Petition for Writ of Certiorari — Lough v. Brunswick Corp.

ii, % +

') 961556 apr 11997,

OFFICE OF THE CLERK

No. 96-___

In The

Supreme Court of the United States

October Term, 1996

¢

STEVEN G. LOUGH,

Petitioner,

BRUNSWICK CORPORATION,

d/b/a MERCURY MARINE,

Respondent.

*

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Federal Circuit

e

PETITION FOR WRIT OF CERTIORARI

+

Of Counsel:

ARNOLD B. SILVERMAN RicHarp R. GARLAND

Kirk D. Houser Counsel of Record

EcKERT SEAMANS CHERIN Warp E. DAHLGREN

& Me ttotrt, LLC DICKINSON & GisBsBons, P.A.

600 Grant Street 1750 Ringling Boulevard

42nd Floor Post Office Box 3979

Pittsburgh, PA 15219 Sarasota, FL 34230

(412) 566-6000 (941) 366-4680

Counsel for Petitioner,

Steven G. Lough

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTION PRESENTED

Should the United States Court of Appeals for the

Federal Circuit invalidate a patent on the basis that the

invention was in public use more than one year before

the date of filing of the application for the patent as a

matter of law, despite a jury’s express factual finding that

there was no prior public use as the use was experimental

use?

ii

PARTIES

Pursuant to Supreme Court Rules 14.1(b) and 29.6,

Petitioner, Steven G. Lough, discloses that he is a person

and there is no parent or subsidiary company to be listed

at the present time. The Appellant in the proceeding

below, Brunswick Corporation, d/b/a Mercury Marine, is

a corporation which does business as Mercury Marine.

ili

TABLE OF CONTENTS

Page

QUESTION PRESENTED..........--00++eseeeeeees i

ah aisv sg haes secs hacersesecasgees ii

TABLE OF CONTENTS........---scccccscccceeeces iii

TABLE OF AUTHORITIES .........-+--eeeeees ere

OPINIONS BELOW. ..........00ccececcceeeeeseneee 1

JURISDICTION .........-- eee e eee eect eee ee nee enees 1

STATUTES INVOLVED .........--eseeceeeeeeeeeeee 1

STATEMENT OF THE CASE........-++-seeeeeeeeee 2

A. Entroduction.......cccccccccscccscccccccccees 2

B. Factual and Procedural History ...........--. 3

REASONS FOR GRANTING THE WRIT ........... 12

THE FEDERAL CIRCUIT’S DETERMINATION

THAT PRIOR PUBLIC USE WHICH INVALI-

DATES A PATENT IS A QUESTION OF LAW IS

ERRONEOUS AND CONFLICTS WITH THIS

COURT’S PRECEDENTS........--seseeeceeeecees 12

NE bce a cern srsctecscesanuesessenes 22

ake awh se vgace seseeee dese es App. 1

iv

TABLE OF AUTHORITIES

Page

CASES

Anderson v. City of Bessemer City, 470 U.S. 564

{Speer err errr rr errr rr ere irr rere rr 20, 22

Atlantic Thermoplastics Co., Inc. v. Faytex Corp., 970

oe i a ec eee eer Cnr eT err e 21

Atlas v. Eastern Air Lines, Inc., 311 F.2d 156 (1st Cir.

ee re er ee reer ee ree 13

Baker Oil Tools, Inc. v Geo Vann, Inc., 828 F.2d 1558

oo! Me Sy ne ener eer are 16

Best v. District of Columbia, 291 U.S. 411 (1934)...... 19

Cantrell v. Wallick, 117 U.S. 689 (1886)............... 13

City of Elizabeth v. American Nicholson Pavement

Oe ee Re Sk eg re reer ere 14

Consolidated Fruit-Jar Co. v. Wright, 94 U.S. 92

0) eee ee ee ee er Parry are 13

DelMar Eng’g Lab. v. Physio-Tronics, Inc., 642 F.2d

te Co ah, | | rere eT errr errs Ter Te 13

DeLong Corp. v. Raymond Int'l, Inc., 622 F.2d 1135

RT Oe ob aks soe da ce padioeennwseseederessess 13

Electric Storage Battery Co. v. Shimadzu, 307 US. 5,

ge. POTEET ORT ELT EEE T OTT rr Leer ore ae 14

FMC Corp. v. F.E. Myers & Bros. Co., 384 F.2d 4 (6th

ty POP eee eee rer Creer errr ee 13

Gayler v. Wilder, 51 U.S. (10 How.) 477 (1850) ....... 12

General Talking Pictures Corp. v. Western Electric

Ce. Se rs Se CR 65.065 Ko Rein seed seer inure 13

Smita an ata ei

Vv

TABLE OF AUTHORITIES - Continued

Page

Hycor Corp. v. Schlueter Co., 740 F.2d 1529 (Fed.

ee | errr rer rr yr eee es Ge ye 14

In re Reese, 290 F.2d 839 (C.C.P.A. 1961)............. 13

International Tooth-Crown Co. v. Gaylord, 140 US.

SO EI i sake 5 v.oes sane 5 ERe se REN Bae eeees 13

Kendall v. Windsor, 62 U.S. (21 How.) 322 (1858)..... 12

Lear Siegler, Inc. v. Ark-Ell Springs, Inc., 569 F.2d

2 Coe Te Bere i a eink eRe es ea ees 13

Lough v. Brunswick Corporation, 86 F.3d 1113 (Fed.

| Ore errr er Perr eo. 5, 6, 15

Lough v. Brunswick Corporation, 103 F.3d 1517 (Fed.

Se ee ko ins cena 16, 17, 18, 20, 21, 22

Manning v. Cape Ann Isinglass & Glue Co., 108 U.S.

OR Pe o's. v css ec Reece eer ee ae ek ees 13

Manville Sales Corp. v. Paramount Systems, Inc., 917

BS SOG GG. Gat TOs 6a oc eevee s caseicns 14, 16, 18

Markman v. Westview Instruments, Inc., __ U.S.

Seo: SF Bae FC. . ee re TET etter 2

McGraw-Edison Co. v. Central Transformer Corp., 308

eo Bee ee ees ee 13

Micro Chemical, Inc. v. Great Plains Chemical Co.,

Inc., 103 F.3d 1538 (Fed. Cir. 1997)............. 21, 22

Moleculon Research Corp. v. CBS, Inc., 793 F.2d 1261

CP Sa Rs ov ka ks Ss cc ¥en hi haa bese eeeee ess 14, 18

Pennock v. Dialogue, 27 U.S. (2 Pet.) 1 (1829)......... 12

Root v. Third Ave. R.R. Co., 146 U.S. 210 (1892)...... 14

Sinskey v. Pharmacia Ophthalmics, Inc., 982 F.2d 494

1, Se ever orree rarer rr ey rrr rrr sr 16

Smith & Griggs Mfg. v. Sprague, 123 U.S. 249 (1887) .... 13

vi

TABLE OF AUTHORITIES —- Continued

Page

Smith v. United States, 145 FSupp. 396 (Ct. Cl.

DOs ok 0 cikvcccedhivcekWemhasee kas 13

TP Laboratories, Inc. v. Professional Positioners, Inc.,

Tak Fae SG Cree. Ga Te deb eve eiedicdecencne. 16

Tucker v. Phyfer, 819 F.2d 1030 (11th Cir. 1987)....... 21

Warner-Jenkinson Co. v. Hilton Davis Chemical Co.,

__. * U.S. __, 65 U.S.L.W. 4162 (1997)............... 3

Watson v. Allen, 254 F.2d 342 (D.C. Cir. 1958)........ 13

STATUTES

BO UDA © TRG oc oven dn cesccecsentennentasaga 1

SO UBL. & TGS) cove cc csowescccsseveceses sacs passim

OPINIONS BELOW

The panel opinion of the United States Court of

Appeals for the Federal Circuit, reported at 86 F.3d 1113

(Fed. Cir. 1996), including the dissenting opinion of Cir-

cuit Judge Plager and the additional comments of Circuit

Judge Lourie, is reproduced in the Appendix to this Peti-

tion (“Pet. App.”) at pages 1-29. The Federal Circuit's

order denying rehearing, reported at 103 F.3d 1517 (Fed.

Cir. 1997), including the dissenting and concurring opin-

ions, is reproduced at Pet. App. 30-87.

+

JURISDICTION

The judgment of the United States Court of Appeals

for the Federal Circuit was filed and entered on June 12,

1996. On June 26, 1996, Petitioner filed a Petition for

Rehearing and Suggestion for Rehearing In Banc, which

the Court of Appeals denied on January 2, 1997. The

jurisdiction of this Court is invoked under 28 U.S.C.

§ 1254(1).

STATUTES INVOLVED

35 U.S.C. § 102 Conditions for patentability;

novelty and loss of right to patent

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... .

35 U.S.C. § 102(b)

STATEMENT OF THE CASE

A. Introduction

Petitioner, Plaintiff in the underlying case, obtained a

judgment in the district court after a jury trial, which

judgment was based on the jury finding that the Respon-

dent, Defendant in the underlying case, had infringed

Plaintiff’s patent both literally and under the doctrine of

equivalents, and that the Defendant, had failed to prove

any defenses of (a) prior public use; (b) failure to disclose

the best mode; and (c) obviousness. A three-judge panel

of the Court of Appeals, with one judge dissenting,

reversed the judgment finding, as a matter of law on de

novo review, that Petitioner’s patent in suit was invalid

under 35 U.S.C. § 102(b) because Petitioner’s invention

had been in public use more than one year before the

patent application was filed. Petitioner’s motion for

rehearing was denied. Petitioner’s suggestion for rehear-

ing in banc was denied with four dissenting opinions.

The United States Court of Appeals for the Federal

Circuit has decided an important question of federal pat-

ent law that has not been, but should be settled by this

Court, and in a way that conflicts with relevant decisions

of this Court. Effectively, the Court of Appeals for the

Federal Circuit has removed the issue of patent invalidity

due to public use from the jury as a trier of facts. In

Markman v. Westview Instruments, Inc., _ U.S. __, 116 S.

Ct. 1384 (1996), this Court decided that patent claim

construction is an issue of law for the court, not the jury.

In Warner-Jenkinson Co. v. Hilton Davis Chemical Co., __

U.S. __, 65 U.S.L.W. 4162 (1997), this Court recently

addressed, but did not decide, the issue of whether

infringement under the patent doctrine of equivalents

should rest with the judge or with the jury as the trier of

facts. Inasmuch as the Court granted certiorari in Mark-

man and Warner-Jenkinson, the Court is aware that there

are significant issues in the division of responsibility

between the judge and the jury in the determination of

patent infringement issues. For these reasons, Petitioner

respectfully submits that the instant case presents an

appropriate vehicle for the Court to enunciate a consis-

tent national rule concerning the province of the trier of

facts on the issue of invalidating public use, versus non-

invalidating experimental use.

B. Factual and Procedural History

Petitioner, Steven G. Lough (hereinafter “Lough”),

sued Respondent, Brunswick Corporation, d/b/a Mer-

cury Marine (hereinafter “Brunswick”), for Brunswick's

infringement of U.S. Patent No. 4,848,775 (hereinafter the

“'775 Patent”), which issued on July 18, 1989, and

claimed a liquid seal assembly as well as such an assem-

bly in combination with a marine stern drive system. On

January 27, 1994, the jury returned a verdict in favor of

Lough, finding infringement and lost profit damages of

$1,500,000. In answer to question 1 of the special verdict

form, the jury found that Bruriswick had not proved that

any one of Lough’s seal assemblies were in public use

more than one year before the filing date of his patent

application. On August 26, 1994, Brunswick filed a

motion for judgment as a matter of law under Rule 50,

Federal Rules of Civil Procedure, and for new trial on

damages under Rule 59, Federal Rules of Civil Procedure,

asserting that Brunswick had not infringed the ‘775 Pat-

ent; that the ‘775 Patent was invalid as obvious; that the

‘775 Patent was invalid under 35 U.S.C. § 102(b), based on

public use more than one year before the filing date of

Lough’s patent application; and that lost-profit damages

were inappropriate. The district court denied Brunswick’s

post-trial motion, entering judgment in favor of Lough

and against Brunswick for the sum of $1,500,000 with

interest.

Subsequently, Brunswick appealed the judgment to

the United States Court of Appeals for the Federal Cir-

cuit. In its opinion and judgment rendered June 12, 1996,

a 2:1 split panel of the Court of Appeals reversed the

district court’s denial of Brunswick’s motion for judg-

ment as a matter of law on the ground of invalidity

because of prior public use, and vacated the jury’s award

of damages. Judge Lourie, writing for the panel, opined:

[T]he jury had no legal basis to conclude that

the uses of Lough’s prototypes were experimen-

tal and that the prototypes were not in public

use prior to the critical date. . . . Lough’s failure

to monitor the use of his prototypes by his

acquaintances, in addition to the lack of records

or reports from those acquaintances concerning

the operability of the devices, compel the con-

clusion that, as a matter of law, he did not

engage in experimental use... .

- ill

We conclude that the jury’s determination

that Lough’s use of the invention was experi-

mental so as to defeat the assertion of public use

was incorrect as a matter of law. The court thus

erred in denying Brunswick’s JMOL motion on

the validity of claims 1-4 of the ‘775 patent

under § 102(b).

Lough v. Brunswick Corporation, 86 F.3d 1113, 1122 (Fed.

Cir. 1996) (Pet. App. pp. 18, 19).

Judge Plager, in his dissenting opinion, stated:

Under our standard of review, the jury’s

decision to accept Lough’s version of the case is

not properly subject to reversal. The trial court

correctly denied Brunswick’s JMOL motion, and

this Court should affirm that denial... . I

believe it is improper and unjust to deny Lough

his victory at trial on the question of invalidity

under section 102(b), a question properly put to

and decided by the jury.

Id. at 1125 (Pet. App. pp. 26, 27).

On January 2, 1997, the Court of Appeals denied a

timely filed petition for rehearing and declined rehearing

in banc, with four judges dissenting. Lough v. Brunswick

Corporation, 103 F.3d 1517, 1518 (Fed. Cir. 1997) (Pet. App.

pp. 31-87). Judge Rader, in a dissenting opinion, stated:

The outcome of Lough turns on the standard

of review applied by this court. With any level

of proper deference to the fact-finding of those

who heard seventeen days of evidence, this

court must have affirmed... . A factual analysis

logically calls for the deferential review

accorded questions of fact. Respect for the

Supreme Court also calls for deference because

our nation’s highest court has repeatedly

instructed that public use is predominantly a

question of fact... .

Notwithstanding logic and binding prece-

dent, the Lough court ventured to designate pub-

lic use a question of law and extended that error

vy announcing that experimentation is also sub-

ject to unfettered review. Logic sometimes

escapes even this distinguished court, but disre-

gard of binding precedent, including the prior

jurisprudence of this court and its predecessors,

invites irreconcilable conflict and confusion.

Id. at 1529 (Pet. App. at 65-69) (footnote omitted).

Judge Plager, also dissenting, opined:

[T]he decision by the panel majority to deny the

jury any deference and thus arrogate to itself the

fact finding has not only caused a gross miscar-

riage of justice to Mr. Lough, but profoundly

contributes to the confusion and misunder-

standing that had already begun to emerge

around this question of what is, and who

decides, experimental use.

Id. at 1526 (Pet. App. at 54-55).

Judge Newman, in another dissenting opinion,

stated:

The need to exercise wisdom or judgment in

considering the totality of the circumstances

does not convert fact into law and remove the

issue from the trier of fact. To the contrary, the

exercise of wisdom and judgment when weigh-

ing and balancing the evidence is the role of the

trier of fact. . . . While the appellate court has

full authority to correct jury verdicts that are not

ine semana

supported by substantial evidence, such correc-

tion does not permit ignoring the trial process.

When the jury verdict is sustainable on the evi-

dence, the appellate role is fulfilled.

Id. at 1523 (Pet. App. at 47-48).

Although he had just a high school education and

was not a trained marine mechanic, Lough had a great

deal of intuitive mechanical ability. Between April 1986

and October 1987, Lough worked as an independent con-

tractor for Marine Service, an authorized MerCruiser

dealer in Sarasota, Florida, which serviced boats and

marine engines and drives. At Marine Service, Lough

repaired motors and stern drives, including Brunswick’s

MerCruiser stern drives, and encountered many of such

drives having badly corroded shift shaft upper end open-

ings which precluded effective sealing.

A stern drive is a propulsion device for a boat in

which the engine is located inside the boat and is coupled

to an outdrive located outside the rear of the boat. The

outdrive is housed in a driveshaft housing including an

aluminum bell housing. The stern drive includes a shift-

ing system having a gear shift shaft assembly for placing

the outdrive in forward, reverse or neutral gear. The bell

housing has apertures for the shift shaft assembly. An

upper seal assembly and a lower seal assembly, located at

the respective upper and lower ends of the shift shaft

assembly, are supposed to prevent sea water and exhaust

from passing through these apertures and causing corro-

sion. It was the MerCruiser upper seal assembly that

Lough noticed often failed in the stern drives he was

working on. Lough designed a new upper seal assembly

that isolated a part of the seal assembly (its annular seal)

from the aluminum bell housing in order to resist such

corrosion in the hostile marine environment.

When Lough conceived his invention, while working

at Marine Service, he hoped that his prototype seal

assembly would solve the seal problem. Further, he had

to determine whether his prototype worked for its

intended purpose and solved the seal problem in the

environment at the upper end of a stern drive shift shaft.

Lough obtained brass stock and machined some proto-

types of the bushing by hand on his grandfather’s metal

lathe. After some trial and error, in which Lough dis-

carded numerous bushings as unacceptable due to

dimensional variations, Lough was able to hand-make six

usable prototypes which were properly dimensioned to

fit into a MerCruiser stern drive.

