[00:00:00] Speaker 01:
We have four cases on the argument calendar this morning.

[00:00:30] Speaker 01:
with this SNF holding company, 2019-12-43, Mr. O'Quinn.

[00:00:47] Speaker 04:
Thank you, Judge Laurie.

[00:00:48] Speaker 04:
May it please the court, John O'Quinn, on behalf of BASF.

[00:00:51] Speaker 04:
There are two independent reasons to reverse the grant of summary judgment of invalidity as to all asserted claims.

[00:00:58] Speaker 04:
First, the Selenese process was not prior art precisely because it was deliberately kept confidential.

[00:01:05] Speaker 04:
And second, there are disputed issues of material fact as to whether the Selenese process actually performed the final step of the claimed process.

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Now, as to the first, this court has long recognized that a third party's confidential use of a trade secret process to make commercial products

[00:01:22] Speaker 04:
does not invalidate a separate inventor's patent to that process, not under 102A and not under 102B.

[00:01:29] Speaker 01:
And I think truly a third party, they were licensee, weren't they?

[00:01:33] Speaker 04:
Well, Judge Lorry, the Selanese, whether you're referring to Selanese or whether you're referring to Sanyo, they're third parties as to the inventor here, the patentee here.

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They're not in the chain of patenting.

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So they are entirely third parties with respect to the patent owner in this case.

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And so this case, in that respect, is indistinguishable from W.L.

[00:01:57] Speaker 04:
Gore versus Garlock.

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If Selenese had been BASF's licensees, then they would have been like Bud and Cropper in W.L.

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Gore, right?

[00:02:05] Speaker 04:
I think that's right.

[00:02:06] Speaker 04:
I think that's right.

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And so that would have been a problem.

[00:02:08] Speaker 04:
That would be a problem.

[00:02:09] Speaker 04:
That's exactly right.

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This court, and indeed the Supreme Court, have made clear that there is a distinction between inventors and non-inventors.

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And this goes all the way back to Judge Learned Hand's decision in metallizing engineering some 75 years ago.

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where he said it was well settled then that a third party's secret use was not prior art, even though the same acts, if they were committed with respect to the inventor, would be.

[00:02:35] Speaker 00:
Well, it's easier to see that you're talking about it as though it's an all or nothing proposition.

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But I see this as there's some nuances between, say, where they're talking about public use or known to the public versus the on sale bar.

[00:02:53] Speaker 04:
So Judge Moore, I think with respect to public use, I think the line that's been drawn in the cases is that if something is deliberately hidden, if it's deliberately secret or confidential, then that doesn't count as a public use.

[00:03:09] Speaker 00:
Like, let me give you an example.

[00:03:10] Speaker 04:
Sure.

[00:03:11] Speaker 00:
The formula for Coke, we still don't know what it is.

[00:03:13] Speaker 00:
Correct.

[00:03:14] Speaker 00:
For all these years, nobody knows what the formula for Coke is.

[00:03:17] Speaker 00:
But Coke's been on sale for decades and decades.

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So if I suddenly came up with a formula for Coke on my own, independently invented it, I could get a patent on that process for manufacturing Coca-Cola.

[00:03:30] Speaker 00:
Is that your view?

[00:03:32] Speaker 04:
I think potentially you could.

[00:03:34] Speaker 04:
I think the question would depend on underlying facts, which would have to be proved by clear convincing evidence, but would be things like, was it possible to reverse engineer the process from the product that was sold?

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Certainly, if you have even a third party using a confidential process to then sell a product from which you can then determine the process, I think the cases are consistent that that

[00:03:58] Speaker 04:
that that would result in a public use, because the public art has been enriched.

[00:04:05] Speaker 00:
There are really two underlying public policies that... Well, I don't know if that's right, but there's a difference, what I will call secret uses on the one hand, which is what this is, confidentiality restrictions that were abided by.

[00:04:19] Speaker 00:
And then there's sort of non-public public uses, like the brassiere in the 1800s case, right?

[00:04:25] Speaker 00:
So there's some differences.

[00:04:27] Speaker 04:
There is, Judge Moore, and I think that the case law recognizes that if what you have is essentially a non-visible, non-widespread use, that's still a public use, but that is different from when something is being kept deliberately confidential, and that's recognized

[00:04:46] Speaker 04:
in the Supreme Court's decision in Shimatsu itself referred to the fact that, quote, no efforts were made to conceal the process, and it was not, quote, purposely hidden.

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And if you look at footnotes 34 and 36 of the Supreme Court's opinion there, it cites

[00:05:01] Speaker 04:
the Egbert case that Judge Moore, you were referencing a moment ago, as well as Hall versus McNeil.

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And both of those cases distinguish between that which is public but not widespread versus that which is deliberately concealed.

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And what we have in this case is something that is deliberately concealed.

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And so I don't think that you can affirm, particularly on the summary judgment posture that we find ourselves in, the district court's finding

[00:05:27] Speaker 04:
of invalidity consistent with the precedent on 102A and 102B, certainly with respect to public use.

