United States Federal Circuit Court of Appeals Reports
PLUMTREE SOFTWARE v. DATAMIZE, 06-1017 (Fed. Cir.
12-18-2006) PLUMTREE SOFTWARE, INC., Plaintiff-Appellee, v.
DATAMIZE, LLC, Defendant-Appellant. No. 06-1017. United
States Court of Appeals, Federal Circuit. December 18,
2006.
Michael B. Levin, Wilson Sonsini Goodrich & Rosati, of Palo
Alto, California, argued for plaintiff-appellee. With him
on the brief were David H. Kramer, Christopher R. Parry and
Bart E. Volkmer. Of counsel was Michael A. Ladra.
Theodore Stevenson, III, McKool Smith, P.C., of Dallas,
Texas, argued for defendant-appellant. With him on the
brief were Douglas A. Cawley and Garret W. Chambers.
Appealed from: United States District Court for the
Northern District of California Chief Judge Vaughn R.
Walker.
Before NEWMAN, Circuit Judge, FRIEDMAN, Senior Circuit
Judge, and DYK, Circuit Judge.
DYK, Circuit Judge.
Plumtree Software, Inc. (“Plumtree”) filed this declaratory
judgment action against Datamize, LLC (“Datamize”) in the
United States District Court for the Northern District of
California.[fn1] The district court denied Datamize’s
motion to dismiss for lack of subject matter jurisdiction
and granted summary judgment in favor of Plumtree on the
ground that Datamize’s patents were invalid under the on
sale bar doctrine, 35 U.S.C. § 102(b). Datamize now
appeals. We sustain the district court’s jurisdictional
ruling, but vacate and remand for further proceedings on
the merits.
BACKGROUND
I
This case involves two Datamize patents, U.S. Patent Nos.
6,460,040 (“‘040 patent”) and 6,658,418 (“‘418 patent”).
Datamize principal Kevin Burns is the named inventor of the
patents, which were continuations of his U.S. Patent No.
6,014,137 (“‘137 patent”). The patents are entitled
“Authoring System for Computer-based Information Delivery
System” and share a common specification.
The patented invention is a computer program that is used
to create other computer programs (an “authoring tool”).
The invention encompasses both the method of creating the
computer program and the software for creating the computer
program. The ‘040 patent contains method claims, and the
‘418 patent is asserted to contain both method and
apparatus claims. The authoring tool may be used to create
customized kiosks. As an example, the patents explain the
authoring tool might be used to create electronic kiosks
used at ski resorts to provide information to customers
about ski conditions, local hotels, and restaurants through
a touch screen or key pad. The patented invention is not
the kiosk itself, but is the software for, and the method
of, creating the kiosk.[fn2]
Plumtree is a computer software company that produces
“corporate portal” software. The corporate portal is
web-based software that brings together various
applications and information into a customized desktop
screen that employees of an organization can separately
access. Plumtree primarily markets its corporate portal
software to companies that want to organize their corporate
intranet sites.
II
This declaratory judgment action brought by Plumtree
concerning the ‘040 and ‘418 patents is not the first
lawsuit between Datamize and Plumtree. On May 17, 2002,
Datamize filed an infringement suit against Plumtree in the
United States District Court for the District of Montana
alleging infringement of the parent ‘137 patent (“Montana
action”). On the same day, Datamize sent a letter to
Plumtree stating:
Datamize believes that Plumtree is infringing the ‘137
Patent by, among other things, providing software enabling
the operation of portals and kiosks employing
customization and personalization features. We also
believe that Plumtree will infringe the claims in the
continuation patent application when it issues as a
patent. From the prior communications, it does not appear
that Plumtree has appreciated the implication of
Datamize’s patent rights.
Plumtree Software, Inc. v. Datamize, LLC, No. 04-CV-2777,
slip op. at 5-6 (N.D. Cal. Sept. 12, 2005) (emphasis
added). The underscored language referred to a pending
patent application that later issued as the ‘040 patent.
Datamize attached the ‘040 patent application claims to the
letter, and the letter stated that the application claims
had been “allowed.” The letter stated further that
“[b]ecause a direct assertion of patent infringement could
subject Datamize to a declaratory judgment action by
Plumtree in an inconvenient forum, [Datamize] has proceeded
to preserve its rights by filing the attached Complaint”
charging infringement of the ‘137 patent. Id. at 7. The
complaint could not (and did not) include infringement
claims with respect to the yet-to-be-issued ‘040 patent.
