elements essential to [its] case, and on which [it] will bear the burden
of proof at trial." Celotex, 477 U.S. at 322, 106 S.Ct. 2548.
B. Defendants' Motion for Summary Judgment
Defendants contend that the claims at issue in the subject patents are
invalid and unenforceable. Specifically, they argue that the on-sale bar
of 35 U.S.C. § 102 (b) renders the patent claims at issue invalid.
Defendants also argue that the public disclosure bar renders the patent
claims at issue invalid. Finally, they argue that Persistence's omission
of Skinner's contributions to the invention in its patent application
renders the patents unenforceable with respect to the claims at issue in
1. General Legal Standards Relating to the Patent Act
a. Invalidity of a Patent
1) The On-Sale Bar
Under the "on-sale bar" to patentability, a person is not entitled to a
patent if "the invention was . . . on sale in this country, more than one
year prior to the date of the application for a patent . . ."
35 U.S.C. § 102 (b). "It is a condition upon an inventor's right to a
patent that he shall not exploit his discovery competitively after it is
ready for patenting; he must content himself with either secrecy, or
legal monopoly." Metallizing Engineering Co. v. Kenyon Bearing & Auto
Parts Co., 153 F.2d 516, 520 (2nd Cir. 1946). A determination of whether
a patent is invalid under the on-sale bar is a question of law based on
underlying issues of fact. See Weatherehem Corp. v. J.L. Clark, Inc.,
163 F.3d 1326, 1332 (Fed.Cir. 1998). The standard for the application of
the on-sale bar was recently articulated by the Supreme Court in Pfaff
v. Welts Electronics, Inc., 525 U.S. 55, 119 S.Ct. 304, 142 L.Ed.2d 261
(1998). A patent is invalid under the on-sale bar if two conditions have
occurred before the critical date. See id. at 67, 119 S.Ct. 304. First
the invention must be the subject of a commercial offer for sale, and
second, the invention must be ready for patenting. See id. at 67-68, 119
a) Commercial Sale vs. Experimental Use
The first condition requires that a sale or offer for sale be made.
Pfaff 525 U.S. at 67, 119 S.Ct. 304; 35 U.S.C. § 102 (b). A defendant
attempting to prove that an invention was the subject of a commercial
sale "must demonstrate by clear and convincing evidence that there was a
definite sale or offer to sell more than one year before the application
for the subject patent, and that the subject matter of the sale or offer
to sell fully anticipated the claimed invention or would have rendered
the claimed invention obvious by its addition to the prior art." STX,
L.L.C., v. Brine, Inc., 211 F.3d 588, 590 (Fed.Cir. 2000).
Notwithstanding, the use of an invention by the inventor himself, or of
any other person under his direction, by way of experiment, and in order
to bring the invention to perfection, has never been regarded as [a
public] use. City of Elizabeth v. American Nicholson Pavement Co.,
97 U.S. 126, 134, 7 Otto 126, 24 L.Ed. 1000 (1877). This doctrine is
based on the underlying policy of providing an inventor time to determine
if the invention is suitable for its intended purpose, in effect, to
reduce the invention to practice. See id. at 137, 7 Otto 126 (holding
that "[i]t is sometimes said that an inventor acquires an undue advantage
over the public by delaying to take out a patent . . . but this cannot be
said with justice when the delay is occasioned by a bona fide effort to
bring his invention to perfection, or to ascertain whether it will answer
the purpose intended."). If a use is experimental, it is not, as a matter
of law, a public use within the meaning of section 102. Lough v.
Brunswick Corp., 86 F.3d 1113, 1120-1121 (Fed, Cir. 1996).
