Netscape Communications Corp. v. Konrad

• Decision Date: 09 July 2002
• Docket Number: No. 01-1455.,01-1455.
• Citation: 295 F.3d 1315
• Parties: NETSCAPE COMMUNICATIONS CORPORATION, Plaintiff/Counterclaim Defendant-Appellee, and Microsoft Corporation, Plaintiff/Counterclaim Defendant-Appellee, and America Online, Inc., Counterclaim Defendant-Appellee, v. Allan M. KONRAD, Defendant/Counterclaimant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

295 F.3d 1315

NETSCAPE COMMUNICATIONS CORPORATION, Plaintiff/Counterclaim Defendant-Appellee, and Microsoft Corporation, Plaintiff/Counterclaim Defendant-Appellee, and America Online, Inc., Counterclaim Defendant-Appellee, v. Allan M. KONRAD, Defendant/Counterclaimant-Appellant.

No. 01-1455.

United States Court of Appeals, Federal Circuit.

July 9, 2002.

Rehearing Denied August 2, 2002.

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John D. Vandenberg, Klarquist Sparkman, LLP, of Portland, OR, argued for plaintiff/counterclaim defendant-appellee, Microsoft Corporation. With him on the brief was Kristin L. Cleveland. Of counsel on the brief were Charles K. Verhoeven, and Jennifer K. Hartog, Quinn Emanuel Urquhart Oliver & Hedges, LLP, of San Francisco, CA, for plaintiff/counterclaim defendant-appellee, Netscape Communications Corporation, and counterclaim defendant-appellee, America Online, Inc. Of counsel was T. Andrew Culbert, Microsoft Corporation, of Redmond, Washington.

Susan Marie Spaeth, Townsend and Townsend, of Palo Alto, CA, argued for defendant/counterclaimant-appellant. On the brief were Scott R. Campbell, and Oriet Cohen Supple, Zelle, Hofmann, Voelbel, Mason & Gette, L.L.P., of San Francisco, CA; and William D. Cramer, Richard G. Urquhart, and Brett A. Wallingford, Zelle, Hofmann, Voelbel, Mason & Gette, L.L.P., of Dallas, TX.

Before MAYER, Chief Judge, NEWMAN and PROST, Circuit Judges.

MAYER, Chief Judge.

Allan M. Konrad appeals from the judgment of the United States District Court for the Northern District of California granting Netscape Communications Corp., Microsoft Corp., and America Online, Inc. ("Netscape") summary judgment that U.S. Patent Nos. 5,544,320 (the "'320 patent"), 5,696,901 (the "'901 patent"), and 5,974,444 (the "'444 patent") are invalid under the public use and on-sale bars of 35 U.S.C. § 102(b). Netscape Communications Corp. v. Konrad, No. C 00-20789 JW (N.D. Cal. April 2, 2001). Because we agree with the district court that Konrad has not raised a genuine issue as to any material fact pertaining to pre-critical date demonstrations, public uses by others, and his commercial offer to create the high energy physics remote database object, we affirm.¹

Background

Konrad is the owner of the '320, '901, and '444 patents, all directed to systems that allow a computer user to access and search a database residing on a remote computer. He began working as a staff scientist for the Lawrence Berkeley Laboratory in 1977, where he studied how an individual computer workstation user could obtain services from a remote computer. On September 26, 1990, while working with Cynthia Hertzer, a Lawrence Berkeley Laboratory staff assistant, Konrad successfully tested the remote database object system. The first prototype of this system was configured to access Lawrence Berkeley Laboratory's STAFF database from a remote workstation. The Lawrence Berkeley Laboratory STAFF database resided on an IBM mainframe computer on the Berkeley campus of the University of California. A local starter portion of the remote database object system prototype was created for installation on users' personal computers to allow the display of an icon by which the user could access the remote database. In 1991, Konrad and Hertzer adapted the Lawrence Berkeley Laboratory STAFF remote database object system prototype for the high energy physics database, maintained at the Stanford Linear Accelerator Center, which is a national laboratory operated by Stanford University. The high energy physics database was a compilation of abstracts and technical papers used as a research tool for physicists worldwide.

The '320 patent, Konrad's first issued patent, is a continuation of an application filed on January 8, 1993. The '901 patent is a continuation of the '444 patent application, which is a continuation of the '320 patent application. Thus, the earliest filing date that Konrad is entitled to is January 8, 1993, making the critical date for the public use and on-sale inquiry January 8, 1992.

