Opinion ID: 2929114
Heading Depth: 3
Heading Rank: 1

Heading: Offered for Sale More than One Year Prior

Text: The on-sale bar of 35 U.S.C. § 102 provides that “no person is entitled to patent an ‘invention’ that has been ‘on sale’ more than one year before filing a patent application.” Pfaff, 525 U.S. at 57. Although our court has not delineated the precise boundaries of the “on sale” prong of 35 U.S.C. § 102 after the Supreme Court’s controlling decision in Pfaff, the Federal Circuit has held that “[o]nly an offer which rises to the level of a commercial offer for sale, one which the other party could make into a binding contract by simple acceptance (assuming consideration), constitutes an offer for sale under § 102(b).” Grp. One, Ltd. v. Hallmark Cards, Inc., 254 F.3d 1041, 1048 (Fed. Cir. 2001). We are persuaded by the Federal Circuit’s reasoning, and apply its holding here. We conclude that a reasonable attorney could have determined that the magnetic braking system was not part of Intamin’s contract with Kentucky Kingdom and that the magnetic braking system was not commercially offered for sale more than one year prior to April 12, 1996. See Pfaff, 525 U.S. at 67.
The September 14, 1994 contract between Intamin and Kentucky Kingdom did not constitute a commercial offer to sell the magnetic braking system described in the ‘350 Patent. 12 MAGNETAR TECHS. V. INTAMIN The contract specified that passengers on the Hellevator would be stopped by a “braking zone where they are stopped by a series of permanently closed fin brakes.” Fin brakes are a form of mechanical brakes. The September contract further states elsewhere that “mechanical brakes” would be used.
The October 11, 1994 letter agreement similarly does not support Magnetar’s position that the magnetic braking system was sold by Intamin to Kentucky Kingdom. This document augments the September 14 contract, but it says nothing about the use of magnetic brakes on the Hellevator.
The October 19, 1994 letter from Patrick Spieldiener specified that magnetic brakes could be used on the Hellevator: “Contrary to previous descriptions INTAMIN is planning to have the braking executed by a newly developed magnetic brake unit which does not physically enter in contact with the vehicles.” Nevertheless, a reasonable attorney could have determined that this letter does not constitute “a commercial offer for sale” of magnetic brakes. Pfaff, 525 U.S. at 67. The language in the letter does not require that magnetic brakes be used on the Hellevator. Rather, Patrick Spieldiener states that Intamin is “planning” to use the magnetic brakes, which implies at least some uncertainty. Because the original contract stated that mechanical brakes would be used, the letter suggests only that Intamin would attempt to replace the mechanical brakes with magnetic ones. MAGNETAR TECHS. V. INTAMIN 13 Moreover, an attorney analyzing all the facts could determine that the original contract to provide mechanical brakes had not been modified by the October 19 letter. The parties do not dispute that Kentucky law applies to the contract because Kentucky is the place of performance, and Kentucky Kingdom is located in that state. Under Kentucky law, a modification is subject to the same requirements as the contract itself; namely, offer, acceptance, and consideration. See Energy Home, Div. of S. Energy Homes, Inc. v. Peay, 406 S.W.3d 828, 834 (Ky. 2013). It is unclear whether the contract modification discussed in the letter was complete. “For the terms [of a modification] to be considered complete they must be ‘definite and certain’ and must set forth the ‘promises of performance to be rendered by each party.’” Id. (quoting Kovacs v. Freeman, 957 S.W.2d 251, 254 (Ky. 1997)). Here, the letter does not refer to the original agreement nor does it clearly state that it is meant as an amendment to the original contract. The alleged modification was signed by Patrick Spieldiener, who did not state he was signing on behalf of Intamin Ltd., the party to the original contract. Patrick Spieldiener was also an officer of Intamin AG. In light of these facts, a reasonable attorney could have concluded that the letter did not modify the original contract, and that Intamin had only contracted to sell mechanical brakes to Magnetar.