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When private sales don’t count as public disclosure of prior art
So-called “prior art” that makes an invention obvious can lead to a patent being found invalid. But what seems like prior art may not be. The U.S. Court of Appeals for the Federal Circuit recently explored an exception to the rule and whether a private sale of an invention would qualify.
Challenger connects
Sanho Corporation owns a patent for a port extension apparatus designed to enhance connectivity of end-user devices (for example, laptops) with other devices (for instance, printers). Kaijet Technology sought inter partes review (IPR) to challenge the patent’s validity.
Under IPR, the Patent Trial and Appeal Board (PTAB) can reconsider and cancel an already-issued patent based on certain types of prior art. The PTAB in this case found that prior art rendered the relevant claims unpatentable. Sanho appealed the decision to the Federal Circuit, which hears IPR appeals.
Court unplugs patentee’s argument
The prior art at issue was an earlier patent filing known as “Kuo.” Kuo ordinarily would have been prior art because its effective filing date was before the filing date of Sanho’s patent. But an exception in federal patent law provides that a disclosure isn’t prior art if the subject matter disclosed had been “publicly disclosed” by the inventor. Sanho contended that, before Kuo’s effective filing date, Kuo’s inventor publicly disclosed the invention through the private sale of a device that allegedly embodied the invention. As a result, it argued, the invention wasn’t prior art.
Sanho claimed that the plain meaning of “publicly disclosed” in the statutory exception is the same as the definition of the term “disclosed” used elsewhere in the same section of the patent law. This definition includes situations where the invention was “on sale.” Therefore, placing something on sale would mean the invention it embodied was necessarily publicly disclosed for purposes of the exception.
But the court found that the use of the two different terms suggests that Congress intended them to have different meanings. In its view, the addition of the word “publicly” indicated that the types of disclosures that qualify for the exception are a narrower subset of “disclosures.” In other words, the exception applies only to “disclosures” that result in the subject matter of the invention being “publicly disclosed.” Moreover, the legislative history for the exception explicitly stated that “public disclosure” requires that the invention be made available to the public.
The Federal Circuit also noted that Sanho’s interpretation ran contrary to the exception’s purpose. It’s intended to encourage the public disclosure of new inventions by protecting inventors who do so from forfeiting patent rights because of subsequent disclosures made by others. The court said it would be unfair, for example, to deny a patent to the original inventor because another inventor filed a patent application appropriating the invention after public disclosure.
Turning to the facts before it, the court held that the sale alleged by Sanho didn’t publicly disclose the relevant invention. The fact that the sale included no confidentiality or nondisclosure agreement was beside the point, as the only evidence was of a private sale between two individuals arranged via private messages.
Still to be determined
It’s worth noting that the court only affirmed the PTAB’s ruling that Kuo qualified as prior art, making the patent’s claims obvious and unpatentable. It didn’t articulate what’s necessary to demonstrate that a sale publicly disclosed an invention.
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