Estee Lauder Inc. v. L'Oreal, S.A.

Decision Date03 November 1997
Docket NumberNo. 96-1512,96-1512
PartiesESTEE LAUDER INC., Plaintiff-Appellee, v. L'OREAL, S.A., Defendant-Appellant.
CourtU.S. Court of Appeals — Federal Circuit

Gerald J. Flintoft, Pennie & Edmonds, of New York City, argued, for plaintiff-appellee. With him on the brief were Anthony M. Insogna, Thomas G. Rowan, and Clifford E. Wilkins, Jr., of New York City, and Marcia H. Sundeen, of Washington, DC.

Michael R. Slobasky, Jacobson, Price, Holman & Stern, PLLC, of Washington, DC, argued, for defendant-appellant. With him on the brief was D. Douglas Price.

Before MAYER, RADER, and SCHALL, Circuit Judges.

MAYER, Circuit Judge.

L'Oreal, S.A. appeals the judgment of the United States District Court for the District of Columbia, 40 USPQ2d 1425, 1996 WL 679430 (D.D.C.1996), reversing a decision of the United States Patent and Trademark Office Board of Patent Appeals and Interferences and awarding Estee Lauder Inc. priority to an invention for sunscreens utilizing a copper compound to boost their Sun Protection Factor. Because the court erred in holding that Estee Lauder's inventors did not have to establish that they recognized the success of their invention before the date L'Oreal's inventors reduced their invention to practice, we reverse.

Background

This case involves an interference between U.S. patent application serial number 07/135,666, filed by Walter P. Smith and Edward Pelle, which is assigned to Estee Lauder Inc., and U.S. patent application serial number 07/180,556, filed by Michel Hocquaux and Georges Rosenbaum, which is assigned to L'Oreal, S.A. 1 The applications are directed to a composition for protecting skin from damage caused by ultraviolet (UV) light exposure or to its method of use. The sole count provides:

A composition for protecting skin from damage caused by exposure to ultraviolet light said composition comprising a sunscreen agent and copper 3', 5' diisopropylsalicylate [ (CuDIPs) ] in a cosmetic carrier or a method for protecting skin from damage caused by exposure to ultraviolet light comprising apply [sic] to the skin an effective amount of the composition comprising a sunscreen agent and copper 3', 5' diisopropylsalicylate in a cosmetic carrier.

The '666 application was filed on December 21, 1987, while the '556 application was filed on April 12, 1988. Because L'Oreal had applied for a patent for the same invention in Luxembourg on April 13, 1987, however, it was given the benefit of that filing date and deemed the senior party. See 35 U.S.C. § 119 (1994). Consequently, Estee Lauder was required to prove priority by preponderant evidence.

Estee Lauder first became interested in the potential use of CuDIPs to boost the Sun Protection Factor (SPF) in sunscreens in the summer of 1986. Dr. Walter Smith, Director of Estee Lauder's Biological Research Department (BRD), requested that Edward Pelle, a senior scientist in the BRD, attend a conference on copper complexes in August 1986, which he did. The conference was held by Dr. John R.J. Sorenson of the University of Arkansas, who is reputed to be the world's leading expert on CuDIPs.

Pelle spoke with Sorenson about the potential use of CuDIPs to reduce skin inflammation and to minimize damage caused by exposure to the sun. Upon his return, Pelle discussed the conference and Sorenson's qualifications with Smith, and they agreed that Sorenson was their best source of CuDIPs. In September 1986, Pelle telephoned Sorenson and ordered two grams of CuDIPs for $20.00.

Later that month, Pelle received from Sorenson two grams of material he believed to be CuDIPs (the "material"). He used the material to perform several experiments to test whether CuDIPs inhibited inflammation after UV light exposure. First, in November 1986, Pelle applied a template with two square-shaped openings to his arm. On one opening he applied isopropyl alcohol (IPA), while on the other he placed a solution of IPA mixed with the material. Pelle then exposed his arm to UV light, after which he applied the same solutions to the same openings a second time. Pelle found that the site treated with IPA only was red, whereas the site treated with IPA and the material was not. He then took a photograph of his arm, which he taped into his laboratory notebook. Pelle showed his arm to Smith and to Ken Marenus, who began working as laboratory manager and Pelle's supervisor in the BRD that day, and the three discussed the results. Pelle then repeated his arm test, but this time he did not apply the material until after the UV exposure. He found that the material effectively reduced redness.