Where an invention has been reduced to practice, however, it can no
longer be deemed experimental. Zacharin v. U.S., 213 F.3d 1366, 1369
(Fed.Cir. 2000); see also RCA Corp. v. Data General Corp., 887 F.2d 1056,
1061 (Fed.Cir. 1989) (holding that "experimental use, which means
perfecting or completing an invention to the point of determining that it
will work for its intended purpose, ends with an actual reduction to
b) Invention Ready to Patent
The second condition "may be satisfied in at least two ways: by proof
of reduction to practice before the critical date; or by proof that prior
to the critical date the inventor had prepared drawings or other
descriptions of the invention that were sufficiently specific to enable a
person skilled in the art to practice the invention." Pfaff 525 U.S. at
67-68, 119 S.Ct. 304.
While it is true that reduction to practice ordinarily provides the
best evidence that an invention is ready for patenting, it does not
follow that proof of reduction to practice is necessary. Pfaff 525 U.S.
at 66, 119 S.Ct. 304. In fact, it is immaterial for the purposes of the
on-sale bar that the invention at issue was "makeshift". Linear
Technology Corp. v. Micrel, Inc., 63 F. Supp.2d 1103, 1123 (N.D.Cal.
1999). Similarly, the fine tuning of features not claimed in the patent
after the critical date is insufficient to avoid the on-sale bar. See
Weatherchem, 163 F.3d at 1334.
2) Public Demonstration
In addition to the foregoing, section 102(b) also invalidates patents
where the patented invention was in the public use more than one year
prior to the patent application date. Public use is construed broadly, and
includes a public demonstration of the invention by the inventor.
Harrington Manufacturing Co., Inc. v. Powell Manufacturing Co.,
815 F.2d 1478, 1481 (Fed.Cir. 1986).
a. Unenforceability of a Patent
As a separate matter, applicants for patents and their attorneys are
required to prosecute patent applications in the U.S. Patent and
Trademark Office ("PTO") with candor, honesty, and good faith.
37 C.F.R. § 1.56 (a). Inequitable conduct includes affirmative
misrepresentations of material facts, failure to disclose material
information, or submission of false material information, coupled with an
intent to deceive the PTO. Semiconductor Energy Laboratory Co., Ltd. v.
Samsung Electronics Co., Ltd., 204 F.3d 1368, 1373 (Fed.Cir. 2000). The
law is clear that proper identification of the inventor — or one
who designed the claimed invention — is a material fact. See
generally Stark v. Advanced Magnetics, Inc., 119 F.3d 1551 (Fed.Cir.
a. Invalidity of Patents at Issue
1) On-Sale Bar
a) Invention Ready for Patenting
From the very start of this litigation, Persistence's position has been
that the inventions which are the subject of the present dispute were
reduced to practice no later than January of 1992. Persistence first
asserted this position in its Initial Supplemental Disclosure served on
January 31, 2000, which stated that the software at issue in the subject
patents was conceived between January and December of 1991 and was reduced
to practice no later than January of 1992. See Local Rule 16-6(e)
(stating that disclosures constitute evidence). Said dates are further
confirmed by the declaration of Derek Henninger, the Vice President of
Engineering at Persistence and one of the inventors of the subject
patented software, in connection with a companion case to this litigation
entitled Persistence v. Secant Technologies, Inc., No. C-00-1488-PJH,
which is also currently being litigated in this court, in his
declaration, signed on March 10, 2000, Henninger declared that
"[t]he conception and reduction to practice date ranges in Persistence's
Initial Disclosures of Asserted Claims are the best information
Persistence can provide based on the documents in its possession and the
memories of the engineers involved who are still at Persistence."
As stated above, reduction to practice provides the best evidence that
an invention is ready for patenting. Pfaff 525 U.S. at 66, 119 S.Ct.
