The Fox Group, Inc. v. Cree, Inc.

Invalidation Under § 102(g) Does Not Require Prior Conception If There Was Prior Reduction to Practice


November 28, 2012


Last Month at the Federal Circuit - December 2012

Judges: Newman, O'Malley (concurring-in-part, dissenting-in-part), Wallach (author)

[Appealed from: E.D. Va., Judge Smith]

In Fox Group, Inc. v. Cree, Inc., No. 11-1576 (Fed. Cir. Nov. 28, 2012), the Federal Circuit affirmed the district court’s SJ of invalidity under 35 U.S.C. § 102(g) as to the asserted claims but vacated the decision as to the remaining unasserted claims.

The Fox Group, Inc. (“Fox”) is the assignee of U.S. Patent No. 6,562,130 (“the ’130 patent”). The ’130 patent has a priority date of January 22, 1997, and is directed to a low-defect silicon carbide (“SiC”) crystal semiconductor. Fox initially asserted all claims of the ’130 patent against Cree, Inc. (“Cree”) and, prior to judgment, limited its infringement assertion to claims 1 and 19. Cree filed a motion for SJ of invalidity of all claims based on prior inventorship under § 102(g). Cree asserted, inter alia, that Cree had reduced the invention to practice in February 1995, and had described the invention at a conference in 1995 and in a published article in 1996. The district court granted Cree’s motion, finding all of the claims of the ’130 patent invalid. Fox appealed.

On appeal, Fox argued that Cree was not a prior inventor and, if it was, that Cree had abandoned, suppressed, or concealed the invention. Fox also argued that the district court erred in invalidating all claims of the ’130 patent when only claims 1 and 19 were asserted.

Regarding inventorship, the panel decision held that “Cree needs only prove either that it reduced its invention to practice first or that it conceived of the invention first and was diligent in reducing it to practice.” Slip op. at 8. “An alleged prior inventor would need to prove conception only if the alleged prior inventor had not successfully reduced the invention to practice before the critical date of the patent-at-issue . . . .” Id. The panel found that because Cree reduced the invention to practice in 1995, before the critical date of the ’130 patent, it did not need to prove conception. The Court rejected Fox’s argument that Cree failed to prove reduction to practice because Cree admitted it had not invented a repeatable process. The panel majority held that there is no requirement that the alleged prior inventor repeatedly reduced the invention to practice. The panel majority held that there was no genuine issue of material fact as to whether Cree reduced the invention to practice prior to Fox’s critical date.

Regarding abandonment, suppression, or concealment, the panel majority rejected Fox’s argument “that abandonment, suppression, or concealment may be inferred from the inventor’s ‘unreasonable delay in making the invention publicly known.’” Id. at 10 (quoting Dow Chem. Co. v. Astro-Valcour, Inc., 267 F.3d 1334, 1342 (Fed. Cir. 2001)). The panel majority explained that neither filing a patent application nor commercialization are required, and that “[t]here are other ways to prove public disclosure including, e.g., the use of a printed publication[] as prior art under 35 U.S.C. §§ 102(a), (b).” Id. at 11.

Fox argued that Cree’s prior disclosures needed to be enabling. The Court distinguished the cases cited by Fox, which were directed to process claims, and held that there is a distinction under § 102(g) between process claims and product claims as the ones asserted. The panel majority concluded that Fox did not produce sufficient evidence to generate a genuine issue of material fact as to whether Cree suppressed or concealed its invention. The panel majority affirmed the district court’s holding that claims 1 and 19 are invalid under § 102(g).

The panel majority also noted that the remaining claims were not asserted. Both parties were on notice that only claims 1 and 19 were at issue. “There was no case or controversy with respect to the unasserted claims at the time of the summary judgment motions; therefore, the district court did not have jurisdiction over the unasserted claims.” Id. at 16. The panel vacated the district court’s holding that the remaining claims of the ’130 patent are invalid.

Judge O’Malley concurred-in-part and dissented-in-part. Judge O’Malley agreed with the panel majority that Cree reduced its invention to practice first but dissented from the panel majority’s judgment. Judge O’Malley opined that SJ was inappropriate because Fox presented direct and inferential evidence of abandonment, suppression, or concealment, and Cree’s publication was insufficient to rebut that evidence. “If a prior inventor could disclose the mere existence of a product and take no further action for nine years, the concept of abandonment, suppression, or concealment would be rendered meaningless.” O’Malley Dissent at 10.

Summary authored by Robert A. Hall, Esq.