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“Our precedent demonstrates that an offer directed to a United States entity at its United States place of business is an offer ‘made in this country’ as required for pre-AIA § 102(b).” – CAFC
The U.S. Court of Appeals for the Federal Circuit (CAFC) on Tuesday, December 10, in its sixth precedential patent opinion of the last week, reversed and remanded a district court finding that Crown Packaging Technology Inc.’s patents were not invalid under the on-sale bar.
The case concerns Crown’s U.S. Patent Nos. 9,308,570; 9,968,982; and 10,751,784, which relate to “necking machines” meant to reduce the diameter of the tops of metal beverage cans. The earliest priority date of the three patents is April 24, 2008. The case turned on whether Crown made a commercial offer for sale in the United States before the April 24, 2007, critical date of the asserted patents under pre-AIA 35 U.S.C. § 102(b).
Belvac argued that a letter Crown sent to a company called Complete Packaging Machinery and that included a description and price for a 13 stage “3400 Die Necker,” as well as payment terms and packaging/ dispatch information, represented a “commercial offer for sale to an entity in this country sent before the critical date, describing a necking machine that was ready for patenting and embodied the claimed invention of the asserted patents,” according to the CAFC opinion. There was no indication that Complete placed an order. The district court determined that the letter was “an invitation to make an offer, not an offer in itself.”
On appeal, however, the CAFC said the letter did constitute an offer for sale because 1) “the letter was sent specifically to potential-purchaser Complete and signed by Crown’s representative”; 2) the letter “characterized itself as an ‘offer,’ providing that the ‘offer [was] generally in accordance with [Crown’s] conditions of sale and additional terms’”; and 3) “was sufficiently definite as to the terms of the offer for sale to constitute a commercial offer for sale.”
While both the district court and Crown gave weight to the letter’s use of “quotation,” arguing “that this term supports a determination that the letter is not a commercial offer for sale,” the CAFC explained that “[w]hile we have previously explained that the labelling of a proposed offer as a ‘quote’ or a ‘quotation’ is an ‘important fact,’ we have also held that the ‘precise label used for a given communication. . . is not controlling.’”
The district court also gave weight to the fact that Crown said in the letter that “[q]uotations . . . are subject to [Crown’s] written acceptance of your order,” which it said meant that Complete’s acceptance would not create a binding contract. But the CAFC said its case law “counsels against concluding that a term of written acceptance is determinative.” The CAFC pointed to the fact that the letter included language obligating Complete to “commence performance by paying 50% of the purchase price immediately with receipt of the order” and requiring certain information so that Crown could begin filling requests upon order. The CAFC similarly rejected Crown’s arguments that the letter omitted certain other “hallmarks” of an offer for sale, concluding that, “taken as a whole, the letter to Complete was a commercial offer for sale under the meaning of § 102(b).”
Finally, Crown argued on appeal that the letter did not trigger the on-sale bar because it was not made “in this country,” as required by the pre-AIA statute. Crown contended that an offer for sale is only made in this country if the invention was sold for use in the United States. However, the CAFC said “[o]ur precedent demonstrates that an offer directed to a United States entity at its United States place of business is an offer “made in this country” as required for pre-AIA § 102(b).” The panel cited In re Caveney, where an offer was “presumably made from England” but directed to a place of business in the United States, and Hamilton Beach Brands to reiterate its holding that “a commercial offer for sale made by a foreign entity that is directed to a United States customer at its place of business in the United States may serve as an invalid[at]ing activity.” Since Crown addresses its offer to Complete’s Colorado place of business, it sufficed under the case law, said the CAFC.
The CAFC thus ultimately held the asserted claims of the patents invalid and reversed the district court’s judgment, remanding for entry of judgment in Belvac’s favor.