On February 8, 2000, Konrad filed a patent infringement suit in the District Court for the Eastern District of Texas, alleging that thirty-nine commercial entities, all customers of Netscape, had infringed the '320, '901, and '444 patents. Citing threatened customer relationships, Netscape filed a declaratory judgment action against Konrad in the District Court for the Northern District of California, seeking a judgment of invalidity, noninfringement, and unenforceability. Netscape moved for partial summary judgment that prototypes of the invention were in public use or on-sale under 35 U.S.C. § 102(b) based on Konrad's activities prior to January 8, 1992. The California district court entered partial summary judgment for Netscape concluding that: (1) Konrad's demonstration of the claimed invention to Shuli Roth and Dick Peters, University of California computing personnel, without any obligation of confidentiality was a public use; (2) his demonstration of the high energy physics remote database object to the Stanford Linear Accelerator Center in conjunction with the use of the remote database object by University Research Association Superconducting Super Collider Laboratory employees was a public use; and (3) his offer to create the high energy physics remote database object system for the University Research Association Superconducting Super Collider Laboratory in exchange for four months full-time employment or no more than $48,000, and his stipulation that the reduction to practice of the invention occurred prior to that event, satisfied the on-sale bar. Konrad stipulated that all of the claims of the patents in suit would be invalid if the court were to find that his activities qualified as prior art. In view of this stipulation, on June 18, 2001, the district court entered the parties' joint stipulation for final judgment on invalidity. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

Discussion

We review a district court's grant of summary judgment de novo. Bose Corp. v. JBL, Inc., 274 F.3d 1354, 1358, 61 USPQ2d 1216, 1218 (Fed.Cir.2001). "Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Vanmoor v. Wal Mart Stores, Inc., 201 F.3d 1363, 1365, 53 USPQ2d 1377, 1378 (Fed.Cir. 2000). Summary judgment is improper "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). When ruling on a motion for summary judgment, all of the nonmovant's evidence is to be credited, and all justifiable inferences are to be drawn in the nonmovant's favor. Id. at 255, 106 S.Ct. 2505.

Under 35 U.S.C. § 102(b), "[a] person shall be entitled to a patent unless... the invention was in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States...." 35 U.S.C. § 102(b) (2000). Whether a patent is invalid for a public use or sale is a question of law based on underlying facts. Intel Corp. v. Int'l Trade Comm'n, 946 F.2d 821, 829, 20 USPQ2d 1161, 1169 (Fed.Cir.1991). A conclusion that a section 102(b) bar invalidates a patent must be based on clear and convincing evidence. Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544, 549, 16 USPQ2d 1587, 1591 (Fed.Cir. 1990).

I.

Public use includes "any use of [the claimed] invention by a person other than the inventor who is under no limitation, restriction or obligation of secrecy to the inventor." Petrolite Corp. v. Baker Hughes Inc., 96 F.3d 1423, 1425, 40 USPQ2d 1201, 1203 (Fed.Cir.1996) (citing In re Smith, 714 F.2d 1127, 1134, 218 USPQ 976, 983 (Fed.Cir.1983)). "The public use bar serves the policies of the patent system, for it encourages prompt filing of patent applications after inventions have been completed and publicly used, and sets an outer limit to the term of exclusivity." Allied Colloids v. Am. Cyanamid Co., 64 F.3d 1570, 1574, 35 USPQ2d 1840, 1842 (Fed.Cir.1995).

The law recognizes that an inventor may test his invention in public without incurring the public use bar. "Experimental use negates public use; when proved, it may show that particular acts, even if apparently public in a colloquial sense, do not constitute a public use within the meaning of section 102." Baxter Int'l, Inc. v. Cobe Labs., Inc., 88 F.3d 1054, 1059, 39 USPQ2d 1437, 1441 (Fed.Cir.1996) (citing TP Labs., Inc. v. Prof'l Positioners, Inc., 724 F.2d 965, 971, 220 USPQ 577, 582 (Fed.Cir.1984)). "The use of an invention by the inventor himself, or of any other person under his direction, by way of experiment, and in order to bring the invention to perfection, has never been regarded as such a use." City of Elizabeth v. Am. Nicholson Pavement Co., 97 U.S. 126, 134, 24 L.Ed. 1000 (1877).

We look to the totality of the circumstances when evaluating whether there has been a public use within the meaning of section 102(b). Sinskey v. Pharmacia Ophthalmics Inc., 982 F.2d 494, 498, 25 USPQ2d 1290, 1293 (Fed.Cir. 1992). The totality of the circumstances is considered in conjunction with the policies underlying the public use bar. Tone Bros., Inc. v. Sysco Corp., 28 F.3d 1192, 1198, 31 USPQ2d 1321, 1324 (Fed.Cir. 1994). The circumstances may include: the nature of the activity that occurred in public; the public access to and knowledge of the public use; whether there was any confidentiality obligation imposed on persons who observed the use; whether persons other than the inventor performed the testing; the number of tests; the length of the test period in relation to tests of similar devices; and whether the inventor received payment for the testing. See Allied Colloids, 64 F.3d at 1574, 35 USPQ2d at 1842; Baker Oil Tools, Inc. v. Geo Vann, Inc., 828 F.2d 1558, 1564, 4 USPQ2d 1210, 1214 (Fed.Cir.1987); In...