That patent issued on October 1, 2002.
On November 23, 2002, pursuant to Plumtree’s motion to
dismiss, a magistrate judge recommended dismissing the
Montana action as to the ‘137 patent for lack of personal
jurisdiction over Plumtree. On December 4, 2002, before the
magistrate’s recommendation was adopted by the district
court, Plumtree filed a declaratory judgment action in the
United States District Court for the Northern District of
California seeking a judgment that it did not infringe the
‘137 patent (“first California action”). Datamize then
counterclaimed for infringement.[fn3] On July 8, 2003, the
District of Montana judge adopted the magistrate’s
recommendation and dismissed the Montana action for lack of
personal jurisdiction.
On September 3, 2003, Datamize filed a third lawsuit
alleging infringement of the ‘040 patent against nine
defendants (not including Plumtree) in the United States
District Court for the Eastern District of Texas (“Texas
action”). After the ‘418 patent issued on December 2, 2003,
Datamize moved to add infringement claims under the ‘418
patent to the Texas action. In briefing the motion to add
the ‘418 patent claims, Datamize argued that, in light of
the similarity of the ‘040 and ‘418 patents, “it would be
highly surprising if Defendants’ counsel had not
specifically considered the possibility that Datamize would
add the ‘418 Patent to this case.” J.A. at 496. An
interrogatory was served in the Texas action asking
Datamize to list “each product made, used, offered for
sale, or sold by . . . persons other than the Defendants
that Datamize contends incorporates or embodies a claimed
invention of the patent(s)-in-suit.” In its response,
Datamize listed Plumtree’s Corporate Portal and Enterprise
Web Suite.
On July 9, 2004, in the first California action, the
district court granted Plumtree’s summary judgment motion
and held that the asserted claims of the ‘137 patent were
invalid for indefiniteness under 35 U.S.C. § 112,
¶ 2, because the term “aesthetically pleasing”
rendered the claims too subjective. (This court eventually
affirmed the grant of summary judgment. Datamize, LLC v.
Plumtree Software, Inc., 417 F.3d 1342, 1356 (Fed. Cir.
2005)).
On the same day, the district court granted summary
judgment in favor of Plumtree on the ‘137 patent, Plumtree
filed the present declaratory judgment action with respect
to the ‘040 and ‘418 patents (“second California action”).
Those patents are similar to the ‘137 patent but do not
include the “aesthetically pleasing” language. On October
15, 2004, Plumtree filed a motion for summary judgment on
the ground that the ‘040 and ‘418 patents were invalid
under the on sale bar because the methods of the patent
claims had been on sale or offered for sale before the
critical date (one year before the application date). Three
days later, Datamize filed a motion to dismiss for lack of
subject matter jurisdiction on the theory that Plumtree had
not established a “reasonable apprehension” that Datamize
would sue it for infringement of the ‘040 and ‘418 patents.
III
Plumtree’s summary judgment motion established the
following undisputed facts.
In early 1993 Emmett and Kevin Burns formed Multimedia
Adventures (“MA”) (which later assigned its patents to
Datamize). By December 1994 Kevin Burns had completed
development of the authoring tool which could be used to
create an interactive kiosk system. On January 17, 1995,
representatives from MA gave a presentation to
representatives from the Ski Industry of America (“SIA”),
sponsors of a ski industry trade show, offering to create a
kiosk for the trade show. On January 25, 1995, SIA sent a
letter to MA confirming that MA would provide a kiosk at
the trade show in exchange for SIA’s “waiving the $10,000
sponsorship fee associated with participation in the
electronic information center.” J.A. at 227. The trade show
was held on March 3-7, 1995, in Las Vegas, NV, shortly
after the February 27, 1995, critical date, and the kiosk
was displayed when it was completed near the end of the
first day of the show. The record establishes that the
SkiPath kiosk was created with the authoring system and
that the authoring system “embodied all the claims of all
three of Datamize’s patents.” J.A. at 349.
The district court first considered Datamize’s motion to
dismiss for lack of subject matter jurisdiction. The court
concluded that declaratory judgment jurisdiction was proper
because a “case or controversy” existed as to both the ‘040
and ‘418 patents. As to the ‘040 patent, the court stated
that “Datamize’s May 17, 2002, letter represented an
‘explicit threat or other action’ that would cause
reasonable apprehension of an infringement suit.” Plumtree,
slip. op. at 13. Although the letter was sent two years
before Plumtree filed the declaratory judgment action, the
court found that “there [was] no evidence . . . indicating
that Datamize’s intention to pursue litigation over alleged
infringement[] of [the] ‘040 . . . [patent had] changed.”
