defect SiC
crystals since its founding in 1987. In February 1995, as
part of its research program, Cree grew boule G0259 and
sent Dr. Michael Dudley, of the State University of New
York at Stony Brook, a wafer sliced from that boule, wafer
G0259-3 (the “Kyoto Wafer”), for X-ray topography analy-
sis. After the initial analysis, Cree asked Dr. Dudley to
do more analysis “to see if there are more 1c dislocations
in areas with no micropipes than in areas with micro-
pipes.” JA2121. Dr. Dudley advised Cree that there was
an exceptionally low defect area in the Kyoto Wafer.
At the 1995 International Conference on SiC and Re-
lated Materials (the “Kyoto Presentation”). Dr. Calvin
Carter, one of the Cree inventors, showed a cropped image
and described the low defect nature of the Kyoto Wafer,
stating that it had an area with less than 1,000 disloca-
tions per square centimeter, and no micropipes. In an
article published in 1996 (“1996 Article”), entitled “Recent
progress in SiC crystal growth,” Cree described the Kyoto
Wafer. JA2129. The 1996 Article disclosed that Cree had
“recently had a breakthrough that . . . dramatically re-
duced” micropipe density. JA2127. The article included
an image of the X-ray topograph generated during Dr.
Dudley’s analysis, showing the high quality SiC that Cree
had grown. The caption explained that the image was of
a “14 x 4.5 mm area of a 4H-SiC wafer. Excluding the
portions with dislocation tangles, this area has a total line
defect density of about 1000 cm-2.” Id.In 2007, Dr. Dudley analyzed a wafer from Cree at
Fox’s request. In April 2011, Dr. Dudley reviewed the
1995 X-ray topographs of the Kyoto Wafer and deter-
mined that a region of the wafer had an average disloca-
tion density of less than 104 per square centimeters, no
micropipes, and no secondary phase inclusion.
5 FOX GROUP v. CREE INC
Fox originally brought suit against Cree on June 29,
2010.1 In its Complaint, Fox sought injunctive relief as
well as compensatory damages against Cree for infringing
the ’130 patent and U.S. Patent No. 6,534,026 (“the ’026
patent”).2 In its Answer, Cree filed counterclaims seeking
declarations that the ’026 and ’130 patents are not in-
fringed, invalid, and unenforceable. Cree filed a motion
for summary judgment of invalidity on April 11, 2011.
On June 10, 2011, the court issued its claim construc-
tion opinion construing terms in both the ’130 patent and
the ’026 patent. On July 20, 2011, in response to a motion
from Fox, the district court entered a judgment of non-
infringement of the ’026 patent for Cree and dismissed
Cree’s counterclaims related to the ’026 patent. The court
then denied Cree’s motion for summary judgment of non-
infringement of the ’026 patent as moot and considered
only whether there was any genuine issue of material fact
concerning the validity and infringement of the ’130
patent.
On August 8, 2011, the district court granted Cree’s
motion for summary judgment on its counterclaim seek-
ing a declaration that the ’130 patent is invalid, and
dismissed or denied the other claims and counterclaims
on infringement and unenforceability as moot. Id. at 537.
Fox timely appealed. We have jurisdiction pursuant to 28
U.S.C. § 1295(a)(1).
1 Fox also filed suit against Dow Corning Corp. On
October 25, 2010, the action against Dow Corning Corp.
was transferred to the United States District Court for
the Southern District of New York. Fox Group, Inc. v.
Cree, Inc., 749 F. Supp. 2d 410 (E.D. Va. 2010).
2 The ’026 patent is no longer a subject of this liti-
gation. See Fox Group, 819 F. Supp. 2d at 527 n.4.
FOX GROUP v. CREE INC 6
DISCUSSION
Fox’s challenge to the district court’s grant of sum-
mary judgment of invalidity is premised on the notion
that Cree is not a prior inventor of the low defect wafer
claimed by Fox, or, if it was, that Cree abandoned, sup-
pressed, or concealed the invention. Fox also argues that
the district court erred in entering an order invalidating
the entire ’130 patent, when only claims 1 and 19 were
asserted. We address each in turn.
“This court reviews the district court’s grant or denial
of summary judgment under the law of the regional
circuit.” Lexion Med., LLC v. Northgate Techs., Inc., 641
F.3d 1352, 1358 (Fed. Cir. 2011). The Fourth Circuit
reviews the grant of summary judgment de novo. Nader v.
Blair, 549 F.3d 953, 958 (4th Cir. 2008). Summary judg-
ment is appropriate when there is “no genuine issue of
material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). It is the moving
party’s burden to show it is entitled to judgment as a
matter of law, and the non-moving party’s burden to
“demonstrate that a triable issue of fact exists; he may
not rest upon mere allegations or denials. A mere scin-
tilla of evidence supporting the case is insufficient.” Shaw
v. Stroud, 13 F.3d 791, 798 (4th Cir. 1994) (citation omit-
ted). In evaluating a motion for summary judgment, we
view all evidence and draw all reasonable inferences from
the evidence in a light most favorable to the non-moving
party. Nader, 549 F.3d at 958. “Where the record taken
as a whole could not lead a rational trier of fact to find for
the non-moving party, there is no ‘genuine issue for trial.’”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 587 (1986) (quoting First Nat’l Bank of Ariz. v.