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I think that you probably have a very strong argument, Mr. O'Quinn, on the state of the existing precedent, especially the Federal Circuit precedent like W.L.

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Gore.

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But it's a little bit hard to recognize with the plain text of the on-sale bar in the statute itself, which doesn't seem to recognize the distinction that courts have created

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between something that was on sale by the patentee versus something that was on sale by a third party?

[00:06:01] Speaker 04:
Sure.

[00:06:01] Speaker 04:
No, I appreciate that question, Judge Moore.

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And certainly, this is an area in which there is a lot of judicial gloss.

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And certainly, at least as of 1952, when you have the recodification of the Patent Act, Congress recognized, and it was reflected in the reviser's notes, that courts had come to interpret known or used as requiring a public knowledge or public use

[00:06:24] Speaker 04:
and that no change was intended at that time.

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And just as the Supreme Court recently said,

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in Helsin in the context of addressing an inventor, not a third party, Congress is presumed to legislate with the knowledge of those judicial decisions.

[00:06:40] Speaker 01:
But I would also- Was there a sale at all?

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This was a process.

[00:06:44] Speaker 01:
Sure.

[00:06:44] Speaker 01:
Was the process sold?

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Or was it licensed?

[00:06:48] Speaker 04:
So the process was licensed, Judge Lorry.

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What you have here, I think, is really indistinguishable from what was at issue in Kolar or in

[00:06:58] Speaker 04:
Moz Hamilton, because yes, you have an exclusive licensee that is being licensed with the rights.

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You have no how that is being transferred.

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But what you don't have

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as your concurrence put it in group one, is an immediate transfer to the buyer.

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That's not what happened here.

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I mean, the facts are that you had some two or three years to build a plant, another year to get it operational.

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And what you don't have is some off-the-shelf transfer of unembodiment.

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And I think the lodestar that this court identified.

[00:07:33] Speaker 00:
The strength you see in Minton right now, the computer that went with it, right?

[00:07:36] Speaker 00:
That's what you're distinguishing between Kolar and Minton.

[00:07:38] Speaker 04:
Right, both of which I would note are inventor cases.

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And as this court put it in Poly America at 383 F 3rd at 1309, they implicated the public policy addressing inventor commercialization while

[00:07:55] Speaker 04:
deferring filing a patent application, which is not implicated here.

[00:07:59] Speaker 00:
Judge Laurie raised an important point with regard to the license.

[00:08:02] Speaker 00:
Are there two different things being accused of amounting to an action which would create the on-sale bar here?

[00:08:09] Speaker 00:
Number one being the license itself, which it seems to me is clearly out under COLLAR, and number two being sales.

[00:08:18] Speaker 00:
Did Selenese sell products that were made

[00:08:21] Speaker 00:
that resulted from the process, or is that a separate on-sale bar that's being alleged in this case?

[00:08:28] Speaker 04:
So Judge Moore, I don't think that they are arguing that the sale of the polymer itself would violate the on-sale bar, because that would then run headlong into W.L.

[00:08:41] Speaker 04:
Gore.

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I mean, in W.L.

[00:08:42] Speaker 04:
Gore it was the tape that was being sold.

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And so that, I don't think, is what they are arguing.

[00:08:48] Speaker 04:
And that wasn't the basis for the district court's decision.

[00:08:51] Speaker 00:
For the on-sale bar, it was limited to the license question.

[00:08:54] Speaker 04:
So with respect to the on-sale bar, the district court's decision was limited to the license question.

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Now, there is an argument that my colleague has made on appeal that the corporate transaction in which Selenys merged into Hersht and became Hersht Selenys should somehow trigger the on-sale bar, because you have the entire company being

[00:09:15] Speaker 04:
acquired and merged into Hirsch Selenies.

[00:09:18] Speaker 04:
And of course, that would implicate the concerns of the Ninth Circuit's 1973 decision in Micro Magnetic, where as a general matter of policy, you don't want to have any time that Bell Labs, for example, gets sold, that everything that was ready for patenting suddenly now has a one-year expiration before it is no longer eligible to be patented.

[00:09:41] Speaker 04:
Because there's not really a sale

[00:09:43] Speaker 04:
of an embodiment.

[00:09:44] Speaker 04:
There's not really a sale of the technology.

[00:09:47] Speaker 04:
It's a sale of the company.

[00:09:48] Speaker 01:
That confuses the subject matter of the patent with the assignee, the owner.

[00:09:54] Speaker 04:
I think that's right, Judge Laurie.

[00:09:55] Speaker 04:
And at the end of the day, that's really what you're ultimately talking about is a change in identity.

[00:09:59] Speaker 01:
This couldn't have been a sale because the agreement says the rights here may not be assigned.

[00:10:05] Speaker 04:
That's right.

[00:10:06] Speaker 01:
And that precludes the idea that in Waterman versus McKenzie that an exclusive license can be tantamount to an assignment.

[00:10:16] Speaker 04:
Well, and in fact, Judge Lurie, the only way that there could be a transfer was subject to the very same confidentiality restrictions that were put in place in the first instance.

