Opinion ID: 336567
Heading Depth: 1
Heading Rank: 3

Heading: Plant Patents

Text: 142 With the antitrust issues decided, we return to the problem that initially gave rise to this lawsuit Yoder's allegation that Cal-Florida was infringing its plant patents and its consequent demand for damages. Cal-Florida responded with the predictable assertions of patent invalidity and noninfringement, among others. As discussed above, the only issues before this Court concern the seven patents that the district court ruled valid and infringed as a matter of law: 30 Red Torch, Gold Marble, Morocco, Promenade, Southern Gold, Mountain Snow, and Mountain Sun. 31 After considerable thought, we have decided that the district court correctly ruled that Cal-Florida failed to rebut the statutory presumption of validity with sufficient relevant evidence. Nevertheless, we hold that the court should not have trebled the damages found for the infringement, in light of the difficulty and novelty of the issues presented and the good faith defense of invalidity.
143 Article I, section 8, clause 8 of the Constitution provided that Congress shall have the power: 144 To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries; . . . 145 Although the first legislation implementing this provision for mechanical inventions was passed in 1790 by the first Congress, 1 Stat. 109, see 1 Deller's Walker on Patents § 12, at 93 (2d ed. 1964), Congress did not include plants within the clause's protection until 1930. Act of May 23, 1930, 46 Stat. 376. In its present form, the principal statute allowing patents on plants reads: 146 Whoever invents or discovers and asexually reproduces any distinct and new variety of plant, including cultivated sports, mutants, hybrids, and newly found seedlings, other than an tuberpropagated plant or a plant found in an uncultivated state, may obtain a patent therefor, subject to the conditions and requirements of this title. 147 The provision of this title relating to patents for inventions shall apply to patents for plants, except as otherwise provided. 148 35 U.S.C. § 161. Since section 161 makes the general patent law applicable to plant patents except as otherwise provided, 32 we take as our starting point the general requisites for patentability, and then apply them as well as we can to plants. See Application of LeGrice, Ct.Cust. & Pat.App.1962, 301 F.2d 929. 149 Normally, the three requirements for patentability are novelty, utility, and obviousness. 33 See, e. g., Graham v. John Deere Co., 1966,383 U.S. 1, 86 S.Ct. 684, 686, 15 L.Ed.2d 545; Van Gorp Mfg., Inc. v. Townley Indus. Plastics, Inc., 5 Cir. 1972, 464 F.2d 16, 17; Ramirez v. Perez, 5 Cir. 1972, 457 F.2d 267, 269. For plant patents, the requirement of distinctness replaces that of utility, and the additional requirement of asexual reproduction is introduced. 150 The concept of novelty refers to novelty of conception, rather than novelty of use; no single prior art structure can exist in which all of the elements serve substantially the same function. See Van Gorp Mfg., Inc. v. Townley Indus. Plastics, Inc., supra. In Beckman Instruments, Inc. v. Chemtronics, Inc., 5 Cir., 439 F.2d 1369, 1375, cert. denied, 1970, 400 U.S. 956, 91 S.Ct. 353-54, 27 L.Ed.2d 264, this Court said: 151 (S)ection 102, which pertains to novelty, requires that the patentee be the original inventor of the object claimed in his patent, and also that the invention not have been known or used by others before his discovery of it. . . . Furthermore the prior art is to be considered as covering all uses to which it could have been put. 152 As applied to plants, the Patent Office Board of Appeals held that a new plant had to be one that literally had not existed before, rather than one that had existed in nature but was newly found, such as an exotic plant from a remote part of the earth. 34 Ex parte Foster, 90 U.S.P.Q. 16 (1951). In Application of Greer, Ct.Cust. & Pat.App.1973, 484 F.2d 488, the court indicated that the Board believed that novelty was to be determined by a detailed comparison with other known varieties. 153 The legislative history of the Plant Patent Act is of considerable assistance in defining distinctness. The Senate Report said: 154 (I)n order for the new variety to be distinct it must have characteristics clearly distinguishable from those of existing varieties and it is immaterial whether in the judgment of the Patent Office the new characteristics are inferior or superior to those of existing varieties. Experience has shown the absurdity of many views held as to the value of new varieties at the time of their creation. 155 The characteristics that may distinguish a new variety would include, among others, those of habit; immunity from disease; or soil conditions; color of flower, leaf, fruit or stems; flavor; productivity, including ever-bearing qualities in case of fruits; storage qualities; perfume; form; and ease of asexual reproduction. Within any one of the above or other classes of characteristics the differences which would suffice to make the variety a distinct variety, will necessarily be differences of degree. 