This сase presents the question whether the claims of U.S. Patent No. 5,443,717 (the “ '717 patent”) are invalid under 35 U.S.C. § 102(b) because the claimed invention was offered for sale more than one year before the filing of the patent application. We affirm the district court’s decision granting summary judgment of invalidity.
BACKGROUND
I. '717 Patent
Scaltech, Inc. (“Scaltech”) is in the business of recycling industrial waste produced during the refining of petroleum products. Retee/Tetra, L.L.C. (“Retee”) is in the business of producing delayed coker quench streams for use in producing coke. Their paths crossed when thеy both used waste products from the petroleum refinery process to produce coke.
Scaltech is the assignee of the '717 patent, entitled “Recycle of Waste Streams.” The '717 patent issued on August 22, 1995, pursuant to the January 19, 1993, application of Robert M. Scalliet, et al. Mr. Scalliet is also the founder of Scaltech. Retec is the alleged infringer of the '717 patent.
The '717 patent describes a process for treating oil refinery waste by introducing the waste into the coking process, which oil refiners use to produce coke. '717 рatent, col. 2, 11. 52-58. Coke is a porous solid or charcoal-like residue that is frequently burned as a fuel. However, this substance also plays an important role in
In 1975, the Mobil Oil Company (“Mobil”) developed a process to dispose of refinery waste by injecting it into the coke bed during the quench cycle. During the delayed coking process, the solid waste and any organic liquids become dispersed throughout the coke mass. The combustible portion of the sludge becomes part of the coke. Aptly named the Mobil Oil Sludge Conversion process, or the MOSC process, Mobil obtained U.S. Patent No. 3,917,564 (the “Meyers patent”) on the process. After issuance of the Meyers patent, U.S. Patent Nos. 4,874,505 and 5,009,767 (collectively, the “Bartilucci patents”) were issued to Mobil and described a treatment process similar to that of the Meyers patent, but which separated the refinery waste into two streams: high oil content and high water content. The Bar-tilucci patents teach the injection of the high oil content waste stream into the coker drum during the coking cycle, so that there will be sufficient heat to flash off the oily waste. The high water content stream should be introduced to the coker during the quench cycle. The process described in the Bartilucci patents allows the coker to process increased amounts of refinery waste. Although the Meyers and Bartilucci patents represent a significant step forward in disposing of refinery waste, there are still disadvantages to these processes, including a significant loss of oil because it is not removed before the coking process takes place and oily buildup in the coke drum. '717 patent, col. 2,11. 21-26. The '717 patent attempts to solve both of these problems.
The '717 patent teaches a desirable technique for treating the waste stream, before it is introduced into the coker drum, using a centrifuge, such as a Guinnard DC-6 vertical disk centrifuge (“DC-6 centrifuge”), to separate the waste stream into organic (oil), aqueous, and solids fractions. Id., col. 5, 11. 38-55. This separation process is the first step in increasing the concentration of solids. If the solids portion contains too much water, the wet sediment can be further processed by filtering out additional water to increase the concentration of solids and produce the coker quench stream. Id. at 11. 58-61. The content of the quench stream after separation is approximately 5-35% by weight solids, less than 6% by weight mobile organics, and water. Id., col. 2,11. 52-58. Before entering the coker drum, the quench stream frequently will enter a storage tank where uniformity of the stream is maintained. Id., col. 6, 11. 27-31. Lastly, the coker quench stream, consisting of a high solids concentration and a small particle size, and the primary quench stream are introduced into the coker drum. Id., col. 5,11. 62-64.
One advantagе of the '717 patent is that it enables processing of a significantly larger amount of waste. As the '717 patent teaches, increased quantities of refinery waste may be successfully disposed of in the quench stream of the coker unit when this stream has a high solids concentration, and the particle sizes of greater than 70% of the solids in the stream have been reduced to less than 15 microns.
Id.,
col. 5, 11. 10-23. As the specification indicates, the separation and dewatering processes increase the concentration of solids.
Claims 1 and 6 are the only independent claims in the '717 patent. Claim 1 reads as follows:
1. In a process for producing delayed petroleum coke, wherein a liquid hydrocarbon feed stream is introduced into a delayed coking vessel under delayed coking conditions and the coke produced is quenched, the improvement comprising:
treating a waste stream containing water, organic compounds and solids so as to cause аttrition of said solids to produce a delayed coker quench stream containing from about 5 to about 35% by weight solids, water and less than about 6% by weight mobile organics, said solids in said coker quench stream having a particle size distribution such that greater than about 70% of the total solids volume comprises solids having a particle size of less than about 15 microns; and introducing said coker quench stream into said coking vessel during quenching.
