Application of Theis

• Decision Date: 06 December 1979
• Docket Number: Appeal No. 79-574.
• Citation: 610 F.2d 786
• Parties: In the Matter of the Application of Peter F. THEIS.
• Court: U.S. Court of Customs and Patent Appeals (CCPA)

610 F.2d 786

In the Matter of the Application of Peter F. THEIS.

Appeal No. 79-574.

United States Court of Customs and Patent Appeals.

December 6, 1979.

Jerold A. Jacover, Chicago, Ill., attorney of record, for appellant, John L. Cline, Chicago, Ill., of counsel.

Joseph F. Nakamura, Washington, D. C., for the Commissioner of Patents, Thomas E. Lynch, Washington, D. C., of counsel.

Before MARKEY, Chief Judge, RICH, BALDWIN and MILLER, Judges, and NEWMAN,^* Judge.

RICH, Judge.

This appeal is from the decision of the Patent and Trademark Office (PTO) Board of Appeals (board) affirming the rejection of claims 11-23, all claims in application serial No. 604,930, filed August 15, 1975, entitled "Programmed Conversation Recording System."¹ The claims were rejected under 35 U.S.C. § 102(b) as drawn to subject matter which had been on sale for more than one year prior to the filing date of the parent application. We affirm.

The Invention

Appellant's invention is a system capable of simulating a conversation with a respondent. The system is programmed with a series of prerecorded statements or questions which are played to the respondent. After hearing each statement, the respondent has an indefinite time in which to give a response which is recorded by the system. The system then responds to the voice or vocal pauses made by the respondent by playing the next statement or question to the respondent and recording the corresponding response until the needed information has been obtained.

Claim 11 is illustrative:

11. Apparatus for simulating a conversation with a respondent including a plurality of pre-recorded messages which are playable in sequence in response to a corresponding response from the respondent comprising:

means for detecting a pause in the respondent's communication;

means responsive to said pause for playing the next prerecorded message;

means for detecting a lack of response from the respondent to a prerecorded message; and

means responsive to said lack of a response for altering said sequence.

Although one of the principal uses contemplated by appellant for his system is in conjunction with a telephone system wherein the respondent is a telephone caller, the claims are not limited to include telephone apparatus. Appellant's specification states that "the system has a number of applications that do not utilize the telephone system," and cites several examples of non-telephone related applications.

Background

In order to overcome a 35 U.S.C. § 102(a) rejection based upon a patent issued to Winterhalter, cited by appellant in a prior art statement to the PTO, appellant submitted an affidavit under Rule 131 to swear back of that reference.² Included in the affidavit, dated June 22, 1976, were exhibits I, J, and K, all invoices evidencing delivery to customers of systems embodying the claimed invention. The affidavit stated that the systems were delivered prior to June 4, 1973, the filing date of the reference.

In response, the examiner entered a rejection under § 102(b), stating:

Applicant's exhibits I through J sic K suggest that the device was "on sale" more than one year prior to the filing date of the original application. In order to overcome this rejection applicant should research the criteria for "experimental use" and then set forth facts which show applicant meets the criteria.

The critical date, one year prior to the date on which appellant's parent application was filed, is February 4, 1973.

In an attempt to overcome the § 102(b) rejection, appellant submitted three additional affidavits of his own, two affidavits by Buchberger, his engineering assistant, and one affidavit by Mitchel, vice president of Market Facts, Inc. (Market Facts), a recipient of two of the systems.

Appellant's additional affidavits stated that six systems had been offered to customers including Montgomery Ward, J. C. Penney, Market Facts, and Household Finance Corporation, prior to the critical date.³ In addition, appellant's affidavits, and those of Buchberger, detailed the nature of the problems encountered with the systems, concluded that the systems were incapable of functioning in their intended manner until after the critical date, and set forth the various procedures undertaken to cure the defects.

The Mitchel affidavit corroborated that the systems were delivered to Market Facts and installed prior to the critical date. The affidavit further stated that the systems did not function, that appellant expended considerable effort in attempts to get them to work, and that the systems never did function as intended and were disconnected. Accompanying the affidavit were exhibits A, B, and C, copies of correspondence between applicant and Market Facts concerning the acquisition by Market Facts of the systems in question.