156 S.Rep. 315, 71st Cong., 2d Sess. (1930). (Emphasis omitted.) A definition of distinctness as the aggregate of the plant's distinguishing characteristics seems to us a sensible and workable one. 157 The third requirement, nonobviousness, is the hardest to apply to plants, though we are bound to do so to the best of our ability. The traditional three part test for obviousness, as set out in John Deere,supra, inquires as to (1) the scope and content of the prior art, (2) the differences between the prior art and the claims at issue, and (3) the level of ordinary skill in the prior art. 383 U.S. at 17, 86 S.Ct. at 694, 15 L.Ed.2d at 556. Accord, Sakraida v. Ag Pro, Inc., 1976, --- U.S. ----, 96 S.Ct. 1532, 47 L.Ed.2d 784; Dann v. Johnston, 1976, --- U.S. ----, 96 S.Ct. 1393, 47 L.Ed.2d 692. Secondary characteristics such as commercial success, long felt but unsolved needs, and failure of others can be used to illuminate the circumstances surrounding the subject matter sought to be patented. Graham v. John Deere Co., supra, 383 U.S. at 17-18, 86 S.Ct. at 694, 15 L.Ed.2d at 556. 158 The Supreme Court has viewed the obviousness requirement of section 103 as Congress' articulation of the constitutional standard of invention. Dann v. Johnston, supra, --- U.S. at ----, 96 S.Ct. at 1397, 47 L.Ed.2d at 698. See Sakraida v. Ag Pro, Inc., supra. In Dann, the Court commented that 159 (a)s a judicial test, invention i. e. an exercise of the inventive faculty, . . . has long been regarded as an absolute prerequisite to patentability. 160 --- U.S. at ----, 96 S.Ct. at 1397, 47 L.Ed.2d at 697-98 (citation omitted). Accord, Sakraida v. Ag Pro, Inc., supra, --- U.S. at ----, 96 S.Ct. at 1535, 47 L.Ed.2d at 789. An invention is characterized by a degree of skill and ingenuity greater than that possessed by an ordinary mechanic acquainted with the business. Hotchkiss v. Greenwood, 52 U.S. (11 How.) 248, 267, 13 L.Ed. 683, at 691. The obviousness requirement appears to presume that if the gap between the prior art and the claimed improvement is small, then an ordinary mechanic skilled in the art would have been able to create the improvement, thus leading to the conclusion that the improvement was obvious and a patentable invention not present. Section 103 requires the determination of obviousness vel non to be made with reference to the time the invention was made. See Jacobson Bros., Inc. v. United States, Ct.Cl.1975, 512 F.2d 1065, 1068. Obviousness, like the general question of patent validity, is ultimately a question of law, though factual inquiries are often necessary to its resolution. Sakraida v. Ag Pro, Inc., supra; Graham v. John Deere Co., supra. 161 Rephrasing the John Deere tests for the plant world, we might ask about (1) the characteristics of prior plants of the same general type, both patented and nonpatented, and (2) the differences between the prior plants and the claims at issue. We see no meaningful way to apply the third criterion to plants i. e. the level of ordinary skill in the prior art. Criteria one and two are reminiscent of the distinctness requirement already in the Plant Patent Act. Thus, if we are to give obviousness an independent meaning, it must refer to something other than observable characteristics. 162 We think that the most promising approach toward the obviousness requirement for plant patents is reference to the underlying constitutional standard that it codifies namely, invention. 163 The general thrust of the invention requirement is to ensure that minor improvements will not be granted the protection of a seventeen year monopoly by the state. In the case of plants, to develop or discover a new variety that retains the desirable qualities of the parent stock and adds significant improvements, and to preserve the new specimen by asexually reproducing it constitutes no small feat. 164 This Court's case dealing with the patent on the chemical compound commonly known as the drug Darvon, Eli Lilly & Co. v. Generix Drug Sales, Inc., 5 Cir. 1972, 460 F.2d 1096, provides some insight into the problem of how to apply the invention requirement to a new and esoteric subject matter. The court first noted that 165 (a)nalogical reasoning is necessarily restricted in many chemical patent cases because of the necessity for physiological experimentation before any use can be determined. 166 In fact, such lack of predictability of useful result from the making of even the slightest variation in the atomic structure or spatial arrangement of a complex molecule . . . deprives the instant claims of obviousness and anticipation of most of their vitality . . .. 167 460 F.2d at 1101. The court resolved the apparent dilemma by looking to the therapeutic value of the new drug instead of to its chemical composition: 168 (R)eason compels us to agree that novelty, usefulness and non-obviousness inhere in the true discovery that a chemical compound exhibits a new needed medicinal capability, even though it be closely related in structure to a known or patented drug. 169 460 F.2d at 1103. 170 The same kind of shift in focus would lead us to a more productive inquiry for plant patents. If the plant is a source of food, the ultimate question might be its nutritive content or its prolificacy. A medicinal plant might be judged by its increased or changed therapeutic value. Similarly, an ornamental plant would be judged by its increased beauty and desirability in relation to the other plants of its type, its usefulness in the industry, and how much of an improvement it represents over prior ornamental plants, taking all of its characteristics together. 