[00:10:26] Speaker 04:
So I think that is a transfer of

[00:10:30] Speaker 04:
of the technology and any of the material that was related to it.

[00:10:38] Speaker 01:
And the agreement is to be interpreted under the laws of Japan.

[00:10:43] Speaker 01:
Is that relevant here?

[00:10:45] Speaker 04:
Well, I think, Judge Laurie, the agreement is interpreted under the laws of Japan as to claims that were brought by one of the parties and potentially interpreted under the laws of New York as to claims brought by

[00:10:58] Speaker 04:
the other party.

[00:10:59] Speaker 04:
I'm not sure that that ultimately makes a difference here.

[00:11:02] Speaker 04:
But there is no question that there was no sale of an embodiment that actually took place.

[00:11:09] Speaker 04:
And nothing about the agreement suggests that, in the words of Kolar, quote, the process had to be carried out or performed as a result of the transaction.

[00:11:18] Speaker 04:
It was instead, just as in Moz Hamilton, giving Selenese the exclusive right to make and market.

[00:11:27] Speaker 02:
One other point... Can I ask a question about the Supreme Court?

[00:11:32] Speaker 02:
Yes, Judge Schenker.

[00:11:35] Speaker 02:
Which Supreme Court cases should we be looking at that gives us some guidance that doing

[00:11:43] Speaker 02:
you know, making your use under some confidentiality agreement can preclude that use from being a 102A type of use by others or knowledge by others.

[00:11:55] Speaker 02:
Sure.

[00:11:55] Speaker 02:
Because Gaylor and Coffin don't say that, right?

[00:12:00] Speaker 04:
No, Judge Chin, I agree that the Supreme Court in Gaylor did not address a confidentiality agreement as such.

[00:12:07] Speaker 04:
And I'd also note that

[00:12:08] Speaker 04:
None of the Supreme Court cases that SNF relies on involved confidentiality agreements.

[00:12:14] Speaker 04:
They involved what I would describe as non-visual, non-widespread, limited use.

[00:12:21] Speaker 04:
And so the interpretation with respect to confidentiality and the application of the principle that was articulated in Gaylor, the same principle that this court articulated in Woodland Trust, was I think first made by Judge Lerner at hand in the Gilman case

[00:12:37] Speaker 04:
and then again in the metalizing engineering case.

[00:12:40] Speaker 04:
And I think those are the cases that sort of are foundational in this space.

[00:12:45] Speaker 02:
Now, the Supreme Court's... Right, but those are second circuit cases.

[00:12:48] Speaker 04:
They are, and they are second circuit cases that have stood the test of time.

[00:12:52] Speaker 02:
I'm just trying to understand

[00:12:54] Speaker 02:
What drove the court in Gaylor in that particular instance where the knowledge had been lost and the Supreme Court said okay.

[00:13:02] Speaker 02:
It was known at some point in time and used but it was then lost and so therefore although technically it was known and used we're not going to say that it's a patent-defeating prior art.

[00:13:18] Speaker 04:
And Judge Chen, and this gets back to the question that Judge Moore had asked.

[00:13:23] Speaker 02:
And the theory, I think, was because by having lost that knowledge, the public never at that point had the ability to benefit from the invention.

[00:13:33] Speaker 02:
And so here, what Selenese was doing with its factory, with its plant, in producing these polymers,

[00:13:42] Speaker 02:
the public was able to benefit from the invention, from this unique process for making these kinds of polymers.

[00:13:50] Speaker 04:
So Judge Chen, I think Judge Rich addressed this exact issue in the context of a 102G case.

[00:13:57] Speaker 04:
It's called Polymer vs. Dudzik.

[00:13:59] Speaker 04:
It's 41F2, 1377.

[00:14:03] Speaker 04:
And he made the, his reasoning there was

[00:14:08] Speaker 04:
we do not think that a finding of suppression or concealment is negated simply because a secret use of the invention has been commercial.

[00:14:16] Speaker 04:
And it goes on to say, quote, the public may have received some benefit from such use, but this alone has not so enriched the art as to negate the concealment.

[00:14:26] Speaker 04:
And I think that gets back to sort of the underlying public policy point, which is, as W.L.

[00:14:31] Speaker 04:
Gore put it, early disclosure is a linchpin of the patent system.

[00:14:38] Speaker 04:
interpretations that have been made of 102A and 102B encourage that early disclosure.

[00:14:44] Speaker 04:
I see I'm well into my rebuttal time.

[00:14:46] Speaker 04:
If I may, I would just like to say a few words about the removing limitation and why that is an additional basis.

[00:14:55] Speaker 04:
Because if the court reverses the grant of summary judgment as to invalidity, it would be useful if the court would address all of these issues so that some issues are not taken off the table on remand.

[00:15:06] Speaker 04:
And regardless of whether the selenese process was prior art, as construed, the removing step requires that substantially all of the gelatinous reaction mixture must be discharged from the reactor by the injection of inert gas.

[00:15:19] Speaker 04:
And the evidence shows that is simply just not how the selenese process worked in the United States, or for that matter, the Sanyo process worked in Japan.

