Protecting Your Process Patent: How Dippin’ Dots May Make it More Difficult to Secure Process Patents After Prior Sales

November 16, 2007 | By: John R. Carr, Esq.

Does the sale of a product that is made using a new and useful process more than a year before a patent claim is filed render that process “public art” and therefore unpatentable? According to 35 U.S.C. Section 101, any person who “invents or discovers” a “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof” is eligible for patent. Whether it is a product or a process, the new invention or discovery must be “new.” For that reason, an invention (product or process) that was “known or used by others in this country, or patented or described in a printed publication” before the date of invention thereof is ineligible for patent, since such an invention cannot be described as “new.” 35 U.S.C. Section 102(a). Similarly, an invention that “was patented or described in a printed publication...or in public use or on sale in this country, more than one year prior to the date of the application for [US] patent” is ineligible for patent, since such an invention could not be considered “new.” 35 U.S.C. Section 102(b). Instead, these inventions are considered “public art.” Accordingly, where an inventor claims to have invented a new product, any sale of that product starts a one year tolling period for acquiring patent rights here in the United States¹.  An exception is made for sales that are made for experimentation purposes.  This exception allows an inventor “to refine his or her invention or to assess its value relative to the time and expense of prosecuting a patent application.” Baxter Intern., Inc. v. COBE Laboratories Inc., 88 F.3d 1054, 1060 (Fed.Cir.1996).  But the sale must have been pursuant to a true experiment or evaluation and not for commercial purposes.

A second requirement for obtaining patent protection is that the subject matter of the patent be more than an obvious elaboration on prior or “public art.” According to 35 U.S.C. Section 103(a), “if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious...to a person having ordinary skill in the art to which said subject matter pertains” that subject matter is ineligible for patent since patent laws were not intended to grant a new patent for every minor elaboration on the public art.

Accordingly, a new product that is sold more than a year before a patent claim is filed (i.e., before the “critical date") for that product is ineligible for a patent by virtue of its sale date and the fact that it has become “known” to the general public. The same logic should hold true for a new process that is revealed or sold before its critical date. Such a process is considered prior art when “sufficient information is available to enable members of the public to learn the process, if they so choose.” Chemithon Corp. v. Procter & Gamble Co., 287 F.Supp. 291 (D.C.Md. 1968) (citing 35 U.S.C.A. Section 102(b)).

But what results when a new product using a new process is sold more than a year prior to filing a patent claiming both the product and the process? Clearly, the product has been sold and become known to the public and ineligible for patent.  However, the same cannot be said about the process that produced the product.

In D.L. Auld Co. v. Chroma Graphics Corp., 714 F.2d 1144 (C.A.Fed.,1983) the Federal Circuit Court of Appeals stated that an inventor’s commercial sale of a product produced by a novel or patentable process prior to the critical date not only results in the forfeiture of patent rights to the product itself; but, also forfeits any patent rights in the underlying process.  Interestingly, if the process remains secret, however, the sale will not bar another inventor from patenting that very same process. 714 F.2d 1144 at 1148 (See also Invitrogen Corp. v. Biocrest Mfg., 424 F.3d 1374, 1382 (Fed.Cir.2005) (citing Metallizing Eng’g Co. v. Kenyon Bearing & Auto Parts Co., 153 F.2d 516, 520 (2d Cir.1946) (Learned Hand, J.))).  This seems to be a rather harsh and unfair double standard in the patent arena.

In Dippin’ Dots, Inc. v. Mosey, 476 F.3d 1337, (C.A.Fed. (Tex.), 2007), the Federal Circuit pushed this reasoning one step further, declaring that not only with a prior sale of a product made by a novel and patentable process result in forfeiture under 102; but, the same can also be used as prior art under Section 103.  Accordingly, not only does the sale prohibit the inventor from obtaining a patent on the original process; but the sale also makes that process, however unknown and secret, prior or “public art” for purposes of Section 103, as against the inventor/seller.  Again this seems to be a harsh double standard.

In Dippin’ Dots, plaintiffs Dippin’ Dots, Inc. and Curt D. Jones ("DDI") invented and patented a process for flash-freezing novelty ice cream. However, more than a year before filing for this patent, DDI sold novelty ice cream products manufactured using a process very similar to the patented process. Customers were permitted to leave with the product and confidentiality agreements were not used.  DDI did not disclose these prior sales to the USPTO.