Cities Serv. Co., 391 U.S. 253, 289 (1968)).
7 FOX GROUP v. CREE INC
An issued patent is presumed valid. 35 U.S.C. § 282.
“[I]f a patentee’s invention has been made by another,
prior inventor who has not abandoned, suppressed, or
concealed the invention, [35 U.S.C. § 102(g)] will invali-
date that patent.” Apotex USA, Inc. v. Merck & Co., Inc.,
254 F.3d 1031, 1035 (Fed. Cir. 2001). Under § 102(g), on
a motion for summary judgment, a challenger of a patent
must prove “by clear and convincing evidence that ‘the
invention was made in this country by another inventor.”’
Id. at 1037 (quoting 35 U.S.C. § 102(g)). Then, the burden
shifts “to the patentee to produce evidence sufficient to
create a genuine issue of material fact as to whether the
prior inventor has suppressed or concealed the invention.”
Id. Finally, the burden shifts again to the challenger who
“must rebut any alleged suppression or concealment with
clear and convincing evidence to the contrary.” Id. at
1038.
I. Inventorship
Under § 102(g) a patent may be invalidated if “the in-
vention was made in this country by another inventor
who had not abandoned, suppressed, or concealed it.” 35
U.S.C. § 102(g). This section “operates to ensure that a
patent is awarded only to the ‘first’ inventor in law.”
Apotex, 254 F.3d at 1035. “[A] challenger . . . has two
ways to prove that it was the prior inventor: (1) it reduced
its invention to practice first . . . or (2) it was the first
party to conceive of the invention and then exercised
reasonable diligence in reducing that invention to prac-
tice.” Mycogen Plant Sci., Inc. v. Monsanto Co., 243 F.3d
1316, 1332 (Fed. Cir. 2001).
Fox argues that Cree failed to prove that it invented a
process for making low defect SiC wafers because it did
not provide proof that it did, or could, duplicate the proc-
ess used to make the Kyoto Wafer. Fox avers that
FOX GROUP v. CREE INC 8
“[i]mplicit in the ‘conception’ requirement of inventorship
is that the inventor must have conceived of something
definite enough to be repeated, and that this conception is
actually repeatable by those skilled in the art without
undue experimentation.” Fox’s Opening Br. 41.
However, Cree needs only prove either that it reduced
its invention to practice first or that it conceived of the
invention first and was diligent in reducing it to practice.
Mycogen, 243 F.3d at 1332. An alleged prior inventor
would need to prove conception only if the alleged prior
inventor had not successfully reduced the invention to
practice before the critical date of the patent-at-issue
(May 4, 2000).3 Since Cree reduced the invention to
practice in 1995, Fox Group, 819 F. Supp. 2d at 532, it
does not need to prove conception. Reduction to practice
and conception are separate and distinct concepts and
tests; we will not combine them.
The test for establishing reduction to practice requires
that “the prior inventor must have (1) constructed an
embodiment or performed a process that met all the claim
limitations and (2) determined that the invention would
work for its intended purpose.” Teva Pharm. Indus. Ltd.
v. AstraZeneca Pharms. LP & IPR Pharms., Inc., 661 F.3d
1378, 1383 (Fed. Cir. 2011). Cree met both prongs to
establish reduction to practice. It developed the Kyoto
Wafer, a SiC wafer that met all three defect density
3 To show conception a prior “inventor must be able
to ‘describe his invention with particularity.’ [Burroughs
Wellcome Co. v. Barr Labs., Inc., 40 F.3d 1223, 1228 (Fed.
Cir. 1994).] This requires both (1) the idea of the inven-
tion’s structure and (2) possession of an operative method
of making it.” Invitrogen Corp. v. Clontech Labs, Inc., 429
F.3d 1052, 1063 (Fed. Cir. 2005). Cree would also meet
the requirements of prior conception since it had an
embodiment of the claimed product prior to Fox.
9 FOX GROUP v. CREE INC
limitations of claims 1 and 19 of the ’130 patent. Fox
Group, 819 F. Supp. 2d at 532. Fox does not dispute that
in 1995 Cree grew the Kyoto Wafer, which met all three of
the defect density limitations of claims 1 and 19 of the
’130 patent. Cree presented the results at the Kyoto
Conference, describing the defect reduction achieved as a
“breakthrough.” Id. at 534.
Fox argues that the district court “improperly focused
on a generalized purpose of making ‘low defect’ SiC,
rather than on the claimed purpose of making SiC wafers
that met three specific, measurable, and repeatable defect
densities.” Fox’s Opening Br. 46. However, case law
shows that the prior inventor does not need to “establish
that he recognized the invention in the same terms as
those recited” in the patent claims. Dow Chem. Co. v.
Astro-Valcour, Inc., 267 F.3d 1334, 1341 (Fed. Cir. 2001).