[00:15:27] Speaker 04:
And that is because

[00:15:28] Speaker 04:
As Appendix 11458 shows, a heel of polymerized material occupying more than the cone portion of the reactor remained with each cycle.

[00:15:38] Speaker 04:
And that meant when a new batch of polymerization began, a sizable part of the reactor was already taken up.

[00:15:45] Speaker 04:
And what you don't have is what's contemplated in the specification.

[00:15:48] Speaker 04:
The specification, Appendix 42, Column 7, Lines 1 through 3,

[00:15:55] Speaker 04:
says gel can be, quote, completely pushed out of the reactor after opening the shut off element.

[00:16:01] Speaker 04:
That is simply not what happens here.

[00:16:02] Speaker 04:
And if you look at the red brief at pages 52, 53, their principal response is to dispute the facts.

[00:16:10] Speaker 04:
That's a classic fact question that should be addressed on reading.

[00:16:11] Speaker 01:
You're saying you'll win whether or not the process is prior ought or not.

[00:16:15] Speaker 04:
What?

[00:16:16] Speaker 04:
I'm sorry, Judge Laurie?

[00:16:17] Speaker 01:
You're saying you'll win whether or not the process is prior ought or not.

[00:16:21] Speaker 04:
I am.

[00:16:21] Speaker 04:
And if the court has further questions about that.

[00:16:22] Speaker 02:
But you're not disputing the claim construction.

[00:16:25] Speaker 04:
I'm not disputing the claim construction.

[00:16:26] Speaker 04:
And the claim construction requires that substantially all be removed.

[00:16:31] Speaker 04:
And that is simply not what happens.

[00:16:33] Speaker 04:
Now, to the extent that SNF is disputing the claim construction, maybe that creates sort of a quasi-02 micro-type issue, albeit in the summary judgment context, as opposed to in the context of a trial.

[00:16:45] Speaker 04:
But I think that given the clear statement in the specification, there's no reason to dispute the construction.

[00:16:51] Speaker 04:
And under that construction,

[00:16:53] Speaker 04:
All of the material is not substantially removed.

[00:16:56] Speaker 01:
Thank you, counsel.

[00:16:57] Speaker 01:
Thank you, Judge Lurie.

[00:16:58] Speaker 01:
We'll give you three minutes as we bottle back.

[00:17:00] Speaker 04:
Thank you, Judge Lurie.

[00:17:01] Speaker 01:
Mr. Dabney.

[00:17:06] Speaker 03:
Thank you, Judge Lurie.

[00:17:07] Speaker 03:
May it please the court, James Dabney, for the defendant's appellees.

[00:17:14] Speaker 03:
This case involves a straightforward application of pre-AIA 102A

[00:17:23] Speaker 03:
and b, to an undisputed set of facts, the most important ones of which have been the subject of this argument, the transaction agreement that appears in the record at pages 4537 through 4566.

[00:17:38] Speaker 03:
In terms of the statutory text, it is undisputed that the Sanwet process prior to July 1, 1985, was an invention.

[00:17:52] Speaker 03:
It was reduced to practice.

[00:17:53] Speaker 03:
It was being commercialized in an existing industrial plant in Nagoya, Japan.

[00:17:59] Speaker 03:
It is undisputed that Sanyo commercially marketed that process to selenese in the United States.

[00:18:08] Speaker 03:
And that commercial marketing activity is what this court identified in medicines, its in-bank decision in medicines,

[00:18:16] Speaker 03:
a critical triggering event to deciding when an on-sale event could occur.

[00:18:22] Speaker 03:
And with regard to, Judge Moore, your comment about W.L.

[00:18:26] Speaker 03:
Garlock, this Court's decisions in J.A.

[00:18:30] Speaker 03:
LaPorte and in Ray Cavini and medicines recognize that where you have an offer

[00:18:36] Speaker 03:
a commercial marketing of an invention, which results in the offeree receiving full disclosure of the invention.

[00:18:42] Speaker 03:
The fact that it's a third party making the offer doesn't matter.

[00:18:47] Speaker 03:
Further, in the Supreme Court's Helsing decision.

[00:18:49] Speaker 01:
But it was confidential.

[00:18:52] Speaker 03:
In those decisions, the ratio de sedentia of those decisions was that this court distinguished the W.L.

[00:19:00] Speaker 03:
Gore case and said what was important in W.L.

[00:19:03] Speaker 03:
Gore was that

[00:19:04] Speaker 03:
The commercial use of the process in that case didn't result in the vendis of the tape learning what the process was, whereas in J.A.

[00:19:14] Speaker 03:
Laporte and in Inrei Kavini, the on-sale event placed the buyer in possession of the invention, which is exactly what happened here.

[00:19:23] Speaker 03:
Other critical point.

[00:19:24] Speaker 03:
It was characterized as a license.

[00:19:27] Speaker 03:
This transaction was far more than a license.

[00:19:30] Speaker 03:
Article II of the transaction, in pages 5420,

[00:19:34] Speaker 03:
did have a license, but it went on much farther.

