951 F.3d 1310
Fed. Cir.2020Background
- The Patents‑in‑Suit claim methods to recover oil from dry‑mill ethanol "thin stillage" by evaporating to a syrup/concentrate and mechanically separating oil (e.g., disk‑stack centrifuge).
- Inventors at Vortex Dehydration Technology (VDT) worked with Alfa Laval and tested Agri‑Energy syrup in June–July 2003; bench tests reportedly separated oil at ~176–180°F with pH ≈4 and moisture 70–80%.
- On July 31, 2003 VDT prepared a proposal to Agri‑Energy offering a "no‑risk" trial and sale of an oil recovery skid; the inventors later sent an email with that proposal dated August 1, 2003.
- Inventors filed a provisional application on August 17, 2004 (critical date August 17, 2003). During later prosecution Cantor Colburn represented CleanTech and did not disclose the June/July 2003 test reports, diagram, or the pre‑critical‑date proposal to the PTO.
- The district court found the July 2003 proposal constituted a pre‑critical‑date commercial offer, that the invention was "ready for patenting" by June/July 2003, and after a bench trial concluded CleanTech and its prosecutors committed inequitable conduct (withholding material information and filing false declarations).
- The Federal Circuit affirmed: on‑sale bar applied and the patents were unenforceable for inequitable conduct.
Issues
| Issue | CleanTech's Argument | Defendants' Argument | Held |
|---|---|---|---|
| Whether the July 2003 proposal was a pre‑critical‑date offer for sale (on‑sale bar) | Proposal was not an invalidating commercial offer because no performance for compensation occurred and it was for testing | The July 2003 proposal (and surrounding dealings) amounted to a commercial "sale on approval" and was not primarily experimental | Court affirmed: the proposal was an offer for sale under UCC and Pfaff; on‑sale bar applies |
| Whether the invention was "ready for patenting" before the critical date | Readiness requires claim‑by‑claim reduction to practice and CleanTech disputed that testing showed reduction to practice for all claims | Bench tests, sales drawings, contemporaneous communications showed reduction to practice or adequate enablement to a PHOSITA | Court affirmed: June/July 2003 tests plus diagram and communications made the invention ready for patenting |
| Whether the pre‑critical‑date activity was experimental (so not a bar) | The interactions with Agri‑Energy were for testing/experimentation, not a commercial sale | The Allen factors and documentary evidence show the dealings were commercial, not primarily experimental | Court affirmed: activity was not experimental and does not avoid the on‑sale bar |
| Whether failure to disclose and false declarations before the PTO amount to inequitable conduct (materiality + specific intent) | Any nondisclosure was inadvertent or immaterial; no single most reasonable inference of intent to deceive | Withholding the 2003 tests/diagram/proposal and filing false Cantrell declarations were material and the single most reasonable inference is intent to deceive | Court affirmed: clear and convincing evidence of knowledge, materiality, and specific intent; patents unenforceable |
Key Cases Cited
- Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (standard for proving inequitable conduct: knowledge, materiality, and specific intent; specific intent must be the single most reasonable inference)
- Pfaff v. Wells Elecs., Inc., 525 U.S. 55 (U.S. 1998) (on‑sale bar test: commercial sale/offer and ready for patenting)
- Hamilton Beach Brands, Inc. v. Sunbeam Prods., 726 F.3d 1370 (Fed. Cir. 2013) (defining "ready for patenting": reduced to practice or sufficiently enabling drawings/writings)
- Allen Eng’g Corp. v. Bartell Indus., Inc., 299 F.3d 1336 (Fed. Cir. 2002) (factors to determine whether prior activity was experimental)
- Clock Spring, L.P. v. Wrapmaster, Inc., 560 F.3d 1317 (Fed. Cir. 2009) (experimental‑use analysis; public testing and Allen factors relevant)
- Linear Tech. Corp. v. Micrel, Inc., 275 F.3d 1040 (Fed. Cir. 2001) (UCC principles inform on‑sale bar analysis)
- Molins PLC v. Textron, Inc., 48 F.3d 1172 (Fed. Cir. 1995) (failure of candor to the PTO can support inequitable conduct finding)
- Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556 (Fed. Cir. 1983) (submission of false affidavits is material)
- Energy Heating, LLC v. Heat On‑The‑Fly, LLC, 889 F.3d 1291 (Fed. Cir. 2018) (inequitable conduct reviewed for abuse of discretion; district court fact‑finding on intent/materiality given deference)