Non-enabling disclosure by first inventor of low defect single crystal was sufficient to defeat under 102(g) patent claim of subsequent inventor

Le-Nhung McLeland | December 12, 2012

The Fox Group, Inc. v. Cree, Inc.

November 28, 2012

Panel:  Newman, O’Malley, and Wallach.  Opinion by Wallach.  Dissent by O’Malley.

Summary:

 (1)   Summary judgment in favor of defendant was affirmed with respect to asserted claims because (a) defendant was first to reduce to practice the claimed SiC single crystal, and (2) plaintiff did not produce sufficient evidence raising genuine issue of material fact to show that defendant suppressed or concealed the invention.

 (2)   Holding that unasserted claims were invalid was vacated.

Background:

Fox is the assignee of U.S. patent No. 6,562,130, issued from an application which is a continuation-in-part of a U.S. national stage of an international application filed on January 22, 1997 in Russia.

Claims 1 and 19 of the ‘130 patent were asserted against Cree.

Claim 1:  A silicon carbide material comprising an axial region of re-crystallized single crystal silicon carbide with a density of dislocations of less than 104 per square centimeter, a density of micropipes of less than 10 per square centimeter, and a density of secondary phase inclusions of less than 10 per cubic centimeter. (emphasis added)

Claim 19:  A silicon carbide material, comprising:

a single crystal silicon carbide seed crystal, said single crystal silicon carbide seed crystal having a growth surface; and

a region of axially re-crystallized silicon carbide,

said region of axially re-crystallized silicon carbide initiating at said growth surface of said single crystal silicon carbide seed crystal, said region of axially re-crystallized silicon carbide having a density of dislocations of less than 104 per square centimeter, a density of micropipes of less than 10 per square centimeter, and a density of secondary phase inclusions of less than 10 per cubic centimeter (emphasis added).

Cree has been engaged in research to grow low defect SiC crystals since 1987.  In February 1995, Cree grew a particular SiC “boule” and sent a wafer sliced from that boule for analysis by a university researcher, who informed Cree that there was an area of exceptionally low defect in the wafer.  At a 1995 conference in Kyoto, one of the Cree inventors “showed a cropped image and described the low defect nature” of the wafer, stating that it had an area with less than 1,000 dislocations per square centimeter, and no micropipes.  In an article published in 1996, Cree described the wafer, announcing that it had “recently had a breakthrough” that dramatically reduced micropipe density.  The article included an X-ray topograph taken by the university researcher.

In 2007, the same university researcher analyzed a wafer from Cree at Fox’s request.  In 2011 he also reviewed the 1995 X-ray topographs of the wafer and determined that the wafer had a region with an average dislocation density of less than 104 per square centimeter, no micropipes, and no secondary phase inclusion (i.e., the wafer met the conditions recited in the claims.)

Fox brought suit against Cree in 2010, seeking injunctive relief and compensatory damages for infringement of the ‘130 patent and another patent (US 6,534,026).  Cree counterclaimed for declarations that the patents were not infringed, and were invalid and unenforceable.  Cree filed for summary judgment of invalidity of the patents in April 2011.

In June 2011, the district court entered a judgment of non-infringement of the ‘026 patent.

In August 2011, the district court granted Cree’s motion for summary judgment that the ‘130 patent was invalid, and Fox appealed this judgment.

Discussion

35 U.S.C. § 102(g) bars patentability when “the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it.”  On motion for summary judgment the mover must prove by clear and convincing evidence that the invention was made in the U.S. by another inventor.  Then, the burden shifts to the patentee to produce evidence sufficient to create a genuine issue of material fact as to whether the prior inventor has suppressed or concealed the invention.  Finally, the burden shifts back to the mover for rebuttal by clear and convincing evidence.

Although 102(g) prior art will no longer exist under the first-to-file system, issues involving 102(g) prior art will continue to be raised for patents issued from applications filed under the first-to-invent regime.

