United States: Public Use Analysis Involves Consideration of Totality of the Circumstances

The U.S. Court of Appeals for the Federal Circuit recently applied a "totality of the circumstances" analysis for evaluating a public use, differentiating the analysis from that used to evaluate an on-sale bar. Netscape Communications Corp. v. Konrad, Case No. 01-1455, 2002 U.S. App LEXIS 13840 (Fed. Cir. July 9, 2002).

Allan Konrad developed a system that allows a computer user to access and search a database residing on a remote computer. Konrad admitted that his invention was reduced to practice on or about September 26, 1990, when he successfully tested his invention with a Lawrence Berkeley Laboratory staff assistant. The patent issued as a continuation from Konrad’s first application, which was filed on January 8, 1993, making the critical date for Konrad’s public use and on sale activities January 8, 1992.

Three actions taken by Konrad in 1991 were held by the Federal Circuit to invalidate his patents. First, Konrad demonstrated his invention to two University of California computing personnel, without any obligation of confidentiality. Secondly, Konrad demonstrated his invention on a remote database maintained by the Stanford Linear Accelerator Center and allowed the use of his invention on the Stanford University database, again without any confidentiality agreement. Finally, Konrad offered to make his invention for a university laboratory in exchange for four months of employment, or no more than $48,000.

In accordance with the analysis mandated by Pfaff, the Federal Circuit evaluated Konrad’s offer to sell his invention by determining whether "the invention is the subject of a commercial offer for sale, and is ready for patenting before the critical date."

However, the Federal Circuit did not apply the "ready for patenting" test to determine if there was a public use. Instead, the Federal Circuit relied upon its own precedent (citing Sinskey v. Pharmacia Ophthalmics Inc.) and applied the "totality of the circumstances" test to determine whether a public use, within the meaning of 35 U.S.C. § 102(b), was present. The relevant factors considered by the Federal Circuit included "the nature of the activity that occurred in public; the public access to and knowledge of the public use; whether there was any confidentiality obligation imposed on persons who observed the use; whether persons other than the inventor performed the testing; the number of tests; the length of the test period in relation to tests of similar devices; and whether the inventor received payment for the testing."