Pfaff, Wayne K. v. Wells Electronics, Inc. (11/10/1998)

By: Chandra Palermo, Medill News Service

Questions presented

In view of the long-standing statutory definition that the one-year grace period to an ""on-sale"" bar can start to run only after an invention is fully completed, should the Pfaff patent have been held invalid under 35 U.S.C. 102(b) when Mr. Pfaff's invention was admittedly not ""fully completed"" more than one year before he filed his patent application?

Brief

Texas Instruments, an electronics company that makes both components and devices that use those components, contacted Wayne K. Pfaff and asked him to develop a socket for testing leadless chip carriers, a protective enclosure for chips, in late 1980.

Pfaff developed a concept and prepared detailed engineering drawings. In early 1981, Pfaff sent the drawings to a tooling company for production, and on Apr. 8, 1981, Texas Instruments sent him a conditional purchase order for 30,100 sockets. Pfaff filed a patent application a little more than a year later on Apr. 19, 1982, and the patent was issued as U.S. Patent No. 4,491,377.

Wells Electronics developed devices that Pfaff felt infringed on his patent in the late 1980s. He sued, but the U.S. District Court for the Northern District of Indiana ruled in Wells' favor in 1988. The U.S. Court of Appeals for the Federal Circuit upheld the noninfringement ruling.

Shortly after the ruling, Wells modified its socket, and put it out in the marketplace. Pfaff sued Wells again, claiming that six of the devices produced by Wells for the socket infringed on his patent. Pfaff's lawyer, Jerry Selinger, said that Wells was originally being careful when it developed the orignal socket, but ""as soon as the court said the patent was not infringed, Wells went and copied [the socket] even more.""

The U.S. District Court found that two of the claims were invalid because they could be anticipated by prior art. But the court also found that four of the claims were valid and that Pfaff's patent was infringed because the invention was not ""on sale"" within the meaning of the on-sale bar of 35 U.S.C. 102(b).

The ""on-sale"" bar provision states that an inventor cannot be granted a patent if the invention was on sale in this country more than one year prior to the date of application for a patent. A patent allows inventors exclusionary rights to their inventions for 20 years. Inventors sometimes try to extend this period by selling their inventions for a few years before applying for a patent, but the on-sale bar provision was created to protect against this. It also balances the right of inventors to have a reasonable amount of time during which they can judge whether a patent is worth pursuing for a particular invention.

The Court of Appeals for the Federal Circuit reversed, finding that all six of the claims were invalid because the invention was on sale more than a year prior to the date Pfaff applied for a patent, and the invention was ""substantially complete"" at the time of the sale. Pfaff admitted that that he had a ""deal"" with Texas Instruments prior to the critical date, but he argued that the invention had not been reduced to practice at the time of the sale. There was no physical embodiment, like a prototype, of the invention. The appeals court explained that the on-sale bar can be invoked without a physical embodiment. It found that an invention need only be ""substantially complete at the time of sale such that there was reason to expect that it would work for its intended purpose upon completion.""

""There's nothing in the legislative history to indicate that Congress felt there must be a prototype,"" said James Hall, attorney for Wells.

Detailed engineering drawings of Pfaff's invention had already been drawn and submitted for production, which was the only stage left in its development. The court said that the manufacturing would be relatively simple and routine, since the invention is mechanical and contains no complicated components or complex interaction of parts. Because of this, the court determined that ""Pfaff was confident...that his invention would work.""

""In this day and age, you can have an invention and a commercial transaction without a prototype,"" Hall said. ""Nowadays, with computer animation and that sort of thing, you don't actually have to make a device to see if it will perform properly.""

Pfaff argued that since no socket had been tested, he could not know whether the invention would work. He tested several of the sockets in a cycling machine in July 1981, within the year after applying for the patent. But the court explained that Pfaff only tested the sockets to see if they could withstand repeated use, and since durability was not a claimed aspect of the invention, the court said the testing was irrelevant to on-sale bar status.

Pfaff's petition for certiorari was granted by the U.S. Supreme Court on March 9, 1998.

On November 10, 1998, the Court held that Pfaff's patent was invalid because the invention had been on sale in the United States for more than one year before he filed his patent application. Writing for a unanimous court, Justice John Paul Stevens found that the primary meaning of ""invention"" in the Patent Act unquestionably refers to the inventor's conception rather than to a physical embodiment of that idea and that Pfaff could have obtained a patent when he accepted Texas Instruments' order, for at that time he provided the manufacturer with a description and drawings of ""sufficient clearness and precision to enable those skilled in the matter"" to produce the device.