Opinion ID: 223687
Heading Depth: 2
Heading Rank: 3

Heading: The NSX-80

Text: During trial, Camtek also argued that August Tech's NSX-80 wafer inspection machine was prior art. The jury concluded in its special verdict that the NSX-80 was not on sale prior to the '298 patent's critical date, July 15, 1997. Because the jury found that the NSX-80 was not on sale before the critical date and thus was not § 102(b) prior art, the district court dismissed as moot Camtek's inequitable conduct charges which were based on non-disclosure of the NSX-80. On appeal, Camtek argues that the district court erred as a matter of law in Jury Instruction 23 and that this error caused the jury to wrongly find that the NSX-80 was not prior art. In particular, Camtek argues that Jury Instruction 23 wrongly instructed the jury that: In order to be on `sale' the NSX-80 must also have been ready for patenting at the time the alleged offer for sale is made. J.A. 56. [4] Had the jury considered the NSX-80 in combination with the other prior art, it could have found the claims obvious, Camtek contends. Before determining whether the NSX-80 would have rendered the claims obvious, we first consider whether the device could qualify as 102(b) prior art. Based on Jury Instruction 23, the jury concluded that it does not. We agree with Camtek, however, that this instruction contains an erroneous statement of law. Section 102(b) requires that the invention was ... on sale in this country before the critical date. The Supreme Court has explained that the § 102(b) on-sale bar applies when two conditions are met before the critical date: (1) the product is the subject of a commercial offer for sale, and (2) the invention is ready for patenting. Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 67, 119 S.Ct. 304, 142 L.Ed.2d 261 (1998). Disclosure of inventions is one of the primary objectives behind the limited time patent grant. Aronson v. Quick Point Pencil Co., 440 U.S. 257, 262, 99 S.Ct. 1096, 59 L.Ed.2d 296 (1979) (Among the purposes of the federal patent system is to promote[ ] disclosure of inventions to stimulate further innovation and to permit the public to practice the invention once the patent expires.); Kewanee Oil v. Bicron, 416 U.S. 470, 481, 94 S.Ct. 1879, 40 L.Ed.2d 315 (1974) (When ... the information contained in [a patent] is circulated to the general public and those especially skilled in the trade, such additions to the general store of knowledge are of such importance to the public weal that the Federal Government is willing to pay the high price ... of exclusive use for its disclosure, which disclosure, it is assumed, will stimulate ideas and the eventual development of further significant advances in the art.); see also Rebecca S. Eisenberg & Arti K. Rai, Harnessing and Sharing the Benefits of State-Sponsored Research: Intellectual Property Rights and Data Sharing in California's Stem Cell Initiative, 21 Berkeley Tech. L.J. 1187, 1194-95 (2006). Section 102(b) encourages prompt disclosure of new inventions and in particular limits commercial exploitation of an invention prior to filing for a patent application. Timothy R. Holbrook, The More Things Change, The More They Stay The Same: Implications of Pfaff v. Wells Electronics, Inc. and the Quest for Predictability in the On-Sale Bar, 15 Berkeley Tech. L.J. 933, 938 (2000). The issue presented in this case is whether the invention must be ready for patenting at the time the alleged offer is made. We conclude that it does not. Under Pfaff, the invention must be ready for patenting prior to the critical date. But to conclude that it must also be ready for patenting at the time of the offer would render the second prong of the Pfaff test superfluous. Our decision in Robotic Vision Sys. v. View Eng'g, Inc., 249 F.3d 1307, 1313 (Fed.Cir.2001) expressly holds that completion of the invention prior to the critical date pursuant to an offer to sell would create a bar. As we explained in Robotic Vision, the on-sale bar was triggered by a prior commercial offer for sale and a subsequent enabling disclosure that demonstrated that the invention was ready for patenting prior to the critical date. Id. (emphasis in original). Robotic Vision would have to be overturned for us to hold, as the district court did, that the invention must be ready for patenting at the time of the offer for sale. [5] This we cannot do. While the invention need not be ready for patenting at the time of the offer, consistent with our cases, we hold that there is no offer for sale until such time as the invention is conceived. Pfaff states that the word `invention' in the Patent Act unquestionably refers to the inventor's conception. 