Paulik v. Rizkalla

• Decision Date: 22 April 1985
• Docket Number: No. 84-787,No. 99764,84-787,99764
• Parties: Frank E. PAULIK and Robert G. Schultz, Appellants, v. Nabil RIZKALLA and Charles N. Winnick, Appellees. AppealInterference
• Court: U.S. Court of Appeals — Federal Circuit

Page 1270

760 F.2d 1270

226 U.S.P.Q. 224

Frank E. PAULIK and Robert G. Schultz, Appellants, v. Nabil RIZKALLA and Charles N. Winnick, Appellees.

Appeal No. 84-787.

Interference No. 99764.

United States Court of Appeals Federal Circuit.

April 22, 1985.

James H. Laughlin, Jr., Benoit, Smith & Laughlin, Arlington, Va., argued, for appellants; Wendell W. Brooks, Monsanto Co., St. Louis, Mo., of counsel.

William C. Long, The Halcon SD Group, Inc., New York City, argued, for appellees. With him on brief was Riggs T. Stewart, of counsel.

Before MARKEY, Chief Judge, and FRIEDMAN, RICH, DAVIS, BALDWIN, KASHIWA, BENNETT, MILLER, SMITH, NIES, NEWMAN and BISSELL, Circuit Judges. ^*

PAULINE NEWMAN, Circuit Judge.

This appeal is from the decision of the United States Patent and Trademark Office Board of Patent Interferences (Board), awarding priority of invention to the senior party Nabil Rizkalla and Charles N. Winnick (Rizkalla), on the ground that the junior party and de facto first inventors Frank E. Paulik and Robert G. Schultz (Paulik) had suppressed or concealed the invention within the meaning of 35 U.S.C. Sec. 102(g). We vacate this decision and remand to the Board.

I.

Rizkalla's patent application has the effective filing date of March 10, 1975, its parent application. Paulik's patent application was filed on June 30, 1975. The interference count is for a catalytic process for producing alkylidene diesters such as ethylidene diacetate, which is useful to prepare vinyl acetate and acetic acid. Paulik presented deposition testimony and exhibits in support of his claim to priority; Rizkalla chose to rely solely on his filing date.

The Board held and Rizkalla does not dispute that Paulik reduced the invention of the count to practice in November 1970 and again in April 1971. On about November 20, 1970 Paulik submitted a "Preliminary Disclosure of Invention" to the Patent Department of his assignee, the Monsanto Company. The disclosure was assigned a priority designation of "B", which Paulik states meant that the case would "be taken up in the ordinary course for review and filing."

Despite occasional prodding from the inventors, and periodic review by the patent staff and by company management, this disclosure had a lower priority than other patent work. Evidence of the demands of other projects on related technology was offered to justify the patent staff's delay in acting on this invention, along with evidence that the inventors and assignee continued to be interested in the technology and that the invention disclosure was retained in active status.

In January or February of 1975 the assignee's patent solicitor started to work toward the filing of the patent application; drafts of the application were prepared, and additional laboratory experiments were requested by the patent solicitor and were duly carried out by an inventor. The evidentiary sufficiency of these activities was challenged by Rizkalla, but the Board made no findings thereon, on the basis that these activities were not pertinent to the determination of priority. The Board held that "even if Paulik demonstrated continuous activity from prior to the Rizkalla effective filing date to his filing date ... such would have no bearing on the question of priority in this case", and cited 35 U.S.C. Sec. 102(g) ¹ as authority for the statement that "[w]hile diligence during the above noted period may be relied upon by one alleging prior conception and subsequent reduction to practice, it is of no significance in the case of the party who is not the last to reduce to practice". The Board thus denied Paulik the opportunity to antedate Rizkalla, for the reason that Paulik was not only the first to conceive but he was also the first to reduce to practice.

The Board then held that Paulik's four-year delay from reduction to practice to his filing date was prima facie suppression or concealment under the first clause of section 102(g), that since Paulik had reduced the invention to practice in 1971 and 1972 he was barred by the second clause of section 102(g) from proving reasonable diligence leading to his 1975 filing, and that in any event the intervening activities were insufficient to excuse the delay. The Board refused to consider Paulik's evidence of renewed patent-related activity.

II.