304. Based on Persistence's admissions that the subject inventions were
reduced to practice no later than January of 1992, it follows that the
subject inventions were ready for patenting no later than January of
Notwithstanding the foregoing, on September 11, 2000, three weeks after
defendants filed their motion for summary judgment based on Persistence's
position that the inventions were reduced to practice on or before January
of 1992 and almost a year into the present litigation, Persistence
submitted a Second Supplemental Initial Disclosure which stated that
claim 1 of the '362 patent was conceived no later than December of 1991
and reduced to practice on August 17, 1992, that claims 2-7 of the '362
patent were conceived no later than December of 1991 and reduced to
practice on March 19, 1993, and that claim 11 of the '362 patent was
conceived no later than January of 1991 and reduced to practice on August
17, 1992. In addition, said Second Supplemental Initial Disclosure stated
that claims 1 and 4 of the '506 patent were conceived no later than
December of 1991 and reduced to practice on March 19, 1993, that claim 6
of the '506 patent was conceived no later than January of 1991 and
reduced to practice on March 19, 1993, and that claim 12 of the '506
patent was conceived and reduced to practice on March 19, 1993.
Further still on November 13, 2000, Persistence submitted a Third
Supplemental Initial Disclosure which stated that claim I of the '362
patent was conceived no earlier than July 31, 1992 and no later than April
14, 1993 and was reduced to practice no earlier than August 3, 1992 and
no later than April 14, 1993, that claims 2-7 and 11 of the '362 patent
were conceived no earlier than January 5, 1993 and no later than February
19, 1993 and reduced to practice no earlier than January 5, 1993 and no
later than February 19, 1993. In addition, said Third Supplemental
Initial Disclosure stated that claims 1, 4, 6 and 12 of the '506 patent
were conceived no earlier than January 5, 1993 and reduced to practice no
later than February 19, 1993.
Defendants argue that Persistence's attempt to avoid summary judgment
by changing the reduction to practice dates is a "sham."
A party cannot submit a declaration flatly contradicting its prior
deposition or other sworn testimony in an attempt to "create" an issue of
fact and avoid summary judgment. Kennedy v. Allied Mutual Ins. Co.,
952 F.2d 262, 266-67 (9th Cir. 1991); see also Cleveland v. Policy
Management Systems Corp., 526 U.S. 795, 807, 119 S.Ct. 1597, 143 L.Ed.2d
966 (1999). As the Kennedy court noted, if a party "could raise an issue
if fact simply by submitting an affidavit contracting his own prior
testimony, this would greatly diminish the utility of summary judgment as
a procedure for screening out sham issues of fact." 952 F.2d at 266.
Notwithstanding, "[a] definite distinction must be made between
discrepancies which create transparent shams and discrepancies which
create an issue of credibility or go to the weight of the evidence." Bank
of Illinois v. Allied Signal Safety Restraint Sys., 75 F.3d 1162, 1169-70
The purpose of summary judgment is to separate real,
genuine issues from those which are formal or
pretended. To allow every failure of memory or
variation in a witness's testimony to be disregarded
as a sham would require far too much from lay
witnesses and would deprive the trier of fact of the
traditional opportunity to determine which point in
and with which words the witness ... was stating the
truth. Variations in a witness's testimony and any
failure of memory throughout the course of discovery
create an issue of credibility as to which part of the
testimony should be given the greatest weight if
credited at all. Issues concerning the credibility of
witnesses and weight of the evidence are questions of
fact which require resolution by the trier of fact.
Id. at 1170 (citations omitted).
In accordance with the foregoing, the Ninth Circuit requires the
district court to make a factual determination that the contradiction is
actually a "sham." Kennedy, 952 F.2d at 267. In other words, the district
court must determine whether the nonmoving party submitted a declaration
containing the contradicting testimony in an effort to "create" an issue
of fact and avoid summary judgment. Id. at 266-67. In making this
determination, the court is to consider whether the party who submitted
the declaration contradicting its prior testimony presents a sufficient
explanation for the contradiction. See Cleveland v. Policy Management
Systems Corp., 526 U.S. at 807, 119 S.Ct. 1597; see also Leslie v. Grupo
ICA, 198 F.3d 1152, 1157-58 (9th Cir. 1999).