525 U.S. at 60, 119 S.Ct. 304. Therefore, we conclude that an invention cannot be offered for sale until its conception date. Hence, if an offer for sale is made and retracted prior to conception, there has been no offer for sale of the invention. In contrast, if an offer for sale is extended and remains open, a subsequent conception will cause it to become an offer for sale of the invention as of the conception date. In such a case, the seller is offering to sell the invention once he has conceived of it. Before that time, he was merely offering to sell an idea for a product. As our court explained in Sparton Corp. v. United States, 399 F.3d 1321, 1324 (Fed.Cir.2005): Under the Claims Court's analysis, the patented single part release plate was the subject of a commercial offer for sale before it was even conceived. Such a result is illogical. Sparton entered a contract with the Navy to sell sonobuoys incorporating dual-depth operating capability into an existing SSQ-53 design. Id. at 1323. There was no dispute that the product which was the subject of the contract was not the patented invention  the specified release plate was a different design than the patented release plate. Id. The fact that the patented release plates were ultimately included in the delivered devices after the critical date does not change the result. Sparton offered and contracted to sell the Navy something entirely different than the patented design. Sparton failed to establish the first prong of the Pfaff test  offer for sale of the invention. In this case, August Tech was approached by ICS to develop a wafer inspection machine that would meet their needs. J.A. 4845. In late 1996, with a concept of what the machine would be, August Tech issued ICS and a second customer, Eastman Kodak, separate purchase orders for a NSX-80 automated wafer inspection machine. J.A. 4982. ICS agreed to pay 15% of the purchase price on order, 20% on design review, 50% upon acceptance at August Tech's factory, and 15% after acceptance at the ICS's site. J.A. 4866, 5029, 14494, 14498. Once it received an initial payment, August Tech began preliminary hardware design for the NSX-80 in the first quarter of 1997. J.A. 4866, 4872. Design and development proceeded at August Tech's facilities, and the first NSX-80 unit was shipped to ICS for onsite acceptance in September of 1997, after the July 15, 1997 critical date. J.A. 4867-77, 14500. August Tech argues that at the time of the contracting August had not conceived of the software or hardware components that would be necessary for the machine. Appellee's Br. 58. While August Tech admits that there was a partial prototype prior to the critical date, the record on appeal is not clear as to whether August Tech had conceived of the NSX-80 prior to the critical date. And we believe this question of fact must be decided by the fact finder in the first instance with a proper statement of the law regarding the first prong of the Pfaff test. As an alternative ground for affirmance of this issue, August Tech argues that even if Jury Instruction 23 is incorrect, the jury could have arrived at its determination that the NSX-80 was not on sale for purposes of § 102(b) based on the experimental use exception. Even if there is substantial evidence to support a determination of experimental use (a decision we do not reach), we could not affirm on this basis in light of the error in the jury instruction. The special verdict form asked the jury: Has Camtek proven by clear and convincing evidence that August's NSX-80 was `on sale' before July 15, 1997? J.A. 18. The jury answered NO. We do not know upon which basis the jury made its decision. The jury may well have rejected August Tech's arguments regarding experimental use, but agreed that the invention was not ready for patenting at the time of the offer. Because we cannot peek inside the black box, we cannot affirm even if there is substantial evidence to support this alternative argument. Even if the NSX-80 was on sale, however, it does not disclose the claimed strobing and therefore does not supply the missing element for purposes of the obviousness analysis. As discussed above, substantial evidence supports the jury's implied factual determination that Chau and Moriya failed to teach the claims' strobing elements. Camtek does not argue that the NSX-80 teaches this feature. Indeed, it is undisputed that NSX-80 units are non-strobing, start-and-stop inspection machines. See Appellant's Br. 16 ([T]he NSX-80 ... was a start-and-stop system for inspecting patterned wafers that did not use strobing. (citing J.A. 4980:14-16)). Thus, we conclude that even if the jury were to decide that the NSX-80 was on sale and therefore prior art, as a matter of law based on the undisputed facts, it would not render the asserted claims obvious in view of the other cited prior art, including Chau, Moriya, and Sandland. Accordingly, we affirm the court's denial of JMOL and a new trial on invalidity for obviousness  there is no need for a retrial on the issue of whether the NSX-80 was on sale. For the same reasons, the NSX-80 is not material prior art. Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1291-92 (Fed.Cir.2011) (requiring but-for materiality or egregious misconduct). Accordingly, we affirm the district court's dismissal of Camtek's inequitable conduct counterclaim.