On June 6, 1988, Lough filed a patent application

entitled “Liquid Seal for Marine Stern Drive Gear Shift-

shafts,” which issued as the ’775 Patent on July 18, 1989.

The preferred embodiment of the invention, and a sum-

mary of Claim 1 of the ’775 Patent is contained at Pet.

App. pp. 6-7. After Brunswick’s engineers spoke to

Lough and obtained one of his patented seal assemblies,

they offered to procure his patent rights. When Lough

refused their offer of $50,000, Brunswick designed an

improved upper seal assembly, which (the jury later

found) infringed upon the ’775 Patent when Brunswick

incorporated its new upper seal assembly in its new boats

and sold it 1s a replacement part under its Quick Silver

line. This erfectively ended demand for Lough’s seal

assembly, which was not an authorized Mercruiser

replacement part. Over a two-year period, according to

Lough’s expert economist, Brunswick purchased over

—

120,000 infringing seal assemblies to resell as new or

replacement parts.

In order to verify his seal assembly's operability,

including its durability as compared with Brunswick’s

troublesome seal arrangement, effectiveness in different

end use environments, and the ability of different

mechanics to install the seal assembly, Lough arranged

for testing of six prototypes over the span of more than

one year. Lough considered this to be a reasonable test

period, since this exceeded Brunswick’s own warranty

period. During this period, Lough did not observe any

failures or receive any negative feedback about the oper-

ability of his prototypes in their test environment.

In the spring of 1986, as part of his testing of the

operability of his seal assembly, Lough installed one of

his prototypes in his own boat at home. Lough installed a

second prototype in the boat of his personal friend, Tom

Nickla. A third prototype was installed in the tow boat of

Jim Yow, a co-owner of Marine Service where Lough

worked. Later, while working at Marine Service, Lough

installed a fourth prototype in the boat of Jack Wherry, a

customer of Marine Service who had considerable prob-

lems with his stern drive resulting from corrosion of the

upper shift shaft bell housing opening. Lough did not

charge for these prototypes. Mr. Lough, Mr. Nickla and

Richard Paetsch of Marine Service all testified that these

prototype seal assemblies were installed for testing pur-

poses.

These four boats in which the prototype seal assem-

blies were installed were directly under Lough’s supervi-

sion and within his ability to periodically examine. Of

10

course, he had this control with the seal assembly

installed in his own boat, and also the Yow and Wherry

boats at Marine Service where he worked. Lough testified

that he installed the seal assemblies in the two boats at

Marine Service where he worked so he could see them

from time to time. Lough wanted to put the seal assembly

in Wherry’s boat as it sat in the water most of the time

and would periodically return to the Marina, so that he

could periodically check the performance of his seal

assembly. Indeed, Lough testified that he took pictures of

the stern drive with the seal in place in Wherry’s boat

some six to eight months after he installed the seal assem-

bly to show that it was working, which pictures were

admitted at trial as exhibits. Mr. Yow, the owner of the

marina where Lough worked, testified that every three to

six months his tow boat, in which a Lough test seal

assembly was installed, was pulled out of the water to

check the performance of the seal. Finally, Mr. Nickla, in

whose boat a Lough seal assembly prototype was

installed, testified that a year or so after the seal assembly

was installed, he called Lough to explain that Lough’s

seal assembly was still in good shape. Lough also testi-

fied that his acquaintances at Marine Service provided

the ultimate in positive feedback; they suggested that he

patent the seal assembly.

Lough also gave two of the prototype seal assemblies

to his longtime friends (since high school days) Rodney

Presley and Randy Bradley, who were employees of Gulf-

wind Marine in Sarasota, with the express understanding

that they would install the two prototypes in boats with

the troublesome seal problem in order to test them and

determine if they worked. One of these prototypes was

11

installed by Mr. Bradley in the boat of Mark Liberman, a

local charter guide and friend of the owner of Gulfwind

Marine, who regularly received free maintenance service

therefrom. Mr. Liberman was not billed for either the seal

assembly or the installation. The other of the two proto-

types was installed in a troublesome, used demonstration

boat at Gulfwind Marine. Mr. Bradley and Mr. Presley

had no knowledge of what happened to the demonstra-

tion boat at Gulfwind. Mr. Bradley testified that he

installed the seal assemblies in two types of boats with

different problems so there would be a “good test.” Mr.

Bradley then testified that he periodically inspected the

demonstration boat at Gulfwind. Mr. Presley, called in

Brunswick’s case, testified that the seal assemblies had

been installed in Gulfwind boats to see what would hap-

pen on a “[t]rial basis.” Lough did not charge Mr. Presley,

Mr. Bradley, Gulfwind Marine or anyone else for any of

the prototypes.

After determining through experimental testing that

the prototypes worked, and based on his friends’ advice,

Lough inquired about obtaining a patent on his inven-

tion. On May 31, 1988, Lough contacted Charles Prescott,

a Sarasota patent attorney, about a patent application. In

accordance with Mr. Prescott’s advice, no seal assemblies

were placed on sale until the June 6, 1988 filing date of

Lough’s patent application.

¢

12

REASONS FOR GRANTING THE WRIT

THE FEDERAL CIRCUIT’S DETERMINATION THAT

PRIOR PUBLIC USE WHICH INVALIDATES A PAT-

ENT IS A QUESTION OF LAW IS ERRONEOUS AND

CONFLICTS WITH THIS COURT’S PRECEDENTS.

35 U.S.C. § 102(b) provides that an inventor is not

entitled to a patent if the invention was in public use for

more than one year before the filing date of the patent

application. This Court has consistently held that what

constitutes such public use is a question of fact. In Pen-

nock v. Dialogue, 27 U.S. (2 Pet.) 1, 16 (1829), this Court

held that whether an inventor has engaged in public use

is a fact question for the jury:

The question which generally arises at trials, is a

question of fact, rather than of law; whether the

acts or acquiescence of the party furnish, in the

given case, satisfactory proof of an abandon-

ment, or dedication of the invention to the pub-

lic. But when all the facts are given, there does

not seem to be any reason why the court may

not state the legal conclusion deducible from

them. In this view of the matter, the only ques-

tion would be, whether, upon general princi-

ples, the facts stated by the court would justify

the conclusion.

27 U.S. at 16 (emphasis added).

The Court has consistently followed Pennock in ruling

that questions of public use and on sale statutory bars are

factual questions for the jury, and that appellate courts

must defer to the factual findings of trial courts. Gayler v.

Wilder, 51 U.S. (10 How.) 477, 484 (1850) (jurors are the

judges of facts determinative of prior public use); Kendall

13

v. Windsor, 62 U.S. (21 How.) 322, 331 (1858) (whether the

inventor has surrendered his patent rights is a question of

fact, “peculiarly within the province of the jury”); Cantrell

v. Wallick, 117 U.S. 689, 696 (1886) (proof of public use is

dependent on testimony); General Talking Pictures Corp. v.

Western Electric Co., 304 U.S. 175, 182-83 (1938) (deferring

to the finding of no public use by district and circuit

courts based on adequate evidence). Accord, Consolidated

Fruit-Jar Co. v. Wright, 94 U.S. 92, 94 (1876); (“The result

must always depend upon the purpose and incidents

accompanying the act or acts relied upon [as public

uses].”) Manning v. Cape Ann Isinglass & Glue Co., 108 U.S.

462, 465 (1882); Smith & Griggs Mfg. v. Sprague, 123 US.

249 (1887); International Tooth-Crown Co. v. Gaylord, 140

U.S. 55, 64 (1891). That § 102(b) statutory bar questions

were primarily questions for the jury, to whose factual

findings the appellate courts defer, is also clear from

cases predating the modern Federal Circuit.’

1 In re Reese, 290 F.2d 839, 841 (C.C.P.A. 1961) (recognizes

that prior public use under § 102(b) raises an issue of fact); Smith

v. United States, 145 F.Supp. 396 (Ct. Cl. 1956) (patent validity

and prior public use is a factual issue). The non-Federal Circuit

appellate decisions uniformly concluded that § 102(b) is

predominately a question of fact. See, ¢.g., Watson v. Allen, 254

F.2d 342, 346-47 (D.C. Cir. 1958); Atlas v. Eastern Air Lines, Inc.,

311 F.2d 156, 159-60 (1st Cir. 1962); McGraw-Edison Co. v. Central

Transformer Corp., 308 F.2d 70, 73 (8th Cir. 1962); FMC Corp. v.

F.E. Myers & Bros. Co., 384 F.2d 4, 10 (6th Cir. 1967); Lear Siegler,

Inc. v. Ark-Ell Springs, Inc., 569 F.2d 286, 291 (Sth Cir. 1978);

DeLong Corp. v. Raymond Int'l, Inc., 622 F.2d 1135, 1141 (3d Cir.

1980); DelMar Eng’g Lab. v. Physio-Tronics, Inc., 642 F.2d 1167,

1169 (9th Cir. 1981).

14

This Court analyzed the doctrine of public use in the

specific context of experimental use in City of Elizabeth v.

American Nicholson Pavement Co., 97 U.S. 126 (1877). In

that classic case, the Court found a new type of pavement

material not to have been in public use, even though used

on a public road for six years, since the inventor’s pur-

pose was to test the material under actual conditions. City

of Elizabeth recognizes that when an accused infringer

defends by claiming patent invalidity based on a § 102(b)

public use bar, the inventor may negate that defense

based upon “experimental use,” i.e., even though the

exposure of the invention to the public occurred more

than one year before the filing date of the patent applica-

tion, the public use will not invalidate the patent if the

use is experimental. In City of Elizabeth, 97 U.S. at 135, the

Court recognized that an inventor with a “bona fide

intent of testing” could not be held to have engaged in an

invalidating public use. The Court reasoned that to deter-

mine the question of public use, it was necessary to

examine the circumstances of the experimental use and

the inventor’s object and purpose. 97 U.S. at 133. Examin-

ing the inventor’s intent, object and purpose is inherently

a fact-finding function, and the Court has deferred to

such fact findings in making a determination of an exper-

imental use. Root v. Third Ave. R.R. Co., 146 U.S. 210, 225

(1892); Electric Storage Battery Co. v. Shimadzu, 307 U.S. 5,

20 (1939).

The Federal Circuit began its departure from this

Supreme Court precedent in holding that public use is a

question of law. See Hycor Corp. v. Schlueter Co., 740 F.2d

1529, 1535 (Fed. Cir. 1984); Moleculon Research Corp. v.

15

CBS, Inc., 793 F.2d 1261, 1265 (Fed. Cir. 1986), both recog-

nizing that though public use is a question of law, the

facts underlying public use are subject to clearly erro-

neous review. In Manville Sales Corp. v. Paramount Systems,

Inc., 917 F.2d 544, 549 (Fed. Cir. 1990), cited by the major-

ity in Lough, the court stated as follows:

Whether or not an invention was on sale or in

public use within the meaning of section 102(b)

is a question of law that this court reviews de

novo; however, factual findings underlying the

trial court’s conclusion are subject to the clearly

erroneous standard of review.

917 F.2d at 549.

Although such a standard departs from Supreme

Court precedent, it was at least consistent with the spirit

of Supreme Court precedent in that the appellate court

paid some deference to the jury’s findings. Thus, it is not

as radical a departure as the Lough court’s pure legal

standard.

Despite Supreme Court precedent recognizing both

that a prior public use is an inherently factual issue and

that experimental use is a factual inquiry, and despite the

Federal Circuit’s own precedent recognizing that even

though public use may be a question of law, the facts

underlying the conclusion of public use are subject to

clearly erroneous review, the majority in Lough com-

pletely abandoned factual inquiry and deference due to

the jury as a finder of fact when cealing with the question

of experimental use. The Lough court flatly stated,

“Whether an invention was in public use prior to the

critical date within the meaning of § 102(b) is a question

of law.” 86 F.3d at 1120. Moreover, the court stated: “To

16

determine whether a use is ‘experimental,’ a question of

law, the totality of the circumstances must be consid-

ered. ...” Id. For the proposition that a public use

question is a question of law, the Lough court cited the

Manville case, but ignored Manville’s language recogniz-

ing that despite § 102(b) being a question of law, factual

findings underlying the trial court’s conclusion are sub-

ject to the clearly erroneous standard. To support its

erroneous ruling that the court considers the totality of

the circumstances in determining experimental use as a

separate question of law, the Lough court cites three cases

which actually stand for the proposition that experimen-

tal use is a factual inquiry. See Baker Oil Tools, Inc. v. Geo

Vann, Inc., 828 F.2d 1558, 1565 (Fed. Cir. 1987); Sinskey v.

Pharmacia Ophthalmics, Inc., 982 F.2d 494, 498 (Fed. Cir.

1992); TP Laboratories, Inc. v. Professional Positioners, Inc.,

724 F.2d 965, 972 (Fed. Cir. 1984), which all recognize that

fact issues are involved in the determination of experi-

mental use.

The Lough court also departed from Federal Circuit

precedent in separating the concept of experimental use

from the issue of prior public use and invoking “required

indicia” to determine if an experimental use had occurred

as a matter of law. Under TP Lab.:

It is incorrect to impose on the patent owner, as

the trial court in this case did, the burden of

proving that a ‘public use’ was ‘experimental.’

These are not two separable issues. It is incor-

rect to ask: ‘Was it a public use?’ and then, ‘Was

it experimental?’. Rather, the court is faced with

a single issue: Was it a public use under section

102(b)?

17

724 F.2d at 971. Instead of deferring to the jury’s finding

that there was no public use, the Lough court instead

asked: “The question framed on appeal is whether

Lough’s alleged experiments lacked enough of these

required indicia so that his efforts cannot, as a matter of

law, be recognized as experimental.” 86 F.3d at 1121. As

recognized in the dissent of Judge Rader:

To reach its incorrect result, the Lough court had

to separate experimental use from its proper

context of public use, then create a separate list

of required elements for a factual inquiry, and

finally make the separate list a question of law

to avoid the deference due to the jury verdict.

Each error sent the Lough court fishing in deeper

waters without a license.

103 F.3d at 1534. Effectively, the Lough court imposed the

burden on the inventor, Mr. Lough, for the first time on

appeal, to establish that his use of the six seal assemblies

was experimental, rather than requiring the appellant

infringer, Brunswick, to show that the jury finding that

Lough did not engage in public use was clearly erro-

neous. |

In looking at the totality of the circumistances, the

Federal Circuit majority in Lough simply selected facts

with unfavorable inferences from the record, applied

some circumstances and not the totality, and reweighed

this evidence against Lough, substituting their view of

the facts for that of the jury. The Lough court emphasized

the absence of two indicia to the exclusion of all others in

the totality of the circumstances: (1) Lough’s failure to

maintain supervision and control throughout the testing

by monitoring his acquaintances’ use of the prototypes;

18

and (2) Lough’s failure to keep adequate records and

reports of the test results. 86 F.3d 1121-22. As recounted

in the Factual and Procedural History, there was ample

evidence, ignored by the Lough majority, that even though

Lough did not keep formal written records, he had taken

photographs of some of the prototypes in use, as well as

received verbal feedback from some of his acquaintances.

Yet in TP Lab., 724 F.2d at 969, experimental use was

found despite “scanty” records “at best.” The Lough

majority also ignored evidence that Lough had a close

relationship with each of the persons to whom he

entrusted the seal assemblies with specific instructions to

each that the seal assemblies were installed for testing

purposes. Yet in Moleculon, 793 F.2d at 1266-67, close

relationship and notification of experimental purpose

were adequate substitutes for control. The Lough court

gave little credit to Lough’s unwillingness to commer-

cially exploit the invention before filing, yet in Moleculon,

great weight was given to the inventor’s lack of commer-

cial advantage. Id. Finally, the Lough court also com-

pletely ignored other recognized indicators of

experimental use such as the inventor’s careful tailoring

of the test to the nature of the invention and the hidden

nature of the experiment. See, e.g., Manvilie, 917 F.2d at

550-51. Reapplying a factual totality of circumstances test

on a cold appellate record without deference to the facts

found by the jury is indeed an arbitrary and standardless

approach which makes the law of public use completely

unpredictable.

When a court evaluates whether an invention was in

public use, it is not to apply some formulaic test, but

consider how the totality of the circumstances comports

ieee eesti at Rana

|

19

with policies underlying the public use bar, which in

effect define it. Id. at 549. These policies include discour-

aging removal of inventions from the public domain

which the public believes are freely available, prohibiting

extension of the period for exploitation of the invention,

and favoring prompt and undisputed disclosure of the

invention. Id. at 550. Lough’s uses before the critical date,

i.e., June 6, 1987, do not implicate these policies as he did

nothing to lead the public to believe the prototype seal

assemblies were in the public domain, he did not place

the prototype seal assemblies on sale, and until his proto-

type seal assemblies were sufficiently tested in a marine

environment for a year or so, he did not have a proven

invention to disclose. Since the policies are not applica-

ble, the totality of the circumstances test should not be

applied to reach the result that the public use bar invali-

dates the ‘775 Patent.

Historically, appellate courts have been required to

give deference to the triers of fact based on the clearly

erroneous or substantial evidence standard in reviewing

oral testimony and other evidence. A “totality of the

circumstances” test for experimental use is a classic jury

question. See Best v. District of Columbia, 291 U.S. 411, 415

(1934) (“Where uncertainty arises either from a conflict of

testimony or because, the facts being undisputed, fair-

minded men may honestly draw different conclusions

from them, the question is not one of law but of fact to be

settled by the jury.”) An appellate court’s role in review-

ing such a fact question requires appropriate deference to

the trier of fact; indeed, an appellate court may not revise

a district court’s plausible account of the evidence even

though it would have weighed the evidence differently

20

had it been the trier of fact. Anderson v. City of Bessemer

City, 470 U.S. 564, 573-74 (1985). The Federal Circuit is

unique in the federal system in that it is the sole appellate

court for patents and certain other appeals. Given this

unique position, the Federal Circuit should be especially

subject to limitations on appellate review to which other

appellate courts are bound. Logic dictates that in deter-

mining the issues of public use and experimental use, a

factual determination must be made before legal princi-

ples can be applied.

