Tyco v Ethicon: Ethicon Prototype Design Changes which were not required by Tyco's Claims Did Not Prohibit Ethicon Prototype from being Prior Art

Category: 102  
By: Abby Lin, Contributor 
CaseTyco Healthcare Group, LP v. Ethicon Endo-Surgery, Inc., No. 2013-1324, -1381 (Fed. Cir. Dec. 4, 2014).
1) "Tyco argues on cross-appeal that because Ethicon made changes to design features of the prototype, such as replacing the single cam with a dual cam mechanism, Ethicon did not establish prior conception. Tyco further asserts that Ethicon failed to show diligence through the date of constructive reduction to practice in October 1997, arguing that there was a gap in weekly records from September 1996 to February 1997."
Tyco, at *9.
2) "Relying on Kimberly-Clark Corp. v. Johnson & Johnson, 745 F.2d 1437 (Fed. Cir. 1984), Tyco asserts that the Ethicon Prototype cannot serve as prior art under § 102(g) because there was no reduction to practice before Tyco’s priority date. Tyco contends that the absence of prior reduction to practice is dispositive of the issue, but also argues that based on In re Clemens, 622 F.2d 1029, 1039- 40 (CCPA 1980), § 102(g) prior art cannot be prior art under § 103 if it was “unknown to both the applicant and the art at the time the applicant makes his invention,” because doing so would “establish a standard for patentability in which an applicant’s contribution would be measured against secret prior art.”"
Id. at *11.
1) "Having established prior conception and diligent reduction to practice, the district court correctly found that the Ethicon Prototype anticipates those twenty-six claims under § 102(g)."
Tyco, at *10-11.
2) "The district court erred when it inconsistently applied § 102(g) to the Ethicon Prototype by not requiring prior reduction to practice for anticipation purposes but requiring it for the obviousness analysis. The clear language of § 102(g) does not require prior reduction to practice so long as the inventor can prove that he or she conceived of the invention first and was diligent in later reducing it to practice.....We therefore hold that neither § 102(g) nor § 103 make prior reduction to practice the only avenue through which § 102(g) prior art can constitute prior art under § 103. "
Id. at *11.
Procedural History
Contributor Note: Relevant procedural history has been summarized below. See the opinion on pages 2-8 for this information.
1) Tyco sued Ethicon in the U.S. District Court for the District of Connecticut for infringment of patents 6,682544(544), 6063050(050), and 648286(286).
2) Ethicon raised defenses arguing that Tyco's valids were invalid because of its own Ethicon prototype and other prior art such as Davison and an European patent.
3) The district court classified some of the claims in the patents. Claim 15 of '286 and Claims 6,8 of '544 as the Curved Blade Claims. Claims 11 and 12 of '050 and claim 8 of '286 were considered Dual Cam Claims.
4) The district court preliminarily held on summary judgment that Ethicon infringed Tyco's claims, but did not enter final judgment in the event that Ethicon succeeded at trial for invalidity defense.
5) During bench trial, the court find that Ethicon infringed, but 26 of the claims were invalid because the Ethicon Prototype anticipated the claims under 102(g).
6) As to 103, the court determined that the Ethicon prototype could not serve as prior art under 103 because Ethicon's reduction to practice did not occur before Tyco's reduction to practice and was therefore not known. Therefore, only Davison was relied upon, and Davison did not disclose Tyco's claims of the curved and dual cam. Therefore, the Curved Blade and Dual Cam claims were valid.
7) The Court awarded Tyco for Ethicon's infringment.
8) Ethicon appeals judgment of infringement, and Tyco cross appealed the 102(g) issue to the Federal Circuit.
Legal Reasoning (PROST, Reyna, Hughes)
Background: Legal Standards
Infringement Burden of ProofA party challenging the validity of a patent must establish invalidity by clear and convincing evidence. See Microsoft Corp. v. i4i Ltd. P’ship, 131 S. Ct. 2238, 2242 (2011).
Tyco, at *8.
Standard of Review for AnticipationAnticipation is a question of fact reviewed for clear error after a bench trial.
Forest Labs., Inc. v. Ivax Pharms., Inc., 501 F.3d 1263, 1268 (Fed. Cir. 2007).
Id. at *8.
Standard of Review for ObviousnessFollowing a bench trial on the issue of obviousness, we review the court’s ultimate legal conclusions de novo and the underlying factual findings for clear error. Novo Nordisk A/S v. Caraco Pharm. Labs., Ltd., 719 F.3d 1346, 1354 (Fed. Cir. 2013).
Id. at *8.

