02/12/14

Solvay S.A. v. Honeywell Int’l Inc.: Pre-AIA 102(g) Analysis for Foreign Conception, Domestic Reduction to Practice


Category: 102 
 
 
 
By: Jesus Hernandez, Blog Editor/Contributor  
 
TitleSolvay S.A. v. Honeywell Int’l Inc., No. 2012-1660 (Fed. Cir. Feb. 12, 2014).
IssueThe question at the heart of this appeal is when an invention conceived by a foreign inventor and reduced to practice in the United States qualifies as prior art under § 102(g)(2) [since, under the facts at hand, Russian inventors conceived an invention outside of the US, and Honewell personnel reduced it to practice in the US.].
Solvay S.A. at *2 (text added).
Holding[T]he process invented by the Russian engineers was made in this country when Honeywell successfully performed the process because the Russians authorized Honeywell personnel to practice the invention and specifically contemplated that they would do so[, therefore, the invention qualifies as prior art].
Id. at *17 (text added).
 

Procedural HistoryPlaintiff Solvay S.A. (“Solvay”) appeals from a judg- ment of the United States District Court for the District of Delaware in favor of defendant Honeywell International (“Honeywell”). The district court held that asserted claim 1 of Solvay’s U.S. Patent No. 6,730,817 (“the ’817 patent”) was invalid under 35 U.S.C. § 102(g)(2) (2006). This was so because engineers working at the Russian Scientific Center for Applied Chemistry (“RSCAC”) first conceived the invention, which was reduced to practice in this country by Honeywell personnel pursuant to the RSCAC’s instructions, and did not abandon, suppress, or conceal it.
Solvay S.A. at *2.
 
 
 
Legal Reasoning (Rader, CJ, Dyk)
Background
Legal Background: 102(g)(2)
Statutory LanguageThat section provides, “[a] person shall be entitled to a patent unless . . . before such person’s inven- tion thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it.” 35 U.S.C. §102(g)(2). Although section 102(g) initially was designed for determining priority of invention in interference proceedings, it is settled that the section has “independent significance as a basis for prior art outside of the interference context.”
Solvay S.A. at *2-*3 (some internal citations omitted).
"Made in this Country"Our prior cases have illuminated what is meant by “made in this country.” […] Although the inventors may reside in a foreign country and conceive the invention abroad, a reduction to practice made outside the United States is beyond the scope of § 102(g)(2) prior art. In other words, § 102(g)(2) allows conception to occur in another country, but in such circumstances requires the work constituting the reduction to practice to be performed in the United States by or on behalf of the inventor.2 However, “there is no requirement that the inventor be the one to reduce the invention to practice so long as the reduction to practice was done on his behalf” in the United States. […]
Id. at *3-*4 (internal citations omitted).
Doctrine of Inurement[N]o inurement can arise from a third party’s “unwarranted and hostile use” of another’s invention, Burgess v. Wetmore, 1879 Dec. Comm’r Pat. 237, 240 (no inurement of reduction to practice built by rival applicant), but an express request or direction is not required. The request may be “implicit[].” […] [I]n Learned v. Thompson, 191 F.2d 409, 410–11, 415 (CCPA 1951), an inventor benefited from work performed by a third party with whom he had no direct communication. The inventor, Learned, disclosed his invention and offered it to the United States government, which then turned the disclosure over to an employee, who reduced the invention to practice. […] The employee even filed his own patent application for improvements he made, although he later abandoned that application in the first inventor’s favor. […] The court treated the reduction to practice as the inventor’s because he had given “authorization to the Government” to use his invention. […] The inventor’s authorization was sufficient even though he never asked the government or its employee to reduce the invention to practice nor supervised the reductive work.
Id. at *14-*15 (internal citations omitted).
Factual Background
In 1994, before Solvay’s priority date, Honeywell and RSCAC personnel entered into a research contract. Pur- suant to that agreement, RSCAC engineers, working in Russia, conducted process development studies for the commercial production of HFC-245fa. In July 1994, the RSCAC sent Honeywell a report documenting the devel- opment of a continuous process capable of producing high yields of HFC-245fa by reacting HCC-240fa4 with hydro- gen fluoride in the presence of a catalyst. Honeywell personnel in the United States used the RSCAC’s report to run the same process in this country in 1995, before the ’817 patent’s October priority date.
Id. at *5.
On appeal, Solvay does not dispute that the Russians were first to conceive the invention recited in claim 1 or that Honeywell reduced it to practice in this country before Solvay’s October 23, 1995, priority date, but challenges (1) the jury’s finding of non- suppression, and (2) the district court’s ruling that the Russians made the invention in this country.
Id. at *8-9.
Analysis: Reduction to Practice in the US, for the benefit of someone who conceived the invention abroad, qualifies an invention as prior art
Inurement Exists
[I]nurement exists if the inventor authorizes another to reduce his invention to practice. Here, the research agreement between the RSCAC and Honeywell confirms that the RSCAC authorized Honeywell to practice its invention in the United States and contemplated that Honeywell would do so. The contract stated that “RSCAC will assist [Honeywell] in the development of manufacturing processes for hydrofluorocarbon com- pounds (HFCs) . . . or hydrofluorocarbon ethers (HFC ethers).” J.A. 3355. Pursuant to that agreement, Honey- well promised to provide yearly compensation, information, and equipment, while the Russians agreed to produce 1,000 kg of HFC-245fa, develop production pro- cesses, and send regular reports to Honeywell detailing their results and progress. While title and rights to inventions would belong to Honeywell, the RSCAC could make, use, and sell those inventions in Russia.
Solvay S.A. at *16.
But Learned shows that the mere filing of a related pa- tent application does not in itself preclude inurement. Here, the Russians applied for and received a patent in Russia, while Honeywell filed a patent application in the United States. The parties did not view these applications as rivals, providing that Honeywell was entitled to exclusive rights to inventions resulting from the collaboration while the Russians were entitled only to sublicenses.
Id. at *17.
Dicta on DissentThe dissent argues that the majority is improperly incorporating concepts from interferences into the in- fringement context, and is allowing “secret prior art” to invalidate a patent. Dissent at 1–3, 8–9. The dissent is incorrect. We have repeatedly held that prior invention by another is a defense to infringement.
Id. at n11 (internal citations omitted).
Conclusion
We affirm the district court’s judgment that the ’817 patent is invalid under § 102(g)(2).
Solvay S.A. at *17-*18.
 
