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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1997
- **Citation:** 522 U.S. 806

## Text

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

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 trial, not appellate, courts. See, e.g., Kendall, 62 U.S. (21
How.) at 331 (“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... . ”). Without the discipline of the
limited standard of review under the Supreme Court's
rule, an appellate court may pick, choose, and reassess

8 Those who doubt the difference between a cold, abridged,
written appellate record and the living, detailed, and emotion-
charged courtroom need to read Ludwig Wittgenstein’s
philosophical observations (communication lacks meaning
divorced from its entire context) and contemplate: What does a
witness mean by the answer, “I believe so.” Is this assent to the
proposition? Is this an expression of doubt in the proposition? Is
this a description of the witness’s state of mind (tentative belief)
or a description of an actual state of affairs (it is so!)? In other
words, how is an appellate court to assess this factual record:
“Q: Mr. Inventor, did you intend to experiment? A: I believe
so.”?

This ambiguity and complexity multiples with the number
of witnesses - each with their own peculiar personality,
perception, and perspective. An appellate tribunal is simply not
equipped in time or tools to unlock the mysteries of the single
testimonial snowflake (e.g., “I believe so.”), let alone the
swirling blizzard of trial evidence. Our trial system - multiple
jurors with an experienced trial judge as a check —- may have
flaws, but remains a “palladium of free government,” and “an
excellent method of determining questions of property.” The
Federalist No. 83, at 499, 501 (Alexander Hamilton) (Clinton
Rossiter ed., 1961). For wise purpose, the Supreme Court
commended factual inquiry to the trial system.

App. 79

various circumstantial factors. No wonder this undis-
ciplined exercise produces inconsistent and irreconcilable
results.? No wonder commentators excoriate this court’s
random application of the “totality of circumstances”
test.10

9 The dissent in Atlantic Thermoplastics Co. v. Faytex Corp., 5
F.3d 1477, 1482-88, 28 USPQ2d 1343, 1347-52 (Fed. Cir. 1993),
notes that the Federal Circuit has set forth at least three different
tests for application of section 102(b).

10 E.g., William K. West, Jr. & Nancy J. Linck, The Law of
“Public Use” and “On Sale”: Past Present and Future, 72 J. Pat. &
Trademark Off. Soc’y 114, 115 (1990) (“[T]he court’s insistence
on a ‘totality of the circumstances’ test may tend to make
predictability of result . . . even more difficult than in former
times.”); Jorgensen, supra note 1, at 213 (“[T]he Federal Circuit
has lacked consistency in its application of the on sale and
public use bars of section 102(b). . . . Instead, confusion remains
the central theme. . . . ”); Stephen R. Schaefer, Comment,
Envirotech Corp. v. Westech Engineering, Inc.: The On-Sale Bar to
Patentability and Executory Sales Offers, 75 Minn. L. Rev. 1505,
1508 (1991) (“[T]he application of the on-sale bar provision lacks
predictability, fails to inform the inventor . . . and, thus, fosters
litigation.”). This confusion has also been critically noted by
commentators:

[T]he Federal Circuit needs to resolve inconsistencies
in its precedent regarding the policy underlying
experimental use itself, the factual/legal nature of
experimental use. . . . Only by returning to the law as
it stood over 100 years ago and by keeping an eye on
the policy underlying experimental use could the
Federal Circuit return the law in this area to a state of
common sense and reasonable, if not sublime,
simplicity.
Rooklidge & Jensen, supra note 1, at 49-50.

App. 80

Indeed Lough illustrates the arbitrariness of reapply-
ing a factual “totality of circumstances” test on an appel-
late record without any deference to the fact-finding of
the trial court. Lough lists several indicia of experimenta-
tion, including: 1) the number of prototypes and the
duration of testing; 2) the attention to records or reports
during testing; 3) the existence of a confidentiality
arrangement; 4) the receipt of any commercial advantage
by the patentee; and 5) the inventor’s control over the
testing. Although a brief review of prior Federal Circuit
cases calls into question the sufficiency of this listing,” at
this point it is more important to show that the Lough
court’s application of its own indicia conflicts with bind-
ing Federal Circuit cases.

