MEMORANDUM To: John F.

Murphy

From: 7213 Date: November 15, 2011 Re: Telescope Casual Furniture, Inc v. Furniture World Corp. et al. Patent Infringement Case Firm File No. 53092ETW.003 Printed Publication, Public Use

Question Presented More than one year prior to filing its application for patent of an outdoor seat pad, and employee of Telescope Casual Furniture sold a prototype pad to a neighbor who used it in his backyard. Further, more than a year prior to filing its patent application, Telescope e-mailed a power-point sales presentation containing the patent information to the program chair of an outdoor furniture show, and made it available on Telescope Casual Furnitures FTP website for seven days. (1) Did the backyard use of the seat pad by a neighbor constitute a public use which invalidates the patent application? (2) Did the e-mail and subsequent posting of the powerpoint sales presentation on Telescopes FTP site constitute a printed publication invalidating its patent application?

Short Answer (1) Probably not. While the United States Code section governing the right to a patent requires the holder of the patent to refrain from placing the invention in public use more than one year prior to the date of application for a patent there is an experimental use exception. The keeping of meticulous records by the inventing

employee as to the pads performance, the monitoring of the neighbors pad, and the importance of the inventions durability in an outdoor environment as inherent in its use qualifies for the experimental use exception to the public use prohibition.

(2) Probably so. Telescope Casual Furnitures e-mail to the Furniture Design Society that included that patent information without any confidentiality stipulation attached, as well as posting it on their FTP website for seven days prior to the critical date made it publicly accessible and therefore a printed publication. In addition, once posted the patent information was in effect categorized and shelved to the extent that individuals on Google Groups commonly referenced it, constituting an additional ground to find that the power-point presentation was publicly accessible, and therefore forfeiting its right to the patent. Statement of Facts Telescope Casual Furniture, Inc. is a wholesale outdoor furniture manufacturer that is involved in a patent dispute with Furniture World Corp. Furniture World Corp alleges, under 35 U.S.C. 102(b) that the invention was used in public, and described in a printed publication more than a year prior to the filing date of the patent application.

On December 6, 1999, more than one year prior to filing its patent application, Telescope Casual Furniture made ten outdoor seat pads for experimental use. In order to ensure that the seat pads worked well in all weather conditions, Mr. Vanderminden, the employee who designed the pad, took three pads 2

home and placed them in his backyard. The company allowed another employee, Mr. Barns, to take two seat pads home, one of which was placed on his patio, and the other which he sold to his neighbor for $30.00. Over the next year, Vanderminden took meticulous notes on the performance of the pads in the weather. Vanderminden further checked weekly with Barnes on his seat pads, who inquired almost weekly with his neighbor as to the performance of his seat pad-after one year, Barnes traded the neighbor a new seat pad for the original pad, and returned it to Vanderminden for evaluation.

In October 1999, the Furniture Design Society announced a show to be held in 2000, called the Show of Outdoor Furniture Accents. In response, in March of 2000, more than one year prior to the its filing of its patent application, Telescope Casual Furniture created a power-point sales presentation, which they submitted via e-mail containing the patent information. The e-mail reflected that the presentation was also available on Telescope Casual Furnitures FTP site, which was made available for a period of seven days. Also prior to the critical date, Telescope Casual Furniture provided specific links to documents within the FTP site which was commonly referenced by individuals in Google Groups. Discussion Telescope Casual Furniture will likely not be able to prove that they are entitled to a patent because (1) while there was not a public use of the pad (2) the details of the patent were described in a printed publication prior to the critical date.

Pursuant to 35 U.S.C.A. Section 102(b), a party is not entitle to a patent if: (1) the invention was patented or described in a printed publication, or (2) the invention was in public use or on sale more than one year prior to the date of application. TP Lab., Inc. v. Profl Positioners, Inc,, 724 F2d 965 (Fed. Cir. 1984). The statutory presumption of a patents validity places the burden of proof on the party attacking the validity of the patent, and that burden of persuasion does not shift at any time to patent owner; it is constant and remains throughout suit on challenger. Id. Most importantly, the party challenging the validity of the patent must prove its case by clear and convincing evidence. Id. This standard is more stringent than a preponderance of the evidence, requiring a greater degree of substantial certainty or probability. This memorandum will argue that while Telescope Casual Furnitures public use was protected under experimental use, the e-mailing and posting of the powerpoint sales presentation on its FTP website constituted a detailed printed publication more than one year prior to the critical date, disqualifying the company for patent protection. 1. Public Use The conduct of the Telescope Casual Furniture employer will not likely rise to the level of a public use element because the invention in question was used in an experimental context. The testing of the seat pads in an outdoor environment was inherent to the purpose of the pads, and testing it in public does not disqualify I as public use.

