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Studies Continuing Beyond Filing of Patent Application Cannot Constitute Experimental Use

March 25, 2009

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Last Month at the Federal Circuit - April 2009

Judges: Bryson, Dyk (author), Patel (District Judge sitting by designation)

[Appealed from: S.D. Tex., Judge Gilmore]

In Clock Spring, L.P. v. Wrapmaster, Inc., No. 08-1332 (Fed. Cir. Mar. 25, 2009), the Federal Circuit affirmed a district court’s grant of SJ of invalidity and the district court’s SJ finding that a false advertising claim was without merit.

Clock Spring, L.P. (“Clock Spring”), a high-pressure gas pipeline repair company, is the exclusive licensee of U.S. Patent No. 5,632,307 (“the ’307 patent”), directed to methods for repairing damaged high-pressure gas pipes. The claimed repair method includes filling pipe defects with a filler material and then wrapping the pipe with a high tensile strength material. Its main distinctive feature over the prior art is that wrapping of the damaged pipe occurs while the filler material is in an uncured state so as to ensure smooth and continuous contact between the wrap and the pipe.

In 2005, Clock Spring filed an infringement suit against Wrapmaster, Inc. (“Wrapmaster”) alleging infringement of all claims of the ’307 patent.

It also filed a separate Lanham Act suit alleging that Wrapmaster engaged in false advertising. The two cases were consolidated. Following discovery, Wrapmaster filed an SJ motion of invalidity of all claims of the ’307 patent and an SJ motion on the Lanham Act claim. Both motions were referred to a magistrate judge.

In the invalidity SJ motion, Wrapmaster argued that the claims were invalid due to obviousness over a number of prior art patents and due to an alleged prior public use under 35 U.S.C. § 102(b). Rejecting Clock Spring’s argument that a 1989 demonstration by named inventor Norman C. Fawley was experimental, the magistrate judge recommended that the 1989 demonstration triggered the public use bar. The magistrate judge also recommended that the claims were invalid due to obviousness over the prior art. The district court rejected the magistrate judge’s recommendation concerning the public use bar, finding that additional reports submitted by Clock Spring raised a genuine issue of material fact regarding its experimental use claim. The district court agreed with the magistrate judge as to obviousness, however, and granted SJ of invalidity on that basis.

As to the Lanham Act SJ motion, the magistrate judge found that Clock Spring had failed to provide any evidence that two statements Wrapmaster made about its own pipe wrap product resulted in actual consumer deception or were materially misleading. The district court agreed, granting SJ in favor of Wrapmaster. Clock Spring timely appealed.

On appeal, the Federal Circuit evaluated the 1989 demonstration as a possible prior public use bar. Noting that representatives of several domestic gas transmission companies attended the demonstration without any obligation of confidentiality, the Federal Circuit concluded that the 1989 demonstration was indisputably public. Slip op. at 9. Next, the Federal Circuit considered Clock Spring’s assertion that the 1989
demonstration did not encompass three claim limitations, namely: (1) that “at least one cavity” be involved; (2) that “filler material” be used to fill the “cavity”; and (3) that the pipe be wrapped while the filler material was in an “uncured state.” Pointing out that “the public use bar applies to obvious variants of the demonstrated public use,” the Court held that Clock Spring’s argument regarding the three claim limitations was without merit, as the 1989 demonstration involved filling “pinhole areas of corrosion” with filler compound, and the conditions under which the demonstration occurred indicated that the filler was in an uncured state. Id. at 10-11.

Moving to address Clock Spring’s alternative assertion that the 1989 demonstration was an experimental use, the Federal Circuit emphasized that “there is no experimental use unless claimed features or overall workability are being tested for purposes of the filing of a patent application.” Id. at 13. In this case, Clock Spring argued that the 1989 demonstration was designed to determine the durability of the repair method, not to refine the claim limitations. Nevertheless, the Federal Circuit rejected Clock Spring’s argument. First, the Court observed that no report of the 1989 demonstration in any way suggested that the demonstration was designed to test durability. Rather, the Federal Circuit observed that the reports clearly stated that the durability testing was for “acceptance by regulators and the pipeline industry.” Id. at 15. Second, the 1989 demonstration involved burial of the repaired pipe underground. The buried pipe was not dug up and examined until nearly a year after the patent application was filed. The Court found that by filing the patent application, the inventors represented that the invention was ready for patenting and, as a result, “studies done thereafter cannot justify an earlier delay in filing the application under the rubric of experimental use.” Id. Accordingly, as the 1989 demonstration encompassed all elements of claim 1 of the ’307 patent and was not for experimental purposes, the Federal Circuit held claim 1 invalid due to prior public use. In light of its finding of invalidity due to prior public use, the Court did not reach the obviousness question.

The Court next addressed the district court’s grant of SJ on Clock Spring’s Lanham Act false advertising claim. Abandoning its assertion that the two Wrapmaster statements were materially misleading, Clock Spring only argued on appeal that SJ was inappropriate because genuine issues of material fact existed as to whether two statements made by Wrapmaster about its products were literally false. In support of its claim that Wrapmaster’s statements were literally false, Clock Spring relied on an expert report and declaration. The Federal Circuit noted, however, that the expert report and declaration failed to address the subject matter of the first Wrapmaster statement, and were based on a review of old Wrapmaster products prior to redesign. Clock Spring thus presented no evidence that the two Wrapmaster statements about its current products were literally false. Accordingly, the Court affirmed the district court’s grant of SJ.