924 F.3d 1220
Fed. Cir.2019Background
- Quest owns U.S. Patent No. 7,542,874, which claims methods, a system, and a computer-readable medium for displaying furnace inspection data by generating data markers, partitioning inspection data, and producing displays (2D/3D) that represent tube geometry to enable visual detection of problem areas.
- In Feb–Mar 2003 Quest performed paid furnace-inspection services for Orion Norco Refinery (the Norco Sale) and delivered two reports containing two-dimensional, color-coded strip charts (Norco Strip Charts). Quest did not sell hardware or software to the customer.
- Cokebusters defended a patent-infringement suit by alleging the Norco Sale triggered the pre-AIA § 102(b) on-sale bar (critical date June 1, 2003) because the Norco activity practiced the claimed invention more than one year before filing.
- The district court construed the claim Display Limitation to include time-based strip charts (Example 1 of the specification) and granted summary judgment that claims 12, 24, and 33 were invalid under the on-sale bar; it also found claims 30 and 40 invalid based on deposition testimony that software used at Norco had a “composite bend indicator” and used sensor data.
- Quest submitted inventor declarations contradicting earlier deposition testimony; the district court disregarded them as sham affidavits and entered judgment of invalidity as to all asserted claims.
- On appeal, the Federal Circuit affirmed invalidity for claims 12, 24, and 33, but held the district court erred in applying the sham-affidavit doctrine to exclude inventor declarations and reversed as to claims 30 and 40, remanding for trial on those claims.
Issues
| Issue | Plaintiff's Argument (Quest) | Defendant's Argument (Cokebusters) | Held |
|---|---|---|---|
| Claim construction of Display Limitation (do time-based strip charts fall within claim scope?) | Example 1 (time-based strip charts) was not within the narrowed claim scope after prosecution and should be excluded. | Example 1 remains within claim scope; prosecution history did not disclaim time-based displays. | Court: Display Limitation includes Example 1; Norco Strip Charts meet the limitation. Claims 12, 24, 33 invalid under on-sale bar. |
| Whether Norco Sale is a § 102(b) commercial offer for sale | Norco was experimental or otherwise did not put invention on sale. | Norco was a commercial sale of services that used the claimed invention; sale of reports and paid service triggers on-sale bar. | Parties agreed Norco was commercial; court treats performance/sale of reports as on-sale activity under Pfaff framework. |
| Whether Norco satisfied additional limitations of claims 30 and 40 (composite data markers; analysis of sensor data) | Inventor declarations show composite bend indicator was commented out/not available at Norco; sensor data not analyzed; creates genuine dispute. | Deposition testimony of inventor (30(b)(6) witness) and other evidence show composite function and sensor-analysis were used at Norco. | Court: District court erred in excluding inventor declarations as sham; declarations + corroborating record create genuine issue of material fact as to claims 30 and 40 -> reverse and remand. |
| Application of sham-affidavit doctrine to contradicting inventor declarations | Declarations explain deposition error and are corroborated by source code, experts, and other evidence; not sham. | Deposition testimony is prior sworn testimony and declarations contradict it; court may disregard later affidavits. | Court: Under Third Circuit flexible standard, later sworn explanations and independent corroboration take declarations out of sham rule; district court abused discretion in excluding them. |
Key Cases Cited
- Pfaff v. Wells Elecs., Inc., 525 U.S. 55 (establishes two-part on-sale test: commercial offer for sale and ready for patenting)
- Medicines Co. v. Hospira, Inc., 827 F.3d 1363 (Fed. Cir.) (on-sale bar applies where claimed methods/systems are commercially exploited; sale of product made by a claimed process can trigger bar)
- Scaltech, Inc. v. Retec/Tetra, LLC, 269 F.3d 1321 (Fed. Cir.) (on-sale bar applies to sale of a process-invention)
- Helsinn Healthcare S.A. v. Teva Pharm. USA, Inc., 139 S. Ct. 628 (secret commercial sales can trigger § 102(b))
- Thorner v. Sony Comput. Entm’t Am. LLC, 669 F.3d 1362 (Fed. Cir.) (clear and unmistakable disclaimer standard for prosecution history estoppel/disclaimer)
- Trustees of Columbia Univ. v. Symantec Corp., 811 F.3d 1359 (Fed. Cir.) (interpreting prosecution statements and claim scope)
- Baer v. Chase, 392 F.3d 609 (3d Cir.) (sham affidavit doctrine; later affidavit needs plausible explanation or corroboration)
- Jiminez v. All Am. Rathskeller, Inc., 503 F.3d 247 (3d Cir.) (independent record evidence can bolster a later affidavit and defeat sham-affidavit exclusion)
- Finjan, Inc. v. Secure Computing Corp., 626 F.3d 1197 (Fed. Cir.) (locked/inactive code can still be relevant to infringement; distinguished on facts here)