Prior invention

Fox argued that “Cree failed to prove that it invented a process for making low defect SiC wafers because it did not provide proof that it did, or could, duplicate the process used to make the wafer in question.  In its opening statement Fox averred that “[i]mplicit in the “conception” requirement of inventorship is that the inventor must have conceived of something definite enough to be repeated.”  The CAFC majority opinion states that Cree needs only to prove either that (1) it reduced the invention to practice first, or (2) it conceived of the invention first and was diligent in reducing it to practice (albeit not before Fox’s critical date.).  As emphasized in the majority opinion: “Reduction to practice and conception are separate and distinct concepts and tests; we will not combine them.”

The majority found that Cree had met both prongs of the test for reduction to practice by (1) constructing an embodiment (i.e., the wafer) that met all the claim limitations; and (2) determining that the invention would work for its intended purpose (by describing the defect reduction as a breakthrough.)  Fox argued that Cree had failed to show reduction to practice because Cree had not shown that it could obtain the low defect wafer repeatedly.  The majority stated flatly that “there is no requirement for it to have done so repeatedly.”

Abandonment, Suppression, or Concealment

Fox disputes the sufficiency of Cree’s public disclosures, contending that abandonment, suppression, or concealment may be inferred from Cree’s “unreasonable delay in making the invention publicly known.”  Specifically, Fox argues that Cree suppressed or concealed the invention since Cree (1) did not file a patent application for its wafer; (3) did not present proof of commercialization that would allow for reverse engineering; and (3) did not otherwise provide adequate disclosure of the growth conditions for obtaining the wafer.

The majority opinion disposes of the first two averments by noting that “[T]here are other ways to prove public disclosure, including, e.g., the use of a printed publications (sic) as prior art under 35 U.S.C. §§ 102(a), (b).”  With respect to the third averment, Fox contends that the presentation at the conference and the article publication were not enough to enable one skilled in the art to make the invention because Cree never disclosed how the wafer was made.

The CAFC majority opinion notes that all the cases cited by Fox to support its position that 102(g) requires an enabling disclosure involve process claims.  The ‘130 patent is directed to a product, and the majority opinion dismisses Fox’s contention that “any distinction between product and process claims is irrelevant.”

Applying the burdens of proof stated at the beginning of the opinion, the majority found that Fox had “not produced sufficient evidence raising any genuine issues of material fact to show that Cree suppressed or concealed its invention.”  The decision of the district court as to claims 1 and 19 was affirmed.

Unasserted claims of ‘130 patent

Considering the totality of the somewhat convoluted procedural history of the case, the CAFC majority affirmed the district court’s finding that only claims 1 and 19 were asserted.  There was no case or controversy with respect to the unasserted claims at the time of the summary judgment.  Therefore, the district court’s decision that the entire ‘130 patent is invalid is vacated.

DISSENT

Judge O’Malley’s dissent focuses on the troubling issue of the non-enabling disclosure by Cree, and the public policy underlying section 102(g).  She cites Apotex USA, Inc. v. Merck (Fed. Cir. 2001) for the proposition that, although there is no explicit disclosure requirement in § 102(g), the CAFC has held that “the spirit and policy of the patent laws encourage an inventor to take steps to ensure that ‘the public has gained knowledge of the invention which will insure its preservation in the public domain’ or else run the risk of being dominated by the patent of another.”

When there is no enabling written disclosure, Judge O’Malley believes that the case law requires that there “must be evidence that the prior inventor timely made its invention available to the public in some other way – e.g., through public use, commercialization, or filing a patent application claiming the invention.  Such a requirement is consistent with § 102(g)’s general goal of giving the public the benefit of the invention.”

Noting the deposition testimony of one of Cree’s inventors about “the company’s policy to exclude all details as to how to replicate discoveries in any publications regarding them,” Judge O’Malley concludes that the evidence, as a whole, is sufficient to create a genuine issue that Cree abandoned, suppressed, or concealed its invention.  In the dissent’s view, Cree had failed to rebut that evidence.  The non-enabling disclosure at the conference and in the publication was not sufficient for rebuttal.

CAUTION:  The majority opinion must be read narrowly and within the context of the specific pleadings and facts in this case, as the opinion is bound to elicit strong reactions in the patent community including the patent judicial community.  For the moment, it would be wise not to expect that a non-enabling disclosure of an invention would always serve as a bar under 102(g) against a later inventor, in the absence of any other indication of the invention being made available to the public.

Full Opinion

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