Id. at 18. The court noted that the May 17, 2002, letter did
not refer to the ‘418 patent. However, under the totality
of the circumstances, the court concluded that Plumtree had
a reasonable apprehension of suit regarding the ‘418 patent
because Datamize had already sued Plumtree on the parent
‘137 patent, sued other defendants in the Texas action on
the ‘040 and ‘418 patents, and identified Plumtree as
infringing both patents. Accordingly, the court stated that
“the amalgamation of (1) the May 17, 2002, letter, (2) the
‘137 infringement suit and (3) the TX action represents an
‘explicit threat or other action’ that would cause Plumtree
to have a ‘reasonable apprehension’ of suit.” Id. at 16
(internal quotations omitted).
Next the district court considered Plumtree’s motion for
summary judgment. The court held both the ‘040 and ‘418
patents invalid under the on sale bar rule. The court
concluded that “the on-sale bar [was] triggered by the
facts of this case” because there was “an agreement to
‘perform’ a method claim” before the critical date. Id. at
23. The basis for this holding was the fact that “[a]t the
January 17, 1995, meeting, MA offered to provide its
interactive electronic kiosk system during the March 1995
trade show.” Id. at 21 (internal quotations omitted). The
court found that MA received consideration because “MA was
granted a ‘prime location’ and its fee was waived in
exchange for the display of MA’s kiosk.” Id. The court
noted that MA’s meeting with SIA on January 17, 1995, and
the subsequent agreement both occurred before the February
27, 1995, critical date. The court then stated that “the
agreement with SIA embodied all of the claims of the ‘040
and ‘418 patents” because “the kiosk at the trade show
embodied all of the claims.” Id. at 24-25. Accordingly, the
court granted summary judgment in favor of Plumtree.
Datamize timely appealed to this court. We have
jurisdiction pursuant to 28 U.S.C. § 1295(a)(1)
(2000).
DISCUSSION
I
The determination of whether Article III jurisdiction
exists is a question of law that we review without
deference. Arrowhead Indus. Water, Inc. v. Ecolochem, Inc.,
846 F.2d 731, 735 (Fed. Cir. 1988). We review the
underlying factual findings for clear error. Gen-Probe Inc.
v. Vysis, Inc., 359 F.3d 1376, 1379 (Fed. Cir. 2004).
A declaratory judgment action may be brought where there is
an “actual controversy” between “interested” parties. See
28 U.S.C. § 2201 (2000); Aetna Life Ins. Co. v.
Haworth, 300 U.S. 227, 239-40 (1937); BP Chems. Ltd. v.
Union Carbide Corp., 4 F.3d 975, 977 (Fed. Cir. 1993). This
court has developed a two-part test for determining whether
an “actual controversy” exists. “There must be both (1) an
explicit threat or other action by the patentee, which
creates a reasonable apprehension on the part of the
declaratory plaintiff that it will face an infringement
suit, and (2) present activity which could constitute
infringement or concrete steps taken with the intent to
conduct such activity.” Sierra Applied Scis., Inc. v.
Advanced Energy Indus., Inc., 363 F.3d 1361, 1373 (Fed.
Cir. 2004) (quoting BP Chems., 4 F.3d at 978).[fn4] Here
the parties do not dispute that the second prong is met.
Accordingly, we need only determine, under the first prong,
whether Plumtree had a “reasonable apprehension” that it
would face an infringement suit on the ‘040 and ‘418
patents.
This court looks to “the ‘totality of the circumstances’
in determining whether [the] conduct meets the first prong
of the test.” Arrowhead Indus. Water, Inc., 846 F.2d at
736.
Our decision in Goodyear Tire & Rubber Co. v. Releasomers,
Inc., 824 F.2d 953 (Fed. Cir. 1987), is directly on point.
In that case, Releasesomers sued Goodyear in state court
for misappropriation of trade secrets. While the trade
secret litigation was pending, patents were issued to
Releasomers that were “directed to essentially the same
technology involved in the state trade secret litigation.”
