Umc Electronics Company v. The United States, Cross-Appellant , 816 F.2d 647 ( 1987 )

816 F.2d 647

55 USLW 2615, 2 U.S.P.Q.2d 1465

UMC ELECTRONICS COMPANY, Appellant,
v.
The UNITED STATES, Cross-Appellant.

Appeal Nos. 86-522, 86-559.

United States Court of Appeals,
Federal Circuit.

April 15, 1987.

Robert H. Montgomery, Costas, Montgomery & Dorman, P.C., New Haven, Conn., argued for appellant. With him on brief was Peter L. Costas.

John Fargo, Asst. Director, Commercial Litigation Branch, Dept. of Justice, Washington, D.C., argued for cross-appellant. With him on brief were Richard K. Willard, Asst. Atty. Gen. and Vito J. DiPietro, Director.

Before SMITH, NIES, and ARCHER, Circuit Judges.

NIES, Circuit Judge.

1

UMC Electronics Company brought this action, pursuant to 28 U.S.C. Sec. 1498(a), to recover compensation for use of its patented invention by the United States. UMC is the owner of Patent No. 3,643,513, issued February 22, 1972, by assignment from the inventor Preston Weaver. The United States Claims Court, 8 Cl.Ct. 604, 228 U.S.P.Q. (BNA) 396 (1985), upheld the validity of all claims (1-4) but dismissed the complaint on the ground of no infringement or, more accurately, no use of the patented invention by the United States. Both parties appeal. We reverse the Claims Court's holding that the patented invention was not on sale within the meaning of 35 U.S.C. Sec. 102(b).1 Accordingly, we affirm the judgment in favor of the government, but on different grounds.

2

* Background

3

The claimed invention is an aviation counting accelerometer (ACA), a device for sensing and for recording the number of times an aircraft has been subjected to predetermined levels of acceleration.2 The sensor component is mounted on the aircraft in a direction to measure acceleration loading and is connected electrically to the recorder component. Records produced by an ACA can indicate an aircraft's remaining useful life and show the need for structural inspection, overhaul, or rotation to less demanding service.

4

The patent application which became the patent in this suit ('513) was filed on August 1, 1968. Under 35 U.S.C. Sec. 102(b) the commercial exploitation and the state of development of the invention one year before the filing of the application for the subject invention are critical to resolution of the on-sale issue.

5

Prior to the late 1960's when UMC first entered this field, the U.S. Navy had procured ACA's from Maxson Electronics Company and from Giannini Controls Corporation. The Navy was dissatisfied with these ACA's because they sometimes recorded data that defied common sense, failed to count accelerations, or counted accelerations that never occurred. In 1966 the Navy contacted Preston Weaver, an employee of UMC, told him of the problems with existing ACA's and informed him of the Navy's interest in buying improved devices. Weaver designed an accelerometer, model UMC-A, and in late 1966, UMC was awarded a contract to supply the Navy with approximately 1600 units.

6

In early 1967, UMC concluded that its model UMC-A would not meet the Navy's performance specification required by its contract. Like the Maxson and Giannini ACA's, the UMC-A accelerometer utilized, as part of its sensor, an electromechanical transducer to mechanically generate signals that indicate levels of acceleration.3 Like the Maxson and Giannini devices, the UMC-A device sometimes counted and sometimes did not count the same acceleration load. The problem lay in the inherent frequency of the mass-spring system in the transducer. The devices could not distinguish between acceleration due to inflight maneuvers, which determines actual stress, and acceleration from other sources, e.g., windgusts or weapons release.

7

To prevent UMC from losing the ACA contract, Weaver began work to improve the sensor portion of an ACA and conceived his invention which uses an analog transducer in the sensor. An analog transducer electrically generates a varying signal (in contrast to the mechanically produced signal of prior devices) which can be filtered electronically to selectively remove the effects of superimposed vibrations. The Claims Court found that in April-May of 1967 Weaver built and tested an engineering prototype of his ACA containing a commercial analog transducer, a filter, a timing circuit and a voltage sensor that measured one load level. UMC sought to modify the existing contract for ACA's to substitute an analog transducer for the electro-mechanical transducer specified in the contract, but was unsuccessful in negotiating a modification.

8

In late May, 1967, the Navy issued new specifications and in July, 1967, requested proposals from contractors to deliver ACA's built to the new specification (Mil-A-22145B). Technically, the request for proposals called separately for a certain number of sensor components of an ACA system and a certain number of recorders, the two units being compatible in combination. UMC responded to the request on July 27, 1967, the final date for making a proposal, with an offer to supply $1,668,743 worth of its improved ACA (hereinafter model UMC-B). UMC represented as part of its proposal that the sensor portion "has been constructed and tested in conjunction with voltage sensing and time controlled circuitry." In response to a Navy inquiry, on August 2, 1967, after the critical date, UMC submitted a technical proposal which described the model UMC-B in detail and included test results and schematic drawings. On August 9, 1967, UMC gave a demonstration of its device to the Navy at the UMC facility.

9

In early 1968 the Navy canceled the request to which the above submission of UMC was directed, and in July 1968, it issued another. The latter request eventually led to a contract with Systron-Donner Corporation, which company has been providing the Navy with ACA's utilizing analog transducers since 1970.

10

In June, 1980, UMC filed the instant action against the United States seeking compensation (after attempting for a number of years to obtain compensation directly from the Navy) by reason of the Navy's alleged use of its invention in the Systron-Donner ACA's. The Claims Court upheld the validity of the patent claims, which were challenged by the government on a number of grounds, but found that the Systron-Donner ACA's did not fall within the scope of the claims. Both parties appeal: UMC asking for reversal of the Claims Court's finding of no infringement; the government seeking to have the claims in suit held invalid. Since we conclude that the Claims Court erred as a matter of law in holding that the claims of the '513 patent were not invalid under section 102(b), we need discuss only that issue in detail.

II

The Claims Court Decision

11

The Claims Court analyzed the on-sale bar under the following three-part test set out in In re Corcoran, 640 F.2d 1331, 1333-34, 208 U.S.P.Q. (BNA) 867, 870 (CCPA 1981), taken from Timely Prods. Corp. v. Arron, 523 F.2d 288, 302, 187 U.S.P.Q. (BNA) 257, 267-68 (2d Cir.1975)4:(1) The complete invention claimed must have been embodied in or obvious in view of the thing offered for sale.... Complete readability of the claim on the thing offered is not required because whatever is published (or on sale) more than one year prior to the filing of a patent application becomes part of the prior art over which the claim must be patentable....

12

(2) The invention must have been tested sufficiently to verify that it is operable and commercially marketable. This is simply another way of expressing the principle that an invention cannot be offered for sale until it is completed, which requires not merely its conception but its reduction to practice....

13

(3) Finally, the sale must be primarily for profit rather than for experimental purposes.... [Citations omitted.]

14

Proceeding through the Timely Products requirements in reverse order, the Claims Court first noted that UMC had admitted that its offer to the Navy was for profit, not for experimentation. The court then found that the invention of the '513 patent had been reduced to practice before the critical date by Weaver's tests of the engineering prototype of the ACA in April-May, 1967, because Weaver admitted that as a result of those tests he was satisfied that his invention would serve its intended purpose. 8 Cl.Ct. at 620, 228 U.S.P.Q. (BNA) at 403-04. However, the court found the first requirement that the complete invention must be embodied in the thing offered for sale was not met because the engineering prototype did not include all elements of the claims. The court found that the evidence established that the inventor had not built a physical embodiment of the invention including all limitations of the claims before the critical date.

15

The court then construed the decision of this court in Barmag Barmer Maschinenfabrik AG v. Murata Mach., Ltd., 731 F.2d 831, 221 U.S.P.Q. (BNA) 561 (Fed.Cir.1984). It interpreted Barmag as making an exception to the physical embodiment requirement where "commercial benefits outside the allowed time have been great." Because UMC "never produced its ACA," the court found it "reaped no commercial benefits." Based on those findings, the court held that the invention of the '513 patent was not on sale within the meaning of section 102(b). The court also held that the invention would not have been obvious from the prototype, which the court considered to be the thing offered for sale. 8 Cl.Ct. at 620, 228 U.S.P.Q. (BNA) at 404. This was error in the court's analysis, the prototype not being the thing offered for sale. The subject matter of the offer for sale is admittedly the claimed invention.