The examiner was of the opinion that Exhibits A thru C, submitted with the Mitchel affidavit, evidenced a contract of sale between appellant and Market Facts. In exhibit A, Mitchel states: "The units when installed will not be considered purchased until both are working to the complete satisfaction of Market Facts." In exhibit B, Mitchel states, in toto, "This letter serves as purchase authorization for two Con-Mode system trademark units. This purchase is made under the conditions of our letter to you dated December 6, 1972, and your letter to Market Facts dated December 20, 1972." (Emphasis ours.)

Appellant contended that the deliveries made prior to the critical date were for experimental purposes and thus fell under the exception to the statutory loss of right to patent provision, § 102(b), which exception has existed at least since Elizabeth v. Pavement Co., 97 U.S. 126, 24 L.Ed. 1000 (1877). For this argument, he relies on the fact that the systems did not work as delivered, the fact that several of the invoices for systems delivered prior to the critical date contained the legend "6 month evaluation,"⁴ and the fact that the systems, after installation, were constantly modified and repaired by appellant and Buchberger in an attempt to get them to function properly.

Before the board, appellant argued that although the equipment was delivered to various recipients, title to the equipment remained with appellant, and so no "sales" were consummated. He further denied that the systems were on sale because they were used by the recipients for evaluation purposes.

Appellant continued to press his argument that the use of the systems prior to the critical date was experimental in nature. In addition, appellant argued that since the systems were inoperative for their intended purposes, they did not embody the claimed invention. Thus, according to appellant, that which was in use prior to the critical date was not the claimed invention, making the loss of right provision of § 102(b) inapplicable.

The Board

The board found that the systems bearing serial Nos. 001-004 were delivered prior to the critical date.⁵ The board noted that, of the systems delivered prior to the critical date, only serial No. 001 was, according to the invoice, delivered for a "6 month evaluation." Although Mitchel averred in his affidavit that the systems delivered to Market Facts were for a six-month evaluation period, the board found that this was contradicted by exhibits A, B, and C accompanying the affidavit. The board observed that these letters (portions of which we have quoted supra) were silent regarding any evaluation, experimentation, or control of the systems by appellant.

Appellant had urged that the statement in exhibit A (Mitchel's letter of December 6, 1972), viz: "The units when installed will not be considered purchased until both are working to the complete satisfaction of Market Facts," corroborated the statement in the Mitchel affidavit that the systems were delivered for a six-month evaluation period. However, the board viewed this statement as "no more than a demand for a money back guarantee; a warranty, a right of recission or a right to a refund." The board viewed the exhibits as evidence of a contract of sale:

The correspondence manifestly constitutes an offer to buy under certain conditions, a counter offer to sell on modified conditions and a purchase authorization. In our opinion, this correspondence between appellant and Mitchel is clear evidence that the equipment was "on sale" prior to the critical date. Whether or not a sale was, in fact, consummated is not controlling, although, as we view the evidence, a sale to Market Facts was made prior to the critical date.

The board held that other evidence of record tended to bolster its conclusion that the system was on sale prior to the critical date. A letter from appellant responding to questions from Lee Weber, Marketing Manager of Sears Roebuck, dated December 21, 1971, about appellant's "ability to produce adequately for Sears' requirements," purported to "clarify our production abilities" and proposed "a special production line for your requirements." Status reports regarding appellant's attempts to sell to Sears and Wards, both dated February 2, 1972, detailed appellant's plans to have those two giant retailers test the systems against competing systems with the ultimate objective of making a sale. A letter to Charles Brown of Associated Merchandising, dated June 14, 1972, described the system and advised that within a week appellant would be in touch to give Brown a phone number to call for a demonstration of the system. A letter from appellant to John H. Rosenhein of Universal Training Systems Company, dated July 10, 1972, offered to show Rosenhein what Wards and Sears were doing with the system, referring to them as "customers."

Finally, the board relied on a press release, dated January 7, 1973, announcing the system at the National Retail Merchant's Association Annual Retailer's Business and Equipment Exposition, as "strong evidence of an `on sale' status." At this retailer's trade show, appellant had placed a...