Id. at 954. We noted that “the situation here indicates
that these parties are themselves currently embroiled in a
protracted dispute in state court over the commercial
technology generally covered by the . . . patents.” Id. at
955. We found that “[b]y suing Goodyear in state court for
the same technology as is now covered by the patents,
Releasomers has engaged in a course of conduct that shows a
willingness to protect that technology,” and a reasonable
apprehension of suit. Id. at 956; see also Vanguard
Research, Inc. v. PEAT, Inc., 304 F.3d 1249, 1255 (Fed.
Cir. 2002) (finding reasonable apprehension where PEAT sued
Vanguard for misappropriation of trade secrets regarding
the same technology and stating that “[f]iling a lawsuit
for patent infringement would be just another logical step
in [PEAT’s] quest to protect its technology”).
Here, before Plumtree commenced this declaratory judgment
action, Datamize had sued Plumtree on the parent ‘137
patent. Although the ‘040 and ‘418 patents do not share the
same “aesthetically pleasing” language as the ‘137 patent,
the three patents all describe a similar technology and
share a common specification. Here, as in Goodyear and
Vanguard, “[b]y suing [earlier] for the same technology as
is now covered by the patents [in suit], [the patent
holder] has engaged in a course of conduct that shows a
willingness to protect that technology,” Goodyear, 824 F.2d
at 956, and has created a reasonable apprehension of suit.
Datamize argues that, even if there were a reasonable
apprehension of suit in 2002 when the suit on the ‘137
patent was filed, the declaratory judgment action on the
‘040 and ‘418 patents was not filed until July 9, 2004, and
the passage of time had dissipated any reasonable
apprehension. Where the defendant does not sign a covenant
not to sue, a reasonable apprehension may only be
eliminated in “narrow” circumstances because “otherwise a
patent holder could attempt extra-judicial patent
enforcement with scare-and-run tactics that the Declaratory
Judgment Act was intended to forestall.” Fina Research,
S.A. v. Baroid Ltd., 141 F.3d 1479, 1483 (Fed. Cir. 1998)
(internal quotation marks omitted). Here Datamize did not
meet this burden because, between the two lawsuits,
Datamize continued to “engage[] in a course of conduct that
show[ed] a willingness to protect [its] technology.”
Goodyear, 824 F.2d 956. On September 3, 2003, Datamize sued
nine other defendants in the Texas action on the ‘040 and
‘418 patents. See Arrowhead Indus. Water, Inc., 846 F.2d at
737 (noting that a patentee’s infringement suit against a
third party “evidenced not only an intent but a willingness
and capacity to employ litigation in pursuit of its patent
rights”). Moreover, on May 12, 2004, in the Texas action,
Datamize directly stated in response to an interrogatory
that it believed Plumtree was infringing these patents.
Plumtree was aware of the Texas action, and whether or not
the interrogatory response was actually communicated to
Plumtree, the response is probative of Datamize’s
intentions. This suit was filed only two months after the
interrogatory response on July 9, 2004.
Accordingly, Datamize’s actions clearly created a
“reasonable apprehension” of suit on the ‘040 and ‘418
patents, and this apprehension was not dissipated by
Datamize’s subsequent actions.
II
As we have jurisdiction over this action, we next consider
whether the ‘040 and ‘418 patents are invalid under the on
sale bar, 35 U.S.C. § 102(b).
The determination of whether an invention was on sale
within the meaning of § 102(b) is a question of law
that we review without deference. Scaltech, Inc. v.
Retec/Tetra, LLC, 269 F.3d 1321, 1327 (Fed. Cir. 2001). We
also review a grant of summary judgment without deference.
See Crater Corp. v. Lucent Techs., Inc., 255 F.3d 1361,
1366 (Fed. Cir. 2001).
A claimed invention is considered to be on sale under
§ 102(b) if the invention is sold or offered for
sale more than one year before the filing date of the
patent application. Here the ‘040 and ‘418 patents claim
priority to a provisional application that was filed on
February 27, 1996. Thus, for purposes of the on sale bar,
the critical date is February 27, 1995.
The facts pertinent to the on sale bar issue are as
follows. By December 1994 Kevin Burns, the inventor of the
‘040 and ‘418 patents, had completed development of the
authoring tool ultimately reflected in the patent claims.
In the winter of 1994 his company, MA, learned that the SIA
was going to hold a trade show in Las Vegas, Nevada in
March 1995. As part of the show, SIA planned to include an
example of a “ski store of the future” called the “Mountain
Visions” store.