Id., col. 8, line 54 — col. 9, line 2.
Claim 6 reads:
6. A process for producing a delayed coker quench stream for use in producing delayed petroleum coke wherein a liquid hydrocarbon feed stream is introduced into a delayed coking vessel under delayed coking conditions and the coke produced is quenched comprising:
treating a waste stream containing water, organic compounds and solids so as to cause attrition of said solids to produce a delayed coker quench stream containing from about 5 to about 35% by weight solids, water and less than about 6% by weight mobile organics, said solids in said coker quench stream having a particle size distribution such that greater than about 70% of the total solids vоlume comprises solids having a particle size of less than about 15 microns.
Id., col. 9, line 16 — col. 10, line 8.
II. Scaltech’s Activities Before the Critical Date
Retec challenged the validity of the claims of the '717 patent under the on sale bar rule. 1 A claimed invention is considered to be on sale within the meaning of § 102(b) if the claimed invention is offered for sale more than one year before the filing date of the patent application. Here, the critical date is January 19, 1992, which is one year before the filing date of the '717 patent application. The following facts are relevant to the on sale determinatiоn.
In 1987, Scaltech began treating refinery waste at Chevron. Chevron wished to dispose of its refinery waste by injecting it into the coking process, and it turned to Scaltech for advice on how to improve its disposal process. Mr. Scalliet, the named inventor of the '717 patent and the founder of Scaltech, suggested that excess oil in the waste might be clogging the coke pores and preventing effective disposal of all of Chevron’s- hazardous waste. Mr. Scalliet offered to use a DC-6 centrifuge to separate the oil from the waste and to provide loads of de-oiled waste to Chevron, so that Chevron could test Mr. Scalliet’s theory, even though Scaltech was not going to participate in the testing. Following Scaltech’s suggestions yielded positive results for Chevron.
III. Prior Proceedings
Scaltech sued Retec for patent infringement of all the claims of the '717 patent in the United States District Court for the Southern District of Texas. Retec raised the affirmative defense of patent invalidity under 35 U.S.C. §§ 102(b), 103 and 112. Retec moved for summary judgment on the grounds of invalidity. In the first district court opinion, the district court granted a motion for summary judgment in favor of Retec because it found that an embodiment of the claimed invention was offered for sale to Chevron and Champlin in 1988. However, in granting this motion, the district court did not analyze whether the process on sale inherently satisfied each claim limitation. Scaltech appealed to this court. This court’s initial opinion was published at
Scaltech, Inc. v. Retec/Tetra, L.L.C.,
On remand, the district court
sua sponte
granted summаry judgment on the existing record, concluding that both the 1988 Chevron and Champlin proposals offered a process that inherently satisfied the claim limitations regarding a high solids concentration and small particle size. According to the court, both Mr. Scalliet and Mr. Koopersmith admitted that the DC-6 centrifuge in its normal operation inherently reduces the size of the particles to the size claimed in the '717 patent. The court found that this attrition occurs through the ejection of the solid particles against a cast iron shield, and that because the 1988 offеrs embodied the claimed invention, the process was reduced to practice in 1988.
Scaltech, Inc. v. Retec/Tetra, L.L.C.,
No.
Sealtech again timely appealed to this court. We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1295(a)(1).
DISCUSSION
1. Standard of Review
The determination of whether an invention was on sale within the meaning of § 102 is a question of law that we review without deference.
Robotic Vision Sys., Inc. v. View Eng’g, Inc.,
II. On Sale Bar
The question before this court is whether the refinery waste disposal process described in the '717 patent was offered for sale within the meaning of 35 U.S.C. § 102(b) more than one year before the date of application for the patent. Though we conclude that the district court erred in its analysis, we affirm the district court’s decision granting summary judgment because we conclude that the undisputed facts establish an on sale bar.
At the outset, we are confronted by Scaltech’s contention that the district court decision should be reversed because it was rendered on the
Sealtech II
record, and this court in
Sealtech II
determined that the “record does not indicate whether an embodiment of the claimed invention was offered for sale.”
Section 102(b) provides: “A person shall be entitled to a patent unless ... the invention was ... in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States.” 35 U.S.C. § 102(b). The date exactly one year prior to the date of application for the patent is known as the critical date. As noted above, since the patent application was filed on January 19, 1993, the critical date here is January 19,1992.
