(as published in IPWatchdog)
Start-ups often face many competing pressures. Two such pressures that are frequently at odds with each other are the need to adequately protect the intellectual property that will be the basis for future revenue and investment, and the need to bring such revenue and investment into the business to allow for continued technology development and commercialization. Many start-ups are aware of how the on-sale bar interacts with these pressures and the associated need to file patent applications on any technology prior to offering or placing it on sale. However, fewer startups are aware of the public-use bar and how activities pursued with the goal of growing their businesses may unwittingly invoke it. This article provides an overview of the public-use bar and instructive examples from case law where start-ups and other patentees were ensnared by it.
Understanding the Statute
The public-use bar is set out in 35 U.S.C. § 102(a), which states that: “A person shall be entitled to patent unless . . . the claimed invention was . . . in public use . . . before the effective filing date of the claimed invention.” Courts have interpreted “public use” in 35 U.S.C. § 102(a) and its precursors to encompass two types of activities: (1) those that involve commercial exploitation of the claimed invention; and (2) those that involve showing the invention to a non-inventor or allowing a non-inventor to use the invention without limitations, restrictions, or confidentiality obligations.” Additionally, the use of the invention must be in its “natural and intended way” (sometimes formulated as “use for its intended purpose”), and the invention must be “ready for patenting.” Whether an invention is “ready for patenting” is assessed in the same manner for both the public-use bar and the on-sale bar. Briefly, an invention is “ready for patenting” upon reduction to practice or upon the creation of a description that would allow those skilled in the art to practice it. The courts have found that public use can occur even if the details of the invention are kept secret as long as the use falls within one of these categories. For this reason, startups should be careful to avoid using prototypes in revenue-generating activities prior to patent application filing, such as using them to make products that will be offered for sale or performing analyses for compensation. Startups should keep all such prototypes under tight control.
There is a one-year grace period under 35 U.S.C. § 102(b)(1)(A) for public uses performed by the inventors. Thus, one year prior to the date of the patent application is often referred to as the “critical date.” However, unless the startup is certain that the public use is not of a character that would allow for others to obtain sufficient information to engage in further public use or other novelty-destroying activities, it is safest to file a patent application before any possible public use.
The public-use bar does have one notable exception—that of experimental use. To constitute experimental use, the experimentation performed must be of a character that can only be done in public, be under the control of the inventor, and be directed to reducing the invention to practice or testing its durability or safety. Any profit associated with the experimental use must be incidental. Moreover, the courts have been clear that market testing and experiments conducted for the purpose of determining customer preferences does not fall within this category. Thus, startups should consider the experimental-use exception to be narrow and unlikely to help them should they perform activities that would otherwise invoke the public-use bar.
Startups should also be aware that public use can be employed in determining both the novelty and obviousness of claimed inventions. Accordingly, patent claims will not be saved solely because the public use at issue is of prototypes that do not fall completely within the relevant claims. Practically, this means that even prototypes expected to be subjected to further development should be tightly controlled and not employed to perform revenue-generating activities until appropriate patent applications have been filed.
One recent case that is instructive is Minerva Surgical, Inc. v. Hologic, Inc. 59 F.4th 1371 (Fed. Cir. 2023). Here, Minerva Surgical, Inc. “Minerva) demonstrated and pitched one of its devices to attendees at an industry event. These demonstrations and pitches involved allowing attendees to closely scrutinize the device and observe its manner of operation. Minerva also imposed no secrecy obligations on the attendees. In view of these facts, the Federal Circuit held that Minerva’s actions constituted a public use of the device that invalidated later-filed claims thereto. Startups wanting to generate buzz and interest around upcoming products they hope to release should consider this fact pattern carefully and either file patent applications before bringing prototypes to conferences and other industry events or carefully consider the information they share during such industry events.
Another recent case that is informative for startups is In re WinGen LLC, No. 2021-2322 U.S. App. LEXIS 2628 (Fed. Cir. Feb. 2, 2023) (nonprecedential). The patent application at issue in this case claimed a particular plant. More than one year prior to filing this patent application, a related entity (Proven Winners) displayed the plant at a private event at Home Depot. Although attendees were not allowed to take samples of any part of the plant, they were provided with a brochure that described the plant and were not subject to any confidentiality obligations. The Federal Circuit held that, because the plant was ornamental, displaying the plant was a use thereof that was for its intended purpose. The Federal Circuit concluded that, because of the lack of confidentiality obligations imposed on the plant’s viewers, its display therefore constituted public use. The analysis behind the decision contrasted the claimed plant’s intended ornamental use with the facts in Motionless Keyboard v. Microsoft Corp., 486 F.3d 1376 (Fed. Cir. 2007), in which the display and testing of a keyboard was not found to be a use for its intended purpose because the keyboard was not plugged in to a computer or employed during the normal course of business to enter or transmit data. Startups should thus carefully consider all uses to which their inventions may be put and refrain from engaging in such uses without exercising appropriate control prior to filing patent applications covering the invention.
A classic case that that has been relevant to several of our clients is Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts Co., 153 F.2d 516 (2d Cir. 1946). In this case, the patent at issue was granted to the inventor Meduna and related to a process for performing metallization. Meduna did not disclose this process prior to the statutory critical date, but did perform it for paying customers. The court held that, although secret, Meduna’s performance of his process for paying customers constituted commercial exploitation of his invention and therefore amounted to the type of public use that the patent statutes intended to prevent. Startups interested in pursuing method claims should thus be careful to file patent applications before they use such methods to perform analyses for compensation or make products that they plan to sell.
The last case that startups should consider is Netscape Communications Corp. v. Konrad, 295 F.3d 1315 (Fed. Cir. 2002). Here, Konrad, the inventor of the patents at issue, engaged in several demonstrations prior to the critical date that were found to constitute invalidating public use of the claimed inventions. Konrad, an employee of Lawrence Berkeley Laboratory (LBL), developed remote access apparatuses for computers. After submitting an invention disclosure form to LBL, but prior to the critical date and without any obligation of confidentiality, he demonstrated these apparatuses to scientists at the Stanford Linear Accelerator Center. The Federal Circuit held that the lack of a confidentiality obligation was dispositive and that the common funding source did not relieve Konrad of his duty to maintain the confidentiality of his invention. Startups working with collaborators or investors should carefully consider this decision and make sure that appropriate confidentiality agreements are in place before communicating with such parties.
Consider Public Use Carefully
To conclude, we hope that this article will motivate startups to pause and think before using their hard-earned inventions to solicit investment or bring in capital. Otherwise, if appropriate patent applications are not filed or confidentiality obligations are not in place, such activities could preclude the issuance and validity of the patents that will be necessary for further business growth.