On January 17, 1995, representatives from MA gave a
presentation to the representatives from SIA at SIA’s
headquarters in Virginia. At the time of the presentation,
the authoring tool had been reduced to practice, but MA had
not yet used the authoring tool to create a kiosk product.
The slides used during MA’s presentation refer to
“proprietary authoring tools” that “allow rapid updating”
and “support new technologies as they appear.” However,
Emmett Burns later testified that he could not “recall
telling SIA any of the particulars of the authoring tool at
the SIA meeting.” J.A. at 549. He stated that he did not
explain how the authoring tool allowed for “rapid updating”
because “even if [h]e explained any of it[,] [t]hese people
. . . are not technology people; and they go into a
different space if you start to get into that.” J.A. at
550. Rather, Emmett Burns testified that the purpose of the
presentation was to show SIA what the ultimate kiosk
product, entitled “SkiPath,” “would be like.”
On January 25, 1995, SIA sent a letter to MA confirming the
agreement that MA would “participat[e] as [a] sponsor of
the ‘interactive’ portion of the electronic information
center of Mountain Visions at SIA.” J.A. at 227. The letter
stated that in exchange for SIA “waiving the $10,000
sponsorship fee associated with participation in the
electronic information center,” MA agreed to:
1. Provide software/hardware package necessary to produce
the interactive touch-screen information center as
presented to SIA on January 17, 1995 in McLean, VA.
2. Provide multiples of this software/hardware package to
allow for multiple customer access in the information
center.
3. Work to the best of their ability to put the other
product sponsors participating in the concept store on the
interactive system, as presented [] January 17th, at no
charge to these companies. SIA will work to facilitate
this effort wherever possible.
4. Provide looped advertising/entertainment video on Ä?
inch VHS for the overhead monitor system. SIA would help
to acquire entertainment segments if necessary.
5. Exhibit within the trade show. SIA will facilitate
getting Multimedia Adventures an appropriate booth space
to exhibit and sell your products.
J.A. at 227. On January 26, 1995, Kevin Burns “filled out
an exhibit space contract for [MA’s] exhibit space at the
tradeshow” and paid $2,430 in exhibit space fees. J.A. at
531. The exhibit space contract stated that “the type of
product” MA would display was a “computer kiosk.” J.A. at
196. Emmett Burns later testified that the agreement
between SIA and MA was that in exchange for space at the
trade show, MA would “put the system in the store.” J.A. at
382. He explained that “the system” was “the multimedia
kiosk” (SkiPath). Id.
The trade show was held on March 3-7, 1995 (after the
February 27, 1995, critical date) in Las Vegas, NV. Kevin
Burns testified that “a Mulitmedia Adventures product” was
demonstrated and that there was a demonstration of the
“kiosk system,” which was called “SkiPath.” J.A. at 350-52.
The record establishes that “SkiPath [was] created with the
authoring system” and that the authoring system embodied all
the claims of all three of Datamize’s patents. J.A. at
347-50. Kevin Burns also testified, somewhat confusingly,
that “the network kiosk system that was demonstrated in
March of 1995 at the Las Vegas show emod[ied] all the
claims” of the ‘040 and ‘418 patents. J.A. at 347. Although
Kevin Burns began creating SkiPath before the January 17
meeting, the programming and testing of the SkiPath product
was not completed until the end of the first day of the
trade show. Thus, the record is not clear whether the
patented process was used before the critical date.
III
The Supreme Court in Pfaff v. Wells Electronics, Inc., 525
U.S. 55 (1998), has set forth a two-part test for
determining whether there was a sale or offer for sale for
purposes of § 102(b). First, “the product must be
the subject of a commercial [sale or] offer for sale.” Id.
at 67. Second, “the invention must be ready for patenting.”
Id. The second condition is met by “proof of reduction to
practice before the critical date.” Id. Here the parties
agree that the authoring tool was reduced to practice in
the winter of 1994. Accordingly, we need only consider the
first prong of the Pfaff test.
A commercial sale or offer for sale necessarily involves
consideration. See Group One, Ltd. v. Hallmark Cards, Inc.,
254 F.3d 1041, 1048 (Fed. Cir. 2001); Restatement (Second)
of Contracts § 71 (1981). We agree with the district
court that MA received valid consideration. SIA awarded MA
floor space at the trade show and waived $10,000
sponsorship fee normally charged to show participants.