The Board's decision converted the case law's estoppel against reliance on Paulik's early work for priority purposes, into a forfeiture encompassing Paulik's later work, even if the later work commenced before the earliest activity of Rizkalla. According to this decision, once the inference of suppression or concealment is established, this inference cannot be overcome by the junior party to an interference. There is no statutory or judicial precedent that requires this result, and there is sound reason to reject it.

United States patent law embraces the principle that the patent right is granted to the first inventor rather than the first to file a patent application. ² The law does not inquire as to the fits and starts by which an invention is made. The historic jurisprudence from which 35 U.S.C. Sec. 102(g) flowed reminds us that "the mere lapse of time" will not prevent the inventor from receiving a patent. Mason v. Hepburn, 13 App.D.C. 86, 91, 1898 C.D. 510, 513 (1898). The sole exception to this principle resides in section 102(g) and the exigencies of the priority contest.

There is no impediment in the law to holding that a long period of inactivity need not be a fatal forfeiture, if the first inventor resumes work on the invention before the second inventor enters the field. We deem this result to be a fairer implementation of national patent policy, while in full accord with the letter and spirit of section 102(g).

The Board misapplied the rule that the first inventor does not have to show activity following reduction to practice to mean that the first inventor will not be allowed to show such activity. Such a showing may serve either of two purposes: to rebut an inference of abandonment, suppression, or concealment; or as evidence of renewed activity with respect to the invention. Otherwise, if an inventor were to set an invention aside for "too long" and later resume work and diligently develop and seek to patent it, according to the Board he would always be worse off than if he never did the early work, even as against a much later entrant.

Such a restrictive rule would merely add to the burden of those charged with the nation's technological growth. Invention is not a neat process. The value of early work may not be recognized or, for many reasons, it may not become practically useful, until months or years later. Following the Board's decision, any "too long" delay would constitute a forfeiture fatal in a priority contest, even if terminated by extensive and productive work done long before the newcomer entered the field.

We do not suggest that the first inventor should be entitled to rely for priority purposes on his early reduction to practice if the intervening inactivity lasts "too long," as that principle has evolved in a century of judicial analysis. Precedent did not deal with the facts at bar. There is no authority that would estop Paulik from relying on his resumed activities in order to pre-date Rizkalla's earliest date. We hold that such resumed activity must be considered as evidence of priority of invention. Should Paulik demonstrate that he had renewed activity on the invention and that he proceeded diligently to filing his patent application, starting before the earliest date to which Rizkalla is entitled--all in accordance with established principles of interference practice--we hold that Paulik is not prejudiced by the fact that he had reduced the invention to practice some years earlier.

III.

This appeal presents a question not previously treated by this court or, indeed, in the historical jurisprudence on suppression or concealment. We take this opportunity to clarify an apparent misperception of certain opinions of our predecessor court which the Board has cited in support of its holding.

There is over a hundred years of judicial precedent on the issue of suppression or concealment due to prolonged delay in filing. From the earliest decisions, a distinction has been drawn between deliberate suppression or concealment of an invention, and the legal inference of suppression or concealment based on "too long" a delay in filing the patent application. Both types of situations were considered by the courts before the 1952 Patent Act, and both are encompassed in 35 U.S.C. Sec. 102(g). The result is consistent over this entire period--loss of the first inventor's priority as against an intervening second inventor--and has consistently been based on equitable principles and public policy as applied to the facts of each case.

The earliest decisions dealt primarily with deliberate concealment. In 1858, the Supreme Court in Kendall v. Winsor, 62 U.S. (21 How.) 322, 328, 16 L.Ed. 165 (1858) held that an inventor who "designedly, and with the view of applying it indefinitely and exclusively for his own profit, withholds his invention from the public" impedes "the progress of science and the useful arts".

In Mason v. Hepburn, supra, the classical case on inferred as contrasted with deliberate suppression or concealment, Hepburn was granted a patent in September 1894. Spurred by this news Mason filed his patent application in December 1894. In an interference, Mason demonstrated that he had built a working model in 1887 but showed no activity during the seven years thereafter. The court held that although Mason may have negligently rather than willfully concealed his invention, the "indifference, supineness, or wilful act" of a first inventor is the basis for "the equity" that favors the second inventor when that person made and disclosed the invention during the prolonged inactivity of the first inventor. 13 App.D.C. at 96, 1898 C....