To relabel factual issues as questions of law subject to

de novo review by the Federal Circuit is an exercise in

semantics which imbalances the roles of the trier of fact

and the Court of Appeals. The Federal Circuit can now

pick, choose and reassess various circumstantial factors

concerning public use to redecide cases on appeal arbi-

trarily, and encourage appellate litigation. It is submitted

that such a result increases uncertainty, produces incon-

sistent and irreconcilable results, and makes the Federal

Circuit a super advisory agency of invalidity for all pat-

ent claims. Indeed, patent holders or infringers might be

encouraged to simply file actions for declaratory judg-

ment of validity and seek to immediately appeal the

decision to the Federal Circuit, which then can issue an

advisory on whether or not the patent is valid, prior to

attempting to further litigate the patent in court.

Much of the Lough court's error derives from the fact

that there is a split of authority within the Federal Circuit

and a departure from this Court’s precedent concerning

the proper role of the fact finder and the appellate court

|

.

21

in determining issues of prior public use and experimen-

tal use.2 This Court should resolve the split of authority

by reaffirming its precedent, articulating a consistent

national rule concerning whether public use and experi-

mental use are issues of law or issues of fact, and setting

forth clear guidelines for the evaluation of a prior public

use versus an experimental use.

On the day after Lough’s petition for rehearing was

denied, the Federal Circuit decided a case presenting

generally the same issue - the proper deference given to

the district court’s findings of fact related to a § 102(b)

bar. Micro Chemical, Inc. v. Great Plains Chemical Co., Inc.,

103 F.3d 1538 (Fed. Cir. 1997). On appeal from a bench

trial, a divided 2:1 panel of the Federal Circuit in Micro

Chemical reversed the district court and held that the on-

sale bar under § 102(b) is a question of law and that the

undisputed facts concerning an alleged offer to sell did

not constitute an on-sale bar within the meaning of

§ 102(b). Micro Chemical, 103 F.3d at 1544-45.

Counsel for Great Plains Chemical Co., Inc. et al. has

informed counsel for- Petitioner Lough that they will be

2 As stated by the Federal Circuit: “A decision that fails to

consider Supreme Court precedent does not control if the court

determines that the prior panel would have reached a different

conclusion if it had considered controlling precedent. See Tucker

v. Phyfer, 819 F.2d 1030, 1035 n. 7 (11th Cir. 1987).” Atlantic

Thermoplastics Co., Inc. v. Faytex Corp., 970 F.2d 834, 839 n. 2 (Fed.

Cir. 1992).

If a panel including at least two of the dissenters in Lough is

confronted with a choice between the Lough precedent and the

extensive Supreme Court authority that they cite, what should

we expect them to follow?

22

filing a petition for writ of certiorari in Micro Chemical. It

is submitted that both the Lough and Micro Chemical cases

involve split decisions of the Federal Circuit in an impor-

tant issue where guidance of this Court is necessary.

In the dissenting opinion in Micro Chemical, Circuit

Judge Mayer, who was apparently silent in both of the

Lough decisions, stated:

Because proper deference to the district

court’s findings of fact about the on sale bar

compels the conclusion that [the] patent is

invalid, I dissent.

Although we may reverse a trial court’s ultimate

conclusion that the totality of evidence supports

a result, we cannot reverse its factual findings

themselves, absent a definite and firm convic-

tion that a mistake has been committed.

Micro Chemical, 103 F.3d at 1551, 1553 (Mayer, C.J., dis-

senting) (citing Anderson, 470 U.S. at 573).

Therefore, both Lough (public use bar, jury trial) and

Micro Chemical (on-sale bar, bench trial) pertain to the

important issue of the proper deference given by the

Court of Appeals to findings of fact related to a § 102(b)

bar. Certiorari is necessary to settle this continuing issue

within the Federal Circuit and bring that court’s

approach in line with settled law and decisions of this

Court.

CONCLUSION

The Federal Circuit has erroneously interpreted the

precedent of this Court, has inconsistently applied the

‘ctantshltiedipsttaeli iis chad A a

23

conflicting precedents within the Federal Circuit, and has

created confusion over the proper role of the court and

the jury in determining questions of public use versus

experimental use pursuant to § 102(b). This conflict must

be resolved by this Court to provide uniformity of rule

and process, and simultaneously, prevent a gross miscar-

riage of justice to Mr. Lough, the patentee.

For these reasons, Petitioner respectfully submits that

this Court should grant the Petition and should reverse

the judgment of the Federal Circuit and order the rein-

statement of the judgment and jury verdict of the district

court.

Respectfully submitted,

Of Counsel: RicHARD R. GARLAND

ARNOLD B. SILVERMAN Counsel of Record

Kirk D. HOUusER Warp E. DAHLGREN

ECKERT SEAMANS CHERIN DickINSON & GrBBons, P.A.

& Metiott, LLC 1750 Ringling Boulevard

600 Grant Street Post Office Box 3979

42nd Floor Sarasota, FL 34230

Pittsburgh, PA 15219 . (941) 366-4680

(412) 566-6000

Counsel for Petitioner,

Steven G. Lough

App. 1

United States Court of Appeals

for the Federal Circuit

95-1266, -1302, -1314

STEVEN G. LOUGH,

Plaintiff-Appellee,

v.

BRUNSWICK CORPORATION, d/b/a

MERCURY MARINE,

Defendant-Appellant.

DECIDED: June 12, 1996

Before PLAGER, LOURIE, and CLEVENGER, Circuit

Judges.

Opinion for the court filed by Circuit Judge Lourie.

Dissenting opinion filed by Circuit Judge Plager. Addi-

tional remarks filed by Circuit Judge Lourie, with whom

Circuit Judge Clevenger joins.

LOURIE, Circuit ‘Judge.

Brunswick Corporation, d/b/a Mercury Marine,

appeals from the final judgment of the United States

District Court for the Middle District of Florida in which

the court denied Brunswick’s Motion for Judgment as a

Matter of Law and its Motion for New Trial after a jury

verdict of infringement of U.S. Patent 4,848,775, owned

by the inventor Steven G. Lough.! Because the court erred

1 Lough v. Brunswick Corp., No. 92-799-CIV-T-21A (M.D. Fia.

Feb. 13, 1995) (amended judgment); Lough v. Brunswick Corp.,

App. 2

in denying Brunswick’s Motion for Judgment as a Matter

of Law, we reverse in part and vacate in part.

BACKGROUND

Stern drives are marine propulsion devices for boats

in which the engine is located inside the boat and is

coupled to an outdrive, which includes a propeller

located outside the boat (“inboard/outboard boat”). A

typical stern drive arrangement is illustrated below.2

No. 92-799-CIV-T-21A (M.D. Fla. Mar. 27, 1995) (second

amended judgment); Lough v. Brunswick Corp., No. 92-799-CIV-

T-21A (M.D. Fla. April 13, 1995) (permanent injunction).

2 This figure is reproduced from U.S. Patent 5,052,958,

“Marine Drive for Easier Shifting,” which is assigned to

Brunswick.

cafe Anh BRAID ea Dread wel i Mee i RL a

The outdrive is housed in a drive shaft housing (20),

which includes an aluminum bell housing (22). A pro-

peller (28) is located at the lower end of the outdrive and

is driven by the engine through a system of shafts (18, 24,

and 26). The stern drive (10) includes a shifting system

for placing the outdrive in forward, reverse, or neutral

gear. As part of the shifting system, a gear shift shaft

assembly (34) extends between a shift lever, which is

connected through a gear shift cable to user controls for

throttle and gear selection, and a clutch (42), which con-

trols forward and reverse gears (44 and 46). At the upper

App. 4

and lower ends of the gear shift shaft assembly (34), an

upper seal assembly and a lower seal assembly prevent

sea water and exhaust from causing corrosion by passing

through the bell housing apertures provided for the shift

shaft assembly (34). The lower seal assembly protects the

gear controls at the lower end of the shift shaft (34), and

the upper seal assembly protects the gear shift cable and

user controls.

In 1986, Steven G. Lough worked as a repairman for a

boat dealership in Sarasota, Florida. While repairing

Brunswick inboard/outboard boats, he noticed that the

upper seal assembly in the stern drives often failed due to

corrosion. A typical upper seal assembly from a

Brunswick motor is shown below.

ON

The upper seal assembly comprises a brass bushing (D)

and an annular seal (E). The brass bushing (D) is forced

into a bell housing aperture (C). An annular seal (E) is

installed below the brass bushing (D) and is in direct

contact with the aluminum bell housing (B).

App. 5

Lough determined that the corrosion in the upper

seal assembly occurred due to contact between the annu-

lar seal (E) and the bell housing aperture (C). He

designed a new upper seal assembly that isolated the

annular seal (E) from the aluminum bell housing (B) in

order to prevent such corrosion.

After some trial and error with his grandfather’s

metal lathe, he made six usable prototypes in the spring

of 1986. He installed one prototype in his own boat at

home. Three months later, he gave a second prototype to

a friend who installed it in his boat. He also installed

prototypes in the boat of the owner of the marina where

he worked and in the boat of a marina customer. He gave

the remaining prototypes to longtime friends who were

employees at another marina in Sarasota. Lough did not

charge anyone for the prototypes. For over a year follow-

ing the installation of these prototypes, Lough neither

asked for nor received any comments about the oper-

ability of the prototypes. During this time, Lough did not

attempt to sell any seal assemblies.

On June 6, 1988, Lough filed a patent application

entitled “Liquid Seal for Marine Stern Drive Gear Shift

Shafts,” which issued as the ’775 patent on July 18, 1989.

Figure 4 of the patent illustrates the preferred embodi-

ment of the invention and is shown below.

>

a?)

7

ro

<y

,

a’

y

ath. 2

9 | mee

VAI a=

abd Whey”

eV Zz gs

\ae

Claim 1, with reference letters and numbers to figure

4 added, is representative of the claims at issue:

1. A liquid seal [10] structured to provide a

watertight barrier between adjacent the upper

end of an elongated gear shift shaft [A] in a

marine stern drive system and an aperture [C]

in the stern drive bell housing [B], the aperture

[C] located between the exhaust passageway

and the parallel adjacent gimbal passageway of

the bell housing [B], the aperture for receiving

the upper end of the gear shift shaft [A]

installed therethrough, said liquid seal [10] com-

prising:

App. 7

a rigid bushing [12] having coaxial upper

[18] and lower portions [14];

said upper portion [18] having a first outer

surface structured to be sealably urged into

the bell housing aperture [C] to form a

watertight junction therebetween and

thusly positioning said lower portion [14]

against the top surface of the exhaust pas-

sageway;

said upper portion [18] also having a longi-

tudinal shift shaft aperture [20] generally

concentric with and extending along the

length of said upper portion [18] structured

to supportively receive the upper end of the

gear shift shaft [A] for supportive rotation

therein;

said lower portion [14] having a second

outer surface [21] radially larger than said

first outer surface and positioned in the

exhaust passageway and a generally con-

centric seal cavity [16] continuous with, and

larger than, said shift shaft aperture [20]

extending along the length of said lower

portion [14];

at least one annular seal [22] structured to

have its outer surface sealably urged into

said seal cavity [16] to form a watertight

junction therebetween and to have its inner

surface coaxial with said second outer sur-

face and sealably mate against the cylindri-

cal surface of the upper end of the gear shift

shaft [A].

After learning of Lough’s invention, Brunswick

designed its own improved upper seal assembly. This

upper seal assembly is shown below:

Seal Cavity

Bushing

In addition to a bushing with an upper and lower por-

tion, Brunswick’s upper seal assembly included its own

patented gap technology.* This gap spaced the upper

portion of the bushing from the shift shaft to alleviate

3 Brunswick is the assignee of U.S. Patent 5,052,958 for a

“Marine Drive with Easier Shifting.” The ’958 patent relates to

an intermediate bushing that provides a seal between an

aperture in the bell housing and an intermediate point along the

shift shaft. The patent claims provide for a gap between the

intermediate bushing and the shift shaft. This gap prevents

binding of the shift shaft when corrosion between the

intermediate bushing and the aperture causes the bushing to

contract radially inward toward the shift shaft. The ‘958 patent

does not disclose the use of the gap technology in an upper seal

assembly.

App. 9

crushing that might otherwise occur due to corrosion

between the bushing and the bell housing. Brunswick

incorporated its new upper seal assembly in its “Alpha

One” inboard /outboard boat. In addition, it sold this seal

assembly as a replacement part under its “Quicksilver”

line of replacement parts.

Lough sued Brunswick on June 12, 1993, alleging

infringement of the ‘775 patent. Brunswick counter-

claimed for a declaratory judgment of patent noninfringe-

ment, invalidity, and/or unenforceability. A jury found

that Brunswick failed to prove that Lough’s invention

was in public use before the critical date on June 6, 1987,

one year prior to the filing date of the ‘775 patent. The

jury also found that Brunswick infringed claims 1-4 of the

‘775 patent, both literally and under the doctrine of

equivalents. Based on its infringement finding, the jury

awarded Lough $1,500,000 in lost profits. After trial,

Brunswick filed a Motion for Judgment as a Matter of

Law in which it argued, inter alia, that the claimed inven-

tion was invalid because it had been in public use before

the critical date. Brunswick also filed a Motion for New

Trial on damages. The court denied Brunswick’s motions

without any comment. Lough v. Brunswick Corp., No.

92-799-CIV-T-21A (M.D. Fla. Feb. 13, 1995). Brunswick

appeals.

DISCUSSION

When a party moves for JMOL in a case tried to a

jury, we review de novo the district court’s decision by

reapplying the JMOL standard. Markman v. Westview

Instruments, Inc., 52 F.3d 967, 975, 34 USPQ2d 1321, 1326

App. 10

(Fed. Cir. 1995) (in banc), aff'd on other grounds, 116 S. Ct.

1384, 38 USPQ2d 1461 (1996). Judgment as a matter of law

against a winning party is appropriate when that “party

has been fully heard on an issue and there is no legally

sufficient evidentiary basis for a reasonable jury to find

for that party on that issue. ...” Fed. R. Civ. P.

50(a)(1).We also review the legal standards that the jury

applied in reaching its verdict to determine whether they

were correct as a matter of law. Id. When a legal issue is

submitted to a jury without an objection, we treat the

jury’s verdict on the legal issue as a resolution of all

genuinely disputed underlying factual issues in favor of

the verdict winner. Mendenhall v. Cedarapids, Inc., 5 F.3d

1557, 1562 n.3, 28 USPQ2d 1081, 1085 n.3 (Fed. Cir. 1993),

cert. denied, 114 S. Ct. 1540 (1994). We review the jury’s

resolution of all factual disputes for substantial evidence.

Markman, 52 F.3d at 975, 34 USPQ2d at 1326.

Brunswick challenges, inter alia, the court’s denial of

its motion for JMOL on the issue of public use. Brunswick

argues that the district court erred in denying its motion

tor JMOL because the uses of Lough’s prototypes prior to

the critical date were not experimental. Brunswick asserts

that Lough did not control the uses of his prototypes by

third parties before the critical date, failed to keep

records of the alleged experiments, and did not place the

parties to whom the seals were given under any obliga-

tion of secrecy. Based on this objective evidence,

Brunswick argues that the uses of Lough’s prototypes

before the critical date were not “experimental.” There-

fore, Brunswick contends that the jury’s verdict was

incorrect as a matter of law and that the court erred in

denying its JMOL motion.

eS ee

tiles

App. 11

Lough counters that the tests performed with the six

prototypes were necessary experiments conducted in the

course of completing his invention. He argues that when

the totality of circumstances is properly viewed, the evi-

dence supports the jury’s conclusion that those uses were

experimental. Lough maintains that a number of factors

support the jury’s experimental! use conclusion, including

evidence that he received no compensation for the proto-

types, he did not place the seal assemblies on sale until

after he filed his patent application, and he gave the

prototypes only to his friends and personal acquaintances

who used them in such a manner that they were unlikely

to be seen by the public. He further argues that, to verify

operability of the seal assemblies, prototypes had to be

installed by mechanics of various levels of skill in boats

that were exposed to different conditions. Thus, he

asserts that the court did not err in denying Brunswick's

JMOL motion. We disagree with Lough.

One is entitled to a patent unless, inter alia, “the

invention was . . . in public use . . . in this country, more

than one year prior’to the date of the application for

patent in the United States.” 35 U.S.C. § 102(b) (1994). We

have defined “public use” as including “any use of [the

claimed] invention by a person other than the inventor

who is under no limitation, restriction or obligation of

secrecy to the inventor.” In re Smith, 714 F.2d 1127, 1134,

218 USPQ 976, 983 (Fed. Cir. 1983) (citing Egbert v. Lipp-

mann, 104 U.S. 333, 336 (1881)). An evaluation of a ques-

tion of public use depends on “how the totality of the

circumstances of the case comports with the policies

underlying the public use bar.” Tone Bros. v. Sysco Corp.,

App. 12

28 F.3d 1192, 1198, 31 USPQ2d 1321, 1324 (Fed. Cir. 1994),

cert. denied, 115 S. Ct. 1356 (1995). These policies include:

(1) discouraging the removal, from the public

domain, of inventions that the public reasonably

has come to believe are freely available; (2)

favoring the prompt and widespread disclosure

of inventions; (3) allowing the inventor a rea-

sonable amount of time following sales activity

to determine the potential economic value of a

patent; and (4) prohibiting the inventor from

commercially exploiting the invention for a

period greater than the statutorily prescribed

time.