Datamize argues that waiver of the $10,000 sponsorship fee
did not constitute consideration because Plumtree did not
demonstrate that the fee waiver was “somehow due to the
invention.” We do not find this argument persuasive.
However, on this record, we cannot sustain the district
court’s conclusion that the method claims are invalid under
the on sale bar rule. The district court reasoned that “the
agreement with SIA embodied all of the claims of the ‘040
and ‘418 patents” because “the kiosk at the trade show
embodied all of the claims.” Plumtree, slip op. at 24. In
so holding, the district court relied on Kevin Burns’s
testimony that “the network kiosk system that was
demonstrated in March of 1995 at the Las Vegas show
embod[ied] all the claims” of the ‘040 and ‘418 patents.
These statements reflect confusion as to the nature of the
patented product. Here the invention reflected in the
method claims is a process for creating a kiosk system, not
the kiosk system itself. The kiosk system itself is not
patented. The court’s focus on whether the kiosk system
somehow embodied the claims of the patent was misplaced, and
the district court’s reasoning does not support a grant of
summary judgment. Nor does the record support the ultimate
result reached by the district court.
In our view, Plumtree could meet the first prong of the
Pfaff test under either of two alternative theories. First,
Plumtree could demonstrate that before the critical date MA
made a commercial offer to perform the patented method
(even if the performance itself occurred after the critical
date). Second, Plumtree could demonstrate that before the
critical date MA in fact performed the patented method for
a promise of future compensation. Under the second theory,
Plumtree would not need to prove that the contract itself
required performance of the patented method. We address
these alternative theories in turn.
Under the first theory, Plumtree would have to demonstrate
that before the critical date MA made a commercial offer to
perform the patented method. A commercial offer is “one
which the other party could make into a binding contract by
simple acceptance (assuming consideration).” Group One, 254
F.3d at 1048. Under this standard, it is clear that the
offeror must be legally bound to perform the patented method
if the offer is accepted. See Linear Tech. Corp. v. Micrel,
Inc., 275 F.3d 1040, 1050 (Fed. Cir. 2001) (stating that
there was no offer where communication did not “indicate
LTC’s intent to be bound” (citing Restatement (Second) of
Contracts § 26 (1981)). Whether there has been a
commercial offer is governed by federal common law. See
Scaltech, 269 F.3d at 1328; Group One, 254 F.3d at 1047.
Whether MA made a commercial offer to perform the patented
method is governed by our decision in Scaltech, where
before the critical date Scaltech made a commercial offer
to perform a patented method. There we stated that “the
fact that the process itself was not offered for sale but
only offered to be used by the patentee . . . does not take
it outside the on sale bar rule.” Scaltech, 269 F.3d at
1328. We reasoned that “[t]he on sale bar rule applies to
the sale of an ‘invention,’ and in this case, the invention
was a process.” Id. We then asked whether there was a
“commercial offer” and whether the offer was “of the
patented invention.” Id. We concluded that Scaltech’s offer
before the critical date to perform the patented method
implicated the on sale bar because the commercial “offer
for sale . . . satisf[ied] each claim limitation of the
patent.” Id. at 1329-30.
Here, as in Scaltech, there has been a commercial offer
before the critical date of February 27, 1995, because
there was a binding contract between MA and SIA. The more
difficult question is whether the commercial offer was “of
the patented invention.” We have stated that “the invention
that is the subject matter of the offer for sale must
satisfy each claim limitation of the patent.” Id. at 1329.
Datamize admits that “SkiPath [was] created with the
authoring system” and that the authoring system “embodied
all the claims of all three of Datamize’s patents.” J.A. at
349. On its face, however, the written agreement between MA
and SIA did not unambiguously require use of the patented
method. The agreement did require MA to “provide the
software/hardware package necessary to produce the
interactive touch-screen information center as presented to
SIA on January 17, 1995 in McLean, Virginia.” J.A. at 227.
This reference to the software/hardware package is
ambiguous as to whether it required MA to provide the kiosk
system software or to perform the patented method.
Moreover, Plumtree has made no showing that extrinsic
evidence would compel an interpretation that MA was bound
to perform the patented method. Therefore, the record does
not provide a basis for summary judgment on this issue.