Fox argues that Cree failed to prove it had reduced
the invention to practice before 1997. Fox contends that
Cree admitted it had not invented a repeatable process,
quoting the 1996 article, which states “we are working on
process repeatability issues that will result in consistent
production of wafers of equal or better quality.” JA2127.
However, Fox does not support its contention that Cree
must prove repeatability to prove it had reduced the
invention to practice. Furthermore, considering Cree’s
statement within the context of the article, Cree never
said that it could not make another SiC boule that met
the claim limitations of the ’130 patent. Rather, Cree was
describing the Kyoto Wafer which had very low micropipe
density and describing plans to continue to reduce defects
and grow even better quality wafers in the future. Cree
proved that it had reduced the invention to practice; there
is no requirement for it to have done so repeatedly, and
therefore no genuine issue of material fact exists as to
this issue.
FOX GROUP v. CREE INC 10
“Cree appreciated in 1995 that its newly grown SiC
material met uniquely low defect density thresholds, and
said appreciation was based on ‘objective evidence [that]
corroborate[s]’ Cree’s public comments concerning that
quality.” Fox Group, 819 F. Supp. 2d at 534 (quoting
Invitrogen, 429 F.3d at 1065) (brackets in original). There
is no genuine issue whether Cree reduced the invention to
practice prior to Fox’s critical date.
II. Abandonment, Suppression, or Concealment
There were two ways for Fox to produce evidence suf-
ficient to create a genuine issue of material fact of aban-
donment, suppression, or concealment. Dow, 267 F.3d at
1342. The first way, that the prior inventor actively and
intentionally suppressed or concealed, has not been raised
before this court. Id. Rather, Fox disputes the sufficiency
of Cree’s public disclosures, contending that abandon-
ment, suppression, or concealment may be inferred from
the inventor’s “unreasonable delay in making the inven-
tion publicly known.” Id.There are numerous ways to support an inference of
abandonment, suppression, or concealment, such as “[t]he
failure to file a patent application, to describe the inven-
tion in a published document, or to use the invention
publicly, within a reasonable time after first making the
invention . . . .” Id. (citations omitted). Fox cites to the
testimony of one of the Cree inventors, Dr. Calvin Carter,
stating that a certain amount of nondisclosure was com-
pany policy. Fox argues that since Cree (1) did not file a
patent application for its Kyoto Wafer, (2) did not present
proof of commercialization that would allow for reverse-
engineering, and (3) did not otherwise provide adequate
disclosure because it failed to reveal the details of the
growth conditions under which boule G0259 was made,
Cree suppressed or concealed its invention.
11 FOX GROUP v. CREE INC
However, our case law establishes that “although
§ 102(g) prior art must be somehow made available to the
public in order to defeat another patent, a § 102(g) prior
inventor is under no obligation to file a patent applica-
tion.” Apotex, 254 F.3d at 1039. Commercialization has
been relied upon as another way to prove public disclo-
sure. See e.g., Dow, 267 F.3d at 1343 (“Here, [the prior
inventor’s] public disclosure of its . . . invention occurred
through commercialization.”); Checkpoint Sys. Inc. v. U.S.
Int’l Trade Comm’n, 54 F.3d 756, 762 (Fed. Cir. 1995) (“In
cases in which an invention is disclosed to the public by
commercialization . . . .”). Filing a patent application and
commercializing a product are only two convenient ways
of proving an invention has been disclosed to the public.
There are other ways to prove public disclosure including,
e.g., the use of a printed publications as prior art under 35
U.S.C. §§ 102(a), (b).4
4 In International Glass, our predecessor court held
that the prior invention was deemed abandoned, sup-
pressed, or concealed, because although Sciaronni’s per-
sonal notebook records were kept of his method for
polishing gem stones, the records were never submitted to
their employer’s patent counsel or supervisory personnel
for further evaluation, there was no evidence that the
method was used by the company to make a finished
product, the method was never described in any document
or report, and no knowledge of the method was ever
disseminated outside of the company. Int’l Glass Co., Inc.
v. United States, 408 F.2d 395, 402-04 (Ct. Cl. 1969). The
court’s analysis is instructive here because Cree took all
of the steps the court mentioned Sciaronni had failed to
take. In particular, Cree sent samples of its boule for
testing by Dr. Dudley, an outside evaluator, the product
itself (though not the process used to make it) was de-
scribed in a published paper, and knowledge of the prod-
uct was disseminated outside of the company in the Kyoto
presentation.
FOX GROUP v. CREE INC 12
Fox claims that public use or descriptions in a pub-
lished document must be enabling, given the policy and
purpose of the patent system to enrich the art by disclos-
ing how to make the invention. Fox quotes extensively
from our case law to support its argument that the prior
art must be enabling:
Early public disclosure is a linchpin of the patent
system. As between a prior inventor who benefits
from a process by selling its product but sup-
presses, conceals, or otherwise keeps the process
from the public, and a later inventor who
promptly files a patent application from which the
public will gain a disclosure of the process, the law
favors the latter.