Beginning with the first indicator, Lough gave no
analysis to its own first factor at all. The Lough court
might have noted Lough’s few prototypes or the limited

11 Other panels of the Federal Circuit, as might be expected
of a “totality of circumstances” analysis, list different “indicia.”
See, e.g., TP Lab., 724 F.2d at 971 (indicia include length of test,
whether payment was made, conditions of secrecy, whether
records were kept, who conducted the tests, and the number of
tests conducted); Manville Sales, 917 F.2d at 550 (indicia for
totality of the circumstances are the policies underlying the bar,
not separate experimental use indicia); Harrington Mfg. v. Powell
Mfg., 815 F.2d 1478, 1480, 2 USPQ2d 1364, 1366 (Fed. Cir. 1986)
(adding indicia of public necessity); Baker Oil Tools, 828 F.2d at
1564 (adding indicia of public testing in relation to nature of
experiment); Allied Colloids Inc. v. American Cyanamid Co., 64
F.3d 1570, 1574, 35 USPQ2d 1840, 1842 (adding indicia of public
access to and knowledge of the public use). These differing lists
disclose again the appellate disposition, in the absence of a
disciplined standard of review, to pick and choose amongst
factors to reach inconsistent results.

Pe ae ae eens

App. 81

duration of his testing. In fact, in view of the six years of
open air testing in City of Elizabeth, 97 U.S. at 133, or more
than a year of open display in Moleculon, 793 F.2d at 1263,
the Lough court might well have followed prior cases to
assess this indicator strongly in favor of experimentation.
After all, Lough conducted a far more limited test than in
City of Elizabeth, limiting his testing to six invisible proto-
types over the course of one year to ensure that his
invention would work in the harsh marine environment.

On the second indicator, the Lough court weighed this
harshly against Lough to undercut his experimentation
claim. Lough, 86 F.3d at 1121. The Lough court declined to
note that, although not keeping formal written records,
Lough had taken photographs to monitor the installed
seal assemblies during the experimentation period. In
view of several cases that detected an experimental use
despite a lack of formal record keeping on the testing, TP
Lab., 724 F.2d at 969 (finding experimental use with
“scanty” records “at best”); Manville Sales, 917 F.2d at 551
(finding experimental use with one memorandum of
intent to experiment, but no records of testing), the Lough
court might well have followed prior cases in seeing this
factor as no obstacle to Lough’s claim of experimentation.

The Lough court did not analyze its own third indica-
tor. Lough, however, testified that he only shared his
experimental prototypes with a few individuals — with
whom he shared a close personal or professional relation-
ship — who he knew would maintain his secrecy. In view
of Federal Circuit cases that inferred confidentiality on
the basis of the close association of the patentee and the
testers, see, e.g., Moleculon, 793 F.2d at 1266, TP Lab., 724
F.2d at 972, the Lough court might well have weighed this

App. 82

indicator in favor of, rather than against, experimenta-
tion.

On the fourth indicator, the Lough court lukewarmly
acknowledged Lough’s steadfast refusal to commercially
exploit his invention before filing. Lough, 86 F.3d at 1121.
In view of Federal Circuit cases that attached great, per-
haps dispositive weight, to this factor, see, e.g., Ferag AG v.
Quipp, Inc., 45 F.3d 1562, 1566, 33 USPQ2d 1512, 1515
(Fed. Cir. 1995) (“Foremost among these is the policy of
preventing inventors from exploiting the commercial
value of their inventions while deferring the beginning of
the statutory term.”) and Moleculon, 793 F.2d at 1266-67,
the Lough court might well have given this factor consid-
erable weight in favor of a finding of experimentation.