[00:19:37] Speaker 03:
Article 3 of the agreement, 4542 to 454042, was a suite of technical services by which Sanyo agreed to provide all of the services necessary to achieve a replication in the United States of the already existing process.

[00:19:59] Speaker 01:
But that still doesn't mean it was a sale of an invention.

[00:20:03] Speaker 03:
Well, when a process is on sale, I would say judge.

[00:20:07] Speaker 01:
A sale transfers all rights.

[00:20:11] Speaker 01:
And in the assignment clause here, they didn't even have sufficient rights to transfer it to anyone else.

[00:20:19] Speaker 03:
In fact, the assignment provision, which is in 4550, is actually very different from what your honor stated.

[00:20:26] Speaker 03:
The assignment provision, unusually in a contract like this, said that Salonese had the right

[00:20:33] Speaker 03:
to retransfer its commercial embodiment of the process to a buyer of the plant where it was instantiated.

[00:20:41] Speaker 03:
And so they not only had the right to resell the technology for money, they actually exercised that right when they sold the plant along with other assets to Hearst in 1987.

[00:20:53] Speaker 03:
So I would say

[00:20:55] Speaker 03:
that to the extent that we're going to get away from the text, and we're not going to ask if Selenese knew the process, or if Selenese used the process, or if the process was an invention, and whether Selenese was another.

[00:21:08] Speaker 00:
There are no agents.

[00:21:09] Speaker 00:
What statutory section are you focusing on?

[00:21:12] Speaker 00:
Are you focusing on known or used under 102A, or public use under 102B?

[00:21:20] Speaker 00:
Statutory section, since you said if we're going to get away from the plain text, I've got to know what plain text you're talking about.

[00:21:26] Speaker 03:
So let's just walk through how 102A applies to this case.

[00:21:29] Speaker 03:
102A fits this case most directly.

[00:21:33] Speaker 03:
No agents of Sanyo, Hearst, or Selenese are named as inventors in the patent.

[00:21:38] Speaker 03:
They are all others within the meaning of the statute.

[00:21:41] Speaker 03:
The San Way process was an invention within the meaning of the statute.

[00:21:46] Speaker 00:
But you're still not talking about the language.

[00:21:49] Speaker 00:
You started by saying, if you judges are going to get away from the plain language, but you haven't mentioned any language of any statute yet in the entire time you've stood here.

[00:21:59] Speaker 00:
So what is the plain language you think applies here?

[00:22:02] Speaker 03:
Known or used by others in this country.

[00:22:05] Speaker 03:
The San Webb process was an invention.

[00:22:07] Speaker 03:
It was known and used.

[00:22:09] Speaker 00:
Do you dispute that it has been understood to be publicly known or used by others under 102A?

[00:22:15] Speaker 00:
Or are you now suggesting that the body of case law that has existed for a very long time, before I was born even, has always said known or used means publicly known or used?

[00:22:28] Speaker 03:
The phrase accessible to the public, known and used by others, is, by definition,

[00:22:35] Speaker 03:
accessible to the public.

[00:22:36] Speaker 03:
It's accessible to someone who has existing and living knowledge of it and can use it for the benefit of the public, which is what we have here.

[00:22:44] Speaker 02:
And if there had been a... What if our case law says if that knowledge or use is under lock and seal, under some kind of confidentiality agreement, then that precludes the characterization of it being known or used as that term, as that phrase is used in 102A.

[00:23:02] Speaker 03:
Well, there's actually two responses to that.

[00:23:05] Speaker 03:
First of all, one of the others in this case was Sanyo itself.

[00:23:10] Speaker 03:
Who's in Japan?

[00:23:11] Speaker 03:
Sanyo was present in the United States for extended periods.

[00:23:14] Speaker 03:
Sanyo was the owner of the Sanwet trademark that was licensed.

[00:23:17] Speaker 03:
Sanyo not only was present in the United States and was deeply involved in the replication of the process here, but it left a permanent record of the process here.

[00:23:28] Speaker 03:
And it also further transmitted

[00:23:31] Speaker 03:
knowledge of its own invention to Hearst in 1987.

[00:23:34] Speaker 03:
So if we're talking about who the others in this case include, the Sanyo Company was one of the others, and they were never under any obligation of confidentiality as to their own invention, point one.

[00:23:47] Speaker 00:
Point two, to come back to... But did they keep it secret?

[00:23:51] Speaker 03:
Well, they commercially exploited it.

[00:23:54] Speaker 03:
by licensing it for money for a half a million dollars up front.

[00:23:58] Speaker 00:
But it's a process.

[00:24:00] Speaker 00:
Yes.

[00:24:00] Speaker 00:
And you haven't offered any evidence, and nor is the issue in front of me, of whether the process itself is reverse-engineerable easily from the product that was sold.

[00:24:08] Speaker 00:
That's not a question that has been presented to this Court to decide.

[00:24:12] Speaker 00:
So at this point in time, I have no reason to believe it was.

[00:24:16] Speaker 00:
So you're saying they had a process and all of the evidence of records suggests that it was of imminent importance to them that that process be maintained in secret.

[00:24:29] Speaker 00:
So are you saying that process is nonetheless publicly available despite their secret maintenance of it?