The Supreme Court has provided guidance in determining whether an invention can be considered on sale within the meaning of § 102(b) of the Patent Act. In the seminal case of
Pfaff v. Wells Electronics, Inc.,
1. Commercial Offer for Sale of Patented Invention
Under
Pfaff,
the first step in our analysis is determining whether there was a commercial offer for sale of the patented invention. This first step has two sub-parts. We must find that there was a “commercial offer” and that it was an offer of the patented invention. While neither party argues the question, we think the fact that the process itself was not offered for sale but only offered to be used by the patentee to process waste does not take it outsidе the on sale bar rule. The on sale bar rule applies to the sale of an “invention,” and in this case, the invention was a process, as permitted by § 101. As a result, the process involved in this case is subject to § 102(b).
Cf. D.L. Auld Co. v. Chroma Graphics Corp.,
a. Commercial Offer for Sale
Recently, this cоurt has defined what constitutes an offer for sale for purposes of this statutory bar. “Only an offer which rises to the level of a commercial offer for sale, one which the other party could make into a binding contract by simple acceptance (assuming consideration), constitutes an offer for sale under § 102(b).”
Group One, Ltd. v. Hallmark Cards, Inc.,
The patentee’s actions that trigger the statutory bar here occurred in 1988, when
b. Invention Offered for Sale Satisfying All Claim Limitations
As we held in
Scaltech II,
the invention that is the subject matter of the offer for sale must satisfy each claim limitation of the patent, though it may do so inherently.
Scaltech argues, without citing any legal authority to support its position, that in order for the invention to be inherent in the process offered, the evidence must show that for all typical applications, each of the claim limitations would have been present. Scaltech further contends that because the offered process did not achieve the reduced particle size and the high solids concentration for some types of waste, there is insufficient evidence to implicate the statutory bar. The district court disagreed with Scaltech and concluded that both the Chevron and Champlin proposals offered a process that inherently satisfied the claim limitations relating to small particle size and high solids concentration. Specifically, the district court concluded that the DC-6 centrifuge inherently reduced the size of the solid particles by ejecting the slurry of solids at a high velocity into a cast iron shield.
The parties agree about the effect of the DC-6 centrifuge on the solids concentration. As Scaltech concedes in its reply brief to this court, “[t]he DC-6 will inherently produce a solids slurry within the '717 [pjatent claim specifications for high solids content DAF float.” Therefore, the 1988 offers embodied the high solids concentration claim limitation for certain types of DAF float waste. Scaltech also admits that the DC-6 centrifuge will always generate a de-oiled waste stream containing less than 6% free oil by weight, which satisfies the low oil content claim limitation of the '717 patent.
However, the district court’s reasoning with respect to the particle size limitation reflected a misunderstanding of the record regarding the effect of the DC-6 centrifuge on the particle size of the waste. There is a genuine factual dispute as to whether the use of the DC-6 centrifuge
But, it is not necessary for Retec to show that all embodiments of the invention were on sale more than one year before filing. It is sufficient to show that one embodiment of the invention was offered for sale during the one-year period.
See Titanium Metals Corp. of Am. v. Banner,
Scaltech argues that the 1988 offers to Chevron and Champlin to process DAF float waste, would have been only an “accidental and unwitting” duplication of the invention, relying on the Supreme Court’s decision in
Tilghman v. Proctor,
2. Ready for Patenting
The second step in our analysis is determining whether the invention was ready for patenting. As previously mentioned, this can be proved by (1) reduction to practice or (2) a showing that the inventor’s drawings or descriptions enabled someone skilled in the art to practice the invention.
See Pfaff,
Scaltech argues that under Pfajf, an invention сannot be ready for patenting until the inventor has conceived of each of the claim limitations of the patent. Since the importance of the small particles in the quench stream was not recognized until after the critical date, Scaltech urges that the invention was not ready for patenting.
Scaltech asserts that it could not have reduced the invention to practice before it even conceived of the claim limitations in the summer of 1992.
See Mycogen Plant Sci., Inc. v. Monsanto Co.,
In any event, the invention also was ready for patenting before the critical date of January 19, 1992, because the inventor had prepared drawings or a description sufficient for enablement.
See Pfaff,
Therefore, both prongs of the Pfaff test are satisfied, and all the claims of the '717 patent are invalid under § 102(b) of the Patent Act. In light of our disposition, Scaltech’s contentions regarding a jury trial, consolidation, and the bifurcation order are moot.
CONCLUSION
For the foregoing reasons, we affirm the district court’s decision granting summary judgment of invalidity.
No costs.
Notes
. While the parties focus on independent claims 1 and 6, Scaltech makes no attempt to argue that the dependent claims require any different treatment.
. The district court also concluded that there was no best mode violation. In light of our disposition, we do not reach the best mode question.