16

The government maintains that, properly interpreted, all three Timely Products requirements had been met, namely, (1) there was an offer to sell model UMC-B accelerometers which embodied the invention of the claims, (2) the invention had been reduced to practice, and (3) the offer to sell was for profit, not experimentation. Thus, per the government, the Claims Court erred as a matter of law in not holding the claims barred under section 102(b). UMC counters that because the inventor never built a physical embodiment containing all elements of the claims, the Claims Court erred in finding a reduction to practice of the invention, but that the court's error was cancelled out by its separate requirement for a physical embodiment.

III

17

As an initial matter, UMC is correct in pointing out the inconsistency between the Claims Court's conclusion that the claimed invention was "reduced to practice" before the critical date and its separate finding that no physical embodiment of the invention existed at that time. It is not sufficient for a reduction to practice that Weaver built and tested only a part of the later-claimed model UMC-B accelerometer. Under our precedent there cannot be a reduction to practice of the invention here without a physical embodiment which includes all limitations of the claim. See, e.g., Correge v. Murphy, 705 F.2d 1326, 1329, 217 U.S.P.Q. (BNA) 753, 755 (Fed.Cir.1983); 1 C. Rivise & A. Caesar, Interference Law and Practice Sec. 137 (1940) and cases cited therein. Because the court found and the parties do not dispute that there was no physical embodiment containing all limitations of the claimed invention before the critical date, we conclude that the Claims Court erred in holding that there had been a reduction to practice.

18

The clarification of that issue, however, does not resolve the precise dispute here. Per the government, UMC's substantial attempted commercial exploitation of the claimed invention contravenes the policies of the on-sale bar despite the absence of a complete embodiment and, thus, raises an on-sale bar under section 102(b). For this proposition the government relies on the decision of this court in Barmag. On the other hand, UMC maintains that, as a matter of law, there is no on-sale bar unless the claimed invention had been reduced to practice before the critical date, and urges that we here reject the contrary suggestion in Barmag. Thus, we address first the issue whether reduction to practice of the claimed invention before the critical date is required to invoke the on-sale bar, and conclude, for reasons that follow, that reduction to practice is not always a requirement of the on-sale bar.5 This leads to the issue whether there is an on-sale bar in this case. On the undisputed facts, we hold that the invention of the '513 patent was on sale within the meaning of section 102(b).

IV

19

Whether a reduction to practice is a requirement of the on-sale bar of 35 U.S.C. Sec. 102(b) requires a review of our precedent.6 However, the issue has been directly addressed by this court or its predecessors in only two cases, Barmag and General Electric Co. v. United States, 654 F.2d 55, 60-61, 211 U.S.P.Q. (BNA) 867, 872-73 (Ct.Cl.1981) (en banc), although the issue has surfaced in others. In General Electric Co. v. United States, 654 F.2d at 61-64, 211 USPQ at 873-75, the Court of Claims, one of this court's predecessors, analyzed an on-sale bar issue by focusing on the policies underlying the bar to determine whether application of the bar would further those policies. Those policies were stated to be:

20

First, there is a policy against removing inventions from the public which the public has justifiably come to believe are freely available to all as a consequence of prolonged sales activity. Next, there is a policy favoring prompt and widespread disclosure of new inventions to the public. The inventor is forced to file promptly or risk possible forfeiture of his invention [patent] rights due to prior sales. A third policy is to prevent the inventor from commercially exploiting the exclusivity of his invention substantially beyond the statutorily authorized 17-year period. The on-sale bar forces the inventor to choose between seeking patent protection promptly following sales activity or taking his chances with his competitors without the benefit of patent protection. The fourth and final identifiable policy is to give the inventor a reasonable amount of time following sales activity (set by statute as 1 year) to determine whether a patent is a worthwhile investment. This benefits the public because it tends to minimize the filing of inventions [sic] of only marginal public interest.

21

654 F.2d at 61, 211 U.S.P.Q. (BNA) at 873 (citations omitted). On the facts of that case, the court held that the policies were violated and that there was a reduction to practice before the critical date. 654 F.2d at 62, 211 USPQ at 874. The latter holding obviated the need to agree or disagree with a detailed analysis of the trial judge, who had concluded that reduction to practice was not "indispensable in every case."7

22

In Barmag, the court went out of its way to reserve the question whether a physical embodiment should be a requirement of the on-sale bar in all cases. 731 F.2d at 836-37, 221 USPQ at 565. Without a physical embodiment, as stated above, there can be no reduction to practice.

23

Contrary to the Claims Court's interpretation, Barmag did not suggest that an embodiment might not be required only in instances where there had been actual sales of goods. An offer to sell a later-claimed invention may be sufficient to invoke the bar whether the offer is accepted or rejected. King Instrument Corp. v. Otari Corp., 767 F.2d 853, 860, 226 U.S.P.Q. (BNA) 402, 406 (Fed.Cir.1985), cert. denied, --- U.S. ----, 106 S. Ct. 1197, 89 L. Ed. 2d 312 (1986); In re Caveney, 761 F.2d 671, 675, 226 U.S.P.Q. (BNA) 1, 3 (Fed.Cir.1985); Barmag, 731 F.2d at 836-37, 221 U.S.P.Q. (BNA) at 565; D.L. Auld Co. v. Chroma Graphics Corp., 714 F.2d 1144, 1147, 219 U.S.P.Q. (BNA) 13, 18 (Fed.Cir.), cert. denied, --- U.S. ----, 106 S. Ct. 83, 88 L. Ed. 2d 68 (1985); General Electric, 654 F.2d at 60, 211 USPQ at 872; In re Theis, 610 F.2d 786 at 791, 204 U.S.P.Q. (BNA) at 192; Gould, Inc. v. United States, 579 F.2d 571, 583-84, 198 U.S.P.Q. (BNA) 156, 167 (Ct.Cl.1978).

24

In Western Marine Elecs., Inc. v. Furuno Elec. Co., 764 F.2d 840, 844, 226 U.S.P.Q. (BNA) 334, 337 (Fed.Cir.1985), the argument was made that the patented invention, a gravity stabilized sonar device used on fishing boats, had not been reduced to practice and, thus, had not been on sale before the critical date. Because the device had not been mounted on a boat, it was argued, the device had not been sufficiently tested and, thus, had not been reduced to practice. In holding the invention to be on sale, the court did not directly answer that issue, stating that the "totality of the circumstances" determined whether the device was on sale. It reiterated:

25

Rigid standards are especially unsuited to the on sale provision where the policies underlying the bar, in effect, define it. See TP Laboratories, Inc. v. Professional Positioners, Inc., 724 F.2d 965, 973, 220 U.S.P.Q. (BNA) 577, 583 (Fed.Cir.1984) [cert. denied, 469 U.S. 826, 105 S. Ct. 108, 83 L. Ed. 2d 51 (1985) ] (public use).

26

As a result, this court has been careful to avoid erecting rigid standards for section 102(b).... While approving of the Timely Products criticism of the "on hand" doctrine because the doctrine often produces results contrary to the basic policies underlying the on sale bar, this court [in Barmag ] nevertheless declined to adopt the Timely Products test for all cases.

27

Accord J.A. LaPorte Inc. v. Norfolk Dredging Co., 787 F.2d 1577, 1580 n. 4, 229 U.S.P.Q. (BNA) 435, 437 n. 4 (Fed.Cir.1986), cert. denied, --- U.S. ----, 107 S. Ct. 274, 93 L. Ed. 2d 250 (1986); King Instrument, 767 F.2d 853, 226 U.S.P.Q. (BNA) 402; In re Caveney, 761 F.2d 671, 226 U.S.P.Q. (BNA) 1.