W.L. Gore & Assocs., Inc. v. Garlock, Inc., 721 F.2d 1540,
1550 (Fed. Cir. 1983) (citations omitted).
A principal purpose of § 102(g) is to ensure that a
patent is awarded to a first inventor. However, it
also encourages prompt public disclosure of an in-
vention by penalizing the unexcused delay or fail-
ure of a first inventor to share the benefit of the
knowledge of the invention with the public after
the invention has been completed.
Checkpoint Sys., 54 F.3d at 761 (citations omitted). Fox
contends that the presentation and publication about the
Kyoto Wafer are not enough to enable one skilled in the
art to make the invention, because Cree never disclosed
how it got its results.
As Fox effectively admits, all of the cases it cites to
support its assertion that § 102(g) requires an enabling
disclosure are process claims. The ’130 patent is a patent
directed to a product, a silicon wafer comprising SiC
material with specific low defect densities, but Fox argues
13 FOX GROUP v. CREE INC
that any distinction between product and process claims
is irrelevant. We disagree.
The purpose of § 102(g) is to bar an inventor from re-
ceiving a patent on an invention that has already been
invented and was not abandoned, suppressed, or con-
cealed. Apotex, 254 F.3d at 1038-39. If the patent claimed
a process, then a prior inventor would have to prove prior
invention of the process which had not been abandoned,
suppressed, or concealed, to invalidate the patent under
§ 102(g). “Cree promptly and publicly disclosed its find-
ings concerning the low defect properties of the SiC mate-
rial from which the [Kyoto Wafer] was cut through a
presentation at the 1995 International Conference and a
published paper on the subject.” Fox Group, 819 F. Supp.
2d at 535. Accordingly, Cree promptly made its invention,
a SiC material with low defect densities, known to the
public. Fox has not produced sufficient evidence raising
any genuine issues of material fact to show that Cree
suppressed or concealed its invention.
Because Cree has produced clear and convincing evi-
dence that it had the low density SiC crystal prior to Fox’s
date of invention, and Fox has not produced sufficient
evidence to show or raise genuine issues that Cree aban-
doned, suppressed, or concealed the invention, we find
claims 1 and 19 of the ’130 patent invalid under
§ 102(g)(2). Accordingly, we affirm the invalidity decision
of the district court as to claims 1 and 19 of the ’130
patent.
III. Invalidity of the Unasserted Claims
Cree sought summary judgment of invalidity with re-
spect to all claims of the patents-in-suit. Upon a finding
that claims 1 and 19 of the ’130 patent were invalid under
§ 102(g), the district court granted Cree’s summary judg-
ment motion on its counterclaim seeking a declaration
FOX GROUP v. CREE INC 14
that the entire ’130 patent is invalid. On appeal, Fox
asserts that there was no justiciable controversy to sup-
port Cree’s counterclaim for invalidity on the remaining
claims of the ’130 patent, and thus the district court’s
order should be vacated with respect to those remaining
claims.
In patent cases, “the existence of a case or controversy
must be evaluated on a claim-by-claim basis.” Jervis B.
Webb Co. v. So. Sys., Inc., 742 F.2d 1388, 1399 (Fed. Cir.
1984) (citations omitted). “[J]urisdiction must exist at all
stages of review, not merely at the time the complaint
[was] filed, . . . a counterclaimant must show a continuing
case or controversy with respect to withdrawn or other-
wise unasserted claims.” Streck, Inc. v. Research & Diag-
nostic Sys., Inc., 665 F.3d 1269, 1282-83 (Fed. Cir. 2012)
(bracket in original) (quotations and citations omitted).
In Scanner Technologies the patent holder filed an in-
fringement suit and the defendants counterclaimed
seeking declaratory judgment on “each of the claims” of
the two asserted patents. Scanner Techs. Corp. v. ICOS
Vision Sys. Corp. N.V., 528 F.3d 1365, 1383 (Fed. Cir.
2008). This court upheld the district court’s judgment
invalidating all of the claims because the parties had
stipulated that the case was to be tried on one representa-
tive claim. Id. at 1383-84. In Streck, this court distin-
guished Scanner Technologies because in Scanner
Technologies the “patentee never affirmatively disclaimed
its allegations of infringement as to the other claims, here
. . . the patentee narrowed the scope of its claims at the
start of litigation pursuant to the local patent rules and
did so even further before any dispositive rulings by the
court.” Streck, 665 F.3d at 1283.