On the fifth indicator, the Lough court weighed this
strongly against Lough. Once again, however, the record
shows that Lough selected friends and professional asso-
ciates over whom he had control by virtue of their rela-
tionship. In view of prior Federal Circuit cases permitting
close relationship and notification of experimental pur-
pose to substitute for full control, see, e.g., Moleculon, 793
F.2d at 1266-67, and LaBounty Mfg. v. United States Interna-
tional Trade Commission, 958 F.2d 1066, 1072, 22 USPQ2d
1025, 1029 (Fed. Cir. 1992) (suggesting that notification of
experimental purpose may substitute for control), the
Lough court might well have balanced this factor in favor
of Lough.

Further, to buttress its own factual finding on appeal
that Lough lacked control over the experiment, the Lough
court used reasoning in conflict with other Federal Cir-
cuit cases. For instance, the Lough court noted that the

:: aA LA RAT

App. 83

experimental use involved Lough’s associates rather than
Lough himself. Lough, 86 F.3d at 1121-22. Other binding
Federal Circuit cases have held that participation by
others in the experiment does not show a lack of control.
See TP Lab., 724 F.2d at 972 (“routine checking of [success
of invention] by one of the [inventor’s associates] does
not indicate the inventor’s lack of control”); Grain Process-
ing Corp. v. American Maize-Prods. Co., 840 F.2d 902, 906, 5
USPQ2d 1788, 1792 (Fed. Cir. 1988) (submitting samples
of invention to food manufacturers for determination of
the product’s utility did not negate experimentation).
Additionally, the Lough court criticized the fact that one
of the boats containing the experimental seal was sold at
some point after the conclusion of the experiment. Lough,
86 F.3d at 1121. This indicator has also been held not to
constitute a loss of control. See Watson v. Allen, 254 F.2d
342, 347, 117 USPQ 68, 71 (D.C. Cir. 1958) (“We believe
the protective umbrella of the experimental use doctrine
should include reasonable disposal of models and proto-
types of the invention once their usefulness to the inven-
tor has ended - reasonable in view of the nature of the
device and the probability of discovery and appropria-
tion of the invention by strangers.”); Goodwin v. Borg-
Warner Corp., 157 F.2d 267, 273, 70 USPQ 387, 393 (6th Cir.
1946) (finding experimentation although automobile con-
taining seal was later sold).

Moreover, several binding Federal Circuit cases
analyze indicators the Lough court chose to ignore. These
unacknowledged indicators further buttress Lough’s case
against a public use. For instance, another indicator
appearing in binding precedents is the inventor’s careful
tailoring of the tests to the nature of the invention. See

App. 84

City of Elizabeth, 97 U.S. at 136; Manville Sales, 917 F.2d at
550-51; Allied Colloids, 64 F.3d at 1575; see also Caterpillar
Tractor Co. v. Berco, S.P.A., 215 USPQ 948, 958 (D. Wyo.
1982) (finding experimental purpose where “tests for
durability and performance are conducted by those who
will eventually be using the product under conditions
which are likely to be difficult to duplicate in the lab”),
aff'd on other grounds, 714 F.2d 1110 (Fed. Cir. 1983). The
record shows Lough designed his experiments to test the
invention in various kinds of boats in various marine
environments. Indeed a careful assessment of this indica-
tor might also recognize that the necessity of testing
under varying circumstances militates against mainte-
nance of full control at all times over the testing.

Still another indicator appearing in binding prece-
dents is the hidden nature of an experiment.!2 In deter-
mining whether an inventor intended to experiment, an
invisible use may add plausibility to the inventor’s expla-
nation that he perceived little need to take further pre-
cautions to protect confidentiality. See, e.g., Manville Sales,

12 Case law distinguishes the notoriety or openness of an
experiment from the notoriety or openness of a public use in
general. As the Supreme Court held in Egbert v. Lippmann, 104
U.S. 333, 336 (1881), a barring use — in this case an innovative
undergarment — need not be open and notorious to be “public.”
Because Egbert himself put the invention into use eleven years
before filing for patent protection, the corset worn by Egbert’s
intimate friend, though not in view, was abandoned to the
public. Id. at 337-38. Such evidence might have been viewed
differently, however, if experimentation had been at issue in
Egbert. See id. at 337 (“They were not presented for the purpose
of experiment, nor to test their qualities. No such claim is set up
in her testimony.”).

ee

App. 85

917 F.2d at 550 (“[T]he invention was mounted atop a
150-foot tall pole in a rest area still closed to the public,
making it very unlikely that the public would even see
the new design.”); Allied Colloids, 64 F.3d at 1574 (public
access to and knowledge of the public use is one of the
factors to consider). This factor, too, if considered by the
Lough court, would have helped Lough. In picking and
choosing amongst its “totality of circumstances,” the
Lough court sadly did not consider the totality of the
circumstances.