28

In a number of decisions the factual findings leading to the conclusion that there was no on-sale bar appear to be based on the assumption that reduction to practice is required, even though "reduction to practice" is not mentioned in the decision. In a footnote in In re Dybel, 524 F.2d 1393, 187 U.S.P.Q. (BNA) 593 (CCPA 1975), that court stated, "Moreover, 'the invention' was not in existence before it was actually installed on the Ford press since the claims required the press and electronic circuit as well as the transducer." 524 F.2d at 1401 n. 8, 187 U.S.P.Q. (BNA) at 598 n. 8 (citation omitted).

29

In Shatterproof Glass Corp. v. Libbey-Owens Ford Co., 758 F.2d 613, 622-23, 225 U.S.P.Q. (BNA) 634, 638-40 (Fed.Cir.), cert. dismissed, --- U.S. ----, 106 S. Ct. 340, 88 L. Ed. 2d 326 (1985), this court approved a jury instruction that "the section 102 bar applies to 'a completed invention that has been shown to be commercially useful for the purpose intended' " on the ground that "[t]he jury instruction focused attention on the factual question critical to this case, that is, whether the offers of sale involved 'functional machines and processes.' " This court concluded that the on-sale bar was not satisfied, because "a reasonable jury could have found that the apparatus and method of the claims were not functional" by the critical date. Id. As in Dybel, the Shatterproof Glass court never specifically mentioned "reduction to practice."

30

In Great Northern Corp. v. Davis Core & Pad Co., 782 F.2d 159, 164-65, 228 U.S.P.Q. (BNA) 356, 358 (Fed.Cir.1986), this court employed the following analysis:

31

The district court concluded, correctly we hold, that the invention was not reduced to practice until after February 28, 1977, and, therefore, the testing prior to that date did not constitute a Sec. 102(b) bar. The '732 support was not reduced to practice until it was sufficiently tested to demonstrate that it would work for its intended purpose, and that did not occur, in our view, until a location for the recesses, as defined in the claims, was determined that eliminated the cracking problem.

32

782 F.2d at 165, 228 U.S.P.Q. (BNA) at 358 (citations omitted).

33

A full reading of the Dybel, Shatterproof Glass, and Great Northern decisions makes it apparent that the parties did not raise and the court did not squarely address the issue of whether reduction to practice is an indispensable requirement of the on-sale bar. In General Electric and Barmag, consideration of the issue was dicta, however well considered. In Western Marine, the court did not explicitly hold that there was or was not a reduction to practice of the claimed invention. It, therefore, cannot be said that this court has taken a definitive position either way on the issue we address here. Cf. NLRB v. Boeing Co., 412 U.S. 67, 72, 93 S. Ct. 1952, 1955, 36 L. Ed. 2d 752 (1973) (premise assumed in earlier cases is rejected when court was, at last, "squarely presented with the issue"); Lear, Inc. v. Adkins, 395 U.S. 653, 663, 89 S. Ct. 1902, 1907, 23 L. Ed. 2d 610, 162 U.S.P.Q. (BNA) 1, 5 (1969) (Court receded from earlier endorsements of "licensee estoppel" as not "considered").

34

The case law of other courts regarding the on-sale bar is not uniform. Some courts have rejected any rigid rules for the operation of the statutory bar, focusing, as much of our precedent does, on the policies of the statute. Chief Judge Wright's comments in Philco Corp. v. Admiral Corp., 199 F. Supp. 797, 815, 131 U.S.P.Q. (BNA) 413, 428-29 (D.Del.1961), are as apt today as when made in 1961:

35

The cases dealing with Sec. 102(b) of the Patent Act are in a state of confusion resulting in part from an attempt to establish hard and fast rules of law based upon overly refined legal distinctions. The area sought to be governed by these rules, however, encompasses an infinite variety of factual situations which, when viewed in terms of the policies underlying Sec. 102(b), present an infinite variety of legal problems wholly unsuited to mechanically-applied, technical rules.

36

The regional circuits that have considered the question have given lip service to a requirement of reduction to practice as part of the on-sale bar.8 However, when faced with a specific factual situation which appeared to fall within the intent of the statutory bar but did not technically satisfy the requirements for reduction to practice, these courts have stepped back from a rigid application of that requirement. In such cases, in an attempt to shoehorn the reduction to practice concept into the on-sale bar analysis, the courts looked to see whether the invention was "sufficiently" reduced to practice for purposes of the bar. See, e.g., Dart Indus., Inc. v. E.I. DuPont DeNemours & Co., 489 F.2d 1359, 1365, 179 U.S.P.Q. (BNA) 392, 396 (7th Cir.1973). In this case, the government appears to urge such a position.

37

Adoption of a "sufficiently" reduced-to-practice requirement is in fact an abandonment of reduction to practice as that term is used in other contexts. This court observed in Barmag, 731 F.2d at 838 n. 6, 221 U.S.P.Q. (BNA) at 567 n. 6, that our case law does not support a variegated definition of reduction to practice. At this point, we point out that "reduction to practice" is a term of art which developed in connection with interference practice to determine priority of invention between rival claimants. See note 6, supra. In that context Judge Rich has said: "There are no degrees of reduction to practice; either one has or has not occurred." Wolter v. Belicka, 409 F.2d 255, 262, 161 U.S.P.Q. (BNA) 335, 340 (CCPA 1969) (Rich, J., dissenting). It can only cause confusion in interference law, with its special technical considerations, and in operation of the on-sale bar, which is guided by entirely different policies, to adopt modifiers in connection with "reduction to practice," whatever the context.

38

Moreover, since reduction to practice is a term of art under this court's precedent, any specific ruling in one context on whether there is or is not a "reduction to practice" necessarily carries over into the other. For example, a holding here, like the trial court's, that there can be a reduction to practice without an embodiment containing all elements of the claim would have a major unintended impact on interference law. Conversely, by invoking reduction to practice as developed in interference law, an inventor might be able to escape the on-sale bar simply through deft claim draftsmanship.9

39

Finally, a major flaw in reduction to practice as a per se requirement of the on-sale bar in all cases is disclosed by a close analysis of Timely Products, the leading case which purports to adopt that requirement. A significant development with respect to the scope of section 102(b) occurred in a series of decisions beginning with those of another of our predecessors, the Court of Customs and Patent Appeals, when it recognized the operation of the bar in conjunction with the obviousness determination under section 103. In In re Foster, 343 F.2d at 988, 145 USPQ at 173, that court held:

40

[S]ince the purpose of the statute has always been to require filing of the application within the prescribed period after the time the public came into possession of the invention, we cannot see that it makes any difference how it came into such possession, whether by a public use, a sale, a single patent or publication, or by combinations of one or more of the foregoing. In considering this principle, we assume, of course, that by these means the invention has become obvious o that segment of the "public" having ordinary skill in the art. Once this has happened, the purpose of the law is to give the inventor only a year within which to file and this would seem to be liberal treatment.

41

Accord Argus Chem. v. Fibre Glass-Evercoat, 759 F.2d 10, 14, 225 U.S.P.Q. (BNA) 1100, 1103 (Fed.Cir.1985); In re Kaslow, 707 F.2d 1366, 1374, 217 U.S.P.Q. (BNA) 1089, 1095 (Fed.Cir.1983); In re Corcoran, 640 F.2d at 133, 208 USPQ at 869.

42

Implicit in the operation of a sections 102(b)/103 bar is the absence of reduction to practice of the claimed invention as a requirement for the bar to operate. The invention, i.e., as claimed with all elements, is not the subject of the sale. If it were, section 103 would not be involved. With respect to non-claimed subject matter of the sale in a sections 102(b)/103 situation, it is meaningless to speak of "reduction to practice" of what was sold. "Reduction to practice" relates only to the precise invention expressed in a claim. Thus, the second requirement of Timely Products, reduction to practice of the claimed invention, is inherently inconsistent with the first requirement under which the bar is applicable if the claimed invention is merely "obvious in view of the thing offered for sale."