[00:24:37] Speaker 03:
The process was known and used by Selenese and Hearst.

[00:24:42] Speaker 03:
And the argument is it's not enough that it was known or used by others in this country.

[00:24:47] Speaker 00:
But that's why I started.

[00:24:49] Speaker 00:
You're right.

[00:24:49] Speaker 00:
It isn't enough that it was known or used by others.

[00:24:52] Speaker 00:
Before I was even born, the word public was inserted in there.

[00:24:56] Speaker 00:
Whether it belongs in there or not, I'm sure you can take up with the Supreme Court and will likely try to do so.

[00:25:01] Speaker 00:
That being said, it's been understood by really not just the Federal Circuit but the Supreme Court that the word public was a critical component known and used publicly, publicly known and used.

[00:25:16] Speaker 00:
And Mr. O'Quinn is 100% right that legislation occurs against the backdrop of the understood way in which something operates.

[00:25:24] Speaker 00:
So you seem to want to read that out.

[00:25:31] Speaker 03:
That is not actually the view that we take.

[00:25:35] Speaker 03:
And let me pivot to the 102B part of this case, because the Supreme Court's most recent disposition of this question of whether or not confidentiality on the part of Avendi prevents a transaction from being an on-sale event, of course, is Helsing.

[00:26:00] Speaker 03:
And the only argument that they make, two arguments against Helson, they argue that the reasoning of Helson doesn't apply to what happened here because the persons who made the process available to Selenese was not a person seeking a patent.

[00:26:24] Speaker 03:
Sanya was an inventor.

[00:26:25] Speaker 03:
But it didn't seek a patent.

[00:26:27] Speaker 03:
And so the argument is that they characterized Sanyo as a third party, and that shouldn't count.

[00:26:32] Speaker 03:
We believe that under this court's precedence in J.A.

[00:26:35] Speaker 03:
Laporte and in Ray Cavini, the status of the person who is making the on-sale event should not matter.

[00:26:46] Speaker 03:
The second point that I would make about this particular transaction is that

[00:26:50] Speaker 03:
I would argue that this is an a fortiori case for an on-sale event as compared to the Minton case, which the district judge correctly relied on in this case, just as in Minton.

[00:27:04] Speaker 03:
The contract here, this agreement, called for the delivery of technical services as in Quest Integrity, another case in which this is a much stronger case for on-sale than Quest Integrity was, Judge Dyke's opinion in Quest Integrity.

[00:27:20] Speaker 03:
because the process was actually disclosed to the Vendee here.

[00:27:23] Speaker 03:
On top of that, they delivered the performance guarantees that they put their money where their mouth was.

[00:27:29] Speaker 03:
They said, we have this benchmark.

[00:27:30] Speaker 03:
We already have industrialized this process.

[00:27:33] Speaker 03:
And therefore, we can guarantee you product quality.

[00:27:35] Speaker 02:
Am I misremembering the facts of Minton?

[00:27:38] Speaker 02:
I thought Minton was based on the fact that there was a transfer of a preprogrammed computer that had already baked in the functionality that was claimed in the patented process.

[00:27:50] Speaker 03:
Well, that's not correct factually.

[00:27:52] Speaker 03:
And it also wasn't the reasoning of the case.

[00:27:55] Speaker 03:
The process at issue in Minton

[00:28:00] Speaker 03:
was one that required steps to be performed not just by the consumer at his computer terminal, but also by a back end system that was under the control of a third party.

[00:28:10] Speaker 03:
And Texan stood for Texas.

[00:28:15] Speaker 03:
It was an electronic trading system.

[00:28:18] Speaker 03:
And what this court held in Minton is that what the patentee had done in that case was it had enabled

[00:28:27] Speaker 03:
the licensee to perform the process, and that was deemed to be an on-sale event.

[00:28:33] Speaker 03:
He delivered performance guarantees, as was here.

[00:28:36] Speaker 03:
There was no further development required.

[00:28:39] Speaker 03:
And all the reasons that this court cited in Minson for distinguishing Collor apply here equally, we say.

[00:28:47] Speaker 01:
Now, if we agree with you, doesn't it still have to go back on the fact questions?

[00:28:53] Speaker 01:
Not at all.

[00:28:55] Speaker 01:
The heel and the temperature?

[00:28:56] Speaker 03:
No, absolutely not.

[00:28:58] Speaker 03:
The history of this case is that throughout the entire pretrial discovery period, the other side took the position that they had no corporate knowledge of the Sanwet process.

[00:29:11] Speaker 03:
And therefore, the evidence was completely one-sided on that.

[00:29:15] Speaker 03:
All the expert testimony, all the competent expert testimony in this case

[00:29:20] Speaker 03:
is that the process step described in step 2.3 on appendix 16 is within the language of the claim.

[00:29:26] Speaker 03:
It wasn't until summary judgment had been filed that attorney argument for the first time came in and made the argument that the removing limitation of the patent doesn't describe this step 2.3 because the way in one embodiment, in an industrial embodiment where you have the reactors running in series,

[00:29:48] Speaker 03:
You eject a certain percent.