 
 
NEWMAN, Circuit Judge, dissenting. Solvay S.A., Newman Op., at *1.
Expansion of Secret Prior ArtThe court today creates a new class of secret prior art, holding that a privately performed experiment, without publication or public knowledge or use or sale or inclusion in a United States patent application, is invalidating “prior art.” Heretofore the role of secret prior art has been carefully circumscribed. The new general rule here adopted contravenes the policy and the letter of patent law, wherein inventors are charged only with knowledge of what is known or knowable as defined by statute, subject to special limited circumstances.
Solvay S.A., Newman Op., at *1.
Case History Counter to Majority Decision
In the prior appeal of this case, Solvay S.A. v. Honey- well Int’l, Inc., 622 F.3d 1367 (Fed. Cir. 2010) (Solvay I), this court confirmed that the Russian invention was conceived and reduced to practice in Russia, and that Honeywell’s repetition of the process in the United States was not an invention made in the United States. Testing the invention of another is not an act of invention by the tester. This aspect was finally resolved in Solvay I, the court describing Honeywell’s work in the United States as a “derivation” of the Russian invention. The matter was finally decided; it is not open for redetermination. Undaunted, the panel majority now rules that Honeywell’s activity was a “reduction to practice” of the Russian process. The private/secret duplication of the prior invention of another does not convert either that prior invention or its duplication into prior art. The issue here is not priority between the Russian invention and the Solvay invention; the issue is prior art against the world.
Id. at *2.
The court in Solvay I resolved that the Russian invention was not made in the United States. The panel majority now concedes that the Russian process was conceived and reduced to practice in Russia, maj. op. at 7, but states that “§102(g)(2) allows conception to occur in another country, but in such circumstances requires the work constituting the reduction to practice to be performed in the United States by or on behalf of the inventor.” Maj. op. at 3-4. This is incorrect on two fronts. First, this court has never held that an invention conceived in a foreign country is “made in this country” under §102(g)(2). And second, it was not shown that Honeywell’s work in the United States was “by or on behalf of” the Russian inventors. Honeywell never so stated; that is a postulate of the panel majority.
Id. at *5.
 
 

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