35 171 Before reaching the issues on appeal, we make a final comment about the requirement of asexual reproduction. 36 It has been described as the very essence of the patent. Langrock, Plant Patents Biological Necessities in Infringement Suits, 41 J.Pat.Off.Soc. 787 (1959). Asexual reproduction is literally the only way that a breeder can be sure he has reproduced a plant identical in every respect to the parent. It is quite possible that infringement of a plant patent would occur only if stock obtained from one of the patented plants is used, given the extreme unlikelihood that any other plant could actually infringe. See Cole Nursery Co. v. Youdath Perennial Gardens, Inc., N.D.Ohio 1936, 17 F.Supp. 159, 160; Ex parte Weiss, Bd.App.1967, 159 U.S.P.Q. (dictum); Langrock, supra, at 788-89. If the alleged infringer could somehow prove that he had developed the plant in question independently, then he would not be liable in damages or subject to an injunction for infringement. 37 This example illustrates the extreme extent to which asexual reproduction is the heart of the present plant patent system: the whole key to the invention of a new plant is the discovery of new traits plus the foresight and appreciation to take the step of asexual reproduction. See Nicholson v. Bailey, S.D.Fla.1960, 182 F.Supp. 509; Ex parte Moore, 115 U.S.P.Q. 145 (1957); Dunn v. Ragin v. Carlile, 50 U.S.P.Q. 472 (1941).
172 During the trial, Cal-Florida offered as evidence certain documents showing that growers had found mutations on the Mandalay variety that were the same as the patented variety Glowing Mandalay i. e. evidence that the sport Glowing Mandalay had recurred. Although Glowing Mandalay is no longer in the case, Cal-Florida later proffered similar evidence with respect to Gold Marble, Promenade, and Red Torch, which are three of the patents whose validity is challenged on appeal. Gold Marble, Promenade, and Red Torch are all sport patents, meaning that they first appeared as a sport of another plant, in contrast to seedling patents, which develop from seeds. Of the remaining four challenged patents, two were sport patents and two were seedling patents. Cal-Florida never proffered any sport recurrence evidence as to the other two sport patents, Mountain Sun and Southern Gold, nor did it offer any specific evidence attacking the seedling patents, Morocco and Mountain Snow. Since we find that the district court's ruling on the sport recurrence evidence did not preclude Cal-Florida from introducing other types of evidence to attack the validity of the patents, and since no sport recurrence evidence was introduced as to Mountain Sun and Southern Gold, we find no warrant on appeal to disturb the ruling that Mountain Sun, Southern Gold, Morocco, and Mountain Snow were valid and infringed. Plant patents, like others, enjoy a statutory presumption of validity that was not rebutted as to those four. See 35 U.S.C. § 282; Kim Bros. v. Hagler, 9 Cir. 1960, 276 F.2d 259, 263. 173 At the time the court rejected the sport return evidence for Glowing Mandalay, it made a ruling designed to apply to the rest of the trial with respect to that kind of evidence. That ruling is the focus of Cal-Florida's cross appeal on the plant patent validity point. Because of its importance, we set out the pertinent parts in some detail here: 174 (I)t seems clear that it was the Congressional intent that a person who discovered an asexually reproduced variety of a new and distinct plant was entitled to a patent.It was not contemplated, apparently, that he invent, in the term that is used, or in the significance of that term, as we understand it, traditional concept of inventing a machine . . . 175 In any event, the issue presented here is a rather narrow one and it has some practical overtones. 176 I am frank to confess that I think Mr. Foster's (Yoder's counsel) presentation here . . . is very persuasive. In all probability, this will be, or may be, the ultimate result of this trial. It may not be, after we have listened to the testimony, of course, of Mr. Boone's (Cal-Florida's counsel) other witnesses who are coming in to testify on the genetics of this thing, but on this one narrow limited issue, it would seem that the plaintiffs (Yoder) were entitled to prevail. 177 Therefore, the objection to the introduction of the various letters and documents from . . . the growers and plant propagators around the country, which were forwarded to Yoder Brothers over the years, is sustained. 178 Cal-Florida construes the above-quoted ruling as an all-encompassing holding that the constitutional standard of invention does not apply to plant patents. It further claims that since the ruling was admittedly intended to apply to the entire trial, it was precluded from offering evidence on the issues of newness, distinctness, and obviousness by the court's action. In fact, it never even tried to introduce the expected expert genetics testimony, although it did make a formal offer of more sport return evidence at a later time in the trial. 