We now turn to the second possible theory. Even if Plumtree
did not agree before the critical date to perform the
patented process, Plumtree could prevail on summary
judgment if it demonstrated that MA in fact performed each
of the steps of the patented process before the critical
date pursuant to the contract. In In re Kollar, 286 F.3d
1326 (Fed. Cir. 2002), this court considered whether
granting a license to perform a patented method violated
the on sale bar. After concluding that there was no sale
under the particular facts of that case, we noted that
“[a]ctually performing the process itself for consideration
would . . . trigger the application of § 102(b).”
Id. at 1333; see also Minton v. Nat’l Ass’n of Sec.
Dealers, 336 F.3d 1373, 1378 (Fed. Cir. 2003) (quoting In
re Kollar, 286 F.3d at 1333). We have explained that “the
intent of [ § 102(b)] is to preclude attempts by the
inventor or his assignee to profit from commercial use of
an invention for more than a year before an application for
patent is filed.” D.L. Auld Co. v. Chroma Graphics Corp.,
714 F.2d 1144, 1147 (Fed. Cir. 1983); see also In re
Kollar, 286 F.3d at 1333 (“Surely a sale by the patentee . .
. of a product made by the claimed process would constitute
. . . a sale because that party is commercializing the
patented process in the same sense as would occur when the
sale of a tangible patented item takes place.”). Performing
the steps of the patented method for a commercial purpose
is clearly an attempt to profit from the commercial use of
an invention. Consequently, performing the patented method
for commercial purposes before the critical date
constitutes a sale under § 102(b).
However, Plumtree has not on this record established that
MA actually performed all of the patented steps before the
critical date pursuant to the contract. While it is
apparent that Kevin Burns used the authoring tool to create
the kiosk system, the kiosk system was not finished until
after the critical date, and it is unclear whether Burns
performed each of the patented method steps before the
critical date. Accordingly, summary judgment was not
appropriate in this case.[fn5]
IV
Finally, the parties disagree about whether the district
court erred in failing to separately consider the apparatus
claims of the ‘418 patent.[fn6] Plumtree argues that
Datamize is barred from arguing that the ‘418 patent
contained apparatus claims because it did not raise that
argument below. In light of the remand, Datamize is free to
argue that some claims should be separately considered as
apparatus claims.
Accordingly, we remand to the district court for further
proceedings consistent with this opinion. In the further
proceedings, it will be important for the district court to
construe the patent claims at issue.
CONCLUSION
For the foregoing reasons, we conclude that the district
court had jurisdiction over this declaratory judgment
action. We further conclude that the district court erred
in granting summary judgment pursuant to § 102(b)
because the record contains insufficient facts to determine
whether the patented process was sold or offered for sale
before the critical date. Accordingly, we vacate the
district court’s summary judgment ruling and remand for
further proceedings.
VACATED AND REMANDED.
COSTS
No costs.
[fn1] Plumtree is now BEA Systems, Inc.
[fn2] Claim 1 of the ‘418 patent is representative of the
method claims:
A method for providing customized assortment of
information content from a plurality of information
providers for display in one or more customized interface
screens in a plurality of computers, comprising:
enabling selection of a customized assortment of
information content from information content from said
plurality of information providers; enabling selection of
at least one interface screen element from a plurality of
pre-defined interface screen elements for inclusion in
said customized interface screens,
said screen elements having on-screen characteristics
subject to pre-defined constraints providing a generally
uniform look and feel with other interface screens of said
plurality of computers; and
associating a selection of a customized assortment of
information content for a first computer of said plurality
and a selection of at least one screen element for said
first computer for display on said first computer in said
one or more customized interface screens.
[fn3] On August 7, 2003, Datamize filed a motion to realign
itself as plaintiff in the first California action, which
the district court granted on October 6, 2003.
[fn4] The Supreme Court in MedImmune, Inc. v. Genentech,
Inc., is considering whether the “reasonable apprehension”
prong of our test is unduly restrictive and not consistent
with Article III standards as interpreted by the Supreme
Court. Brief of Petitioner-Appellant at 20-22, MedImmune,
Inc. v. Genentech, Inc., No. 05-607 (U.S. May 15, 2006). We
need not address that question here because, even under
this court’s existing jurisprudence, we find that there was
a reasonable apprehension of suit.
[fn5] In light of our disposition, we do not reach the
contention that the district court erred in denying
Datamize’s motion under Fed.R.Civ.P. 56(f). Nor need we
address whether Kevin Burns’s affidavit, which contradicted
his deposition testimony, created a genuine issue of
material fact.
[fn6] Claims 24-46 and 63-86 of the ‘418 patent are argued
to be apparatus claims.