In sum, this brief comparison of the Lough court's
assessment of the totality of the circumstances with the
same assessment by prior Federal Circuit cases shows the
plastic malleability of a totality of circumstances test
when divorced from the discipline of a deferential stan-
dard of review. An appellate panel can pick and choose
amongst malleable circumstances to reach results irrecon-
cilable with other Federal Circuit decisions.

This comparison also shows the plausibility of the
jury’s unanimous verdict in Lough. For each and every
indicator under the.Lough court’s abbreviated totality of
circumstances analysis, this record provides factual sup-
port for the jury’s conclusion. Under Federal Circuit law,
the Lough jury had a very solid foundation for its result.
Frankly, this comparison makes the Lough court's conclu-
sion (“the jury had no legal basis to conclude that the uses
of Lough’s prototypes were experimental,” Lough, 86 F.3d
at 1122 (emphasis added)) seem very strained.

App. 86

V.

As noted earlier, no area of Federal Circuit jurispru-
dence has produced more outright criticism than its
review of statutory bars. Plenary standards of review
contribute to unpredictability and inconsistency by multi-
plying at the appellate level the uncertainties of a “total-
ity of circumstances” analysis. Nonetheless the “totality
of circumstances” format itself may well be chiefly
responsible for the confusion.

This observation may seem to lay the blame for chaos
at the steps of the Supreme Court because this nation’s
highest court repeatedly called for factual inquiry to
resolve statutory bar cases. To the contrary, factual
inquiry differs from a standardless “totality of circum-
stances.” The “totality” test recognizes no hierarchy or
principle to guide factual inquiry. The experience of the
common law teaches that generally some facts are more
important than others. These “more important” facts
serve as touchstones lending predictability and consis-
tency to the law. The “totality” test, however, starts each
inquiry from scratch and abandons the experience that
Holmes denoted the “life of the law.” Oliver Wendell
Holmes, The Common Law 1 (1881).

The chief mischief of the “totality” test lies in begin-
ning each factual inquiry anew without reference to the
experience of the common law. Thus, for instance, in
ascertaining whether an inventor possessed a bona fide
intent to experiment, the absence or presence of prema-
ture commercial exploitation might disclose more about
the inventor’s intent than the duration of the testing or
some other factor. Thus the twin touchstones for statutory

App. 87

bar analysis - premature economic exploitation (usually)
in the marketplace! (particularly applicable to on sale
bars) and creation of a widespread expectation that the
public is free to use the invention (particularly applicabie
to public use bars) - ought to guide and restrain factual
inquiry at the trial court level. Indeed Federal Circuit
cases have so held. Ferag AG, 45 F.3d at 1566.

In this case, the jury determined that Lough did not
sell or otherwise exploit his seal, nor did he create the
public expectations by his uses. Instead he conducted
limited tests to ensure his invention seal worked. More-
over the jury determined that Lough maintained ade-
quate monitoring and control over his testing to show
that he was really experimenting, not exploiting or sur-
rendering his invention. The Lough court, however,
reweighed these findings as “questions of law” and chose
to find in its own peculiar “totality of circumstances” a
bar. Without a more rule-based standard for assessing the
facts and with appellate courts reassessing the facts with-
out deference, predictability and certainty will remain
barred from section 102(b) jurisprudence.

13 Egbert, the famous corset case, is the classic example of
exploiting an invention without seeking commercial benefit. 104
U.S. at 336.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386013_0509%3A1. Public record. Not legal advice.