179 Yoder disputes the breadth of the ruling and its effect on any other evidence Cal-Florida might have offered, and notes that the court's actual ruling on the issues of newness and distinctness did not come until some two weeks later. With regard to the ruling on the admissibility of the evidence, Yoder argues that the documents would not have shown lack of distinctness, since the fact that a sport with particular traits recurs says nothing about what those traits are and how they differ from other plants. Furthermore, Yoder argues that the documents would not have shown obviousness, because if sport recurrence were evidence of obviousness, then almost no mutations would be patentable, and that would be contrary to Congress' intent. 38 180 We do not construe the district court's evidentiary ruling as anything more than that; in our opinion, it simply held that the sport recurrence evidence was not relevant to any of the patent validity issues. We therefore confine our remarks accordingly. 181 The only possible probative value of the sport recurrence evidence would be to show that a sport of that particular size, shape, color, or other trait is predictable from a given variety of parent plant. Thus, we must first determine whether Congress intended predictability to negate the possibility of invention. Next, if Congress considered that factor irrelevant, we must decide if the Constitution is offended by permitting patents on the kinds of sports that recur. 39 182 Both the language of the statute and its legislative history persuade us that Congress did not intend to exclude the kind of mutation that might recur from the Act's protection. Instead, both Senate Report 315, 71st Cong., 2d Sess. (1930), on the original bill, and Senate Report 1937, 83d Cong., 2d Sess. (1954), on the 1954 amendment, speak generally about sports and mutations. The 1954 amendment was added to clarify Congress' intention that seedlings should be patentable, but in the process of describing the bill, the report states: 183 The enactment of this legislation will remove any doubt that the legislative intent of the Congress clearly means that sports, mutants, hybrids, and seedlings, discovered by persons engaged in agriculture or horticulture, should be patentable . . . 184 S.Rep. 1937, supra. 185 Although we are willing to assume for purposes of this argument that some mutations may appear that would have been genetically impossible before i. e. that a fundamental change in the biochemical structure of the chromosome may take place by far the majority of mutations and sports of chrysanthemums are predictable to some extent for those skilled in the field. For example, the testimony at trial indicated that a yellow sport could be expected from a white chrysanthemum. Indeed, part of the skill required of a chrysanthemum breeder is to know what to look for and to take steps immediately to preserve it by asexual reproduction if the desired trait appears. Given that fact, we think that the purpose of the Plant Patent Act would be frustrated by a requirement that only those rare, never-before-seen, if not genetically impossible sports or mutations would be patentable. That purpose was to afford agriculture, so far as practicable, the same opportunity to participate in the benefits of the patent system as has been given industry, and thus assist in placing agriculture on a basis of economic equality with industry. S.Rep. 315, supra. To make it significantly more difficult to obtain a plant patent than another type of patent would frustrate that purpose. 186 We therefore find that Congress did not intend to exclude the kind of sport that recurs frequently from the Plant Patent Act. That being the case, the district court correctly ruled that the evidence proffered by Cal-Florida was irrelevant, as a matter of statutory law. 187 The only way that the Constitution would be offended by permitting patents on recurring sports would be if such leniency indicated that no invention was present. 40 We do not think that sport recurrence would negate invention, however. An infinite number of a certain sized sport could appear on a plant, but until someone recognized its uniqueness and difference and found that the traits could be preserved by asexual reproduction in commercial quantities, no patentable plant would exist. An objective judgment of the value of the sport's new and different characteristics i. e. nutritive value, ornamental value, hardiness, longevity, etc. would not depend in any way on whether a similar sport had appeared in the past, or whether that particular sport was predictable. We therefore find no reason to disturb our approval of the district court's evidentiary ruling based on the constitutional standard of invention. As that standard applies to plant patents, the proffered evidence was irrelevant. 188 Viewing the evidence offered on the patent validity question as a whole, we find that Cal-Florida failed to rebut the statutory presumption of validity as to Gold Marble, Promenade, and Red Torch, as well as the other four discussed above. Thus, the lower court's finding of validity must be affirmed on this record.