Here, as in Streck, Fox’s Complaint alleged infringe-
ment of “one or more claims,” but Fox subsequently
15 FOX GROUP v. CREE INC
narrowed the scope of its asserted claims before the court
ruled on the parties’ summary judgment motions. Id. at
1284. In its Complaint, Fox stated that Cree “practice[d]
the invention of the ’130 patent and, thus, infringe[d] one
or more claims of the ’130 patent.” JA4906. Cree argues
that there was a continuing case or controversy with
respect to the unasserted claims because in Fox’s re-
sponses to Cree’s first set of interrogatories, dated De-
cember 23, 2010, it asserted infringement of claims 1, 7,
13, and 19 of the ’130 patent, and never assured Cree that
it would not assert them. The district court stated Fox
only alleged infringement of claims 1 and 19 of the ’130
patent. Fox Group, 819 F. Supp. 2d at 527. The district
court further explained that although terms and phrases
that were the subject of the claim construction order were
also found in claims 7 and 13 of the ’130 patent, “Fox has
never indicated that Cree infringes those claims. Rather,
Fox avers that Cree’s products contain a density of dislo-
cations below 10,000, the dislocation threshold found only
in claims 1 and 19.” Id. at 527 n.5.5
Considering all of the circumstances discussed above
we affirm the district court’s finding that only claims 1
and 19 of the ’130 patent were asserted. However, “unlike
the situation in Scanner Technologies, where all of the
claims were at issue and were never withdrawn or altered
5 The district court supported its determination
with the following: “See, e.g., Compl. ¶ 38 (referencing a
chart ‘depicting that Cree is infringing at least claim 1 of
the ’130 patent.’); Fox’s Supplemental Br. In Opp. to Mot.
for Summ. J. 2 n. 2, ECF No. 522 (claiming that Fox’s
expert’s ‘opinions establish that the surface of an axial
region of each category of Cree’s as-grown wafers . . . has
a density of dislocations of less than 104 per cm2’); id. at 5-
6, 14; see also id. at 11 (‘The issue of infringement has
narrowed to the density of dislocations limitation.’).” Fox
Group, 819 F. Supp. 2d at 527 n.5.
FOX GROUP v. CREE INC 16
by either party, here, both parties were on notice” that
only claims 1 and 19 were at issue, and they knew which
claims were at issue before the district court ruled on the
parties’ summary judgment motions. Streck, 665 F.3d at
1284. There was no case or controversy with respect to
the unasserted claims at the time of the summary judg-
ment motions; therefore the district court did not have
jurisdiction over the unasserted claims. Id. Accordingly,
we vacate the district court’s declaration that the entire
’130 patent is invalid,6 but uphold the district court’s
finding of invalidity of claims 1 and 19 under § 102(g). See
id.; see also Dow, 267 F.3d at 1344 (finding only the
claims at issue invalid under § 102(g)).
CONCLUSION
For the above mentioned reasons, we vacate the dis-
trict court’s decision that the entire ’130 patent is invalid,
but uphold the district court’s finding of invalidity of
claims 1 and 19 under § 102(g).
AFFIRMED-IN-PART AND VACATED-IN-PART
6 Because we uphold the district court’s determina-
tion of invalidity as to claims 1 and 19 of the ’130 patent,
this determination does not impact the district court’s
dismissal of Fox’s claim for infringement of the ’130
patent.
United States Court of Appeals
for the Federal Circuit
__________________________
THE FOX GROUP, INC.,
Plaintiff-Appellant,
v.
CREE, INC.,
Defendant-Appellee.
__________________________
2011-1576
__________________________
Appeal from the United States District Court for the
Eastern District of Virginia in case no. 10-CV-0314, Judge
Rebecca Beach Smith.
__________________________
O’MALLEY, Circuit Judge, concurring-in-part, dissenting-
in-part.
I agree that Cree, Inc. (“Cree”) reduced its invention
to practice before Fox Group, Inc. (“Fox”) did so. Although
my reasons for reaching this conclusion differ somewhat
from those articulated by the majority, I agree that, in
1995, Cree grew a silicon carbide (“SiC”) material that
met uniquely low defect density thresholds and appreci-
ated the qualities the material possessed. These facts are
sufficient, in my view, to establish Cree’s prior reduction
to practice.1 Despite this threshold agreement with the
1 I also agree that, because Cree only sought judg-
ment declaring claims 1 and 19 of U.S. Patent No.
FOX GROUP v. CREE INC 2
majority’s reasoning, however, I dissent from the judg-
ment the majority enters; I do not agree that the record
supports the conclusion that, as a matter of law, Cree
neither abandoned, suppressed, nor concealed its inven-
tion within the meaning of § 102(g).
One is entitled to a patent unless, “before such per-
son’s invention thereof, the invention was made in this
country by another inventor who had not abandoned,
suppressed, or concealed it.” 35 U.S.C. § 102(g)(2). Al-
though there is “no explicit disclosure requirement in
§ 102(g),” we have held that “the spirit and policy of the
patent laws encourage an inventor to take steps to ensure
that ‘the public has gained knowledge of the invention
which will insure its preservation in the public domain’ or
else run the risk of being dominated by the patent of
another.” Apotex USA, Inc. v. Merck & Co., 254 F.3d
1031, 1038 (Fed. Cir. 2001) (quoting Palmer v. Dudzik,
481 F.2d 1377, 1387 (C.C.P.A. 1973)). As the majority
explains, once prior invention is established by clear and
convincing evidence, “the burden of production shifts to
the patentee to produce evidence sufficient to create a
genuine issue of material fact as to whether the prior
inventor abandoned, suppressed, or concealed the inven-
tion.” Dow Chem. Co. v. Astro-Valcour, Inc., 267 F.3d
1334, 1339 (Fed. Cir. 2001) (citing Apotex, 254 F.3d at
1037). If the patentee meets this burden of production,
“the challenger may rebut the evidence of abandonment,
suppression, or concealment, with clear and convincing
evidence to the contrary.” Id. (citing Apotex, 254 F.3d at
1037-38).