Id., 1198, 31 USPQ2d at 1324-25. A patentee may negate a

showing of public use by coming forward with evidence

that its use of the invention was experimental. See TP Lab.

v. Professional Positioners, Inc., 724 F.2d 965, 971, 220 USPQ

577, 582 (Fed. Cir. ) (“[I]f a prima facie case is made of

public use, the patent owner must be able to point to or

must come forward with convincing evidence to counter

that showing.”), cert. denied, 469 U.S. 826 (1984).

Neither party disputes that Lough’s prototypes were

in use before the critical date. Thus, both parties agree

that the issue presented on appeal is whether the jury

properly decided that the use of Lough’s six prototypes

in 1986, prior to the critical date, constituted experimen-

tal use so as to negate the conclusion of public use.4

4 The trial judge instructed the jury as follows:

The law requires that an inventor must file a patent

application within one year after his invention is publicly used.

Public use means any use of Mr. Lough’s invention by any

person other than Mr. Lough who was not limited or restricted

nee teteocenr eecieannnee” alalaaaabinadaaddl

ERE i ALN.

DMG LG SON 5 LIN 2 TR LIAL Coe? AOE RRR Ray 0 oes eka aan?

App. 13

Whether an invention was in public use prior to the

critical date within the meaning of § 102(b) is a question

of law. Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d

544, 549, 16 USPQ2d 1587, 1591 (Fed. Cir. 1990).

“The use of an invention by the inventor himself, or

of any other person under his direction, by way of experi-

ment, and in order to bring the invention to perfection,

has never been regarded as [a public] use.” City of Eliz-

abeth v. American Nicholson Pavement Co., 97 U.S. 126, 134

(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 (“It 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.”); see also RCA Corp. v. Data General Corp., 887

F.2d 1056, 1061, 12 USPQ2d 1449, 1453 (Fed. Cir. 1989)

(“[E]xperimental use, which means perfecting or com-

pleting an invention to the point of determining that it

in their activities regarding the invention, or not obligated to

secrecy by Mr. Lough. Such use, however does not invalidate

Mr. Lough’s patent if the use was primarily for bona fide

experimental purposes.

... The parties do not dispute that the five seal assemblies

were used by others before June 6, 1987. The only dispute is

whether these uses qualify as experimental uses. The law places the

burden on Mr. Lough to come forward with convincing evidence

showing that these uses were experimental uses [emphasis added].

App. 14

will work for its intended purpose, ends with an actual

reduction to practice.”). If a use is experimental, it is not,

as a matter of law, a public use within the meaning of

section 102.

To determine whether a use is “experimental,” a

question of law, the totality of the circumstances must be

considered, including various objective indicia of experi-

mentation surrounding the use, such as the number of

prototypes and duration of testing, whether records or

progress reports were made concerning the testing, the

existence of a secrecy agreement between the patentee

and the party performing the testing, whether the pat-

entee received compensation for the use of the invention,

and the extent of control the inventor maintained over

the testing. See TP Laboratories, 724 F.2d at 971-72, 220

USPQ at 582; see also Sinskey v. Pharmacia Ophthalmics,

Inc., 982 F.2d 494, 498, 25 USPQ2d 1290, 1294 (Fed. Cir.

1992) (listing objective evidence to be considered to deter-

mine if use is “experimental”), cert. denied, 508 U.S. 912

(1993); Baker Oil Tools, Inc. v. Geo Vann, Inc., 828 F.2d 1558,

1564, 4 USPQ2d 1210, 1214 (Fed. Cir. 1987) (same). The

last factor of control is critically important, because, if the

inventor has no control over the alleged experiments, he

is not experimenting. If he does not inquire about the

testing or receive reports concerning the results, similarly,

he is not experimenting.

In order to justify a determination that legally suffi-

cient experimentation has occurred, there must be present

certain minimal indicia. The framework might be quite

formal, as may be expected when large corporations con-

duct experiments, governed by contracts and explicit

written obligations. When individual inventors or small

See a ae OY ee

App. 15

business units are involved, however, less formal and

seemingly casual experiments can be expected. Such less

formal experiments may be deemed legally sufficient to

avoid the public use bar, but only if they demonstrate the

presence of the same basic elements that are required to

validate any experimental program. Our case law sets out

these elements. See TP Laboratories, 724 F.2d at 971-72, 220

USPQ at 582; Baker Oil Tools, 828 F.2d at 1564, 4 USPQ2d

at 1214. The question framed on this appeal is whether

Lough’s alleged experiments lacked enough of these

required indicia so that his efforts cannot, as a matter of

law, be recognized as experimental.

Here, Lough either admits or does not dispute the

following facts. In the spring of 1986, he noted that the

upper seal assembly in Brunswick inboard/outboard

boats was failing due to galvanic corrosion between the

annular seal and the aperture provided for the upper seal

assembly in the aluminum bell housing. He solved this

problem by isolating the annular seal from the aluminum

bell housing in order to prevent corrosion. After some

trial and error, Lough made six prototypes. He installed

the first prototype in his own boat. Lough testified at trial

that after the first prototype had been in his boat for three

months and he determined that it worked, he provided

the other prototypes to friends and acquaintances in

order to find out if the upper seal assemblies would work

as well in their boats as it had worked in his boat. Lough

installed one prototype in the boat of his friend, Tom

Nikla. A prototype was also installed in the boat of Jim

Yow, co-owner of the dealership where Lough worked.

Lough installed a fourth prototype in one of the dealer-

ship’s customers who had considerable problems with

App. 16

corrosion in his stern drive unit. The final two prototypes

were given to friends who were employed at a different

marina in Florida.These friends installed one prototype in

the boat of Mark Liberman, a local charter guide. They

installed the other prototype in a demonstration boat at

their marina. Subsequently, this boat was sold. Neither

Lough nor his friends knew what happened with either

the prototype or the demonstration boat after the boat

was sold. After providing the five prototypes to these

third parties, Lough neither asked for nor received any

comments concerning the operability of these prototypes.

Accepting that the jury found these facts, which

either were undisputed or were as asserted by Lough, it

cannot be reasonably disputed that Lough’s use of the

invention was not “experimental” so as to negate a con-

clusion of public use. It is true that Lough did not receive

any compensation for the use of the prototypes. He did

not place the seal assembly on sale before applying for a

patent. Lough’s lack of commercialization, however, is

not dispositive of the public use question in view of his

failure to present objective evidence of experimentation.

Lough kept no records of the alleged testing. See Paragon

Podiatry Lab., Inc. v. KLM Lab., Inc., 984 F.2d 1182, 1188, 25

USPQ2d 1561, 1566 (Fed. Cir. 1993) (“[W]hen further

combined with other factors, such as the inventor’s fail-

ure to keep test records, the entire surrounding circum-

stances point to only one possible legal conclusion — that

the sales [of the patented device] were commercial in

nature and fall within the statutory bar.”); Sinskey, 982

F.2d at 499, 25 USPQ2d at 1294 (relying on patentee’s

failure to introduce medical records that would likely

indicate that use of medical device was experimental).

App. 17

Nor did he inspect the seal assemblies after they had

been installed by other mechanics. See In re Hamilton, 882

F.2d 1576, 1581-83, 11 USPQ2d 1890, 1894-96 (Fed. Cir.

1989) (lack of involvement by inventor in alleged testing

is an important factor in determining that use was not

experimental). He provided the seal assemblies to friends

and acquaintances, but without any provision for follow-

up involvement by him in assessment of the events occur-

ring during the alleged experiments, and at least one seal

was installed in a boat that was later sold to strangers.

Thus, Lough did not maintain any supervision and con-

trol over the seals during the alleged testing. See Beach-

combers v. WildeWood Creative Prods., 31 F.3d 1154, 1160, 31

USPQ2d 1653, 1657-58 (Fed. Cir. 1994) (sustaining jury’s

finding of public use based on inventor’s failure to con-

trol use of the patented device and the future dissemina-

tion of information about it); Hamilton, 882 F.2d at 1580,

11 USPQ2d at 1893 (“The Supreme Court [in City of

Elizabeth | has indicated that for an assertion of experi-

mental use to have merit, it must be clear that the inven-

tor kept control over his invention in the course of its

testing.”).

Lough argues that other evidence supports a finding

that his uses were experimental, including his own testi-

mony that the prototypes were installed for experimental

purposes and the fact that the prototypes were used in

such a manner that they were unlikely to be seen by the

public. However, “the expression by an inventor of his

subjective intent to experiment, particularly after institu-

tion of litigation, is generally of minimal value.” TP Labo-

ratories, 724 F.2d at 972, 220 USPQ at 583. In addition, the

fact that the prototypes were unlikely to be seen by the

App. 18

public does not support Lough’s position. As the

Supreme Court stated in Egbert v. Lippmann:

[S]ome inventions are by their very character

only capable of being used where they cannot be

seen or observed by the public eye. An inven-

tion may consist of a lever or spring, hidden in

the running gear of a watch, or of a rachet,

shaft, or cog-wheel covered from view in the

recesses of a machine for spinning or weaving.

Nevertheless, if its inventor sells a machine of

which his invention forms a part, and allows it

to be used without restriction of any kind, the

use is a public one.

104 U.S. at 336. Moreover, those to whom he gave the

prototypes constituted “the public,” in the absence of

meaningful evidence of experimentation. Thus, we find

Lough’s reliance on this additional evidence to be of

minimal value when viewed in light of the totality of the

other circumstances surrounding the alleged experimen-

tation.

We therefore hold that the jury had no legal basis to

conclude that the uses of Lough’s prototypes were experi-

mental and that the prototypes were not in public use

prior to the critical date. Our holding is consistent with

the policy underlying the experimental use negation, that

of providing an inventor time to determine if the inven-

tion is suitable for its intended purpose, i.e., to reduce the

invention to practice. Lough’s activities clearly were not

consistent with that policy. We do not dispute that it may

have been desirable in this case for Lough to have had his

prototypes installed by mechanics of various levels of

skill in boats that were exposed to different conditions.

Moreover, Lough was free to test his invention in boats of

a

{

u

:

App. 19

friends and acquaintances to further verify that his inven-

tion worked for its intended purpose; however, Lough

was required to maintain some degree of control and -

feedback over those uses of the prototypes if those tests

were to negate public use. See Moleculon Research Corp. v.

CBS, Inc., 793 F.2d 1261, 1266, 229 USPQ 805, 808 (Fed.

Cir. 1986), cert. denied, 479 U.S. 1030 (1987). Lough’s fail-

ure to monitor the use of his prototypes by his acquain-

tances, in addition to the lack of records or reports from

those acquaintances concerning the operability of the

devices, compel the conclusion that, as a matter of law, he

did not engage in experimental use. Lough in effect pro-

vided the prototype seal assemblies to members of the

public for their free and unrestricted use. The law does

not waive statutory requirements for inventors of lesser

sophistication. When one distributes his invention to

members of the public under circumstances that evidence

a near total disregard for supervision and control con-

cerning its use, the absence of these minimal indicia of

experimentation require a conclusion that the invention

was in public use.

We conclude that the jury’s determination that

Lough’s use of the invention was experimental so as to

defeat the assertion of public use was incorrect as a

matter of law. The court thus erred in denying

Brunswick’s JMOL motion on the validity of claims 1-4 of

the ‘775 patent under § 102(b).°

5 Each claim of the patent must be considered individually

when evaluating a public use bar. However, Lough did not

argue lack of public use on a claim-by-claim basis at trial. Nor

does he do so on appeal. Moreover, section 102(b) may create a

App. 20

Brunswick also challenges the district court’s failure

to grant JMOL or a new trial on the issues of noninfringe-

ment, obviousness, and damages. Our holding that the

patent is invalid under § 102(b), as a practical matter,

eliminates the need to consider these matters. Thus, we

will not address them. We are of course mindful of the

Supreme Court’s decision in Cardinal Chemical Co. v. Mor-

ton International, Inc., 508 U.S. 83, 26 USPQ2d 1721 (1993).

In Cardinal, the Court rejected our previous practice of

vacating invalidity judgments following a determination

of noninfringement. 508 U.S. at 102-03, 26 USPQ2d at

1730. In doing so, the Court emphasized the importance

to the public of resolving questions of patent validity and

the need to prevent parties from having to relitigate

patent validity. Id. at 99-101, 26 USPQ2d at 1729. Here,

however, we have determined that the patent is invalid.

We are not reviving a patent twice previously held

invalid, as in Cardinal. Invalidity is a complete defense to

infringement and, assuming the Supreme Court does not

reverse or vacate our invalidity holding, a statistically

unlikely event, our decision resolves all issues that are

meaningful in this case. No further public interest is

served by our resolving an infringement question after a

determination that the patent is invalid. We therefore

bar to patentability either alone, if the device used in public is

an anticipation of the later claimed invention or, in conjunction

with 35 U.S.C. § 103, if the differences between the claimed

invention and the device used would have been obvious to one

skilled in the art. See LaBounty Mfg., Inc. v. United States Int'l

Trade Comm'n, 958 F.2d 1066, 1071, 22 USPQ2d 1025, 1028 (Fed.

Cir. 1992). Thus our holding with regard to the public use of the

invention applies equally to all of the claims of the ’775 patent.

App. 21

decline to consider the issue of infringement as well as

that of obviousness.

CONCLUSION

The district court’s denial of Brunswick’s motion for

JMOL on the ground of invalidity is reversed. The award

of damages is accordingly vacated.

COSTS

No costs.

REVERSED-IN-PART AND VACATED-IN-PART

App. 22

United States Court of Appeals for the Federal Circuit

95-1266,-1302,-1314

STEVEN G. LOUGH,

Plaintiff-Appellee,

v.

BRUNSWICK CORPORATION, d/b/a

MERCURY MARINE,

Defendant-Appellant.

PLAGER, Circuit Judge, dissenting.

I respectfully dissent. In my view, the panel majority

confuses its role as law-giver and law-reviewer with the

role of fact-weigher and fact-decider. The majority and I

agree that the issue is not whether the trial court applied

the wrong law (it did not), or whether the jury was

wrongly instructed (it was not). As the panel majority

correctly notes, the issue is whether, on the totality of the

circumstances, Mr. Lough was engaged in “a bona fide

effort to bring his invention to perfection, or to ascertain

whether it will answer the purpose intended,” City of

Elizabeth v. American Nicholson Pavement Co., 97 U.S. 126,

137 (1877), or whether he was engaged in selling or, on

the facts of this case oddly enough for a working

mechanic, giving away his invention to members of the

public.

This is not a contest between Evinrude (Outboard

Marine Corporation) and Mercury Marine (Brunswick),

the two big competitors in this field, to see who can

market a better engine. If it were, we could expect the

combination of engineering and legal staffs on each side

ee ne

ee eee Oe ee ey

Pubes Wel EE. ett Ret A

ta cl Sat li eT

App. 23

to be punctilious about observing the niceties of our prior

opinions on how to conduct experiments so as to avoid

any possible running afoul of the public use bar. No, this

is a home-made improvement by a man with only a high

school education who worked on boats and boat engines,

including his own, where he kept encountering the prob-

lem with these shaft seals that Mercury Marine had failed

to solve. He solved it by trial and error, with an ingenious

bushing of his own design, and, on his grandfather's

metal lathe, after several tries, fashioned a half-dozen

prototype seals that looked like they might do the job.

He put one in his own boat, one in the boat of a close

friend, one in the boat of the co-owner of the marine

repair shop where he worked, and later put one in the

boat of a customer of the shop who was having consider-

able problems with his stern drive because of the seal

difficulty. He gave two to mechanic friends at another

marina so they could put them in boats having the same

troublesome seal problem, with the understanding they

would be used to test the seals in different equipment.

Of course it would have been better for all concerned

(except perhaps for Mercury Marine) if Mr. Lough had

read our prior opinions before he became an inventor.

Then he might have kept detailed lab notes setting out

the problem and the possible solutions, and he wisely

would have obtained written confidentiality agreements

from those allowed to see or use his prototypes. Had he

studied our cases first, he no doubt would have devel-

oped a detailed questionnaire for the persons to whom he

provided the seals, and he would have insisted on peri-

odic written reports. In other words, he would have put

in the set of tight controls the majority would have

App. 24

wanted. Instead, he did what seemed appropriate in the

setting in which he worked: he waited to hear from his

test cases what problems might emerge, and, hearing

none, at least none that convinced him he was on the

wrong track, he accepted some friendly advice and pro-

ceeded to patent his invention.

Yes, he failed to conduct his testing, his experiments,

with the careful attention we lawyers, with our clean and

dry hands, have come to prefer. But, under all the facts

and circumstances, it is more likely than not that he was

testing and perfecting his device, rather than simply mak-

ing it available gratis to members of the general public

for what the law calls “public use.” The most that can be

said for the majority view is that this is a close question

under the totality of circumstances. The ultimate question

of what is public use under 35 U.S.C. § 102(b) may be a

question of law, but in a given case in which the issue is

whether in fact the challenged use was experimental (a

complete answer to an infringer’s defense based on a

§ 102(b) violation), the issue involves a blend of law and

fact. This issue, unlike claim construction, is one in which

a jury fully participates. Thus the question before us is

not whether, on the facts, we are persuaded Lough

retained all the control a well-designed test of the seals

would have afforded, but whether a reasonable jury, on

all the evidence before it, could have arrived at the con-

clusion it did. Allied Colloids Inc. v. American Cyanamid

Co., 64 F.3d 1570, 1577, 35 USPQ2d 1840, 1845 (Fed. Cir.

1995) (finding a grant of JNOV improper because “a

reasonable jury could have found, applying the correct

law, that there was not a public use bar under § 102(b)”).

