Delano Farms Co. v. California Table Grape Commission
778 F.3d 1243
Fed. Cir.2015Background
- USDA developed two table grape varieties (Scarlet Royal and Autumn King) and obtained plant patents; USDA licensed rights exclusively to the California Table Grape Commission, which sublicensed growers under royalty-and-no-propagation terms.
- Patent applications filed September 28, 2004, making the §102(b) critical date September 28, 2003; commercial release occurred July 13, 2005.
- In 2002 Jim Ludy received unauthorized unreleased plant material from a USDA employee (Rodney Klassen), grafted <50 vines of each variety, and gave a few buds to his cousin Larry Ludy, who then propagated more vines (to 108 and 650 vines for the two varieties by 2003).
- The Ludys generally treated the material as secret: they were told not to disclose or sell, kept plantings unlabeled, told others to ‘‘keep it to ourselves,’’ and used covert labeling after the critical date; only a marketer (Richard Sandrini) learned of the vines and did not receive plant material until after the critical date.
- Most pre-critical-date plantings bore no usable fruit and produced no sales before the critical date; vines were visible from public roads but could not be reliably identified by sight alone.
- District court found Ludys’ possession and cultivation were clandestine and concluded plaintiffs failed to prove invalidating public use; Federal Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether cultivation/grafting by Jim and Larry Ludy before critical date constituted an invalidating public use under 35 U.S.C. §102(b) | Ludys’ propagation and visible plantings made varieties publicly accessible/commercially exploited | Ludys treated varieties as secret (explicit instructions, limited plantings, no sales, non-identifiable vines) | Not public use — secrecy and limited visibility prevent public accessibility |
| Whether Jim Ludy’s transfer of plant material to cousin Larry triggers public-use rule under Egbert v. Lippmann | Transfer to Larry without formal restrictions is like giving device to another, making use public | Transfer occurred with express expectation of secrecy; no waiver of confidentiality | Not public use — circumstances created expectation of secrecy, distinguishable from Egbert |
| Whether disclosure to marketer Sandrini made the use public | Telling Sandrini shows lack of confidentiality and potential public awareness | Sandrini was a confidant with incentives to keep secrecy; he could not practice varieties before critical date | Not public use — disclosure was to trusted associate within a confidential context |
| Whether visible, unlabeled vines along public roads constituted public use | Visibility equals accessibility; public could see and thus be put in possession of the invention | Vines could not be identified by sight; plantings were small and unlabeled, no evidence public recognized varieties | Not public use — mere visibility without identifiability or public awareness insufficient |
Key Cases Cited
- Delano Farms Co. v. Cal. Table Grape Comm’n, 655 F.3d 1337 (Fed. Cir. 2011) (sovereign immunity waiver under APA for similar suit)
- Moleculon Research Corp. v. CBS, Inc., 793 F.2d 1261 (Fed. Cir. 1986) (bench-trial findings of public use reviewed for clear error)
- Invitrogen Corp. v. Biocrest Mfg., L.P., 424 F.3d 1374 (Fed. Cir. 2005) (public use test: accessibility or commercial exploitation)
- Dey, L.P. v. Sunovion Pharm., Inc., 715 F.3d 1351 (Fed. Cir. 2013) (secret third-party uses do not invalidate patents; confidentiality measured against party controlling use)
- Bernhardt, L.L.C. v. Collezione Europa USA, Inc., 386 F.3d 1371 (Fed. Cir. 2004) (tightly controlled access and industry expectation of confidentiality negate public-use finding)
- Egbert v. Lippmann, 104 U.S. 333 (U.S. 1881) (historical rule: unrestricted transfer to another may constitute public use)
- Eolas Techs. Inc. v. Microsoft Corp., 399 F.3d 1325 (Fed. Cir. 2005) (third-party prior use can bar patent if accessible to public)
- American Seating Co. v. USSC Group, Inc., 514 F.3d 1262 (Fed. Cir. 2008) (demonstrations to friends/colleagues not invalidating where confidentiality understood)