43

In view of all of the above considerations, we conclude that reduction to practice of the claimed invention has not been and should not be made an absolute requirement of the on-sale bar.

44

We hasten to add, however, that we do not intend to sanction attacks on patents on the ground that the inventor or another offered for sale, before the critical date, the mere concept of the invention. Nor should inventors be forced to rush into the Patent and Trademark Office prematurely. On the other hand, we reject UMC's position that as a matter of law no on-sale bar is possible unless the claimed invention has been reduced to practice in the interference sense.

45

We do not reject "reduction to practice" as an important analytical tool in an on-sale analysis. A holding that there has or has not been a reduction to practice of the claimed invention before the critical date may well determine whether the claimed invention was in fact the subject of the sale or offer to sell or whether a sale was primarily for an experimental purpose. A holding that there is a reduction to practice of the claimed invention "may, of course, lighten the burden of the party asserting the bar." General Electric, 206 U.S.P.Q. (BNA) at 271. Thus, we simply say here that the on-sale bar does not necessarily turn on whether there was or was not a reduction to practice of the claimed invention. All of the circumstances surrounding the sale or offer to sell, including the stage of development of the invention and the nature of the invention, must be considered and weighed against the policies underlying section 102(b). See In re Brigance, 792 F.2d 1103, 1107-08, 229 U.S.P.Q. (BNA) 988, 991 (Fed.Cir.1986); Western Marine, 764 F.2d at 845, 226 USPQ at 337.

46

The above conclusion does not lend itself to formulation into a set of precise requirements such as that attempted by the Timely Products court. However, we point out certain critical considerations in the on-sale determination and the respective burdens of proof which have already been established in our precedent. Thus, without question, the challenger has the burden of proving that there was a definite sale or offer to sell more than one year before the application for the subject patent, and that the subject matter of the sale or offer to sell fully anticipated the claimed invention or would have rendered the claimed invention obvious by its addition to the prior art. Cf. D.L. Auld, 714 F.2d at 1150, 219 USPQ at 17 (102(b) only). If these facts are established, the patent owner is called upon to come forward with an explanation of the circumstances surrounding what would otherwise appear to be commercialization outside the grace period. See Smith & Griggs Mfg. Co. v. Sprague, 123 U.S. 249, 8 S. Ct. 122, 31 L. Ed. 141 (1887); D.L. Auld, 714 F.2d at 1150, 219 USPQ at 17; In re Dybel, 524 F.2d at 1400, 187 USPQ at 598, and cases cited therein. The possibilities of such circumstances cannot possibly be enumerated. If the inventor had merely a conception or was working towards development of that conception, it can be said there is not yet any "invention" which could be placed on sale. A sale made because the purchaser was participating in experimental testing creates no on-sale bar. See, e.g., Great Northern, 782 F.2d at 165, 228 U.S.P.Q. (BNA) at 358.

V

47

The issue of whether an invention is on sale is a question of law. Barmag, 731 F.2d at 836-37, 221 U.S.P.Q. (BNA) at 565-66. Because the Claims Court's factual findings are not disputed, and the issue may be resolved by application of the proper rule of law to those findings, we need not remand. Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709, 106 S. Ct. 1527, 1530, 89 L. Ed. 2d 739 (1986); Panduit Corp. v. Dennison Mfg. Co., 810 F.2d 1561, 1565, 1 U.S.P.Q. 2d (BNA) 1593, 1595 (Fed.Cir.1987).

48

UMC made a definite offer to sell its later patented UMC-B accelerometer to the Navy more than one year prior to the date of the application for the patent in suit. In its bid, UMC specified a price of $404.00 for each sensor component of the ACA and $271.00 for the compatible recorder component. The total contract price was in excess of $1.6 million. This written offer which revealed use of the analog transducer in the ACA was supplied on July 27, 1967. UMC admits that the offer it made was for profit, not to conduct experiments.

49

UMC's activities evidence, at least prima facie, an attempt to commercialize the invention of the '513 patent by bidding on a large government contract more than one year prior to the filing of the underlying application and thereby to expand the grace period in contravention of the policies underlying the statute. See Gould Inc. v. United States, 579 F.2d 571, 583, 198 U.S.P.Q. (BNA) 156, 167 (Ct.Cl.1978).

50

Countering the prima facie case, UMC offers only the purely technical objection that no complete embodiment of the invention existed at the time of the sale. In this case, that circumstance is unavailing when we look at the realities of the development of this invention. While UMC asserts that its improved ACA required further "development," as evidenced by its seeking a waiver of the liquidated damages provision in the RFP, that fact might weigh in UMC's favor if UMC had sought by convincing evidence to prove that the primary purpose of the sale was for experimental work. However, the contract was not a research and development contract, and UMC admits that the offer it made was for profit, not to conduct experimental work.

51

We do not attempt here to formulate a standard for determining when something less than a complete embodiment of the invention will suffice under the on-sale bar. However, the development of the subject invention was far beyond a mere conception. Much of the invention was embodied in tangible form. The prior art devices embodied each element of the claimed invention, save one, and that portion was available and had been sufficiently tested to demonstrate to the satisfaction of the inventor that the invention as ultimately claimed would work for its intended purpose. Thus, we conclude from the unchallenged facts with respect to the commercial activities of UMC, coupled with the extent to which the invention was developed, the substantial embodiment of the invention, the testing which was sufficient to satisfy the inventor that his later claimed invention would work, and the nature of the inventor's contribution to the art, that the claimed invention was on sale within the meaning of section 102(b).

52

Accordingly, we hold all claims of the '513 patent invalid. That issue being determinative of the case, we vacate the remainder of the Claims Court opinion.10

53

AFFIRMED ON DIFFERENT GROUNDS.

54

VACATED-IN-PART.

55

EDWARD S. SMITH, Circuit Judge, dissenting.

56

This panel majority opinion ignores the issues raised in these cross-appeals, and which were decided in the Claims Court, in order to frame its own question whether a reduction to practice should be required for application of the on-sale bar provided in section 102(b). It then proceeds to answer its own question in the negative. The trial judge and all parties herein had proceeded, as have countless parties and judges before them, on the premise that reduction to practice is so required. The Claims Court held that under such precedent law of this circuit, there was a reduction to practice, but that for other reasons the on-sale bar did not apply and the '513 patent was not invalid under section 102(b). The Claims Court also held that the '513 patent was not invalid for obviousness under section 103. Finally, the Claims Court held that the charge of infringement would not prevail because the Government did not make use of the device covered by appellant's '513 patent.

57

The panel majority does not even reach the issues of infringement and obviousness, presented at length by the parties. Having strained the issues that are on appeal into a form of issue neither raised nor briefed by the parties, the panel majority then interprets prior cases in this court and its predecessor courts as only "appearing" to assume the requirement of reduction to practice but not having "specifically," or "explicitly," or "squarely" addressed the question the panel majority itself raised sua sponte. Voila! Two judges of the court are now free to disembody a fundamental principle of patent law which a respectable body of precedent holds to exist.

58

Why must we do this in this way? Is our ruling in South Corporation v. United States1 mere window-dressing? Is a representation that the case law of other courts is not uniform a valid reason to support our squeezing around South Corporation, an opinion that does not concern "other" courts?

59

In light of the panel majority opinion, the questions being decided today are in reality whether a 3-judge panel is bound by our own precedent, and whether the precedent jurisprudence of this court requires a reduction to practice by the critical date. The answer to both questions is "yes."

STARE DECISIS

60

The objective of the South Corporation holding is disserved by strained and unnecessary interpretations in lieu of in banc action.

61

Since South Corporation was decided, that case has frequently received its 1-line citation and 1-sentence description as having adopted the jurisprudence of our predecessor courts, which jurisprudence can not be overruled except by the court sitting in banc. We may not yet have arrived where it should be necessary to repeat in full the opinion of South Corporation in a footnote or appendix so that its significance will be conveniently remembered, but it is appropriate at this point to recall that decision more fully in order to emphasize its real force and effect.