Tyco, at *8-9.
102(g), standardUnder § 102(g), Ethicon can establish that its Prototype was prior art by proving “either that it reduced its invention to practice first or that it conceived of the invention first and was diligent in reducing it to practice.” Fox Grp., Inc. v. Cree, Inc., 700 F.3d 1300, 1304 (Fed. Cir. 2012).
Conception“[T]he test for conception is whether the inventor had an idea that was definite and permanent enough that one skilled in the art could understand the invention.” Burroughs Wellcome Co. v. Barr Labs., Inc., 40 F.3d 1223, 1228 (Fed. Cir. 1994). Though the inventor should have “a specific, settled idea,” the inventor “need not know that his invention will work for conception to be complete. He need only show that he had the idea . . . .” Id. (citation omitted).
Reduction to Practice and DiligenceTo establish diligence in reduction to practice, the “basic inquiry is whether . . . there was reasonably continuing activity to reduce the invention to practice.” Brown v. Barbacid, 436 F.3d 1376, 1380 (Fed. Cir. 2006). And, the inventor must not abandon, suppress, or conceal the invention after he or she reduces it to practice. Dow Chem. Co. v. Astro-Valcour, Inc., 267 F.3d 1334, 1342 (Fed. Cir. 2001). The filing of a patent application is constructive reduction to practice of the invention disclosed therein, and failing to file such an application within a reasonable time after first making the invention may constitute such abandonment, suppression, or concealment. Id. at 1337, 1342.
1. 102(g) applies when due diligence without gap is shown.As the district court properly found, however, the Ethicon Prototype, originated by Ultracision and perfected by Ethicon, existed in the form of detailed drawings and physical embodiments in 1996, before Tyco’s conception date of January 1997. Based on this evidence and corroborating testimony, there was a “definite and permanent idea” of an ultrasonic surgical device that could cut and coagulate and fit down a five millimeter trocar. This idea persisted despite Ethicon’s limited design changes to only the cam mechanism and blade size, which is not a feature that the twenty-six anticipated claims recite. Ethicon’s design changes therefore do not preclude the district court’s finding of prior conception.

The district court also correctly determined that the record established Ethicon’s “reasonable continuing activity” to reduce the invention to practice from April 1996 to the filing of the application in October 1997. Contrary to Tyco’s assertion, there was no gap in this activity between September 1996 and February 1997, as the record contains lab results, reports showing due dates and milestones, and similar types of evidence demonstrating diligent reduction to practice within the relevant time period. Tyco does not dispute the district court’s correct determination that the record is “devoid of any evidence that Ethicon ‘unreasonably delayed’ the public disclosure of its invention,” and that Ethicon therefore did not abandon, suppress, or concel it "once it had reducted it to practice".

Tyco, at *9-10.
102(g) art can be used as 103 prior art
The district court erred when it inconsistently applied § 102(g) to the Ethicon Prototype by not requiring prior reduction to practice for anticipation purposes but requiring it for the obviousness analysis. The clear language of § 102(g) does not require prior reduction to practice so long as the inventor can prove that he or she conceived of the invention first and was diligent in later reducing it to practice. Fox, 700 F.2d at 1304. Here, the district court already determined that the Ethicon Prototype satisfied this statutory provision when it held that the prototype anticipates the other twenty-six asserted claims. In Kimberly-Clark, we held that § 102(g) prior art established by prior reduction to practice could constitute prior art under § 103. 745 F.2d at 1444–45. That holding, however, does not preclude an invention from satisfying § 102(g) through prior conception and later diligent reduction to practice. That was simply not at issue in Kimberly- Clark. We therefore hold that neither § 102(g) nor § 103 make prior reduction to practice the only avenue through which § 102(g) prior art can constitute prior art under § 103. And Tyco’s reliance on Kimberly-Clark as requiring otherwise is misplaced.
Id. at *11
Furthermore, the clear language of § 102(g) and § 103 contains no requirement that a prior invention under § 102(g) be “known to the art” or the patentee at the time of invention to constitute prior art under § 103. To the extent that our predecessor court inserted such a requirement into § 102(g) in In re Clemens, we discontinued that requirement as dictum in E.I. du Pont de Nemours & Co. v. Phillips Petroleum Co., 849 F.2d 1430, 1437 (Fed. Cir. 1988) (“the alternative Clemens requirement that the prior work be ‘known to the art’ is . . . implicitly dismissed as dictum”). We are cognizant of the concern in In re Clemens that an applicant’s contribution should not be measured against “secret” prior art, as this could be detrimental to the “innovative spirit the patent laws are intended to kindle.” 622 F.2d at 1040. As we recognized in du Pont, however, the requirement in § 102(g) that the prior invention not be abandoned, suppressed, or concealed after reduction to practice “does mollify somewhat the ‘secret’ nature of § 102(g) prior art.” 849 F.2d at 1437.

This specific requirement in § 102(g) sufficiently encourages public disclosure and aligns with the intent of our patent laws. In addition, the provisions of § 103 themselves provide further support for this conclusion. For instance, § 103(c) creates an exception (though inapplicable here) for when § 102(g) prior art may not qualify as prior art for obviousness purposes. The presence of this exception strongly indicates that the statute itself contemplates that § 102(g) prior art may constitute prior art under § 103. Thus, absent the application of a statutory exception, § 102(g) prior art may serve as prior art under § 103. The district court should have therefore considered the Ethicon Prototype as prior art for obviousness purposes, having already determined that the prototype is prior art under § 102(g).

Id. at *11-13.
Contributor Summary of the Court's Analysis of Prior Art Applied to the Claims: In pages 13-16, the Court states that the District Court erred in not using Ethicon's prototype as prior art and analyzing obviousness based only on Davison. As a result, the Court analyzes obviousness using the combination of Ethicon's prototype and Davison and finds that the claims would have been obvious to a person of ordinary skill in the art in view of the art. Therefore, the Court concluded that these claims were invalid.
We affirm the district court’s determination that twenty-six of the asserted claims are invalid under § 102(g). Because we reverse the court’s decision regarding § 103 prior art and finding that the remaining Curved Blade Claims and Dual Cam Claims would not have been obvious, we vacate Tyco’s damages award. Based thereon, we decline to reach the remaining issues on appeal and cross-appeal.
Tyco, at *17.
Image Attribution Statement: Eugene Courboin, “La Diligence,” available as a public domain image due to expired copyright, http://commons.wikimedia.org/wiki/File:Eugene_Courboin_Diligence.png (image edited) (last visited Feb. 12, 2015).
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