The public use element requires that one is entitled to a patent unless, interalia, the invention was in public use in this country, more than one year prior to the date of the application for patent in the United States. Lough v. Brunswick Corp., 86 F.3d 1113 (Fed. Cir. 1996). Public use is defined as any use of the claimed invention by a person other than the inventor who is under no limitation, restriction, or obligation of secrecy to the inventor. Id. If a prima facie case is made of public use, the patent owner must be able to point to or must come forward with convincing evidence to counter that showing. Id. When considering whether the use of an invention qualifies as an experimental use as opposed to a public use, the totality of the circumstances must be considered, including various objective indica of experimentation surrounding the use, such as number of prototypes, duration of testing, whether records or progress reports were made concerning testing, existence of a secrecy agreement, extent of control inventor maintained over testing, and whether the patentee received compensation for use of invention. Id. For example, in Manville, the court held that the states purpose and use of an invention of an outdoor light pole luminary assembly at a public rest area in Wyoming was experimental, which did not bar the issue of a patent. The invention was specifically designed to withstand environmental elements. The court found that when durability in an outdoor environment is inherent to the purpose of an invention, further testing to determine the inventions ability to serve that purpose will not subject the invention to a section 102(b) bar. Id at 551.

Likewise, in TP Laboratories, Inc., the court held that the non-secret use of the dental invention one-year prior to critical date of application did not constitute a public use. TP Lab., Inc. v. Profl Positioners, Inc,, 724 F2d 965 (Fed. Cir. 1984). The non-secret use of the orthopedic appliance invention prior to the critical date is not in itself dispositive of the issue of whether activity barring a patent under 35 U.S.C. 102(b) occurred. Id at 972. The court held that while the invention was not hidden from view, in considering the entire surrounding circumstances, the court found that although the doctor did not ask his patients to sign a confidentiality agreement, it is clear the inventor was testing the device, not the market. Id at 973. The court further found that the routine checking of patients by the inventors orthopedic practice did not indicate the inventors lack of control or abandonment to the public. Further, in Elizabeth, in which the inventor of a machine which constructed wooden block pavements constructed a road leading out of Boston, the court held that if the invention is used under the surveillance of the inventor, and for the purpose of enabling him to test the machine and ascertain whether it would answer the purpose for which it was intended, and to make such alterations and improvements as experience demonstrates to be necessary, it constituted a mere experimental use, and not a public use, within the meaning of the statute. Elizabeth v. Pavement Co. 97 U.S. 126 (1877). B contrast, in the Baxter case, the court held the use of a centrifuge for separating blood into its components by another researcher not under the direction or surveillance of the inventor prior to the critical date constituted a public use. In addition to citing the fact that invention was being used by another not under the

inventors direction or surveillance, the court also cited the fact that the use by the third party researcher was not for the purpose of trying to refine the invention to prove it would work, for its intended purpose, but rather to see if it could be modified to satisfy the needs of the other researcher. Id at 1060. Finally, in Lough, the inventor made six usuable prototypes of a seal assembly for stern drives in boat, installing five of them in the boats of his friends prior to the critical date, the court held that the friends use was not experimental, and constituted a public use. In considering the totality of the circumstances, the court found that the inventor neither asked for nor received any comments concerning operability of prototypes, maintained no supervision or control over prototypes during the alleged testing, did not keep any records of the alleged testing, and did not know what happened to one of the prototypes after one of the boats was sold by the marina. Id at 1121. The court concluded that for an assertion for an experimental use to have merit, it must be clear that the inventor kept control over his invention in the course of its testing. Id at 1122. In our case, Telescope Casual Furniture, like the applicant Manville, is likely to prove that the invention was used in an experimental use context just as with the outdoor light pole assembly in Manville, the seat pads were designed to withstand the weather, and it was necessary to test them outside in public view. Further, like the use of the dental appliance in public on the inventors patients in TP Laboratories, the non-secret use Telescope Casual Furnitures seat pad by the neighbor in his back yard did not bar the patent. Finally, as with the pavement