62

On the merits, South Corporation involved in part the imposition of a duty on foreign repairs costing $98.40 to the motor vessel "North Seal." A minimum of perspicacity is required to observe that the principle of stare decisis in this court is in much greater danger of slipping beneath the waters as a result of this panel majority opinion than was the good ship North Seal. Once before I protested that our precedent, even if ready for change, was being allowed to slip silently into the backwaters of the law simply by ignoring it.2 It is not important whether the present disposition is in fact only the second time that stare decisis is being allowed to go down, for it is clear that if it does, the importance of South Corporation will be submerged permanently without the necessity of waiting for the traditional third time under.

63

Procedurally, South Corporation deals with the importance which attaches to stability of the law, with which everyone, including the majority, agrees. That opinion contains language which all of us should recall from time to time. Especially the words of the Supreme Court, quoted therein, should be remembered:3

64

Very weighty considerations underlie the principle that courts should not lightly overrule past decisions. Among these are the desirability that the law furnish a clear guide for the conduct of individuals, to enable them to plan their affairs with assurance against untoward surprise; the importance of furthering fair and expeditious adjudication by eliminating the need to relitigate every relevant proposition in every case; and the necessity of maintaining public faith in the judiciary as a source of impersonal and reasoned judgments.

65

Our past decisions consistently have held, as a threshold requirement for the section 102(b) on-sale bar, that a device must be in existence and shown to work for its intended purpose (the classical definition of reduction to practice) before the on-sale bar can apply.4 The panel majority does not seriously dispute that this has been the law of the circuit, the law of our predecessor courts, and the law of the land, for 150 years. Today, the panel majority ignores the significance of decades of discussion of "reduction to practice" as if it does not exist, and eliminates the reduction to practice requirement for the on-sale bar.

66

Of course the 2-judge majority does not overrule this court's precedent. At best it can muddy the water for similar fact situations.

SECTION 102(b) AND THE '513 PATENT

67

There is clear precedent that the on-sale bar requires, 1 year prior to the filing of a patent application: (1) the complete invention claimed must be embodied in or obvious in view of the thing offered for sale; (2) the thing offered for sale must be reduced to practice; and (3) there must be a definite sale or offer for sale, primarily for profit rather than for experimental purposes.5

68

The panel majority correctly holds that the thing offered for sale by UMC was not reduced to practice by the critical date. That should be the end of the inquiry. The law is clear, and the parties agree, that the on-sale bar cannot be invoked without a reduction to practice. The panel majority, however, without being asked by the parties, asks whether reduction to practice "should" be required for the on-sale bar, and concludes that there should be no such requirement, notwithstanding the binding precedent to the contrary.

HISTORY OF SECTION 102(b)

69

Section 102(b)6 is in the nature of a statute of limitations, enacted to implement the policy that those who seek the benefits of the patent grant must act promptly after the invention has been placed in possession of the public. Failure to act within 1 year forfeits the opportunity to obtain a patent.

70

As in statutes of limitation generally, the start of a statutory bar must be reasonably clear at the time it occurs. Although statutes of limitation are inflexible, courts have hesitated to include in their measure time during when the claimant did not know, or have reason to know, that the cause was accruing.7 The long history of section 102(b), which effects the irretrievable loss of a valuable right, shows judicial and congressional recognition of this need for reasonable certainty.8

71

It was never the purpose of section 102(b) to force premature entry into the patent system upon inventors who are still developing their inventions. The public interest is not served by a system that wastes the resources of inventors:9

72

an inventor may wait * * * until he learns whether his invention is of enough value to justify an application for a patent * * * [and] may test it, not only to put it into definitive form, but to see whether his ideas are worth exploiting[,]

73

or by "the waste of Patent Office resources in processing halfbaked inventions."10

74

The variety of situations which have arisen under section 102(b) required early judicial attention, from which evolved the present minimum standard. Courts had early turned to the interference concept of reduction to practice11 as a threshold condition in determinations of public use or sale. Courts drew a pragmatic line whereby an invention that was still merely a conception or idea would not be barred by section 102(b) before the invention had been "made" in the patent sense.

75

Reduction to practice was thus recognized as a minimum legal standard:12

76

The concept that an invention must be operable and reduced to practice before it can be deemed "on sale" * * * is rooted in scientific reality and simple common sense * * *.

77

This requirement for an operable invention is in tune with the purpose of the patent system to encourage and patent useful inventions, not bare ideas.

78

Even after an invention was reduced to practice in the interference sense, courts recognized that the invention still may not have reached the stage at which a section 102(b) bar could fairly attach: "The work of the inventor must be finished, physically as well as mentally. Nothing must be left for the inventive genius of the public * * *."13 The invention must be placed "into the hands of the public in a condition for immediate use, requiring no further speculation or experiment * * * for the accomplishment of its intended ends."14

79

Constant throughout this history is the minimum requirement that a device be shown to work for its intended purpose before the bar starts to run. All of this precedent describes reduction to practice as a minimum requirement, not as a superfluous one. Any change should be well considered. Such change cannot be effected by treating the requirement as if it has never existed.

SECTIONS 102(b)/103

80

I agree with the panel majority that, for purposes of sections 102(b)/103, it is not required that the claimed invention must be reduced to practice and offered for sale. It is sufficient that the claimed invention "must have been embodied in or obvious in view of the thing offered for sale."15 (Emphasis supplied.) "Complete readability of the claim on the thing offered is not required because whatever is published (or on sale) more than one year prior to the filing of a patent application becomes part of the prior art over which the claim must be patentable."16 In applying sections 102(b)/103, it is the "thing offered" which must have been reduced to practice, that is, one of the "things" must have been completed or built and shown to work, prior to the critical date.17

81

In In re Corcoran,18 the CCPA had no difficulty in applying the sections 102(b)/103 bar to the claimed invention of a pre-slit window shade material with tabs and mounted on a roller. The thing offered for sale was only the pre-slit window shade material, without the tabs or roller. Thus, the patent claims did not read on the thing offered for sale. The offer was accompanied by actual samples of the material, which the CCPA held to be in "commercially marketable" form, i.e., completed and reduced to practice. The CCPA held that the material placed on sale must be treated as section 102(b) prior art which would have made the claimed invention obvious under section 103.

82

In In re Foster,19 involving a printed publication in "Industrial and Engineering Chemistry," the CCPA applied the published invention as a section 102(b) prior art reference which would have made the claimed invention obvious under section 103. The CCPA held that the prior art invention had been completed, i.e., reduced to practice, before the date of the disqualifying publication (as attested by a Rule 131 affidavit, and as asserted in the publication itself).20

83

The difficulty postulated by the panel majority, that sections 102(b)/103 could not be applied if the thing offered must be reduced to practice, fails to materialize in real life. The first inquiry is whether the thing offered has been reduced to practice by the critical date and, thus, become prior art under section 102(b). Reduction to practice has occurred if one of the "things" offered has ever been completed or built and shown to work. Only then is it necessary to compare the claims to the prior art for determination of obviousness under section 103.21

84

In the present case, the Claims Court applied a prototype as prior art against UMC's claimed invention, but held that the claimed invention would not have been obvious in view of the prototype. Similarly, if the thing offered on July 27 had been reduced to practice, the thing offered would have been available as prior art against UMC's claimed invention under sections 102(b)/103. However, the thing offered was not reduced to practice by the critical date, and it did not become part of the prior art under sections 102(b)/103.

85

BINDING PRECEDENT: NO REDUCTION TO PRACTICE; ON-SALE BAR REJECTED

86

I must respectfully differ with the panel majority in the interpretation of several cited cases in our prior jurisprudence, in which the requirement of a reduction to practice was a critical element in the decision to apply or not apply the on-sale bar.

87

In In re Dybel,22 the CCPA held that an on-sale bar could not be sustained because the thing offered had not been reduced to practice prior to the critical date. The CCPA reasoned that an "invention" does not exist until it has been reduced to practice, and an invention cannot be said to be "on sale" until it has come into existence:23

88

The board relied on the executory contract of sale, which had been entered into prior to the critical date. However, for an invention of the type involved here to be "on sale," it must be complete at least to such an extent that the purchaser knows how it will perform. The record fails to show that the invention was complete or that either appellant or Ford knew how the invention would perform at the time it was installed.⁸

89

8. Moreover, "the invention" was not in existence before it was actually installed on the Ford press since the claims required the press and electronic circuit as well as the transducer. [Citation omitted.]

