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American Intellectual Property Law Association

Hamilton Beach Brands v. Sunbeam Products: Lessons Learned

Naomi Abe VoegtliIP Practice in Japan Committee Pre-Meeting Seminar

Phoenix AZ

January 28, 2014

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Agenda

• Background: Pre-AIA On-Sale Bar• Hamilton Beach Brands v. Sunbeam Products, No.

2012-1581 (Fed. Cir. Aug. 14, 2013)• Effects of America Invents Act (“AIA”) on On-Sale

Bar Jurisprudence• Lessons Learned

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Background: On-Sale Bar

Pre-AIA 35 U.S.C. §102(b): On-Sale Bar

A person shall be entitled to a patent unless -

. . .

(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States, or . . . .

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Hamilton Beach Brands v. Sunbeam Products

Slow cookers with “clips”•U.S. Patent No. 7,947,928

Hamilton Beach: Stay or Go® Sunbeam: Cook & Carry®

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Hamilton Beach Brands v. Sunbeam Products

Is the ‘928 patent invalid under the on-sale bar?

Feb. 8, 2005 Hamilton Beach issued a purchase order to is supplier

for manufacture of its Stay or Go® slow cookers

Feb. 25, 2005 The supplier, via e-mail, confirmed that: (1) it had received the purchase order and (2) it would begin production after receiving Hamilton Beach’s release

Mar. 1, 2006 Hamilton Beach filed U.S. Patent Application No. 11/365,222, which Hamilton Beach claimed to be a grandparent of the ‘928 patent

Hamilton Beach gave its release to the contract manufacturer to begin a production

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Hamilton Beach Brands v. Sunbeam Products

Decided : The Feb. 25, 2005 e-mail from the supplier to Hamilton Beach was a triggering offer for sale, and thus the ‘928 patent is invalid under the on-sale bar of pre-AIA 35 U.S.C. §102(b)

Pfaff v. Wells Elecs., Inc, 525 U.S. 55 (1998)•The on-sale bar applies when two conditions are satisfied before the critical date:

1. The claimed invention must be the subject of a commercial offer for sale; and

2. The invention must be ready for patenting

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Hamilton Beach Brands v. Sunbeam Products

• Commercial offer for sale– Actual sale is not required

– An attempt is sufficient, if it is “sufficiently definite that another party could make a binding contract by simple acceptance.”

• “Ready for patenting”– An invention is “ready for patenting” when prior to the

critical date:1. the invention is reduced to practice; OR

2. the invention is depicted in drawings or described in writings of sufficient nature to enable a person of ordinary skill in the art to practice the invention

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Hamilton Beach Brands v. Sunbeam Products

• There is no “supplier exception”– It is irrelevant that the commercial offer for sale was

made to Hamilton Beach by its own supplier

• A commercial offer for sale made by a foreign entity that is directed to a U.S. customer at its place of business in the U.S. may serve as an invalidating activity

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Hamilton Beach Brands v. Sunbeam Products

Dissent (Judge Reyna)

•Experimental use exception to the on-sale bar– Is the offer for sale commercial in nature or for purely

experimental purposes?

•Expressed “greatest concerns” over the implications for future innovators, especially for “small enterprises and individual inventors who lack in-house prototyping and fabricating capabilities.”

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Effect of AIA on On-Sale Bar Jurisprudence

35 U.S.C. §102

(a) NOVELTY; PRIOR ART—A person shall be entitled to a patent unless—

(1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention . . . .

(b) EXCEPTIONS—

(1) DISCLOSURES MADE 1 YEAR OR LESS BEFORE THE EFFECTIVE FILING DATE OF THE CLAIMED INVENTION—A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if—

(A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or . . . .

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Effect of America Invents Act (“AIA”) on On-Sale Bar Jurisprudence

• Does one-year grace period apply to on-sale bar?– Highly likely: legislative history, USPTO, statutory construction

• USPTO: Third-party supplier’s commercial embodiment that includes “trivial” or “obvious” modification will create an immediate bar not saved by the grace period.

• Secret (private) v. public sale– According to the USPTO, post-AIA, a “secret sale . . . does not

qualify as prior art.” AIA Examination Guidelines, 78 Fed. Reg. 11059, 11060 (Feb. 14, 2013)

– Statutory construction• “or otherwise available to the public”

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Lessons Learned

• File patent applications prior to any outside disclosure of an invention regardless of whether the recipient is bound by a confidentiality agreement– File patent applications prior to sending

specifications/orders to a contract manufacturer even for a purpose of producing prototypes for experimental purposes

• Avoid using contract manufacturer– Often not feasible especially for small businesses

and individual inventors

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Thanks for your attention! Questions?

Naomi Abe VoegtliSAP

naomi.voegtli@sap.com

This presentation is my personal view and does not purport to reflect views of

SAP or its affiliates.