Despite the fact that Persistence's Second and Third Initial
Supplemental Disclosures completely contradict its First Initial
Supplemental Disclosure and Henninger's March 10, 2000, declaration,
Persistence fails to proffer any evidence explaining the reason for the
contradiction. In fact, Derek Henninger completely ignores his prior
admission that the subject inventions were reduced to practice in or
before January of 1992 in his declaration submitted in opposition to the
motion for summary judgment. While Persistence does mention in a footnote
in its opposition brief that after serving its Initial Supplemental
Disclosure, it found documents that led it to believe that there was a
fundamental design flaw in the foreign keys and relationships that
required redesign of the software in August of 1992 and that the semantic
IDs, an alleged key aspect of the inventions, were not added to the
software until March of 1993, the court finds said explanation to be
inadmissible and substantially incomplete. In particular, Persistence's
explanation lacks any evidentiary support and does not identify which
documents led to Persistence's discovery of the "new" dates, when such
documents were found, and why such documents were not found earlier.
At the hearing for this matter, the court informed Persistence that it
was "surprised" at its complete failure to explain the contradiction
between its original contention that the inventions were reduced to
practice on or before January of 1992 and its post-motion contention that
the inventions were reduced to practice in March of 1993. In response,
Persistence presented two documents that it allegedly did not discover
until sometime in the summer of 2000 which led to its discovery of the
"new" reduced to practice dates. These two documents related only to the
addition of the semantic IDs to the software. Persistence did not present
any documents relating to the discovery of the alleged August 1992 design
flaw. One of these documents was a page from the Appendix of
Persistence's User Manual Vl.0 which stated in relevant part as follows:
A.3.1. Planned [E]nhancements
The following list shows scheduled release dates.
Enhancements scheduled for release by 2/93
1. Semantic key support for existing tables
2. Referential integrity for existing tables.
Defendants were quick to point out, however, that this document was
produced by Persistence in January of 2000 in connection with its Initial
Supplemental Disclosure, as evidenced by its bates number. Persistence
did not dispute this fact. In light of the fact that the document which
allegedly led to its discovery of the "new" reduced to practice dates was
produced to defendants in January of 2000, the court finds the argument of
Persistence's counsel that Persistence did not find this document until
the summer of 2000 less than compelling. In any event, this explanation
suffers from the same defect as the explanation proffered in the footnote
in Persistence's opposition brief; it lacks any evidentiary support.
Furthermore at the hearing, Persistence's counsel did not request that
the court leave the record open so that he could submit, at a later
time, evidence to support his explanation.*fn2
In light of Persistence's failure to proffer any evidence explaining
the reason for its post-motion maneuvering with regard to the dates that
the subject inventions were reduced to practice, the court can only
conclude that Persistence submitted its Second and Third Initial
Supplemental Disclosures in order to "create" a triable issue of fact and
avert summary judgment. Accordingly, the court disregards the "new" dates
contained in Persistence's Second and Third Initial Supplemental
Disclosures. As a result, Persistence is bound by its prior admissions
that the inventions at issue were reduced to practice on or before
January of 1992.
b) Commercial versus experimental use
In the present case, it is undisputed that the inventions were offered
for sale to Du Pont and Anderson between April and July of 1992.
Furthermore, where an invention has been reduced to practice, it can no
longer be deemed experimental. Zacharin, 213 F.3d at 1369. Because the
subject inventions were reduced to practice in January of 1992 and
because the inventions were offered for sale to Du Pont and Anderson
between April and July of 1992, the court finds the claims of the patents
at issue in the present litigation to be invalid pursuant to the on-sale
bar contained in 35 U.S.C. § 102 (b).
b. Defendants' Remaining Arguments
Because the court finds the claims of the patents at issue in the
present litigation to be invalid pursuant to the on-sale bar, the court
need not address defendants' remaining arguments raising the public
disclosure bar and Persistence's alleged inequitable conduct in
connection with the patent application.
In accordance with the foregoing, the court GRANTS defendants' motion
for summary judgment of the invalidity of claims 1-7 and 11 of United
States Patent No. 5,615,362 and claims 1, 4, 6 and 12-14 United States
Patent No. 5,706,506.
This order fully adjudicates the motion listed at number 75 on the
clerk's docket for this case.
IT IS SO ORDERED.