6,562,130 (“the ’130 Patent”) invalid under 35 U.S.C.
§ 102(g), the district court erred in holding the entire
patent invalid. Indeed, the correctness of that proposition
is so clear as to need no further comment.
3 FOX GROUP v. CREE INC
Because I agree that Cree established prior invention
by clear and convincing evidence, the relevant questions
are: (1) whether Fox produced evidence sufficient to create
a genuine issue that Cree nonetheless abandoned, sup-
pressed, or concealed that invention, and, if so,
(2) whether Cree rebutted Fox’s evidence of abandonment,
suppression, or concealment with clear and convincing
evidence. The majority agrees with the district court that
Fox failed to present any evidence that Cree abandoned,
suppressed, or concealed the invention. I disagree. As
discussed below, summary judgment was inappropriate
because: (1) Fox presented evidence of both direct and
inferential abandonment, suppression, or concealment;
and (2) Cree’s written publication – a 1996 article entitled
“Recent progress in SiC crystal growth,” which was pub-
lished in the Kyoto Conference journal (“the Kyoto Arti-
cle”) – was insufficient standing alone to rebut Fox’s
evidence.
I. Fox Presented Evidence of Abandonment,
Suppression, or Concealment
It is well-established that there are two types of
abandonment, suppression, or concealment. The first is
where the inventor deliberately suppresses or conceals his
invention from the public. Fujikawa v. Wattanasin, 93
F.3d 1559, 1567 (Fed. Cir. 1996). The second type occurs
when abandonment, suppression, or concealment “may be
inferred based upon the prior inventor’s unreasonable
delay in making the invention publicly known.” Dow
Chem., 267 F.3d at 1342 (citation omitted). This court
has said that the “failure to file a patent application, to
describe the invention in a published document, or to use
the invention publicly, within a reasonable time after first
making the invention may constitute abandonment,
suppression, or concealment.” Id. (internal citations
omitted).
FOX GROUP v. CREE INC 4
On appeal, Fox argues that it submitted sufficient
evidence to satisfy its burden of production as to both
intentional and inferential abandonment, suppression,
and concealment. The majority disagrees and accepts the
district court’s conclusion that Fox sought only to show an
inference of abandonment, suppression, or concealment
based on unreasonable delay. See Fox Group, Inc. v. Cree,
Inc., 819 F. Supp. 2d 524, 535 (E.D. Va. 2011) (“Fox does
not offer evidence, let alone contend that Cree ‘intention-
ally delayed [disclosure] in order to prolong the period
during which the invention is maintained in secret.”)
(citation omitted).
As Fox’s supplemental briefing to the district court
reveals, however, Fox did not limit its arguments to
inferential abandonment. Instead, Fox argued broadly
that Cree had a policy of concealing its production meth-
ods and that this policy, “in conjunction with Cree’s choice
not to reveal the subject matter of the invention in its
[Kyoto Article] and not to enable its competitors how to
make it, establish that Cree suppressed or concealed the
invention.” J.A. 4170. In support of this position, Fox
pointed to deposition testimony from one of Cree’s inven-
tors – Dr. Calvin Carter – regarding the company’s policy
to exclude all details as to how to replicate discoveries in
any publications regarding them. Fox further argued
that, even if Cree made and appreciated its invention in
1995, it delayed nine years, until 2004, before commer-
cializing anything that resembled the Kyoto wafer. In
other words, Fox argued both that Cree: (1) “made a
choice not to disclose the subject matter of the invention
or enable the public how to make it”; and (2) unreasonably
delayed placing the invention in the public domain. J.A.
4173-74. Given these distinct assertions, although the
district court interpreted Fox’s arguments to relate solely
to the second type of proof, Fox presented evidence suffi-
5 FOX GROUP v. CREE INC
cient to encompass both intentional and inferential aban-
donment, suppression, or concealment.
Fox presented direct evidence that Cree:
(1) deliberately concealed its production methods; (2) did
not file a patent application relating to the low-defect SiC
wafer it created (“the Kyoto wafer”); and (3) failed to
publicly use or commercialize the Kyoto wafer in a man-
ner that would have allowed reverse-engineering. With
respect to abandonment, Fox argued that Cree had no
proof that the process it used to create the Kyoto wafer
was ever used again, or that Cree even understood what
that process was. Specifically, Fox pointed to deposition
testimony which, according to Fox, revealed that “Cree
did not pursue further crystal growth using the same
recipe and reactor in an attempt to reproduce the G0259-
03 crystal.” J.A. 4170. This evidence, taken as a whole, is
sufficient to create a genuine issue that Cree abandoned,
suppressed, or concealed its invention, particularly since
the standard for summary judgment requires that it be
viewed in the light most favorable to Fox.