Later, when DDI attempted to sue for infringement of their patented process, the defendants argued that DDI’s process patent was invalid as being obvious under Section 103(a). More specifically, the defendants argued that the DDI’s own sale of products made using a process very similar to the patented process operated as prior or “public art” and that in light of this prior or “public” art the claimed process was obvious under Section 103.  Although the process used was not identical to the process later patented, the defendants argued that it was an obvious elaboration on the prior art (the prior process which up to the filing had, in fact, been kept secret by DDI) and therefore not entitled to a patent.

The jury agreed with the defendants and the District Court for the Northern District of Texas entered judgment in favor of the defendants, finding the patent obvious and invalid. DDI appealed to the Federal Circuit Court of Appeals and the Federal Circuit affirmed.

On the question of the patent’s validity, the Federal Circuit noted that two conclusions were required to find the patent invalid. First, that DDI’s prior sales were part of the prior art under Section 102(b), and second, that the patented process was an obvious elaboration on this prior art, not entitled to patent protection under Section 103.

In addressing these issues, the Federal Circuit noted that much of the litigation in the District Court concerned whether the prior sales of products produced by a similar process should be deemed prior sales under Section 102(b) or experimental sales. The Federal Circuit deferred to the lower court’s factual finding regarding the issue of a public sale and summarily concluded that: “[t]he public sale of goods produced by a process more than one year before a patent is filed places that process in the Section 102(b) prior art.” 476 F.3d 1337 at 1344.  Interestingly, this statement is not true for everyone and really has not basis under statutory authority (since the invention itself - the process - has not been sold); but, the Federal Circuit failed to address this legal inequity.

On the further question as to whether the patent was an obvious elaboration, not meriting patent protection, the Federal Circuit held that “[p]rior art under the Section 102(b) on-sale bar is also prior art for the purposes of obviousness under Section 103.” According to the Federal Circuit, this is true regardless of whether the process is actually known in the art.  Again, there is no actual statutory basis for this conclusion.

In summary, this case raises several troubling issues. First, it signals to inventors the need to be extra cautious during the development of new products. Individuals intending to sell new products made by way of a new and novel process should be well aware of the one year rule for filing of a patent application and should take any and all precautions necessary to ensure that they do not miss this one year marker.  The need for this precaution is even greater after Dippin Dots, since even a modified process is liable to be subsumed as a merely obvious elaboration of the original process.

Second, this case brings up the unanswered question of how a court is to properly assess whether a process has become publicly known and part of the public art when dealing with third parties. According to Chemithon, a process is not considered prior art (at least insofar as others are concerned) until “sufficient information is available to enable members of the public to learn the process, if they so choose.” 287 F.Supp. 291 at 308. Yet, any sale or disclosure of a product made by a new and novel process can act as prior art insofar as the inventor/seller is concerned.  This leads to a very odd conclusion that the invention of a process by a person who previously discloses a similar process embedded in a product sold before the critical date should be treated differently than another person who creates the same process. Consider the following scenario:

Inventor A discovers a process. He designs a product using that process and sells it for non-experimental purposes, but keeps the process secret. A year and a day later (after the critical date) he files for a patent on the process, since the product is clearly within the public art. Unless the process for which he files is more than an obvious elaboration on the prior process used in making the product he previously sold, the inventor will be unable to secure a patent.

However, if another person discovers the same process or any process that would normally be considered obvious in light of the prior process (had it been publicly known) and files for a patent, that process is eligible for patent protection, despite being the same invention. This absurd dichotomy will surely have to be squared away in future litigation.

¹ Here it is noted that many foreign countries do not allow for a one year filing grace period and any sale of the patented product could operate to vitiate any and all foreign patent rights.

** The author, John R. Carr, Esq., is a Counsel of Zuber & Taillieu LLP, specializing in prosecutions, interferences, oppositions, cancellations, and appeals relating to patents and trademarks.

*** This article is for informational purposes only.  This article does not constitute legal advice and, in the absence of a fully executed retainer agreement, no attorney-client relationship exists between its reader and Zuber & Taillieu LLP or any of its attorneys.  For more information, please read our disclaimer.

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