189 On cross appeal, Cal-Florida asserts that the absence of flowering plants grown from the cuttings it had admittedly taken from Yoder's patented plants was fatal to Yoder's infringement counts. This is because the patent claim in each instance describes a mature flowering plant, and it is Cal-Florida's position that only another mature flowering plant could directly infringe. Yoder retorts that the Plant Patent Act provides that 190 (i)n the case of a plant patent the grant shall be of the right to exclude others from asexually reproducing the plant or selling or using the plant so reproduced. 191 35 U.S.C. § 163. The district court ruled that the act of asexual reproduction was complete at the time the cutting was taken. Finally, the pretrial stipulations established that Cal-Florida had taken plant material, or cuttings, from Yoder's patented plants. 192 We agree with Yoder that it was not necessary to prove that the cuttings actually matured into flowered plants to show infringement. Under such a rule, it would be virtually impossible for a propagator-distributor directly to infringe a patent, despite the vital role he plays in dissemination of plant material. Furthermore, we think section 163 is plain in its statement that a patentee may exclude others from asexually reproducing, selling or using the plant. The negative inference to be drawn from this is that commission of one of those acts would constitute infringement. We therefore affirm the finding of infringement.
193 Section 284 of Title 35, U.S.Code, provides that the court shall award damages to the claimant upon a finding for him, and further provides that 194 (w)hen the damages are not found by a jury, the court shall assess them. In either event the court may increase the damages up to three times the amount found or assessed. 195 Although a trial court has considerable discretion in assessing damages under this section, Maloney-Crawford Tank Corp. v. Sauder Tank Co., 10 Cir. 1975, 511 F.2d 10, 13, an appellate court can reverse the trebling of damages if an abuse of discretion is shown. White v. Mar-Bel, Inc., 5 Cir. 1975, 509 F.2d 287; Dixie Cup Co. v. Paper Container Mfg. Co., 7 Cir. 1948, 169 F.2d 645. Where the issue of patentability is close and litigated in good faith, the court should be more reluctant to impose punitive damages. See Wahl v. Carrier Mfg. Co., 7 Cir. 1975, 511 F.2d 209; Enterprise Mfg. Co. v. Shakespeare Co., 6 Cir. 1944, 141 F.2d 916. In this case, the jury was instructed that the seven patents now on appeal were valid and infringed. In response to a special interrogatory inquiring about the amount of damages for each patent found valid and infringed by either the court or the jury, the jury entered figures as to those seven, and in addition, as to Deep Conquest. It then found that the infringement was willful as to the seven valid and infringed patents. It left blank, however, the space wherein it was to indicate by what factor the damage figure should be multiplied. The district court then trebled the damage amounts found by the jury, from which action Cal-Florida appeals. 196 Cal-Florida's principal effort to avoid the district court's trebling of the damages rests on a recital of its conduct and on protestations of its good faith both before and after suit was filed. It correctly points out that this case presented difficult issues of first impression on the Plant Patent Act and that it therefore had a good faith belief that the patents were invalid. The parties had extensive negotiations concerning the patents prior to the filing of the suit. Finally, Cal-Florida asserts that it did discontinue handling patented varieties after suit was filed. 197 In light of the above factors, we believe the district court abused its discretion in trebling the damages here. The primary reason that impels us to reverse on this point is the novelty of the issues presented. Cal-Florida has argued its case against the validity of these patents forcefully, and it is no small task to decide how to fit plants into the niches normally used by mechanical, design, or process inventions. The jury's finding that the infringement was willful was advisory only. See White v. Mar-Bel, Inc., supra, 509 F.2d at 292. Although we have affirmed the district court's findings of validity and infringement, we direct that only actual damages should be awarded to Yoder, the successful claimant. 198 The subleties of the chrysanthemum business have given rise to a welter of legal issues in this case, both patent and antitrust. To summarize our holdings on the patent claims briefly, we have agreed with the lower court that evidence of sport recurrence is irrelevant to the patentability of plants, and that insufficient evidence was introduced to rebut the statutory presumption of patent validity. We have thus affirmed the court's holding that the seven plant patents were valid and infringed. Finally, we have held that the novelty and difficulty of the plant patent issues in this case rendered the lower court's trebling of the jury's award an abuse of discretion.