II. Cree Failed to Rebut Fox’s Evidence of Abandonment,
Suppression, or Concealment
Because Fox presented evidence creating genuine is-
sues of material fact as to abandonment, suppression, or
concealment, the burden shifted to Cree to rebut that
showing with clear and convincing evidence. A first
inventor can avoid a determination of abandonment,
suppression, or concealment by showing that “he or she
marketed or sold a commercial embodiment of the inven-
tion or described the invention in a publicly disseminated
document.” Checkpoint Sys., Inc. v. Int’l Trade Comm’n,
54 F.3d 756, 762 (Fed. Cir. 1995).
Here, Cree’s only rebuttal argument was that it dis-
closed the Kyoto wafer, together with an x-ray topograph
FOX GROUP v. CREE INC 6
and a description of its low-defect nature, at the Kyoto
Presentation and in the subsequent Kyoto Article. Based
on this evidence alone, the district court found that it
could not draw an inference of abandonment, suppression,
or concealment. Fox Group, 819 F. Supp. 2d at 536(“[T]here is no genuine issue that Cree contemporane-
ously disclosed its invention in a presentation and paper
at the 1995 International Conference, and that said paper
was subsequently published.”). Because it publicly dis-
closed the fact of the invention, albeit in limited fashion,
the district court found “that Cree did not delay in ‘bring-
ing knowledge of the invention to the public’” and that it
was “of no moment that Cree did not market its public
invention in its commercial products for nine years.” Id.In short, the district court, and now the majority here,
find that the same evidence which established Cree’s
prior reduction to practice was sufficient to prohibit a
finding of abandonment, suppression, or concealment.
Fox relies on Apotex for the proposition that Cree’s
failure to either explain to the public how to make its
invention or to provide the public with some mechanism
for making that determination on its own constitutes
concealment.2 In Apotex, which involved a claimed proc-
2 Specifically, Fox emphasizes language in Apotex
where this court discussed the policy in favor of public
disclosure of inventions:
[T]he spirit and policy of the patent laws encour-
age an inventor to take steps to ensure that “the
public has gained knowledge of the invention
which will insure its preservation in the public
domain” or else run the risk of being dominated by
the patent of another. Palmer v. Dudzik, 481 F.2d
1377, 1387 (C.C.P.A. 1973) . . . . Absent a satis-
factory explanation for the delay or the presence
of other mitigating facts, a prior invention will
therefore be deemed suppressed or concealed
7 FOX GROUP v. CREE INC
ess of manufacturing high blood pressure tablets, the
court found that the prior inventor “took no steps to make
the invention publicly known for nearly five years,” and
that this delay gave rise to an inference that it suppressed
or concealed its invention. 254 F.3d at 1039. The court
concluded, however, that the prior inventor successfully
rebutted this inference by, among other things, selling the
tablets commercially, disclosing the ingredients used to
manufacture the tablets in a publication, and providing a
step-by-step description of the process through testimony
at a Canadian trial. Id. at 1040. In reaching this conclu-
sion, we noted that, if it were clear that the process “could
be reverse-engineered by one of ordinary skill through an
inspection” of the product, the patentee “could not benefit
from the inference of suppression or concealment because
[the prior inventor] could not be said to have delayed in
making the benefits of its invention known to the public.”
Id. at 1039, n.3 (citation omitted).
While citing to it in passing, the majority completely
ignores Apotex, failing to address either its policy con-
cerns or the analysis employed. It is difficult to ignore the
fact, however, that Apotex makes clear that a prior inven-
tor must show that the public was clearly given the bene-
fit of an invention, via reverse-engineering, a detailed
disclosure, or otherwise, if it wants to rely on § 102(g) to
invalidate a patent. Despite the majority’s finding to the
contrary, simply disclosing the existence of the product,
within the meaning of § 102(g) “if, within a rea-
sonable time after completion, no steps are taken
to make the invention publicly known.” [Int’l
Glass Co., Inc. v. United States, 408 F.2d 395, 403
(Ct. Cl. 1969)].
Apotex, 254 F.3d at 1038-39.
FOX GROUP v. CREE INC 8
without more, is insufficient to make an invention pub-
licly known. There must be something more.
For example, in Dow Chemical, this court found that
commercialization of a product was sufficient to rebut a
charge of abandonment, suppression, or concealment. In
Dow, the invention related to plastic foam products.
There, a prior inventor, AVI, publicly disclosed its inven-
tion of the foam product to the public through commer-
cialization. 267 F.3d at 1343. The patentee argued that
AVI had abandoned, suppressed, or concealed its prior
invention by delaying public disclosure. Although this
court agreed that “unreasonable delay in bringing knowl-
edge of the invention to the public may raise an inference
of suppression or concealment,” it found that there was no
such delay because AVI took reasonable steps towards
commercialization after its initial discovery. Id. at 1342-
43. Specifically, we found that, “during the 30 months
between first making the isobutane-blown foam and
selling the foam, AVI actively and continuously took steps
towards the commercialization . . . including the procure-
ment of financing to build a new production plant and the
attention to safety considerations associated with using
isobutane as a blowing agent.” Id. at 1343. Because the
undisputed evidence showed that AVI made reasonable
efforts to bring the invention to the public, the court
concluded that Dow did not show suppression or conceal-
ment.