90

In Shatterproof Glass Corp. v. Libbey-Owens Ford Co.,24 the Federal Circuit held that a "bare offer to sell" did not create an on-sale bar, because the thing offered had not been reduced to practice prior to the critical date. The Federal Circuit approved a jury instruction that "the section 102 bar applies to 'a completed invention that has been shown to be commercially useful for the purpose intended.' " "The jury instruction focused attention on the factual question critical to this case, that is, whether the offers of sale involved 'functional machines and processes.' " The Federal Circuit concluded that the on-sale bar was not satisfied, because "a reasonable jury could have found that the apparatus and method of the claims were not functional" by the critical date.25

91

In Great Northern Corp. v. Davis Core & Pad Co.,26 the Federal Circuit held there was no "on sale" bar because the invention was still being tested and had not been reduced to practice prior to the critical date. The Federal Circuit rejected the defendant-appellant's contention that actual transfers of the foam supports to a third party "without restriction and with intent to sell" created an on-sale bar under section 102(b). The lack of a reduction to practice was determinative: "The district court concluded, correctly we hold, that the invention was not reduced to practice until after February 28, 1977, and, therefore, the testing prior to that date did not constitute a Sec. 102(b) bar."

92

BINDING PRECEDENT: REDUCTION TO PRACTICE; ON-SALE BAR APPLIED

93

In In re Theis,27 the CCPA required (and found) a reduction to practice before applying a section 102(b) on-sale bar:

94

It suffices that the claimed invention, reduced to practice, was placed on sale, i.e., offered to potential customers, prior to the critical date. * * * Even if no delivery is made prior to the critical date, the existence of a sales contract prior to that date has been held to constitute an "on sale" status for the invention if it has been reduced "to a reality." * * * [Emphasis supplied; citations omitted.]

95

The CCPA rejected the applicant's contention that the thing offered for sale was "inoperative," affirming the board's finding that the claimed invention had been reduced to practice prior to the critical date.

96

In In re Caveney,28 the Federal Circuit held that "[a]n offer to sell a completed invention is sufficient to support a rejection under 35 U.S.C. Sec. 102(b)." (Emphasis supplied.) In Caveney, the invalidating offer for sale was accompanied by actual samples, or physical embodiments, of the claimed invention.29

97

In In re Brigance,30 the Federal Circuit affirmed the board's use of an on-sale bar, where the board found "both a complete reduction to practice of the Inventory and an offer to sell the Inventory prior to the critical date." (Emphasis supplied.) On appeal, the applicant vigorously contested the finding of a reduction to practice. The Federal Circuit rejected the applicant's argument because the record showed that "a fully marketable embodiment of the claimed invention existed, and was placed on sale prior to the critical date."31

98

In Western Marine Electronics, Inc. v. Furono Electric Co.,32 the Federal Circuit held the district court correctly applied an on-sale bar, where the district court found, prior to the critical date, an offer to sell a physical embodiment with every element of the claims present, complete, functional, and requiring no further testing:33

99

In answer to Wesmar's reduction to practice argument, we reply that the district court properly looked to the totality of circumstances in determining that the claimed invention, as embodied in a structure meeting all the elements of the claim, was on sale prior to the critical date. The district court found the sonar system "complete " well before the critical date. * * * [Emphasis supplied.]

100

In General Electric Co. v. United States,34 the Court of Claims questioned the reduction to practice requirement for the on-sale bar, but it concluded that resolution of that question was unnecessary because the trial division had found that the invention was reduced to practice, shown to be operable and commercially useful, and offered for sale, all prior to the critical date.

101

In Barmag Barmer Maschinenfabrik AG v. Murata Machinery, Ltd.,35 the Federal Circuit affirmed the use of an on-sale bar where the district court found (1) an existing physical embodiment of the claimed invention (a textile processing machine) was offered for sale prior to the critical date; (2) the claimed invention was "reduced to practice" prior to the critical date; and (3) the machines were on sale for profit, not for experimentation. The Federal Circuit questioned whether a physical embodiment should always be required for a reduction to practice, but concluded that resolution of that question was unnecessary because the district court had found both a physical embodiment and a reduction to practice.

102

In D.L. Auld Co. v. Chroma Graphics Corp.,36 the Federal Circuit held that an on-sale bar applied to a method, where the method was reduced to practice and a product produced by the method was offered for sale prior to the critical date. The appellant argued that reduction to practice had not occurred prior to the critical date. The Federal Circuit reviewed the uncontradicted "crucial testimony that every step of the claimed method was followed in producing emblems offered," which testimony "establish[ed] reduction to practice of the claimed method."37 (Emphasis supplied.)

103

In King Instrument Corp. v. Otari Corp.,38 the Federal Circuit affirmed an on-sale bar under section 102(b) because "the district court properly relied on two factors as evidence of 'on sale': (1) a sale or offer of sale of the invention, and (2) an existing reduction to practice of the invention by the time of the offer." (Emphasis supplied.) The Federal Circuit reviewed in detail the findings of fact supporting the prerequisite that the invention had been reduced to practice prior to the critical date.

104

EFFECT OF ELIMINATING THE REDUCTION TO PRACTICE REQUIREMENT

105

It is the users of the patent system who will suffer the impact of the panel majority decision. The question is not theoretical; it is of great practical importance.

106

Those inventors who have sought financing, or who have contacted potential customers, or who have engaged in other normal business activities before they have made a workable device will not know how the time limit for filing a patent application will be measured or where the line will be drawn between raw idea and proved invention. Inventors do not normally try to patent something they have not yet found workable. The patent law, and particularly section 112, does not favor it. Most inventors do not hire a patent lawyer until they know they have something that works, by which time, according to the panel majority, it may be too late.

107

The panel majority does not seem troubled by the prospect that, in accordance with its view, a concept barred under section 102(b) before the invention has been completed is forever foreclosed from the patent system. In its zeal to prevent such inventors from salvaging even narrow patent rights by "deft claim draftsmanship," the majority removes the minimum standard by which courts have heretofore measured the on-sale bar. It is not clear why this change is being wrought on the community of inventors and on the public without providing some alternative measure of certainty. The "all circumstances" rule evoked by the panel majority means that the critical question in more and more cases can only be answered with finality by a judicial determination in which there is no further appeal.

108

As the technology community will attempt to cope with this decision, it perforce will file more "paper patents": patents on sketchy concepts, before they have been reduced to practice and before the inventor knows whether or how the invention will work, or whether it is worth developing.

109

It is the details of how to make and use an invention that are of value in the patent disclosure. Bare ideas are not patentable. Paper patents, prematurely filed, eviscerate the value of patent disclosures because they necessarily contain untested, speculative details. Paper patents merely add to the clutter of unproved patents in the PTO and in the courts, requiring fees, examinations, lawyers, trials and appeals, all of which disserve both the inventing and the using communities.

110

The UMC patent at issue was described by the Claims Court as a "paper patent." This attribute, which the panel majority will now encourage, was held against the patentee in the Claims Court's finding of noninfringement. This is a "Catch 22" situation.

111

Further, we have held that a "paper patent," if insufficient under section 112, cannot provide priority for a continuation-in-part (CIP) application. Thus, even a paper patent may not save an inventor who recognizes the UMC trap and tries to cope with it by premature filing.

112

The section 102(b) bar was not intended to force inventors into the patent system prematurely. It was intended to force the inventor to file, if at all, within a reasonable time (1 year) after the inventor starts to profit from or discloses or uses the invention. The moving of the time bar does not speed up the invention development process; it merely entraps the inventor.

113

Industry does not commit time and money to the development of a technological idea without some marketplace investigation. Many businesses, especially small ones, seek customers for future delivery, before or while they are working out the technological details. The patent system should accommodate the ways of the real world, not place new pitfalls in the way of normal business pursuits.