machine in Elizabeth, the seat pad invention was studied under the direction of the inventor. Thus, Telescope Casual Furnitures patent will not constitute public use in that the actions of Telescope prior to the critical date, in considering the entire surrounding circumstances, including the careful supervision of the inventor, constitutes experimental use. Therefore, a court is likely to determine that there was no public use prior to the critical date. 2. Printed Publication Telescope Casual Furniture is unlikely to prove that its invention was not a described in a printed publication more than one year prior to the date of its application for patent. The e-mailing of a power-point sales presentation containing patent information to be shared outside the company, together with the posting of the presentation on Telescope Casual Furnitures FTP website for a period of seven days, and the providing of the FTP web address to retailers during such period, resulting in it being indexed in Google groups will likely constitute a publication of the patent information. The printed publication disqualification turns on the concept of public accessibility of a perceptible description of the invention, in whatever form it may be revealed. In re Wyer, 655 F.2d 221 (C.C.P.A. 1981). As the court stated in Wyer, given the state of technology, the probability of dissemination of an item has little to do with whether or not it is printed. Id. at 226. Thus, the question to be examined under section 102(b) is the accessibility to at least the pertinent part of the issue of whether a description of a patent is publicly accessible within meaning of statute

turns on the showing that such document has been disseminated or otherwise made available to the extent that the persons interested and ordinarily skilled in the subject matter or art exercising reasonable diligence, can locate it and recognize and comprehend the essentials of the claimed invention without need of further research or experimentation. Bruckelmyer v. Ground Heaters Inc., 445 F.3d 1374 (Fed. Cir. 2006). The question whether something is a printed publication is made on a case by case basis. In re Klapferstein, 380 F.3d 1345 (Fed. Cir 2004). For example, in Bruckelmyer, the court held that a Canadian patent application, including two figures associated with it, was publicly accessible, and thus a printed publication under statute establishing conditions of patentability, because it was properly classified and indexed, in the Canadian Patent Office. The court set out a standard of public accessibility, finding that the Canadian application was accessible to the extent that a person of ordinary skill in the art interested in the subject matter of the patent exercising reasonable due diligence would have been able to locate the patent. Id at 1378. Likewise, in Klopfenstein, the court held that a side presentation describing the cholesterol lowering food process was made sufficiently publicly accessible to constitute as a printed publication. Prior to the critical date, the printed slide presentation was displayed continuously for two and a half days at the American Association of Cereal Chemists. Also prior to the critical date, the same slide presentation was displayed for less than a day at the Agriculture Experiment Station. At no time during either presentation was there disclaimer or notice prohibiting the audience from note-taking or copying of the presentation. The

presentation was shown to a wide variety of viewers, a large group of whom possessed ordinary skill in the art of cereal chemistry and agriculture. In the M.I.T. case, the court found that prior to the critical date, a paper relating to a cell culture invention was distributed at a cell culture without restriction. The court found that the distribution to persons interested in the invention and of ordinary skill in the subject matter of the paper without restriction constituted a prohibited publication. M.I.T. v. AB Fortia, 774 F.2d 1104 (Fed. Cir. 1985) Applying the courts reasoning in Wyre, the bedrock issue is whether the emailing of Telescope Casual Furnitures sales power-point presentation made the patent information publicly accessible. As the court stated in Wyre, given the current state of technology, the posting of the presentation on the companys FTP site would constitute public accessibility, and therefore, publication under the statute. The seven-day posting of the power point on the FTP site is a sufficient amount of time to constitute publication, being a longer period of time then the twoand-a-half day slide presentation display in Klopfenstein. The fact that the link to the FTP site was e-mailed to retailers in this industry, meets the M.I.T. standard of distribution to persons interested in the invention and of ordinary skill in the subject matter. Conclusion While Telescope Casual Furniture will be able to qualify for an experimental use of their outdoor seat pad prior to the critical date, they will not likely be able to

10

establish that they did not make publicly accessible their invention in a printed publication.

11