Pelle and Marenus then added the material to one of Estee Lauder's SPF 6 sunscreen products. They mixed two different concentrations of the material to the sunscreen samples, with the lower (.3 millimolar) concentration labeled BRD 461, and the higher (3.0 millimolar) concentration labeled BRD 462. Marenus and Marie Randazzo, an Estee Lauder employee whose duties included obtaining and sending samples to contract laboratories for SPF testing, next filled out requests for biomedical testing on BRD 461 and 462. They sent the samples to Harrison Research Laboratories, an independent laboratory which both Estee Lauder and L'Oreal use, indicating the SPF range on which the test should focus.

In January 1987, Dr. Lynne Harrison, president and principal investigator of the SPF testing laboratory at Harrison Research, told Marenus the results of the testing on BRD 461 and 462, which were confirmed in a written report received later that month. Pelle and Marenus analyzed the results and determined that the addition of the material they believed was CuDIPs increased the SPF. Both Pelle and Marenus memorialized this determination in separate memoranda to Smith.

Smith, Marenus, and Pelle then decided to expand testing to see whether CuDIPs was effective in boosting SPF in a broader range of sunscreens. Marenus telephoned Sorenson and ordered 100 more grams of CuDIPs for $500. It is undisputed for purposes of this appeal that this material was, in fact, CuDIPs. In late February 1987, Pelle prepared samples incorporating .3 millimolar of CuDIPs into SPF 15 (BRD 498), 25 (BRD 499), and 20 (BRD 500) sunscreens. Pelle also prepared a control sample (BRD 497) containing only SPF 15 sunscreen, which was necessary because Marenus' earlier testing on SPF 15 had not shown an SPF boost.

On or about February 26, 1987, a request for biomedical testing was completed and given to Randazzo for BRD 497-500. On or about March 9, 1987, she sent the samples to Harrison, accompanied by a cover letter, requesting SPF testing and telephonic notification of the test results. Pelle subsequently received a verbal report of partial results from Randazzo, who would have received them from Harrison. The partial results are reflected in an undated page of notes in Pelle's handwriting. The final written results were dated and received after April 13, 1987.

Pelle offered varying and indefinite testimony as to when he received the partial, verbal results. At trial, he claimed that he received them "in the early part of April"; more specifically, "around the first week in April of 1987." He also testified that he had requested the results by March 12, 1987, but they actually arrived "a little bit after that." At his deposition, taken two years before trial, however, Pelle testified that his best recollection was that he received the partial results sometime in "the spring of 1987." Ultimately, the court found Pelle's testimony lacking in credibility. Randazzo, on the other hand, simply did not recall when Harrison telephoned her with the partial results. Nor did any documentary evidence of hers reveal such date.

For her part, Harrison testified that all SPF testing was completed on BRD 497-500 by April 10, 1987. She finished the BRD 497 and 498 testing before 2:00 p.m. on April 7, 1987. Under her normal practice, Harrison testified, she would have called Randazzo with the partial results on April 7, 1987. While she offered long distance telephone records showing a telephone call to Randazzo's extension at 2:36 p.m. on that date, she did not recall making the call to Randazzo with the partial results. Harrison conceded, however, that she was working on other SPF testing for Estee Lauder during that period, so she could have called Randazzo with results from those tests. Harrison also testified that she would have notified Randazzo of the remaining results on BRD 499 and 500 by Friday, April 10, or at the latest by Tuesday, April 14, after the critical date.

Pelle testified that upon receiving the partial results from Randazzo, he calculated the means of the BRD 497 and 498 results, compared them, and concluded that CuDIPs was effective at boosting SPF. He also compared the results of BRD 499 against its nominal SPF and determined that they showed a higher SPF. He did not calculate a mean for the BRD 499 or 500 results. Pelle could not pinpoint when he performed these calculations and comparisons, however. Nor did any documentary evidence answer this question. Moreover, although Pelle shared these results with Marenus, Marenus could not say when this occurred.

Estee Lauder then filed the '666 application. The United States Patent and Trademark Office declared an interference between the Estee Lauder and L'Oreal applications on December 6, 1989. Before the Board of Patent Appeals and Interferences, Estee Lauder relied solely on the experiments leading up to and culminating in the BRD 461-62 tests to establish its reduction to practice. It did not rely at all on the BRD 497-500 tests, which it viewed as cumulative. Further, Estee Lauder did not attempt to establish that it was first to conceive the invention and then diligently reduce it to practice. The board found that Estee Lauder had failed to prove that the initial 2-gram sample it obtained from Sorenson was actually CuDIPs....

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