CONCLUSION

114

This court, its predecessor courts, and numerous other courts, have held there is not an on-sale bar where the thing offered for sale was not reduced to practice by the critical date. When the courts have applied an on-sale bar, they have required that the thing offered for sale must be reduced to practice by the critical date. The precedent law cannot be read as merely "appearing" to assume the requirement in question. The panel majority does not write on a tabula rasa. The majority ignores binding precedent when it makes the conflicting holding that an on-sale bar may be applied without a reduction to practice.

115

I respectfully submit that precedent alone is sufficient reason to hold that an on-sale bar was not triggered by UMC's July 27, 1967, offer because the thing offered was not reduced to practice 1 year prior to the filing of UMC's patent application. I would affirm the Claims Court's holding that the UMC patent is not invalid under section 102(b) or sections 102(b)/103, and I would decide the other issues presented on appeal.

1

35 U.S.C. Sec. 102 provides in pertinent part:

Sec. 102. Conditions for patentability; novelty and loss of right to patent

A person shall be entitled to a patent unless

....

(b) the invention was ... on sale in this country, more than one year prior to the date of the application for patent in the United States....

2

The patent claims read as follows:

1

An accelerometer for counting the number of times each of a plurality of acceleration maneuvering loadings of predetermined magnitude of an aircraft occur, comprising means adapted to be mounted to an aircraft for sensing acceleration loading thereof, means providing a signal proportional to said accelerations, a plurality of sensing and storing means each responsive to an acceleration signal reaching a different predetermined value for sensing such signal and storing an indication of the value reached, a plurality of acceleration level recording means, timing means for timing a predetermined cycle and furnishing a signal indicative of the end of said timing cycle, means responsive to an acceleration signal reaching a reference level for causing said timing means to initiate a timing cycle, means responsive to said end of cycle signal arranged to pass a signal from each of said sensing and storing means to an associated one of said recording means

2

The accelerometer of claim 1 further including means for filtering high-frequency components from the signal waveform

3

The accelerometer of claim 1 wherein said means for recording comprises a plurality of counters, each counter arranged to be advanced by one of said sensing and storing means, said means for passing comprises a plurality of gates, each of said gates being arranged to apply an advance signal from one of said sensing and storing means to a respective one of said counters

4

The accelerometer of claim 1 further including means for sensing when the signal exceeds said reference value, and disabling said sensing and storing means if the signal falls below said threshold value

3

The parties sometimes use the term "transducer" to identify the entire sensor portion of the ACA and at other times merely a component of that sensor portion. Weaver did not invent the analog transducer used in his sensor. He used the Kistler analog transducer which was both a commercial product and prior art. U.S. Patent No. 3,323,372, issued June 6, 1967, to Kistler

4

While in Corcoran, the Court of Customs and Patent Appeals stated that it agreed with the "principles" of Timely Products, only the first requirement of the Timely Products test was there in issue. Barmag Barmer Maschinenfabrik AG v. Murata Mach., Ltd., 731 F.2d 831, 221 U.S.P.Q. (BNA) 561, 565 (Fed.Cir.1984). The patent owner had offered for sale a component of the claimed invention. The court held that the inventor had lost his right to a patent by reason of the one-year time bar of section 102(b) coupled with the non-obviousness provision of section 103 under the principles of law enunciated in In re Foster, 343 F.2d 980, 145 U.S.P.Q. (BNA) 166 (1965), cert. denied, 383 U.S. 966, 86 S. Ct. 1270, 16 L. Ed. 2d 307, 149 U.S.P.Q. (BNA) 906 (1966). This type of loss of right, which we have termed a sections 102(b)/103 bar, will be discussed more fully infra

5

The public use bar of section 102(b) implicates different considerations and nothing said here should be construed to encompass that part of the statute

6

A panel of this court is bound by prior precedential decisions unless and until overturned in banc. Kimberly Clark Corp. v. Fort Howard Paper Co., 772 F.2d 860, 863, 227 U.S.P.Q. (BNA) 36, 37 (Fed.Cir.1985); Mother's Restaurant, Inc. v. Mama's Pizza, Inc., 723 F.2d 1566, 1573, 221 U.S.P.Q. (BNA) 394, 400 (Fed.Cir.1984). The decisions of the United States Court of Claims and the United States Court of Customs and Patent Appeals have been adopted as precedent. South Corp. v. United States, 690 F.2d 1368, 1371, 215 U.S.P.Q. (BNA) 657, 658 (Fed.Cir.1982)

7

Trial Judge Browne observed:

Reduction to practice is a term of art which arose out of the highly technical patent interference practice wherein the issue to be determined, as between contesting applicants, is which of the contestants was the first inventor, and thus is entitled to receive the patent on the invention. The term is found in Sec. 102(g) of the Patent Act. There, reduction to practice is to be taken into account in "determining priority of invention." Nevertheless, some courts have considered proof of reduction to practice to be relevant in determining whether certain sales activities constitute a bar to patent validity under Sec. 102(b). See, e.g., Timely Products Corp. v. Arron, supra. Even assuming the validity of such decisions, however, it does not necessarily follow that proof of reduction to practice is indispensable in every case involving an "on sale" bar. Availability of such proof may, of course, lighten the burden of the party asserting the bar.

General Elec. Co. v. United States, 206 U.S.P.Q. (BNA) 260, 271 (Ct.Cl.Tr.Div.1979), aff'd on other grounds, 654 F.2d 55, 211 U.S.P.Q. (BNA) 867 (Ct.Cl.1981) (en banc).

8

E.g. Dataq, Inc. v. Tokheim Corp., 736 F.2d 601, 605, 222 U.S.P.Q. (BNA) 677, 680 (10th Cir.1984); Stewart-Warner Corp. v. City of Pontiac, 717 F.2d 269, 273-74, 219 U.S.P.Q. (BNA) 1162, 1166 (6th Cir.1983); Digital Equip. Corp. v. Diamond, 653 F.2d 701, 718, 210 U.S.P.Q. (BNA) 521, 540 (1st Cir.1981); Austin v. Marco Dental Prod., Inc., 560 F.2d 966, 970, 195 U.S.P.Q. (BNA) 529, 532 (9th Cir.), cert. denied, 435 U.S. 918, 98 S. Ct. 1477, 55 L. Ed. 2d 511, 197 U.S.P.Q. (BNA) 448 (1978); CTS Corp. v. Piher Int'l Corp., 527 F.2d 95, 103, 188 U.S.P.Q. (BNA) 419, 425 (7th Cir.), cert. denied, 424 U.S. 978, 96 S. Ct. 1485, 47 L. Ed. 2d 748, 189 U.S.P.Q. (BNA) 384 (1976)

9

Weaver could have claimed "an aircraft with an accelerometer ..." instead of "an accelerometer...." In that instance, the claimed invention would not have been reduced to practice even if Weaver had built and tested the entire ACA. Correge v. Murphy, 705 F.2d at 1329, 217 USPQ at 755 (aircraft vent system not reduced to practice because not tested in aircraft as claimed)

10

Prior to release of this opinion, an active judge called for a vote for in banc consideration. The request failed to receive a favorable majority of the votes of the active judges

1

South Corp. v. United States, 690 F.2d 1368, 215 U.S.P.Q. (BNA) 657, 1 Fed.Cir. (T) 1 (1982)

2

SSIH Equip. S.A. v. U.S. Int'l Trade Comm'n, 718 F.2d 365, 389, 218 U.S.P.Q. (BNA) 678, 697, 1 Fed.Cir. (T) 90, 118 (1983) (Smith, J., dissenting)

3

South Corp., 690 F.2d at 1370, 215 USPQ at 658, 1 Fed.Cir. (T) at 2-3, quoting Moragne v. States Marine Lines, Inc., 398 U.S. 375, 403, 90 S. Ct. 1772, 1789, 26 L. Ed. 2d 339 (1970)