The jury chose to accept Lough’s view of the events, and

App. 25

under that view there was more than enough evidence to

support a jury finding that he was testing and perfecting

his invention during much of the period leading up to the

time he applied for his patent.’ As we said in Manville

Sales Corp. v. Paramount Systems, Inc., 917 F.2d 544, 551, 16

USPQ2d 1587, 1592 (Fed. Cir. 1990): “When durability in

an outdoor environment is inherent to the purpose of an

invention, then further testing to determine the inven-

tion’s ability to serve that purpose will not subject the

invention to a section 102(b) bar.” (citing City of Elizabeth,

97 U.S. at 133-34).

Many of the cases cited by the majority in support of

their position are cases in which the inventor made a sale

or an offer to sell the product prior to the critical date.

See, e.g., RCA Corp. v. Data General Corp., 887 F.2d 1056, 12

USPQ2d 1449 (Fed. Cir. 1989); Sinskey v. Pharmacia Oph-

thalmics, Inc., 982 F.2d 494, 25 USPQ2d 1290 (Fed. Cir.

: 1992), cert. denied, 508 U.S. 912 (1993); Paragon Podiatry

Lab., Inc., v. KLM Lab., Inc., 984 F.2d 1182, 25 USPQ2d 1561

(Fed. Cir. 1993); In re Hamilton, 882 F.2d 1576, 11 USPQ2d

1890 (Fed. Cir. 1989). The record in this case is undis-

puted that Lough made no sales of his invention until

after his patent application was filed. Nor was this simply

market testing, rather than product testing, as in In re

ARTA O Re WSs iON DIAL MARA A

ae!

1 The law of this circuit is unequivocal that a “party

attacking validity has the burden of proving facts supporting a

conclusion of invalidity by clear and convincing evidence.”

Ryco, Inc. v. Ag-Bag Corp., 857 F.2d 1418, 1423, 8 USPQ2d 1323,

1327 (Fed. Cir. 1988). Whatever the shifting of the burden of

production of evidence at trial may have occurred, the ultimate

burden remains with the attacker. The jury verdict leaves no

question that Mercury Marine failed to carry its burden.

App. 26

Smith, 714 F.2d 1127, 218 USPQ 976 (Fed. Cir. 1983); and

in any event, that was part of the issue presented to the

jury.

There is no dearth of cases in this court in which

inventors tested their products in various ways before

various audiences, and in which we have held that such

testing, when it made sense in light of the circumstances,

did not constitute public use under section 102(b). See,

e.g., Tone Bros. v. Sysco Corp., 28 F.3d 1192, 31 USPQ2d

1321 (Fed. Cir. 1994) (students asked to test functional

features of spice containers prior to the critical date;

summary judgment of invalidity reversed), cert. denied,

115 S. Ct. 1356 (1995); TP Lab., Inc. v. Professional Posi-

tioners, Inc., 724 F.2d 965, 220 USPQ 577 (Fed. Cir.) (orth-

odontic devices tested on patients prior to critical date;

held not invalid even though a fee paid by the patients),

cert. denied, 469 U.S. 826 (1984); Manville Sales Corp., 917

F.2d 544, 16 USPQ2d 1587 (testing of streetlight, condi-

tionally approved for sale, at outdoor site held experi-

mental); see also Moleculon Research Corp. v. CBS, Inc., 793

F.2d 1261, 229 USPQ 805 (Fed. Cir. 1986) (inventor of

puzzle showed it to a few close colleagues, and allowed

one person to use it, prior to the critical date; held not

invalid.), cert. denied, 479 U.S. 1030 (1987).

Under our standard of review, the jury’s decision to

accept Lough’s version of the case is not properly subject

to reversal. The trial court correctly denied Brunswick’s

JMOL motion, and this court should affirm that denial.

The majority, by unilaterally invalidating the patent

on the public use issue, esses that it thus avoids the

knotty problem of how eal with the infringement

Paty ee

ial al abit’ ii SBA is Bites OR ae tein Esa eee

Poe ee re

App. 27

question, especially infringement under the doctrine of

equivalents. Although | share my colleagues’ unease at

addressing this question before we know the Supreme

Court’s disposition of Hilton Davis, and am in general

sympathy with the views regarding the doctrine of equiv-

alents expressed in the additional remarks, I cannot

acquiesce in avoiding the question on the grounds offered

here. I believe it is improper and unjust to deny Lough

his victory at trial on the question of invalidity under

section 102(b), a question properly put to and decided by

the jury. (Whether his victory can be sustained on the

issue of infringement is not here decided, and I offer no

opinion on that question.)

App. 28

United States Court of Appeals for the Federal Circuit

95-1266,-1302,-1314

STEVEN G. LOUGH,

Plaintiff-Appellee,

v.

BRUNSWICK CORPORATION, d/b/a

MERCURY MARINE,

Defendant-Appellant.

Lourie, Circuit Judge, additional remarks.

There is another reason why we would exercise our

discretion to avoid deciding what appears to be an unnec-

essary issue of infringement, even though we recognize

the value of a complete review of a trial court’s decision

by an appellate court that is not the court of last resort.

That is the current interim uncertainty concerning certain

aspects of the law on infringement. The question of

infringement in this case was decided by the jury on the

basis of both literal infringement and infringement under

the doctrine of equivalents. Were we to face these issues,

we might well reverse the judgment on the issue of literal

infringement on the ground that the upper portion of the

Brunswick upper seal assembly does not supportively

receive the upper end of the gear shift shaft, an express

limitation of the claims. The question of infringement by

equivalence would then become critical. Jury instruction

under the doctrine of equivalents, however, was rather

limited and preceded our recent in banc decision in

Hilton Davis Chemical Co. v. Warner-Jenkinson Co., 62 F.3d

1512, 35 USPQ2d 1641 (Fed. Cir. 1995) (in banc), cert.

oer errs ec rr pee

App. 29

granted, 116 S. Ct. 1014 (1996). Review of the equivalence

finding would therefore be problematical.

The Supreme Court has granted certiorari in Hilton

Davis and will hear the case in its next term. The Supreme

Court has also recently unanimously affirmed our in banc

decision in Markman v. Westview Instruments, Inc., 52 F.3d

967, 34 USPQ2d 1321 (Fed. Cir. 1995) (in banc), in which

we held that construing the scope of a claim is a matter

for the court, rather than the jury. See Markman v. West-

view Instruments, Inc., 116 S. Ct. 1384, 38 USPQ2d 1461

(1996). The Court based its decision in part on a belief

that “[t]he construction of written instruments is one of

those things that judges often do and are likely to do

better than jurors unburdened by training in exegesis. ...

The judge, from his training and discipline, is . . . more

likely to be right, in performing such a duty, than a jury

can be expected to be.” Id. at 1395 (citing Parker v. Hulme,

18 F. Cas. 1138 (No. 10,740) (CC ED Pa. 1849)).

Thus, it is entirely conceivable that the Court, consistent

with its decision in Markman, could hold that determination

of the scope of a claim beyond its literal language for pur-

poses of determining infringement under the doctrine of

equivalents is also a matter for the judge, not the jury. It

could do so on the basis that interpreting a claim arguably

contrary to the statutory requirement for precision set forth

in 35 U.S.C. § 112 requires the discernment of a judge,

tantamount to an equitable reformation of the patent. Decid-

ing the infringement phase of this appeal, when it is not

clearly necessary, would thus not be prudent. Such would

not be the case, of course, were the infringement question to

be dispositive of the appeal, but, as indicated above, it is not

here.

App. 30

95-1266, -1302, -1314

STEVEN G. LOUGH,

Plaintiff-Appellee,

v.

BRUNSWICK CORPORATION,

d/b/a MERCURY MARINE,

Defendant-Appellant.

ERRATUM

The following change has been made to the opinion

of June 12, 1996:

Page 15, lines 20-21, change “Lough neither asked for

nor received” to — Lough did not ask for -. (App. 16)

App. 31

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

95-1266, -1302, -1314

LOUGH V BRUNSWICK CORP

ORDER

(Filed Jan. 2, 1997)

A combined petition for rehearing and suggestion for

rehearing in banc having been filed by the APPELLEE,

and a response thereto having been invited by the court

and filed by the APPELLANT, and the petition for rehear-

ing having been referred to and acted upon by the panel

that heard the appeal, and, thereafter, the suggestion for

rehearing in banc and response having been referred to

the judges authorized to request a poll whether to rehear

the appeal in banc, and a poll having been requested,

taken, and failed, it is

ORDERED that the petition for rehearing be, and the

same hereby is, DENIED, and it is further

ORDERED that the suggestion for rehearing in banc

be, and the same hereby is, DECLINED.

Circuit Judge LOURIE concurs in a separate opinion.

Circuit Judge NEWMAN, with whom Circuit Judge

RADER joins, dissents in a separate opinion.

Circuit Judge PLAGER, with whom Circuit Judge

RADER joins, dissents in a separate opinion.

Circuit Judge MICHEL dissents in a separate opinion.

Circuit Judge RADER dissents in a separate opinion.

App. 32

The mandate of the court will issue on January 9,

1997.

FOR THE COURT,

JAN 2 1997 /s/ Jan Horbaly

Date Jan Horbaly

CLERK

cc: George H. Solveson, Esq.

Arnold B. Silverman, Esq.

App. 33

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

95-1266, -1302, -1314

STEVEN G. LOUGH,

Plaintiff-Appellee,

v.

BRUNSWICK CORPORATION,

d/b/a MERCURY MARINE,

Defendant-Appellant.

LOURIE, Circuit Judge, concurring in the Order declining

the suggestion for rehearing in banc.

I concur in the decision of the court not to take this

case in banc. There is nothing wrong with the panel’s

decision or its statements of law. The latter are not new.

The dissents from the decision not to take the case in

banc argue that public use is a question of fact, not law,

and that the panel erred in failing to defer to the jury’s

decision on public use. They similarly consider experi-

mental use to be a question of fact subject to deference to

the jury. I disagree. However, in the context of a negative

vote to take a case in banc, I will not attempt to counter-

analyze all the case law cited by the dissents. Suffice it to

say that I do not agree with their interpretations. A few

brief comments are nonetheless appropriate.

We have for some time considered the question of

public use under 35 U.S.C. § 102(b) to be a question of

law. Moreover, whether or not all the cases explicitly state

that it is a question of law, they mostly treat the issue as

one of law, notwithstanding occasional loose language in

some opinions, including some from courts to which we

App. 34

are not subordinate. The reason it is a question of law is

that it is a statutory term that requires the exercise of

judgment, taking into account a variety of facts in light of

the policies behind the statute. Public use is not a matter

of simply determining whether, e.g., a particular event

occurred more than one year from the filing date of an

application, a matter capable of precise determination. It

encompasses underlying facts such as whether the action

in question was undertaken for commercial purposes,

whether members of the public viewed the invention

without any bond of confidentiality to the inventor,

whether the nature of the invention was discernible by

observation, whether any precautions were taken to

exclude outsiders, etc. These facts, determinable by a

fact-finder and of course subject to deference, must be

weighed in making a judgment whether they amount to

the type of action that the statute was intended by Con-

gress to prohibit. Frequent references in the case law to

issues of fact relate to these underlying facts rather than

establishing that the statutory question of public use is

one of fact.

Experimental use is not of course a term of the stat-

ute. It is, however, judge-made and accordingly appro-

priately decided by a judge without deference to a jury. It

is often called an exception to a public use bar, but it is

best characterized as a negation of a public use. It is also

based on a variety of subordinate facts, once again deter-

minable by a jury and subject to appropriate deference.

Being a negation of public use and hence on the same

conceptual level as public use, and based on the totality

of subordinate facts and on policy considerations, it is

also properly a question of law. The cases have treated it

App. 35

as such, if not explicitly stating as much. The subordinate

fact questions include the purpose of the alleged experi-

ment, whether supervision and control of the so-called

experiments was maintained by the inventor or someone

acting on the inventor’s behalf, whether records were

kept, and whether the experimenter, if not the inventor,

was obligated to and did report to the inventor the results

of the experiments. Whether a reduction to practice had

already occurred is also a factor, perhaps a conclusive

one, because that which has been shown to work for its

intended purpose (the test for a reduction to practice)

arguably isn’t entitled to be called experimentation suffi-

cient to negate what would otherwise be a public use. In

this case, the indicia of supervision and control were so

lacking that, as a matter of law, there could be no proper

holding of an experimental use. And all of Lough’s pur-

ported experiments occurred after the date on which he

conceded that he reduced his invention to practice.

The principal Supreme Court case on public and

experimental use is City of Elizabeth v. American Nicholson

Pavement Co., 97 U.S. 126 (1877). In that case the Court

discussed a variety of considerations (underlying facts) it

considered relevant to the question. It stated numerous

times that the question was whether they all added up to

an experimental use rather than a public use within the

meaning of the statute or within the meaning of the law.

Clearly, it considered the ultimate question to be one of

law. Earlier, the Court in Pennock v. Dialogue, 27 US. 1,15

(1829), while noting questions of fact, stated: “But when

all the facts are given, there does not seem any reason

why the court may not state the legal conclusion deduc-

ible from them.”

App. 36

With respect to both public use and experimental use,

courts have been accustomed to referring to their deter-

minations as involving “the totality of circumstances,” a

phrase that some have objected to as being indefinite.

What this phrase conveys is simply the process by which

judges decide legal issues based on various facts that

have been determined, utilizing the tools that judges

always use, viz., the language of the statute, the purposes

of the statute as indicated by legislative history, etc. Cases

depend on facts, but they involve legal judgments.

The fact that members of the public may not know

for certain what a judge or panel of judges may decide on

a particular matter is hardly a criticism of the system of

assigning fact-law labels to issues for decision. Juries are

at least as difficult to predict as judges or panels of

judges. Prediction is a skill that lawyers are supposed to

possess, to be able to estimate, based on case law, the

policies of the law, and the facts in a given case, whether

those facts come within the requirements of the law. I

suspect that the multiplicity of cases that arise on these

issues is not due to uncertain standards, but to the fact

that in a competitive economy parties press their posi-

tions until a high court tells them they have finally lost. It

is due at least as much to the unpredictability of juries as

to uncertain legal standards applied by judges.

App. 37

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

95-1266, -1302, -1314

STEVEN G. LOUGH,

Plaintiff-Appellee,

v.

BRUNSWICK CORPORATION,

d/b/a MERCURY MARINE,

Defendant-Appellant.

NEWMAN, Circuit Judge, with whom Circuit Judge

RADER joins, dissenting from the Order declining the

suggestion for rehearing en banc.

In converting the factual question of experimental

purpose into a matter of law, our court has cut another

notch in the removal of patent issues from the trier of

fact. The appellate /trial relationship is distorted in the

panel’s treatment of the factual question of whether this

use of Mr. Lough’s engine seal assembly was primarily

experimental and therefore not a “public use” in terms of

§ 102(b). The panel’s treatment is squarely in conflict with

precedent. Thus I must dissent, respectfully, from the

court’s decision not to consider this issue en banc.

The Appellate/Trial Relationship

As discussed by my colleagues in dissent, the issue of

experimental use is a question of fact, not a ruling of law.

The trial process is the mechanism, in our system of

justice, for finding facts, determining credibility, weigh-

ing the evidence, balancing the circumstances, and ascer-

taining the truth. The trier of fact, applying the rules of

App. 38

statute and the experience of precedent to the facts of the

particular case, must exercise judgment in light of the

probative value of the evidence, informed by the complex

of societal and policy considerations that are the founda-

tion of our system of law. The trial court is not a mere

compiler of data; it is a tribunal of justice.

The role of the appellate court is to correct errors at

trial that prejudiced the outcome, not to make de novo

fact-based rulings as if there had been no decision at trial.

When the law has been correctly stated and the evidence

has been weighed to plausible effect, such that the con-

clusion is not clearly erroneous (upon bench trial) or is

not without substantial supporting evidence (upon jury

trial), the appellate court must give appropriate deference

to the judgment of the trier of fact. The Federal Rules and

judicial tradition require this appellate role. See Anderson

v. City of Bessemer City, 470 U.S. 564, 573-74 (1985) (“If the

district court’s account of the evidence is plausible in

light of the record viewed in its entirety, the court of

appeals may not reverse it even though convinced that

had it been sitting as the trier of fact, it would have

weighed the evidence differently.”); Fed. R. Civ. P. 52(a).

The trial courts are not divested of their primary role

in resolving disputes, whenever appellate review is

sought. The issue raised by this en banc petition is not

whether we, as the appellate court, have authority to

review the law, the facts, and the application of the law to

the facts of this case. Of course we do. The issue is

whether we have authority to reweigh and reevaluate

and rebalance the evidence, with no deference to the

procedures and judgment at trial. That is an improper

appellate role. In the resolution of disputes the trial is the

App. 39

’

“main event,” not a “tryout on the road,” in the words of

Wainwright v. Sykes, 433 US. 72, 90 (1977).

Whether the installation of Mr. Lough’s six hand-

made seal assemblies was primarily for experimental pur-

pose, upon the entirety of the circumstances, was found

by the trier of fact. Review of that finding is not de novo,

as the panel majority holds. This court’s arrogation of

authority to decide this question de novo diminishes the

trial process and elevates the appellate role. As a com-

mentator has explained:

The classification of ultimate facts as questions

of law amounts to a manipulation of the law-

fact doctrine to take questions from the jury or

to subject the trial level’s resolution of questions

to free appellate review.

Martin B. Louis, Allocating Adjudicative Decision Making

Authority Between the Trial and Appellate Levels: A Unified

View of the Scope of Review, the Judge/Jury Question, and

Procedural Discretion, 64 N.C. L. Rev. 993, 1028 (1986).

Whether experimental use is viewed as an historical fact

or an ultimate fact, it is not a matter of law. Its removal

from the jury was an improper “manipulation of the law-

fact doctrine.”

