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Unrestricted Demonstrations of Computer Workstation Invalidate Patent for Public Use

01-1445
July 09, 2002

Decision icon Decision

Last Month at the Federal Circuit - August 2002

Judges: Mayer (author), Newman, and Prost

In Netscape Communications Corp. v. Konrad, No. 01- 1455 (Fed. Cir. July 9, 2002), the Federal Circuit affirmed the district court’s SJ of invalidity of U.S. Patent Nos. 5,544,320; 5,696,901; and 5,974,444 (“the patents-insuit”) issued to and owned by Konrad, under the publicuse and on-sale bars of 35 U.S.C. § 102(b).

On January 8, 1993, Konrad filed a patent application representing a culmination of work performed at the Lawrence Berkeley Laboratory (“LBL”), a research facility funded by the Department of Energy, on systems that allow a computer user to access and search a database residing on a remote computer. The patents-in-suit each issued from continuation applications claiming priority to the application filed January 8, 1993.

In February 2000, Konrad filed suit against various customers of Netscape Communications Corporation (“Netscape”), alleging infringement of the patents-in-suit. Netscape filed for DJ seeking invalidity, noninfringement, and unenforceability and was granted partial SJ that the patents-in-suit were invalid under the public-use and onsale bars.

On appeal, Konrad argued that while others did use his remote database object system, he never disclosed the source code necessary to enable the invention. The Federal Circuit concluded, however, that because an invention is defined by the claims, and because all claimed features were in public use, this argument was not compelling.

Konrad further argued that the demonstration and uses by others were not public uses because of an implied duty of confidentiality. He argued that because the Dept. of Energy funded his project, it owned the invention, and that a contract between the Dept. of Energy and LBL established a duty of confidentiality for all who worked on the project. The Federal Circuit declined to accept Konrad’s argument, concluding instead that any duty of confidentiality must be owed to the inventor to avoid the public-use bar. The Court found that Konrad had failed to make any discernable effort to establish a requirement of confidentiality and had failed to provide evidence that he had maintained records of any alleged experimental use. It observed that Konrad’s own testimony supported a conclusion that the demonstration was geared to making the remote database object more commercially attractive. In combination with Konrad’s failure to establish a requirement for confidentiality, the Federal Circuit concluded that no experimental use had been established.

Finally, Konrad argued that the offer to provide a working prototype in return for employment did not trigger the on-sale bar. The Federal Circuit found that the documentary evidence established an offer for sale under contract law, and Konrad had stipulated that the invention was reduced to practice at the time of the alleged offer. The Court found that, despite the fact that both labs were funded by the Dept. of Energy, they constituted separate entities for the purposes of the on-sale bar. Accordingly, the Federal Circuit affirmed the SJ of invalidity of the patents-in-suit.