4

One commentator, who has argued vigorously for elimination of the reduction to practice requirement, candidly has admitted "all the cases found have held that an invention can be 'on sale' so as to commence the running of the one-year grace period only after the claimed invention has been actually reduced to practice." (Citing CCPA cases; emphasis supplied.) 1 I. KAYTON, PATENT PRACTICE 4-15 (1985)

5

In re Corcoran, 640 F.2d 1331, 1333-34, 208 U.S.P.Q. (BNA) 867, 870 (CCPA 1981); Barmag Barmer Maschinenfabrik AG v. Murata Mach., Ltd., 731 F.2d 831, 835, 221 U.S.P.Q. (BNA) 561, 564 (Fed.Cir.1984)

6

35 U.S.C. Sec. 102(b) (1982)

7

See, e.g., Urie v. Thompson, 337 U.S. 163, 169, 170, 69 S. Ct. 1018, 1024, 93 L. Ed. 1282 (1949) (although "traditional purposes of statutes of limitations * * * require the assertion of claims within a specified period of time after notice of the invasion of legal rights," action not barred because injury was "unknown and inherently unknowable")

8

See Andrews v. Hovey, 123 U.S. 267, 274, 8 S. Ct. 101, 105, 31 L. Ed. 160 (1887) ("purpose of [section 102(b)'s predecessor] was to fix a period of limitation which should be certain"). See also S.REP. NO. 876, 76th Cong., 1st Sess. 1 (1939), and H.R.REP. NO. 961, 76th Cong., 1st Sess. 1 (1939), discussing the legislation that reduced the period of limitation from 2 years to 1, stating Congress' intent that the invention be "fully completed " before the bar starts to accrue. (Emphasis supplied.) So rigorous and short a period of limitation requires no less

9

Aerovox Corp. v. Polymet Mfg. Corp., 67 F.2d 860, 862, 20 U.S.P.Q. (BNA) 119, 121 (2d Cir.1933) (L. Hand, J.)

10

Gould Inc. v. United States, 579 F.2d 571, 584, 217 Ct. Cl. 167, 198 U.S.P.Q. (BNA) 156, 168 (1978) (Nichols, J., dissenting)

11

The phrase "reduction to practice" arose in connection with priority determinations in interference contests. For discussion of this origin in determining priority between conflicting inventors, see 1 W.C. ROBINSON, THE LAW OF PATENTS 529-60 (1890). In its historical development this phrase was applied to inventions at the first flush of positive results, as inventors attempted to obtain the earliest possible priority date. " 'Reduction to practice' [was] not [originally] a statutory phrase. It [was] a phrase coined by the tribunals to indicate what may be proof of completion of the invention." 1 W.F. ROGERS, THE LAW OF PATENTS 47 (1914). Today its only statutory appearance is in 35 U.S.C. Sec. 102(g), that section directed to priority of inventorship

12

Digital Equip. Corp. v. Diamond, 653 F.2d 701, 718 n. 21, 210 U.S.P.Q. (BNA) 521, 540 n. 21 (1st Cir.1981)

13

1 W.C. ROBINSON, THE LAW OF PATENTS 183 (1890)

14

Id. at 179-80. Compare McDonnell Douglas Corp. v. United States, 208 U.S.P.Q. (BNA) 728, 733 (Ct.Cl.1980) (Computer simulation of missile invention made reduction to practice appear inevitable.), with McDonnell Douglas Corp. v. United States, 670 F.2d 156, 161-63, 229 Ct. Cl. 323, 214 U.S.P.Q. (BNA) 857, 860-62 (1982) (Actual physical testing demonstrated significant flaws in missile design unrevealed by computer simulation. "It is not unimportant that eight of the first nine test flights failed to hit the target." Held: no reduction to practice until physical tests showed capability of actual working.)

15

Corcoran, 640 F.2d at 1333-34, 208 USPQ at 867 (quoting Timely Products Corp. v. Arron, 523 F.2d 288, 302, 187 U.S.P.Q. (BNA) 257, 267-68 (2d Cir.1975))

16

Id

17

Id. In Timely Products, the "thing offered" was a sock which "had been made and successfully tested," i.e., reduced to practice. The patent claims did not read on the sock offered; nevertheless, the court treated the sock as Sec. 102(b) prior art making the claimed invention obvious under Sec. 103

18

Corcoran, 640 F.2d 1331, 208 U.S.P.Q. (BNA) 867

19

In re Foster, 343 F.2d 980, 988, 145 U.S.P.Q. (BNA) 166, 173 (CCPA 1965), cert. denied, 383 U.S. 966, 86 S. Ct. 1270, 16 L. Ed. 2d 307 (1966)

20

Foster, 343 F.2d at 986, 145 USPQ at 171

21

See Graham v. John Deere Co., 383 U.S. 1, 17, 86 S. Ct. 684, 693, 15 L. Ed. 2d 545, 148 U.S.P.Q. (BNA) 459, 467 (1966) (First, "the scope and content of the prior art are to be determined." Then, the "differences between the prior art and the claims at issue are to be ascertained."); Corcoran, 640 F.2d at 1334, 208 USPQ at 870 (The thing offered for sale existed in "commercially marketable" form as shown by actual samples, i.e., reduced to practice, even though the patent claims did not read on the thing offered.)

22

In re Dybel, 524 F.2d 1393, 1400-01, 187 U.S.P.Q. (BNA) 593, 598 (CCPA 1975)

23

Id

24

Shatterproof Glass Corp. v. Libbey-Owens Ford Co., 758 F.2d 613, 622-23, 225 U.S.P.Q. (BNA) 634, 638-40 (Fed.Cir.), cert. dismissed, --- U.S. ----, 106 S. Ct. 340, 88 L. Ed. 2d 326 (1985)

25

Id

26

Great Northern Corp. v. Davis Core & Pad Co., 782 F.2d 159, 164-65, 228 U.S.P.Q. (BNA) 356, 358 (Fed.Cir.1986)

27

In re Theis, 610 F.2d 786, 791-92, 204 U.S.P.Q. (BNA) 188, 192-93 (CCPA 1979)

28

In re Caveney, 761 F.2d 671, 675, 226 U.S.P.Q. (BNA) 1, 3 (Fed.Cir.1985) (citing Barmag wherein it was stated that "an invention is 'complete' if reduced to practice" 731 F.2d at 838, 221 USPQ at 567)

29

Caveney, 761 F.2d at 675, 226 USPQ at 3

30

In re Brigance, 792 F.2d 1103, 1107, 229 U.S.P.Q. (BNA) 988, 990 (Fed.Cir.1986)

31

Id., 792 F.2d at 1109, 229 U.S.P.Q. (BNA) at 992

32

Western Marine Elecs., Inc. v. Furono Elec. Co., 764 F.2d 840, 844-47, 226 U.S.P.Q. (BNA) 334, 337-39 (Fed.Cir.1985)

33

Id., 764 F.2d at 845, 226 U.S.P.Q. (BNA) at 338

34

General Elec. Co. v. United States, 654 F.2d 55, 60-64, 211 U.S.P.Q. (BNA) 867, 871-75 (Ct.Cl.1981)

35

Barmag, 731 F.2d 831, 221 U.S.P.Q. (BNA) 561; see also J.A. LaPorte, Inc. v. Norfolk Dredging Co., 787 F.2d 1577, 229 U.S.P.Q. (BNA) 435 (Fed.Cir.), cert. denied, --- U.S. ----, 107 S. Ct. 274, 93 L. Ed. 2d 250 (1986)

36

D.L. Auld Co. v. Chroma Graphics Corp., 714 F.2d 1144, 219 U.S.P.Q. (BNA) 13 (Fed.Cir.1983)

37

Id., 714 F.2d at 1151, 219 U.S.P.Q. (BNA) at 18

38

King Instrument Corp. v. Otari Corp., 767 F.2d 853, 860, 226 U.S.P.Q. (BNA) 402, 406 (Fed.Cir.1985), cert. denied, --- U.S. ----, 106 S. Ct. 1197, 89 L. Ed. 2d 312 (1986)