Public Use and Experimental Use

The patent statute provides that an inventor is barred

| from the patent system if the invention has been in public

: use for more than a year before applying for the patent:

35 U.S.C. § 102 Conditions for patentability;

novelty and loss of right to

patent

App. 40

A person shall be entitled to a patent unless -

(b) the invention was... 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... .

This provision has been in the patent statute since 1839,

varying only in whether the period during which the bar

accrued was one or two years.

The statute states the law. The boundary between law

and fact was explained in simple terms by Professor

Morris: the law is the general principle, stated in

advance, while the fact is a case-specific inquiry based on

evidence. Clarence Morris, Law and Fact, 55 Harv. L. Rev.

1303, 1304 (1942). This usage is illustrated in City of

Elizabeth v. Pavement Co., 97 U.S. 126 (1877), wherein the

Supreme Court discussed the relationship between exper-

imentation and public use, stated certain additional prin-

ciples of law, and discussed their application in that case.

Thus, the Court stated that:

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 such a [public] use.

97 U.S. at 134. This is a principle of law, of general

applicability. The Court also stated a generally applicable

principle of procedural law, as follows:

To determine this question, it is necessary to

examine the circumstances under which this

pavement was put down, and the object and

purpose that Nicholson had in view.

App. 41

97 US. at 133. The “law” is these statements of principles.

Applying these principles to the facts in City of Elizabeth

the Court found, on examining the circumstances, that

the inventor Nicholson’s purpose was primarily experi-

mental. That finding was not a matter of law, but a case-

specific finding upon weighing and balancing and eval-

uating all of the circumstances.

Both before and after City of Elizabeth numerous cases

have involved questions of experimental and public use.

The relevant criteria have been summarized in several

opinions of this court. E.g., Baker Oil Tools, Inc. v. Geo

Vann, Inc., 828 F.2d 1558, 1564, 4 USPQ2d 1210, 1214 (Fed.

Cir. 1987); TP Laboratories, Inc. 0. Professional Positioners,

Inc., 724 F.2d 965, 971, 220 USPQ 577, 582 (Fed. Cir.), cert.

denied, 469 U.S. 826 (1984). These criteria include the

necessity for the testing or evaluation, the extent of the

use and by whom, the degree of openness to the public

during evaluation, whether the inventor monitored the

use and kept a laboratory notebook or other experimental

records, whether there was payment for the use, and

whether there was a confidentiality agreement. The ulti-

mate question is whether the primary purpose of the

activity was experimental. See Allied Colloids, Inc. v. Amer-

ican Cyanamid Co., 64 F.3d 1570, 1576, 1577, 35 USPQ2d

1840, 1844 (Fed. Cir. 1995) (“The dispositive consideration

is whether the inventor was in fact testing the inven-

tion.”); TP Laboratories, 724 F.2d at 972, 220 USPQ at 582

(“[I]f a use is experimental, even though not secret, ‘pub-

lic use’ is negated.”)

The trier of fact must weigh and balance all of the

evidence in order to find the primary purpose of the

App. 42

activity. Although scholars of trial/appellate relation-

ships have drawn elegant distinctions in defining fact

and law, this determination of experimental purpose is

surely not a matter of law. In Armour & Co. v. Wilson &

Co., 274 F.2d 143, 155, 124 USPQ 115, 124-25 (7th Cir.

1960) the court stated:

We have come to speak of questions of ‘facts,’

‘primary facts,’ ‘subsidiary facts,’ ‘evidentiary

facts,’ ‘ultimate facts,’ ‘physical facts,’ ‘docu-

mentary facts,’ ‘oral evidence,’ ‘inferences,’ ‘rea-

sonable inferences,’ ‘findings of fact,’

‘conclusions,’ ‘conclusions of law,’ ‘questions of

fact,’ ‘questions of law,’ ‘mixed questions of law

and fact,’ ‘correct criteria of law,’ and so on ad

infinitum. The simple answer is that we are all

too frequently dealing in semantics, and our

choice of words does not always reflect the

magic we would prefer to ascribe to them.

Indeed, let us not be misled by semantics. The “magic” of

de novo appellate determination of experimental use

serves not to reflect a nuanced definition of law and fact,

but to affect trial/appellate authority and, in the case at

bar, the role of the jury.

The Case of Lough v. Brunswick Corporation

Mr. Lough, a workman at a Florida marina, observed

that a commercial marine engine had a deficient upper

seal assembly. He designed an improved seal assembly,

worked it on his grandfather’s lathe, and installed it in

his own boat. He made five additional prototypes and

persuaded five other persons, all personal acquaintances

in the boating community, to install these handmade

App. 43

assemblies. Mr. Lough testified that he needed to know

whether his seal assembly would hold up during a practi-

cal period of marine use, and that he sought more exten-

sive and varied use than in his own boat:

Well, Jack Wherry’s boat constantly sat in the

water. My boat, I take - it was on a trailer... .

And I explained to Jack what I want to do, I

wanted to put a seal in his boat for testing

purposes to see if it would last, because his boat

sat in the water all the time. And when it comes

back to the marina, then I could look at it and I

could test - I could, you know, make sure every-

thing ir it was just fine.

App. at A000230.

Mr. Lough testified that he wanted to be sure that his

seal would last for at least a year, the typical warranty

period for boats:

I figured if they lasted a year and got them

through the warranty period - the Mercruiser

seal wouldn’t even get them hardly through the

warranty period on a lot of boats.

So, I figured if this thing here that I made lasted

them at least a year, a boat dealership could put

these in there and at least tell the man he’s

going to fix his boat, you know, and it’s going to

last for at least a year.

App. at A000229.

Mr. Lough testified about the free provision of the

handmade seal after he persuaded his friends to try it

out, App. at A000228-29 (“Q: Did you receive any money

or anything for any of these five seals? A: No, I did

App. 44

not.”), and his eventual conclusion that his seal worked

sufficiently better, with respect to the life of the then-used

marine engine seals, as to have commercial potential. He

testified about when he reached this conclusion, and

about his decision to enter into the patent system:

Q: All right. What prompted you to patent this

seal?

A: I guess all the friends at the marina; every-

body told me that, you know, you got a good

thing there, and why don’t you take it to a

patent attorney and have him patent the thing

for you so...

Q: All right. Did you take it to a patent attor-

ney?

A: I did.

App. at A000229-30.

Witnesses at the trial included some of the persons

who offered their boats for the evaluation. Thomas Nickla

testified about his understanding that this seal assembly

was a new creation of Mr. Lough, App. at A000543 (“Q:

Did there come a time when Mr. Lough told you that he

had a new — he had made a new seal to correct this

problem? A: Yeah, there was.”), and that he agreed to its

installation in his boat in view of the known deficiency in

existing seals:

Q: Did you or he, or the two of you, put a seal

in your boat?

A: Right. Both of us did one day.

Q: And you’re talking about now the 23 foot

Wellcraft?

App. 45

A: Right.

Q: All right, sir. What did you understand the

purpose of putting that seal in your boat to be?

Why did you all do it?

A: The reason I first understood was to fix the

problem that MerCruiser had with that seal was

— the aluminum was SO corroded that the seal

wouldn’t stay in the housing.

Q: And why did Steve give you a seal to put in

your boat?

A: Just to try it out.

App. at A000543. Other witnesses testified similarly that

there was no payment for the seal, and that they knew it

was a handmade prototype whose performance was

being evaluated. Mr. Lough testified that after his patent

application was filed he started a business to make the

seals.

All of this evidence occupied many days of trial, with

examination and cross-examination of the witnesses. The

jury was correctly instructed to consider all of the circum-

stances and to determine whether the primary purpose of

the use of the seal in this period was experimental, in

which event, the jury was instructed, the use was not a

public use under the law. The jury found, by special

verdict, that none of “the seal assemblies distributed by

Mr. Lough were in public use more than one year before

the filing of his patent application.”

The panel majority, redetermining the issue de novo,

explains the factors that it found persuasive in deciding

that the use was not primarily experimental: that one of

the boats was sold without retrieving the seal, that Mr.

App. 46

Lough did not keep written records, that he did not

inspect the seal assemblies, and that he did not “maintain

any supervision” over the seals during the testing. I am

not in a position to evaluate and weigh these findings,

some of which appear to be directly contrary to

unchallenged testimony. Those who were present at the

trial were surely better positioned to sort out the truth,

weigh the evidence, and balance all of the circumstances.

The panel majority, in reaching a different balance

than did the trier of fact, must have disbelieved the

testimony that the purpose was to “try out” the seal

assembly, and must have disbelieved the testimony

describing the disassembly and inspection of the seals,

for the majority explicitly finds that Mr. Lough “fail[ed]

to monitor the use of his prototypes,” 86 F.3d at 1122, 39

USPQ2d at 1106, and that he received no comments con-

cerning their operability. Id. at 1116, 39 USPQ2d at 1102.

Mr. Lough testified that he took pictures of the seal

assembly in the boat of a customer of the marina where

he worked, to show that the assembly was working prop-

erly:

I was trying to show that there was no - they

still had the red grease on the bell crank after

about probably six to eight months of testing.

And when we pulled the drive off, there still

wasn’t any water in it... .

James Yow, owner of the marina where Mr. Lough

worked, testified about observations of the performance

of Mr. Lough’s seal in a tow boat at the marina:

Q: How long was the seal in this particular

boat?

App. 47

A: Approximately four years.

Q: Did you ever have any problems with the

seal?

A: No, sir. We pulled the boat out of the water

about every three to six months, pulled the

drive, greased the U-joints and stuff like that,

and checked the seal and there was no water in

the cavity. “

It is hard to square this evidence with the panel major-

ity’s statements that Mr. Lough did not monitor the per-

formance. The proper appellate analysis is not how a

panel of this court would have believed the witnesses and

weighed the evidence, but whether the evidence and

credibility determinations that the trier of fact deemed

probative of experimental purpose were supported by

substantial evidence and within the scope of a reasonable

jury verdict.

The need to exercise wisdom or judgment in consid-

ering the totality of the circumstances does not convert

fact into law and-remove the issue from the trier of fact.

To the contrary, the exercise of wisdom and judgment

when weighing and balancing the evidence is the role of

the trier of fact. See Best v. District of Columbia, 291 US.

411, 415 (1934) (“Where uncertainty arises either from a

conflict of testimony or because, the facts being undis-

puted, fair-minded men may honestly draw different con-

clusions from them, the question is not one of law but of

fact to be settled by the jury.”) While the appellate court

has full authority to correct jury verdicts that are not

supported by substantial evidence, such correction does

App. 48

not permit ignoring the trial process. When the jury ver-

dict is sustainable on the evidence, the appellate role is

fulfilled.

Why Does It Matter?

If the Federal Circuit wants to make de novo deter-

minations of factual matters, isn’t this a good thing?

Won't it add consistency to patent decisions by removing

harried trial judges and sympathetic juries from another

area of patent litigation? Is it not a force for stability if the

Federal Circuit will decide all fact-driven questions de

novo?

Indeed, when there are fewer decision-makers, con-

sistency is more likely. However, the appellate court is

not structured to find facts without recourse to the pro-

cedures of trial. On issues that require weighing and

balancing several confluent fact-laden circumstances,

how can we presume to reach a more just result than

those who were present for days or weeks of testimony,

with demonstrations, exhibits, cross-examination, and

argument? The procedures of trial and the deference

owed to the judgment grounded in these procedures are

the fabric of our system of justice and the trial/appellate

relationship.

Although appellate courts have on occasion departed

from deferential review of findings of fact, such depar-

tures are rare and invoke important policy issues, as in

questions of constitutional fact, e.g., Bose Corp. v. Con-

sumers Union of United States, Inc., 466 U.S. 485 (1984) (the

issue of product disparagement required interpretation of

the First Amendment) and most recently in the policy

App. 49

considerations surrounding patent claim construction,

established in Markman v. Westview Instruments, Inc., 116

S. Ct. 1384, 1396, 38 USPQ2d 1461, 1470 (1996) (“[W]e see

the importance of uniformity in the treatment of a given

patent as an independent reason to allocate all issues of

construction to the court.”)

However, I doubt that the finding of experimental

purpose in particular factual circumstances raises suffi-

ciently grand portents to warrant further disruption of

the trial/appellate relationship. Even if the removal of

patent issues from the mainstream processes in which

tradition (and wisdom) have placed them is the direction

of the future, this piecemeal attrition of district court

authority is pernicious. As Professor Louis remarked,

supra at 1018, appellate action to treat fact as law

“amounts to a direct judicial assault on the prerogatives

of fact finders.” If the majority of this court believes that

the special niche of de novo review is nonetheless the

correct place for the factual question of experimental use,

then the court should speak with one voice so that trial

courts and parties will know how to try and appeal the

issue. Thus I must, respectfully, dissent from the court's

refusal to take this issue en banc in order to establish a

position on experimental use by which we will all be

bound.

App. 50

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

95-1266, -1302, -1314

STEVEN G. LOUGH,

Plaintiff-Appellee,

v.

BRUNSWICK CORPORATION,

d/b/a MERCURY MARINE,

Defendant-Appellant..

PLAGER, Circuit Judge, with whom RADER, Circuit Judge

joins, dissenting from the Order declining the suggestion

for rehearing in banc.

In my dissent to the original panel opinion, I stated

my view as to why the case was wrongly decided. I write

now to state my reasons why, under the standards gov-

erning¥in banc review by this court, see Federal Circuit

Rule 35(a), | would take this case in banc as appellee has

suggested and clarify the legal standard by which we

review cases such as this. In the course of doing so, we

would also correct a gross miscarriage of justice.

An inventor is free to dedicate his invention to the

public, in which case the Patent Act denies him the right

subsequently to obtain a patent. There are several things

an inventor may do that will have that effect; these are

spelled out in section 102 of the Act. Included is to have

“the invention . . . in public use . . . in this country, more

than one year prior to the date of application for patent.”

35 U.S.C. § 102(b) (1994).

The statute does not describe the circumstances

under which an invention is to be considered “in public

App. 51

use.” Presumably the distinction is between a public and

a private use. Courts recognize that private use, strictly

defined, is not always possible because a certain amount

of testing might be needed in order to perfect the inven-

tion, and such testing might have to be done in a setting

which, in a strict sense, was public, that is, open to the

public, or involving persons other than the inventor. The

classic case is City of Elizabeth v. American Nicholson Pave-

ment Co., 97 U.S. 126 (1877), in which the Supreme Court

found a new type of pavement material used on a public

road for six years not to be “in public use” because the

inventor’s purpose was to test the material under actual

use conditions.

City of Elizabeth and cases like it establish that when

an accused infringer defends by claiming patent

invalidity based on a § 102(b) public use bar, the patentee

may counter with what has become known as the “exper-

imental use” counter-defense. If the use of the invention

is experimental, then the fact that the use resulted in

public exposure does not invalidate the patent even if the

exposure occurred more than one year before application

for patent was made.

Whether an inventor intended to dedicate his inven-

tion to the public, or whether he was simply experiment-

ing in order to perfect the invention before seeking his

patent, is a question the answer to which is entirely fact

driven. It involves intent, purpose, behavior, relation-

ships actual and perceived, timing, the nature of the

invention and its stage of development, the environment

in which the testing was done, the experience and train-

ing of the inventor, and perhaps even the extent and

App. 52

sophistication of advice readily available to the inventor

as the invention matures.

When presented after-the-fact to a fact finder, the

reconstruction of these historical events is the typical

fodder of a trial, whether it be a jury trial or a bench trial.

The subjective nature of the reconstruction process gives

rise to notions like the virtual unreviewability of the fact

finder’s credibility determinations regarding the wit-

nesses who testify, and the deference given to the factual

findings and conclusions reached by the fact finder. If the

fact finder is a jury, on appeal we ask whether a reason-

able jury, on the evidence before it, could have arrived at

the conclusion it did. If the matter is tried to a judge in a

bench trial, we ask not whether as judges we all agree,

but whether the trial judge’s findings and conclusions

were clearly erroneous.

It is sometimes suggested that there is a legally-

significant difference between what are called “underly-

ing facts,” on the one hand, and other facts, including

factual inferences and fact-based conclusions that pre-

sumably follow from the “underlying facts.” If a fact falls

in the first category, it is said, the fact findings are enti-

tled to deference on appeal; if not, the fact findings get no

such deference. This artificial bifurcation when dealing

with what is a singular, fact-intensive, issue is I believe

misplaced and misunderstood. The question of whether

an inventor’s activities placed the invention “in public

use” cannot be separated from the factual underpinnings

on which the answer stands. The factual conclusion — was

he experimenting or was he intending to dedicate his

invention to the public - does not derive from some

independent basis of judgment or knowledge, but simply

App. 53

from the total experience presented to the fact finder by

the evidence in any given case.

Thus the concept of “totality of the circumstances”

makes sense as a description of what fact finders wrestle

with, and out of which emerges the “truth” of what

happened and why. However, when invoked as an appel-

late standard of review, “totality of the circumstances”

becomes simply a thin veil behind which appellate judges

substitute their view of the facts for that of the fact finder.

As such it has the propensity to be arbitrary, capricious,

and an invitation to standardless decision making, the

sort of thing that appellate courts are supposed to correct,

not employ.

I fully support the rationale and result in Markman v.

Westview Instruments, Inc., 52 F.3d 967, 34 USPQ2d 1321

(Fed. Cir. 1995) (in banc), aff'd, 116 S. Ct. 1384 (1996), in

which, in the interest of an efficient and fair judicial

system, we made a careful distinction between the role of

judge and jury in the decisional process. However, our

decision that the process of claim construction does not

raise any factual issues appropriate for jury participation

does not necessarily mean that other issues in patent law

should be similarly treated. It depends on the nature of

the issue. What is needed is functional analysis rather

than a priori labeling as “legal issue” or “factual issue.”

When the issue is reconstruction of historical events,

the jury has long been deemed an appropriate fact finder.