Cree cites Dow for the proposition that, where the
claimed invention is a product, the prior inventor need
only disclose the product itself to rebut abandonment,
suppression, or concealment – it need not disclose the
process used to make it; indeed, it need not even under-
stand the process used to make it. According to Cree,
Dow supports its position because the process for making
the foam was never disclosed. The fact remains, however,
9 FOX GROUP v. CREE INC
that in Dow, there was clear evidence that the product
was made publicly available through commercialization.
The majority does not discuss Dow in any detail, per-
haps recognizing that it is distinguishable from the in-
stant case where Cree has not, at this stage, shown any
evidence of commercialization before 2004.3 And, unlike
in Dow, there is no evidence in the record as to steps Cree
took to commercialize its product during the nine year
period following invention. Instead, the evidence at this
stage establishes only that the Cree inventors gave a
presentation and published a non-enabling article. Al-
though Cree alleges that it continued its research efforts
to further improve its SiC material, there is no supporting
evidence of that fact in the record.
Neither Cree nor the majority point to any case law
where § 102(g) was used to invalidate a patent even
though the prior inventor did not commercialize the
product, make it available to the public so that reverse-
engineering was possible, or provide some other detailed
disclosure giving the public the benefit of the invention.
Although the cases on which Fox relies for its enablement
requirement do involve process claims – not a product
claim as we have here – there are no cases before now
where we have said that a non-enabling disclosure, by
3 When asked at oral argument whether Cree
conceded that it took nine years for commercialization,
counsel responded: “I don’t concede that in this record. In
this record we did not pursue a commercialization path to
show that there wasn’t abandonment, suppression, or
concealment.” Oral Argument at 27:47, available at
http://www.cafc.uscourts.gov/oral-argument-
recordings/2011-1576/all. At this stage of the proceedings,
therefore, it is undisputed that the record is devoid of any
evidence of commercialization prior to 2004.
FOX GROUP v. CREE INC 10
itself, is sufficient to rebut evidence of abandonment,
suppression, or concealment.
Because Cree made the fact of its invention known to
the public, the majority, like the district court before it,
concludes that Fox can never establish abandonment,
suppression, or concealment. Under the majority’s ap-
proach, an inventor could publicly announce that it made
a product, with no explanation as to how it did so, and
then hide it away in a closet indefinitely. As long as the
inventor describes a product in general terms, the inven-
tor cannot, according to the majority, be accused of aban-
doning, suppressing, or concealing the invention.
The majority’s approach cannot be the law. If a prior
inventor could disclose the mere existence of a product
and take no further action for nine years, the concept of
abandonment, suppression, or concealment would be
rendered meaningless. Consistent with our prior case
law, where there is no enabling written disclosure, there
must be evidence that the prior inventor timely made its
invention available to the public in some other way – e.g.,
through public use, commercialization, or filing a patent
application claiming the invention. Such a requirement is
consistent with § 102(g)’s general goal of giving the public
the benefit of the invention. See Checkpoint, 54 F.3d at
761 (Section 102(g) “encourages prompt public disclosure
of an invention by penalizing the unexcused delay or
failure of a first inventor to share the ‘benefit of the
knowledge of [the] invention’ with the public after the
invention has been completed.” (citation omitted)).
Here, the record is devoid of any rebuttal evidence be-
yond the Kyoto Article, which did little more than pro-
claim that Cree “recently had a breakthrough that has
dramatically reduced” micropipe density. J.A. 2127. The
Article included an x-ray topograph and stated that one
11 FOX GROUP v. CREE INC
wafer contained “a total of 25 micropipes, yielding a
density of 3.5 cm-2” while some other wafers had a “total
line defect density of about 1000 cm-2.” Id. The Kyoto
Article did not refer to the three defect densities claimed
in the ’130 Patent and did not reveal Cree’s “experimental
methods” or its “specific crystal growth conditions.”
Appellant Br. 14. These deficiencies, coupled with evi-
dence that Cree intentionally did not tell the public how
to make the wafer it described, was not able to repeat its
invention, and did not engage in commercialization of the
wafer for nine years, support Fox’s position that Cree
abandoned, suppressed, or concealed its invention.
By relying solely on the Kyoto Article, Cree has not,
as of yet, satisfied its burden of rebutting Fox’s evidence.
Because there are underlying facts that are both material
and genuinely disputed, and because the district court
erred in resolving those disputes in favor of the moving
party, I would remand this case for further factual devel-
opment on the question of whether Cree abandoned,
suppressed, or concealed its invention within the meaning
of § 102(g).
III. Conclusion
For the foregoing reasons, although I agree with the
majority that Cree established prior inventorship, I
believe there are genuine issues of material fact preclud-
ing summary judgment in Cree’s favor under § 102(g).
Accordingly, I must respectfully dissent from the judg-
ment the majority reaches. I would reverse and remand
for trial.