Addressing the on-sale bar in relation to an offer to make a commercial embodiment by a supplier, the U.S. Court of Appeals for the Federal Circuit affirmed a lower court's summary judgment ruling of invalidity, finding the asserted claims were anticipated by a supplier's offer to make commercial embodiments of a slow-cooker covered by the patent. Hamilton Beach Brands, Inc. v. Sunbeam Products, Inc., Case No. 12-1581 (Fed. Cir. Aug. 14, 2013) (O'Malley, J.) (Reyna, J. dissenting).
Hamilton Beach and Sunbeam Products are direct competitors in the small kitchen appliance industry, both selling competing versions of "slow cookers." The patent-in-suit, having an effective filing date of March 1, 2006, was directed to slow cookers having clips used to seal a lid to the body of the cooker and limit leaks during transport. Hamilton Beach's commercial embodiment of its patented invention is called the Stay or Go® slow cooker. Sunbeam's competing slow cooker is called the Cook & Carry®.
After construing the claims, and on summary judgment, the district court found that there were invalidating commercial offers of the Stay or Go® slow cooker before the critical date. Hamilton Beach appealed.
The Federal Circuit agreed that Hamilton Beach's transaction with its foreign supplier to make the Stay or Go® slow cooker was an offer for sale of a product that anticipated the claims of the patent. The Federal Circuit also found that the invention was ready for patenting before the critical date.
Anticipation of a patent by an on-sale bar requires that the claimed invention was the subject of a commercial offer for sale, and that the invention was ready for patenting before the critical date. Importantly, there is no supplier exception to the on-sale bar; the commercial offer for sale may be made by the patentee's own supplier.
Here, Hamilton Beach contacted its supplier on February 8, 2005, to request that the supplier manufacture 2,000 Stay or Go® slow cookers. The supplier responded on February 25, 2005, that it would begin production as soon as it received word from Hamilton Beach. The Federal Circuit held that the supplier's response, which occurred before the March 1, 2005, critical date, was a commercial offer for sale of the Stay or Go® slow cooker. The Federal Circuit reasoned that the supplier's offer was valid and that all Hamilton Beach need do was accept. Thus, the first prong of the standard was met.
The Federal Circuit also found that the patent was ready for patenting based on Hamilton Beach's presentation of detailed drawings of the Stay or Go® slow cooker to its retail customers' buying agents, reasoning that the invention's relative simplicity needed no more than descriptions and drawings to enable the patent. The Federal Circuit held that a lower court need not conduct an element-by-element comparison of the product subject to the on-sale bar so long as the information disclosed is enabling.
The Federal Circuit rejected Hamilton Beach's argument that it was still fine-tuning the leak-proofness of the Stay or Go® slow cooker after the critical date. Fine-tuning an invention after the critical date does not mean the invention was not ready for patenting. In any event, there was evidence of a working prototype before the critical date that supported the Federal Circuit's analysis.
In dissent, Judge Reyna criticized the majority for not analyzing whether the offer for sale was in fact commercial. In Judge Reyna's view, the Federal Circuit must evaluate whether the offer for sale was experimental in light of Hamilton Beach's argument that it was still working out kinks in its product, arguing that the majority's approach would render the experimental-use exception useless, especially for small innovators that cannot make their own prototypes.
Practice Note: The Federal Circuit's decision in this case highlights the risk of requesting that suppliers manufacture products before a patent is filed and before a working prototype is created. Companies should beware of filing patent applications more than one year after requesting that a supplier produce products intended to be covered by the patent.
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