That the “public use” standard is found in statute is of no

moment; it is not the source of the standard but its

content that matters. Whether a use is experimental, and

thus not a public use under the statute, is unlike the

App. 54

question of the meaning of a patent claim. In claim con-

struction, certain “facts” may be relevant - what might

one skilled in the art have thought the claim language

meant, and what precisely was the prior art against

which this invention was played — but the ultimate judg-

ment of the meaning of the claim derives from the skill

and specialized knowledge of persons trained to make

those judgments. The announced conclusion reached

incorporates learning and, not infrequently, technological

grasp and policy sensitivity, which are aided by distance

from the immediacy of the trial stage.

In the issue before us, whether Mr. Lough’s exposing

of his invention to others was for the purpose of experi-

menting to perfect it or not, and thus in public use or not,

the jury under proper instructions decided the fact-inten-

sive question in his favor; the trial judge who was present

during the proceedings approved what the jury did; and

on appeal the record contains more than enough evidence

by which we can conclude that a reasonable jury could

have arrived at the conclusion this one did. For me, that

is the end of the case.

Mr. Lough was not engaged in market testing or

other commercial activity that, though perhaps falling

short of the related on-sale bar, might be cause for con-

cern. Nor did the panel offer a new, specific test for

experimental use, such as requiring written confiden-

tiality agreements, detailed reports contained in lab

notes, or some other such requirement that Mr. Lough is

deemed to have violated.’ Absent that, the decision by

1 I do not intend by this to suggest that any single test can

or should be imposed.

—_—$_—$—$——————$—$— EK eS

App. 55

the panel majority to deny the jury any deference and

thus arrogate to itself the fact finding has not only caused

a gross miscarriage of justice to Mr. Lough, but pro-

foundly contributes to the confusion and misunderstand-

ing that had already begun to emerge around this

question of what is, and who decides, experimental use.

As attested to by the several accompanying opinions

also dissenting from the denial of in banc action, this

court bears some responsibility for the state of affairs

reflected by the decision in this case. I would take the

case in banc for the purpose of clearly and unequivocally

stating the rule that accords the fact finder proper defer-

ence when the issue is whether the experimental use

counter-defense has been successfully established as a

fact in face of an invalidity attack based on an alleged

public use under section 102. Even under such a deferen-

tial standard, this court can effectively police the behav-

ior of fact finders to ensure that the appropriate criteria,

such as they are or may become, are properly applied.

The outcomes in these cases may vary, but that ordinarily

will be a natural consequence of the different facts in

different cases, and should not be a matter of concern.

Even if it were, other than in the exceptional case it is not

a concern that an appellate court is equipped to address

effectively. Our job is to provide uniformity of rule and

process, not to impose our view of the facts on the

constituted fact finder under the mistaken notion that an

appellate court routinely can provide on a cold record

some better understanding of what actually occurred.

App. 56

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

95-1266, -1302, -1314

STEVEN G. LOUGH,

Plaintiff-Appellee,

v. :

BRUNSWICK CORPORATION,

d/b/a MERCURY MARINE,

Defendant-Appellant.

MICHEL, Circuit Judge, dissenting from the Order declin-

ing the suggestion for rehearing in banc.

I would grant the suggestion for rehearing in banc

for three reasons not fully explicated in any of the sepa-

rate opinions of my colleagues: (1) our case law regarding

the application of the public use bar is too vague, and

outcomes are too unpredictable, (2) dispute accordingly

arises regarding whether public use and the reciprocal

issue of experimental use are questions of fact or of law,

and (3) dispute likewise arises regarding the proper stan-

dard of review by both the trial judge after a jury verdict

and by this court. Unlike most of the other dissenting

judges, however, I do not agree that public use should be

reclassified as an issue of fact. Therefore, I write sep-

arately to explain that I would take the case in banc tc

reaffirm our classification of public use as ultimately an

issue of law and also to identify certain indicia of “con-

trol,” e.g., record keeping, secrecy agreements, testing

protocols, supervision of testing, reports to the inventor

or restricted access to others, proof of which should be

required before any potentially barring use in public can,

ee

App. 57

on grounds of experimentation, avoid the public use bar.

Our declaring such a requirement in banc would make

the potential for invalidation of particular patents more

predictable.

I.

Certain of our cases describe the public use bar as

turning on the “totality of the circumstances.” E.g., Man-

ville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544, 549,

16 USPQ2d 1587, 1591 (Fed. Cir. 1990). So labeling the test

may suggest that all relevant circumstances are merely

factors to be weighed and that no fact can definitively

determine whether a patent is invalid because of public

use of the invention. Thus, lawyers and business people

can only guess about the invalidity of a particular patent

until a panel of our court has ruled. However, to say that

many factors may be relevant is not to say that none can

ever be controlling. For example, I believe existing case

law, when properly read, suggests that control is such a

requirement, i.e., a use cannot be experimental if the

inventor failed to maintain sufficient control over the

invention and its testing. Indeed, that is what the panel

seems to hold. See Lough v. Brunswick Corp., 86 F.3d 1113,

1121 (Fed. Cir. 1996) (“Thus, Lough did not maintain any

supervision and control over the seals during the alleged

testing.”). Requiring indicia of control guarantees both

that the inventor was actually experimenting in an

attempt to acquire information about whether the inven-

tion would work for its intended purpose and that the

invention has been reasonably protected from disclosure

to the relevant public so that competitors could not rea-

sonably conclude it has been dedicated to the public.

App. 58

Absent such control, there can be no realistic conclusion

that the inventor was truly experimenting or that the

competitors and the public were not mislead [sic]. Unfor-

tunately, control as a prerequisite to experimentation may

not seem absolutely required by the panel opinion and, in

any event, the panel opinion lacks the full weight of an in

banc court behind it. Therefore, I would rehear the appeal

in banc.

While requiring control would improve predic-

tability, redesignating public use as an issue of fact would

not. My dissenting colleagues who favor so reclassifying

the issue would increase unpredictability by granting

greater deference to jury verdicts involving a conclusion

of public use. Different juries could render different ver-

dicts on the public use bar in the face of similar facts, and

what a given jury would decide on particular facts could

not be foretold. Consequently, reclassification would also

encourage more litigation. Patent invalidity on public use

grounds could not be determined on examination of

known facts by mere lawyers, no matter how skillful, but

would require the full time and expense of a jury trial,

followed by post-trial motions and appeal, whenever the

patentee seeks to assert his right to exclude others, such

as through warning letters or licensing negotiations.

Although de novo judicial redetermination of invalidity

may be a burdensome and exacting task, I think it is

better for the trial bench and our court to perform this

task than to leave undisturbed an array of unpredictable

and inconsistent jury verdicts.

Moreover, reclassifying the public use issue as one of

fact might create confusion throughout our invalidity

jurisprudence. If we so reclassify public use, would we

App. 59

not, in order to be jurisprudentially consistent, likewise

reclassify other legal invalidity grounds that we have said

comprise both legal and factual issues, such as obvious-

ness?

Il.

In any event, I consider reclassifying the public use

bar as an issue of fact to have been foreclosed by the

Supreme Court’s decision long ago in City of Elizabeth v.

American Nicholson Pavement Co., 97 U.S. 126 (1877).

There, the Court distinguished between “use in public,”

judicially reviewable as fact, id. at 134 (“That the use of

the pavement in question was public in one sense cannot

be disputed.”), and “public use,” the statutory standard,

reviewable as law, Id. at 136 (“The public had the inciden-

tal use of the pavement, it is true; but was the invention

in public use, within the meaning of the statute?”)

(emphasis added). Our court since its inception has

drawn the same distinction. While, if we conclude the

issue is not foreclosed by City of Elizabeth, we are free to

reverse our view, in a stare decisis system a court in banc

should only upset long settled law in the face of a com-

pelling change of circumstances. None is presented here.

Ill.

If our classification of public use as a question of law

with underlying factual issues is to operate more suc-

cessfully, as I believe it can, the court in banc must

articulate how we and trial judges are to review jury

verdicts on this and, by implication, other legal grounds

of invalidity. To say only that such grounds of invalidity

App. 60

are legal conclusions based on underlying facts is not to

enlighten. Nor is it sufficient to say of the “underlying

facts” that those that are historical warrant deferential

review. Another important category of facts might be

termed “legal facts.” An example of such a legal! fact is

the question of control when considering asserted experi-

mental use. I believe that on legal issues of invalidity,

these “legal facts,” too, deserve deferential review by

judges. Indeed, in my view, only the ultimate legal con-

clusion of invalidity ever warrants free review by the trial

judge following jury verdicts and by us on appeal.

Accordingly, I believe judges at both levels, as well as

patent lawyers and business people who could then make

better predictions about patent validity, would all benefit

if we were clearer about how judges are to decide these

issues.

Ibelieve the most difficult challenge is to distinguish

between those cases in which the facts regarding public

use, as duly found, could only support one result, and

those in which the facts as duly found could support

either result. In the latter class of cases, judges must

redecde the issue based on the underlying facts as prop-

erly iound by the jury, while in the former, I believe

judge must leave undisturbed the jury’s resolution of the

ultimate issue as well as the underlying facts, so long as

the underlying facts are supported by substantial evi-

dence Such a standard of review, although variable and

hence complex, would not risk encroachment on the fact-

findirg, evidence-weighing function of the jury. Rather, it

would guarantee deference to the jury’s verdict in those

cases where such deference is due, i.e., where the facts

dictat the result, while still allowing appropriate judicial

App. 61

redetermination in circumstances that merit it, i.e., where

the facts as found do not dictate the result. Although

evaluating the jury’s fact-finding is often difficult in the

face of a general verdict, the jury’s proper role can be

further protected by encouraging the use of special ver-

dict forms or written interrogatories, see Fed. R. Civ. P. 49,

thus leaving little doubt as to the jury’s findings.

I had hoped that in this appeal our court in banc

might have settled these questions regarding judicial

review of jury verdicts on the public use bar, if not legal

invalidity issues generically. That occasion is not to arise

in the present appeal. I hope our court will soon be

presented with such occasion in another appeal. Every-

one affected by the patent system stands to gain.

App. 62

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

95-1266, -1302, -1314

STEVEN G. LOUGH,

Plaintiff-Appellee,

v.

BRUNSWICK CORPORATION,

d/b/a MERCURY MARINE,

Defendant-Appellant.

RADER, Circuit Judge, dissenting from Order declining

the suggestion for rehearing in banc.

In Lough v. Brunswick Corp., 86 F.3d 1113, 39 USPQ2d

1100 (Fed. Cir. 1996), a split panel of this court pro-

nounced public use under 35 U.S.C. § 102(b) a question of

law. Id. at 1120. Under this standard of review — a depar-

ture from Supreme Court and Federal Circuit law - the

Lough court gave no deference to the trial jury’s findings.

Because I believe the Lough court lacks authority for this

departure and complicates a quagmire of already confus-

ing law on statutory bars, I must respectfully dissent

from this court’s decision to decline in banc rehearing.

No subject matter within the jurisdiction of this court

of appeals prompts more outright scholarly criticism than

this court’s review of section 102(b) bars.! Moreover, if

1 See, e.g., Thomas K. Landry, Certainty and Discretion in

Patent Law: The On Sale Bar, The Doctrine of Equivalents, and

Judicial Power in the Federal Circuit, 67 S. Cal. L. Rev. 1151 (1994);

William C. Rooklidge & Stephen C. Jensen, Common Sense,

Simplicity and Experimental Use Negation of the Public Use and On

App. 63

this court presumes to extend plenary appellate review to

the vague totality of circumstances test, this single sen-

tence in title 35 can only produce more conflicting judg-

ments. The unrestricted review of a wide-ranging

“totality of circumstances” creates ample latitude for

inconsistency. By inexplicably designating both public

use and experimental use as questions of law, Lough

threatens to multiply the chaos. Until the Federal Circuit

restores the emphasis on factual inquiry set forth in the

Supreme Court’s standard of review, certainty and pre-

dictability - not to mention unwary inventors - will be

the victims.

I.

Steven G. Lough is the most recent victim of the

uncertainties of public use law. He won a unanimous jury

verdict after an exhaustive seventeen-day trial. After a

lengthy consideration of evidence, the jury decided that

Lough did not publicly use his invention. Moreover, the

trial judge who presided over the trial sustained the

jury’s verdict.

Lough invented an upper seal assembly to solve a

corrosion problem in inboard/outboard motor boats - a

solution that had escaped Brunswick for many years.

After some trial and error with his grandfather’s metal

lathe, Lough made six usable prototypes in the spring of

Sale Bars to Patentability, 29 J. Marshall L. Rev. 3 (1995); James A.

Jorgensen, Comment, Environmentally Dependent Inventions and

the “On Sale” and “Public Use” Bars of 102(b): A Proffered Solution

to a Statutory Dichotomy, 49 U. Miami L. Rev. 185 (1994).

App. 64

1986. He installed one prototype in his own boat. He

placed a second prototype with a friend who installed it

in his boat. He also installed prototypes in the tow boat at

the marina where he worked and in the boat of a marina

customer — both of which Lough regularly maintained.

He gave the remaining prototypes to a friend who was

employed at another marina in Sarasota, Florida. At no

point did Lough charge for these prototypes or try to

profit from his invention. Instead, Lough testified of his

intent to perfect his invention through experimentation.

He relied on his close relationship and association with

the owners of the experimental boats to maintain the

confidentiality of his invention and to monitor the perfor-

mance of his prototypes.

On June 6, 1988, Lough filed a patent application

entitled “Liquid Seal for Marine Stern Drive Gear Shift

Shafts,” which issued as U.S. Patent No. 4,848,775 on July

18, 1989. Lough sued Brunswick on June 12, 1993, for

infringement of the ‘775 patent. The jury found no public

use before the critical date of June 6, 1987.

On appeal to this court, Brunswick argued that

Lough’s prototypes were not experimental, but public

uses. Lough relied on his evidence at trial that he had

experimented with the prototypes to complete his inven-

tion. He stressed his refusal to seek any commercial gain

from the prototypes. In fact, he did not place the seal

assemblies on sale until after he filed his patent applica-

tion. He also referred to his selection of a few friends and

personal acquaintances to check the performance of the

invention under different conditions.

App. 65

This court, however, reversed the decision of the jury

and the trial judge. Over a vigorous dissent, this court

reweighed the record evidence on its own and, for the

first time on appeal, found that Lough’s six prototypes

were a public use.

Il.

The outcome of Lough turns on the standard of

review applied by this court. With any level of proper

deference to the fact-finding of those who heard seven-

teen days of evidence, this court must have affirmed.

Both logic and Supreme Court rules call for that defer-

ence. Logic calls for deference because this court used the

intensely factual “totality of circumstances” analysis. A

factual analysis logically calls for the deferential review

accorded questions of fact. Respect for the Supreme Court

also calls for deference because our nation’s highest court

has repeatedly instructed that public use is predomi-

nantly a question of fact. See, e.g., Pennock v. Dialogue, 27

U.S. (2 Pet.) 1, 16 (1829) and cases cited infra pp. 5-6.

Notwithstanding logic and binding precedent, the

Lough court ventured to designate public use a question

of law and extended that error by announcing that exper-

imentation is also subject to unfettered review.” Logic

2 Despite the Lough court’s presentation, experimental use

is not a doctrine separate from public use with its own required

indicia and standard of review. A fuller discussion of this Lough

court error appears in part III infra. For now, this opinion

examines Lough in its own erroneous context.

App. 66

sometimes escapes even this distinguished court, but dis-

regard of binding precedent, including the prior jurispru-

dence of this court and its predecessors, invites

irreconcilable conflict and confusion.

Turning first to the standard of review for the public

use and on sale bars of section 102(b), the Supreme Court

has already settled this question. The Supreme Court’s

uniform treatment of statutory bars as predominantly

questions of fact began when Justice Story articulated the

justification for statutory bars in Pennock v. Dialogue. Jus-

tice Story, a consummate trial judge as well as Justice,

took care to state from the outset the duties of judge and

jury on statutory bar issues:

The single question then is, whether the

charge of the court was correct in point of law. It

has not been, and indeed cannot be denied, that

an inventor may abandon his invention, and

surrender or dedicate it to the public. ... The

question which generally arises at trials, is a ques-

tion of fact, rather than of law; whether the acts or

acquiescence of the party furnish, in the given

case, satisfactory proof of an abandonment, or

dedication of the invention to the public. But

when all the facts are given, there does not seem

any reason why the court may not state the legal

conclusion deducible from them. In this view of

the matter, the only question would be, whether,

upon general principles, the facts stated by the

court would justify the conclusion.

Id. at 16 (emphasis added). This rule could not be clearer.

The public use question which generally arises at trial is a

question of fact, not of law.

App. 67

Any provision of law invariably involves some inter-

pretation of the legal meaning of the statutory terms.

When a statute uses straightforward words, such as those

in 35 U.S.C. section 102(b), however, that legal interpreta-

tion is minimal. Indeed with section 102(b), the definition

of the statutory language occurred long ago at the

Supreme Court. See, e.g., Egbert v. Lippmann, 104 U.S. 333

(1881) (a use need not be open and visible to be “public”).

Throughout its lengthy experience with the public use

and on sale bars, the Supreme Court has emphasized that

these questions are overridingly factual. F.., Gayler v.

Wilder, 51 U.S. (10 How.) 477, 484 (1850) (“unless the

plaintiff . . . had abandoned said improvement to the

public, and suffered the same to go into public use before

the application for said patent, of which facts the jurors

were the judges “) (emphasis added); Kendall v. Winsor, 62

U.S. (21 How.) 322, 331 (1858) (“The real interest of an

inventor with respect to an assertion or surrender of his

rights . . . is an inquiry or conclusion of fact, and peculiarly

within the province of the jury... . ”) (emphasis added),

Consolidated Fruit-Jar Co. v. Wright, 94 U.S. 92, 94 (1876)

(“The result must always depend upon the purpose and

incidents accompanying the act or acts relied upon [as

public uses].”); City of Elizabeth v. Pavement Co., 97 US.

