Commercial Offer for Sale Does Not Occur Until Claimed Invention Actually Conceived Even Where Commercial Offer Might Include Variation Including Claimed Invention Within Scope of Contract

Sparton alleged that the United States infringed Sparton’s U.S. Patent Nos. 3,921,120 and 4,029,233 relating to sonobuoys and sought relief under 28 U.S.C. 1498(a) in the Federal Court of Claims.  As a defense, the United States noted that the patented invention had been subject to a commercial offer for sale such that the patents were invalid under 35 U.S.C. §102(b).  The Court of Claims agreed with the United States and ruled that the patents were invalid because the inventions were subject to a commercial offer for sale more than one year prior to the effective filing date of these patents since the offer, as interpreted under commercial contracting rules and the UCC, encompassed the claimed invention.  The Federal Circuit reversed the Court of Claims and noted that, in order for a patent to be held invalid based on the 35 U.S.C. §102(b) on-sale bar, the claimed invention itself must have been subject to a commercial offer for sale and the invention as claimed must be ready for patenting.  For the asserted “commercial offer” prong of the test, the relevant sale occurred on March 17, 1971 as part of an engineering change proposal (ECP) submitted by Sparton for sonobuoy work being performed under a United States Navy contract.  However, the patents at issue each recite a single release plate mechanism, whereas the contract having the ECP was for a multiple release plate mechanism.  Thus, any offer was not for the patented invention since there was no evidence that the single release plate was actually offered or conceived.  Thus, even assuming that the ECP would have allowed the contractor to submit the single release plate as a variation on the design to fulfill the contractual requirements, since the design itself was for the multiple release plate mechanism and there is no evidence that the claimed release plate mechanism was conceived prior to submission of the ECP, the Federal Circuit held that no offer for sale was made for the patented invention.   Sparton Corporation v. United States, Civ. Case. No. 03-5169 (Fed. Cir. February 28, 2005).

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