[00:29:50] Speaker 03:
You refill.

[00:29:50] Speaker 03:
You eject a certain percent.

[00:29:52] Speaker 03:
You refill.

[00:29:52] Speaker 03:
You eject a certain percent.

[00:29:54] Speaker 03:
That was never argued to be outside the scope of the claim.

[00:29:57] Speaker 03:
So the district court correctly held, citing the expert testimony of the other side, that the process, as described in the undisputed documents, is within the scope of the claim.

[00:30:09] Speaker 03:
That was never an issue that they timely raised.

[00:30:12] Speaker 03:
There is no competent evidence.

[00:30:14] Speaker 03:
There is just post-summary judgment attorney argument, including more argument that we heard today.

[00:30:18] Speaker 03:
So no, there is no genuine issue of fact on that.

[00:30:22] Speaker 03:
And I would also point out that with regard to the claim to issue in this case, this case is just like KSR, in that there is no dispute at all as to any historical fact.

[00:30:40] Speaker 03:
There's no dispute as to what the sand wet process was,

[00:30:42] Speaker 03:
There's no dispute as to the difference between the process and the claims.

[00:30:47] Speaker 03:
There's no dispute as to the skill level and the art.

[00:30:49] Speaker 03:
And the difference is if you have a vessel of this type

[00:30:54] Speaker 03:
Both sides, experts say if you're using a vessel of this type, the selection of the cone angle is a matter of routine design choice.

[00:31:03] Speaker 03:
If you want to, if you need to find motivation, you say the motivation is to improve the efficiency of any given amount of pressure.

[00:31:11] Speaker 03:
For any given amount of pressure that's going to force the

[00:31:14] Speaker 03:
gel out of the reactor, a steeper cone length will result in a given amount of pressure generating less friction against the walls and therefore you have motivation if you must characterize the reason for varying the cone angle in that way.

[00:31:27] Speaker 02:
Did the district court point to any expert testimony from both sides?

[00:31:32] Speaker 02:
Yes, both sides.

[00:31:33] Speaker 02:
You said that it's undisputed, but did the decision that we have to review actually point to that?

[00:31:39] Speaker 03:
It did.

[00:31:41] Speaker 03:
It cited in 4301 to 4304 of the appendix, Dr. Freeman points out all the reasons why you would do this.

[00:31:54] Speaker 03:
In the excerpt, I believe it's 4224 of the appendix, the other expert says that for any given material, any given

[00:32:01] Speaker 03:
environment, varying this angle is just a matter of routine design choice.

[00:32:08] Speaker 03:
So we believe, just as in KSR, where summary judgment was affirmed, summary judgment is appropriately granted here.

[00:32:15] Speaker 03:
The transaction, there's no dispute as to the... Do I get an extra three minutes?

[00:32:24] Speaker 01:
We'll give you two.

[00:32:25] Speaker 03:
Okay.

[00:32:29] Speaker 03:
Just to sum up,

[00:32:31] Speaker 03:
To get back to the Coca-Cola formula, for 175 years between 1836 and 2011, we had a first to invent system.

[00:32:46] Speaker 03:
And that meant patents were only granted to people who were the original and first inventor.

[00:32:51] Speaker 03:
On this record, there is no doubt but that these claims described

[00:32:56] Speaker 03:
a subject matter that was known or used and hardly at all were not the original and first inventors.

[00:33:02] Speaker 03:
They want to act as if it's 1836 to 1839, and this third party commercial use should be ignored in deciding who the original and first inventor is.

[00:33:15] Speaker 03:
The reason why the statute should be construed the way we believe they were construed in Gaylor, in Coffin, Brush v. Condit is another important case.

[00:33:24] Speaker 03:
The patent-defeating

[00:33:26] Speaker 03:
event in Brush versus Condit was a carbon pencil lamp that existed for two and a half months in the summer of 1876, after which it was dismantled and was never heard from again until the litigation.

[00:33:39] Speaker 03:
And that was held to be prior knowledge in use.

[00:33:41] Speaker 03:
Why?

[00:33:41] Speaker 03:
Because it was operative.

[00:33:42] Speaker 03:
That was the standard in Coffin.

[00:33:45] Speaker 03:
The Supreme Court decided Reed against Cutter, Bedford versus Coffin versus Ogden, Gaylor, again and again and again in its cases, construing the ancestors to 102A.

[00:33:54] Speaker 03:
If there's a single person who has an operative embodiment of an invention, that means that the applicant for patent is not the original and first inventor.

[00:34:05] Speaker 03:
That is the principle that 102A codifies.

[00:34:08] Speaker 03:
And I suggest with regard to the UCB case, it's very telling that that case is not cited in either their opening of the reply brief.

[00:34:15] Speaker 03:
And I suggest that the UCB case makes clear that a single person's prior knowledge of an operative embodiment

[00:34:23] Speaker 03:
Enough to be patent-defeating and it would made no difference in the UCB case that the person who put that transdermal patch on her arm Told her relative.

[00:34:33] Speaker 03:
I'm I promise not to tell you what I did Thank you judge.