126, 133 (1877); Manning v. Cape Ann Isinglass & Glue Co.,

108 U.S. 462, 465 (1882) (“The decided weight of the

evidence shows that there was also a public use of the

invention. . . . These conclusions of fact are fatal to the

complainant's case.”); Cantrell v. Wallick, 117 U.S. 689, 696

(1886) (“The proof of prior use in this case depends on

the testimony.”); Smith & Griggs Mfg. v. Sprague, 123 U.S.

249 (1887); International Tooth Crown Co. v. Gaylord, 140

App. 68

U.S. 55, 64 (1891) (“[i]n the light of this testimony we are

compelled to hold”); General Talking Pictures Corp. v. West-

ern Elec. Co., 304 U.S. 175, 182-83 (1938) (“The district

court and circuit court of appeals found that there was no

public use. . . . These findings were made upon adequate

evidence and petitioner’s contentions as to them will not

be considered here.”). In resolving statutory bar ques-

tions, the Supreme Court unquestionably stressed time

and again that appellate courts must defer to the factual

findings of trial courts.

On at least ten occasions, the Supreme Court clarified

that factual inquiry drives section 102(b) issues. More-

over, the Supreme Court repeatedly stressed its deference

to the fundamental questions of fact in reviewing statu-

tory bars. At no point does the Supreme Court refer to

statutory bars solely as legal issues. The Supreme Court’s

clear and unwavering treatment of the statutory bars calls

into question this court’s departure.

This court’s predecessor courts both recognized and

followed the Supreme Court’s rule. The United States

Court of Customs and Patent Appeals stated expressly

that section 102(b) is an issue of fact in In re Reese:

The board’s finding that the tablets defined in

the claims of the instant application were “in

public use for twenty years prior to the filing

date of the application,” and were therefore not

patentable under 35 U.S.C. § 102(b), raises an

issue of fact.

290 F.2d 839, 841, 129 USPQ 402, 403 (CCPA 1961)

(emphasis added). In re Reese, an opinion binding on this

court, see South Corp. v. United States, 690 F.2d 1368, 1370,

App. 69

215 USPQ 657, 657-58 (Fed. Cir. 1982) (in banc), also

followed the Supreme Court's rule.

Even if the Supreme Court and the Court of Customs

and Patent Appeals had not spoken, this court would

have been bound by the United States Court of Claims

precedent. The Court of Claims followed the Supreme

Court rule in Smith v. United States: “The main issue is

validity of the patent in suit over prior domestic and

foreign patents, and over a prior public use. This issue is

factual.” 145 F. Supp. 396, 396, 111 USPQ 135, 135 (Ct. Cl.

1956) (emphasis added). Based on the principle of respect

for binding precedent, this court should recognize that it

lacks authority to fashion a plenary standard of review

for section 102(b) bar issues.?

3 In addition, pre-Federal Circuit appellate decisions

followed the Supreme Court rule. The uniformity of their

conclusion that section 102(b) is predominantly a question of

fact both buttresses the Supreme Court’s rule and strikiagly

illustrates the aberration of the Federal Circuit’s departure. See,

e.g., Watson v. Allen, 254 F.2d 342, 346-47 (D.C. Cir. 1958); Atlas v.

Eastern Air Lines, Inc., 311 F.2d 156, 159-60 (1st Cir. 1962);

McGraw-Edison Co. v. Central Transformer Corp., 308 F.2d 70, 73

(8th Cir. 1962); FMC Corp. v. F.E. Myers & Bros. Co., 384 F.2d 4, 10

(6th Cir. 1967); Lear Siegler, Inc. v. Ark-Ell Springs, Inc., 569 F.2d

286, 291 (5th Cir. 1978); DeLong Corp. v. Raymond Int'l, Inc., 622

F.2d 1135, 1141 (3d Cir. 1980); Del Mar Eng’g Lab. v. Physio-

Tronics, Inc., 642 F.2d 1167, 1169 (9th Cir. 1981).

Further, early treatises uniformly acknowledged that public

use and on sale doctrines are questions of fact, e.g.: “What

constitutes public use is ordinarily a question of fact.” 2 Deller’s

Walker on Patents § 144 (1964). The 1985 edition of Lipscomb’s

Walker on Patents also states that public use is a question of fact,

but then notes: “The decision of the Court of Appeals for the

Federal Circuit in Moleculon Research Corp. v. CBS, Inc.,

App. 70

The clear rule of the Supreme Court and this court’s

predecessors raises the obvious question: How could this

court have departed from binding precedent? The first

departure occurred in Barmag Barmer Maschinenfabrik v.

Murata Machinery, Ltd., 731 F.2d 831, 221 USPQ 561,

565-66 (Fed. Cir. 1984) (the on sale bar is a question of

law). Notably Barmag did not cite to Supreme Court opin-

ions which uniformly treated the question on factual

terms. Rather, Barmag stated:

[A section 102(b) bar is not] itself a fact nor an

inference of fact drawn from established facts.

In re Corcoran, 640 F.2d at 1333, 208 USPQ at 869

(one-year time bar applied under “principles of

law”). What Barmag is actually contesting is the

court’s conclusion on . . . [this] legal issue[ ].

731 F.2d at 837 (citation omitted). With these few words,

Barmag fashioned an unrestricted standard of review for

statutory bars.

Even a passing analysis calls the reasoning of the

Barmag court into question. Barmag’s reliance on Corcoran

is bizarrely out of context. See In re Corcoran, 640 F.2d

1331, 208 USPQ 867 (CCPA 1981). Corcoran says nothing

about section 102(b) issues as questions of law. Corcoran

instead refers to resolving a section 102(b)/103 rejection

under “the principles of law enunciated in In re Foster.” 640

F.2d at 1333 (emphasis added). Surprisingly, In re Foster

does not even hint that section 102(b) is a question of law.

See In re Foster, 343 F.2d 980, 145 USPQ 166 (CCPA 1965).

regarding whether “public use” under § 102(b) is a question of

fact or a question of law appears to be at odds with the prior

cases.” 2 Lipscomb’s Walker on Patents § 7:28.

App. 71

Statutory bars were not an issue in Foster. Neither Cor-

coran nor the cases upon which it relied addressed statu-

tory bars. Corcoran simply did not and could not supply

authority to depart from binding Supreme Court prece-

dent.

In sum, Barmag, the first opinion of this court to stray

from the Supreme Court's standard of review, was wrong

in at least four ways. First, it erred by citing Corcoran for

a principle that that case did not even address. Second, it

erred by taking the Corcoran phrase “principles of law”

drastically out of context when that phrase had no refer-

ence at all to standards of review. Third, it erred by

ignoring the Supreme Court rule. Fourth, it erred by

ignoring binding precedent from both the Court of Cus-

toms and Patent Appeals and the Court of Claims.

Barmag dealt with on sale bars under section 102(b).

Until Lough, this court had remained more faithful to the

Supreme Court’s rule for review of public uses under

section 102(b). In Hycor Corp. v. Schlueter Co., 740 F.2d

1529, 1535, 222 USPQ 553, 559 (Fed. Cir. 1984), this court

stated, that facts underlying public use are subject to

clearly erroneous review. Hycor had the virtue of keeping

the focus properly on factual inquiry. Moleculon Research

Corp. v. CBS, Inc., 793 F.2d 1261, 1265, 229 USPQ 805, 808

(Fed. Cir. 1986), next stated that public use is a question

of law, with underlying facts subject to clearly erroneous

review. Still the focus remained on factual inquiry. This

appellate court did not presume to reassess the facts

without deference to the fact-finders.

The court in Lough, however, purported to abandon

factual inquiry: “Whether an invention was in public use

App. 72

prior to the critical date within the meaning of section

102(b) is a question of law.” 86 F.3d at 1120. For that

proposition, the Lough court cites Manville Sales Corp. v,

Paramount Systems, Inc., 917 F.2d 544, 549, 16 USPQ2d

1587, 1591 (Fed. Cir. 1990). Manville, however, does not

stand for the proposition for which Lough cites it:

Whether or not an invention was on sale or in

public use within the meaning of section 102(b)

is a question of law that this court reviews de

novo; however, factual findings underlying the trial

court’s conclusion are subject to the clearly erro-

neous standard of review. See, Envirotech, 904 F.2d

at 1574, 15 USPQ2d «t 1232; Moleculon, 793 F.2d

at 1266, 229 USPQ at 808.

917 F.2d at 549 (emphasis added). The Lough court follows

the first part of the above sentence in Manville almost

verbatim. The Lough court, without explanation, refuses

to quote or follow the rest of the sentence in Manville. In

its entirety, the sentence from Manville does not make

public use a question of law, but instead honors the

predominant factual inquiry standard.4 Thus, Lough

departs from the deference due trial court findings with-

out any legal basis.

The Lough court’s error is painfully reminiscent of the

Barmag error. First, it used an incomplete Manville citation

to arrive at an inaccurate characterization of the standard

of review governing public uses. Second, it erred by

4 Subsequent cases have followed in this distortion of

binding precedent. See, e.g., Petrolite Corp. v. Baker Hughes Inc.,

96 F.3d 1423, 1425, 40 USPQ 1201, 1203 (Fed. Cir. 1996) (citing

Barmag, 731 F.2d at 836-37); Baxter Int'l, Inc. v. COBE Lab., Inc., 88

F.3d 1054, 1058, 39 USPQ2d 1437, 1441 (Fed. Cir. 1996).

App. 73

declining to honor Supreme Court and Court of Custom

and Patent Appeals precedent. Third, it erred by declin-

ing to honor Federal Circuit precedent that had uniformly

recognized the clear error standard within the public use

context. According to normal rules of precedence, Lough

lacked authority for its bold change of policy.

Turning next to the standard of review for experi-

mental use,> Lough again replicates the Barmag error.

Once again, logic and binding precedent make experi-

mentation to negate public use a fact-driven inquiry, sub-

ject to the deferential review which the Lough court

refused to accord this jury verdict.

Again logic dictates that a “totality of circumstances”

analysis depends on factual distinctions. With factual con-

siderations dictating the outcome of the underlying anal-

ysis, logic relegates the standard of review to the factual

realm as well. Thus, the following statement of the Lough

court creates a strange illogical juxtaposition: “To deter-

mine whether a use is ‘experimental,’ a question of law,

the totality of circumstances must be considered... . “©

5 As noted earlier, the law would not separate experimental

use from its context within a section 102(b) bar question and

grant it a distinct standard of review. See TP Lab., 724 F.2d at 971.

Nonetheless, the Lough court adopted this methodology. This

dissent examines Lough within its own format.

6 Perhaps the only analog for plenary review of a “totality

of circumstances” test within the sweep of law governed by our

sister circuits is review of so-called constitutional facts. See, e.g.,

Swint v. City of Wadley, 51 F.3d 988, 996 (11th Cir. 1995); United

States v. Edenfield, 995 F.2d 197, 200 (11th Cir. 1993); United

States v. Bloom, 975 F.2d 1447, 1456 (10th Cir. 1992). With life

and liberty at stake, a context hardly similar to the statutory

ao

App. 74

Lough, 86 F.3d at 1120. Frankly the proposition that exper-

imental use — a judge-made doctrine without any express

basis in the Patent Act — is a question of law is absurd on

its face. It is hard to imagine how case law decisions

made by judges to resolve unique factual cases on a fact-

driven issue could create questions of law.

To make matters worse, Lough’s assertion that experi-

mental use is a question of law hides as a brief subordi-

nate clause in a sentence of no less than eighty-five

words. Id. The citations at the end of this loaded sentence

do not support at all the assertion that experimental use

is a question of law. In fact, each of the three cases cited

by the Lough court at the end of its paragraph-sentence

stand for the proposal that experimental use is a factual

inquiry. Baker Oil Tools, Inc. v. Geo Vann, Inc., 828 F.2d

1558, 1565, 4 USPQ2d 1210, 1215 (Fed. Cir. 1987) (“The

disputed factual issue of experimental purpose was material

to the decision.”) (emphasis added); Sinskey v. Pharmacia

Ophthalmics, Inc., 982 F.2d 494, 498, 25 USPQ2d 1290, 1294

(Fed. Cir. 1992) (insufficient evidence was submitted to

create a genuine issue of material fact as to party’s exper-

imental purpose); TP Lab., 724 F.2d at 972.

The Supreme Court first acknowledged experimental

use, a concept without an analog in the patent system of

any other country, in City of Elizabeth, 97 U.S. at 135.

Setting aside the question of whether the law today

would allow an inventor to experiment in full public

view for over six years with no alterations to the claimed

bars, appellate courts review probable cause findings without

deference. See Ker v. California, 374 U.S. 23, 33-34 (1963); see also

Ornelas v. United States, __ U.S. __, 116 S. Ct. 1657 (1996).

ei” ah 6

~~. ee -

App. 75

invention over that period,” the Supreme Court acknowl-

edged that an inventor with a “bona fide intent of testing”

would not encounter a public use bar. Id. In excluding

Nicholson’s experiment from public use, the Supreme

Court “examine[d] the circumstances under which this

pavement was put down, and the object and purpose that

Nicholson had in view.” Id. at 133. In other words, the

Supreme Court set forth a clear fagtual test. Questions

depending on the “bona fide intent” of a party hardly

could be otherwise than factual. Indeed, each time the

Supreme Court encountered an experimental use, it

deferred to factual findings. See, e.g., Pennock, 27 U.S. (2

Pet.) at 16; Root v. Third Ave. R.R. Co., 146 U.S. 210, 225

(1892); Electric Storage Battery Co. v. Shimadzu, 307 U.S. 5,

20 (1939). Until Lough, this circuit had consistently fol-

lowed this Supreme Court standard. See, e.g., Baker Oil

Tools, 828 F.2d at 1565; Sinskey, 982 F.2d at 498.

The Lough court disregarded the findings of the jury

and trial court and forced Lough to re-prove (with all the

strictures of a brief appellate record) his experimental

7 The law generally recognizes that an experimental use

ends with an actual reduction to practice. RCA Corp. v. Data Gen.

Corp., 887 F.2d 1056, 1061, 12 USPQ2d 1449, 1453 (Fed. Cir.

1989). On the other hand, the Supreme Court specifically noted:

“If durability is one of the qualities to be attained, a long period,

perhaps years, may be necessary to enable the inventor to

discover whether his purpose is accomplished. And though,

during all that period, he may not find that any changes are

necessary, yet he may be justly said to be using his machine only

by way of experiment; and no one would say that such a use,

pursued with a bona fide intent of testing the qualities of the

machine, would be a public use, within the meaning of the

statute.” City of Elizabeth v. Pavement Co., 97 U.S. 126, 135 (1877).

App. 76

use. Thus, the Lough court defied logic and binding prece-

dent to make experimental use a question of law. The

casualties of this error, in addition to Mr. Lough, are the

certainty and predictability of statutory bar law.

Il.

A significant part of the Lough court’s error is

abstracting experimentation out of the public use inquiry

and designating it a separate “question of law.” Lough, 86

F.3d at 1120. This incorrect methodology flies in the face

of the teaching in TP Lab.: “[I]t is incorrect to impose on

the patent owner, as the trial court in this case did, the

burden of proving that a ‘public use’ was ‘experimental.’

These are not two separable issues. It is incorrect to ask:

‘Was it a public use?’ and then, ‘Was it experimental?’

Rather, the court is faced with a single issue: Was it a

public use under section 102(b)?” 724 F.2d at 971. This

court in TP Lab. taught that experimental use is not an

exception to public use, but a negation. In other words,

experimental use is not a separate exception with its own

standard of review or its own multi-factored test. Instead

an experimental use by definition does not abandon the

invention to the public.

Disregarding TP Lab., the Lough court addressed itself

to a separate doctrine of experimental use, for which it

created a new standard of review separate from public

use. The jury and the trial court had correctly answered

the correct question: whether Lough gave his invention

into public use. The Lough court transformed the ques-

tion: “The question framed on appeal is whether Lough’s

alieged experiments lacked enough of these required

App. 77

indicia so that his efforts cannot, as a matter of law, be

recognized as experimental.” 86 F.3d at 1121. To reach its

incorrect result, the Lough court had to separate experi-

mental use from its proper context of public use, then

create a separate list of required elements for a factual

inquiry, and finally make the separate list a question of

law to avoid the deference due to the jury verdict. Each

error sent the Lough court fishing in deeper waters with-

out a license.

The Lough court made the same mistake as the trial

court in TP Lab.: “[I]t is incorrect to impose on the patent

owner, as the trial court in this case did, the burden of

proving that a ‘public use’ was ‘experimental.’ ” 724 F.2d

at 971. In fact, in TP Lab., the inventor had used the

invention nearly four years before filing, id. at 967, had

kept only records that were “scanty at best,” id. at 969,

and had shown control over the invention only “inher-

enily by the dentist-patient relationship,” id. at 972. Yet

the Federal Circuit, in a case strikingly similar to Lough,

discerned no public use. Id. at 973. More important, the

Federal Circuit in TP Lab. warned against divorcing

experimentation from its public use context -— the Lough

court’s initial false turn on its unauthorized fishing expe-

dition.

IV.

The mischief of Lough’s plenary review standard is

even more egregious because public use rests on an eval-

uation of the totality of the circumstances. 35 U.S.C.

§ 102(b) (1994); see Manville Sales, 917 F.2d at 549. As

App. 78

noted earlier, the Supreme Court set forth a predomi-

nantly factual inquiry for application of the statutory

bars. See cases cited supra at pp. 5-6. The Supreme Court,

for good reason,® assigned the public use factual inquiry

to t

This text is long and has been trimmed here. Open the source document for the complete record.