[00:34:36] Speaker 01:
Thank you counsel Mr.. O'Quinn three minutes because we consumed a lot of your time earlier with questions I

[00:34:46] Speaker 04:
Thank you, Judge Laurie.

[00:34:48] Speaker 04:
Let me just first say, Judge Moore, you asked about whether the process here would be reverse-engineerable from the product itself.

[00:34:57] Speaker 04:
It wouldn't.

[00:34:57] Speaker 04:
In fact, the patent itself tells you at column 1, lines 14 to 22, that's at appendix 39, there are other ways that the end product can be made.

[00:35:05] Speaker 04:
And you can also see that reflected at appendix 53-33 to 53-34.

[00:35:12] Speaker 04:
So it can't be reverse-engineered from the process.

[00:35:16] Speaker 04:
Now, there have been a number of sort of broad-brush statements that have been made about 102A and how the system in our country worked until the AIA was adopted.

[00:35:25] Speaker 04:
A couple of points I think is worth noting.

[00:35:27] Speaker 04:
Number one, the AIA did away with known or used.

[00:35:30] Speaker 04:
What did it replace it with?

[00:35:32] Speaker 04:
Public use.

[00:35:33] Speaker 04:
and otherwise, quote, available to the public, the very language that is found in this court's cases.

[00:35:39] Speaker 04:
Moreover, we didn't have a pure first to invent system even before that.

[00:35:43] Speaker 04:
102G shows you that's not the case, because if you had an earlier inventor who suppressed or concealed the invention, they don't count.

[00:35:53] Speaker 04:
And indeed, that exception to 102G.

[00:35:54] Speaker 00:
In any event, we don't have one anymore.

[00:35:56] Speaker 04:
Well, that's true.

[00:35:57] Speaker 04:
But for purposes of interpreting the provisions that are in front of you,

[00:36:02] Speaker 04:
102G and the exceptions to it show you that 102A can't be interpreted the way that SNF wants to interpret it.

[00:36:09] Speaker 04:
And historically, it hasn't been interpreted that way.

[00:36:11] Speaker 04:
And indeed, Judge Chen, with respect to your earlier question, metalizing engineering and Gilman were cases that the Congress had before them in 1952, when they recodified the Patent Act.

[00:36:23] Speaker 04:
And the reviser's note specifically referenced that cases, and not just Supreme Court cases, had interpreted known or used to require a public

[00:36:31] Speaker 04:
a public use.

[00:36:32] Speaker 00:
Mr. Quinn, you suggested that you were hoping we would resolve your gel-healed fact question before it went back.

[00:36:41] Speaker 00:
But why would we do that if we agreed with your argument that this is not prior art and there couldn't have been used as your client?

[00:36:50] Speaker 04:
Sure.

[00:36:51] Speaker 04:
So Judge Moore, if you agree with us that it's not prior art, then that should resolve the case and should result ultimately in a grant of summary judgment to us.

[00:37:00] Speaker 04:
to the extent that the court were to reverse the grant of summary judgment on the prior art grounds, but still nonetheless send it back to whether there were fact questions related to that, then it would be necessary to reach.

[00:37:15] Speaker 00:
But what fact questions be related to that?

[00:37:16] Speaker 00:
If we agree with you that this isn't either 102A or 102B prior art, I guess you had earlier said you hoped we would nonetheless

[00:37:26] Speaker 00:
Give the district court what felt to me like advisory Decision on the jail healed in light of if we were to agree with you that it's not even prior art Why would we?

[00:37:36] Speaker 00:
then speculate about whether there are still fact questions.

[00:37:39] Speaker 04:
I'm sorry if I misspoke, Judge Moore.

[00:37:42] Speaker 04:
My simple point was, if for whatever reason this case were to go back.

[00:37:46] Speaker 00:
Well, it has to go back, right?

[00:37:47] Speaker 00:
Because we're reversing a grant of summary judgment.

[00:37:49] Speaker 00:
Right.

[00:37:50] Speaker 00:
We're not instituting a grant of summary judgment in your favor.

[00:37:52] Speaker 00:
I have no idea what other defenses may not have been addressed in this case.

[00:37:57] Speaker 00:
I don't know where the rest of the case stands.

[00:37:59] Speaker 00:
So of course it goes back.

[00:38:02] Speaker 04:
Let me try to be more precise.

[00:38:06] Speaker 04:
To the extent that the issue of invalidity with respect to the Selenese process is still on the table on remand, then I think the court would need to go on and address the issue about the heel remaining and the grant of summary judgment on those grounds, because otherwise the district court would then

[00:38:32] Speaker 04:
say, well, you're precluded from arguing.

[00:38:34] Speaker 01:
In other words, you don't think we should kick the heel question down the road.

[00:38:39] Speaker 04:
That's a great way to put it, Judge Laurie.

[00:38:41] Speaker 01:
You have exceeded your time.

[00:38:44] Speaker 01:
Thank you very much.

[00:38:45] Speaker 01:
The case is submitted.

[00:38:46] Speaker 01:
Thank you very much.