Control and Customer Awareness Critical to Experimental Use Exception

In order for a patent claim to be held invalid under the on-sale bar of 35 USC §102(b), the claimed invention must be (1) the subject of a commercial sale and (2) ready for patenting. In Electromotive Division of General Motors Corp. v. Transportation Systems Division of General Electric Co., et al. (Fed. Cir. July 27, 2005), there was no question as to whether EMD's bearing inventions were "ready for patenting" at the time of the alleged commercial sales. Thus, the relevant inquiry concerned only the first prong of the Pfaff test, and, in particular, "whether the circumstances surrounding a pre-critical date sale objectively show that it was primarily made for experimentation."

The court began by discussing its non-exclusive list of thirteen objective factors relevant to determining whether pre-critical date activities involving the patented invention --either publlic use or sale– were primarily experimental, and therefore not commercial. See Allen Eng’g, 299 F.3d at 1353 (citing EZ Dock, 276 F.3d at 1357 (J. Linn, concurring)). It then went on to "hold not only that customer awareness is among the experimentation factors, but also that it is critical" and to "conclude that control and customer awareness ordinarily must be proven if experimentation is to be found."

In March 1993, EMD approached Union Pacific railroad for permission to substitute its new planetary bearings for prior art bearings in an order for two locomotives that Union Pacific placed earlier in 1992. Union Pacific allegedly agreed. Nevertheless, it did not sign a confidentiality agreement or any other type of a contract consenting to participate in the field program. Union Pacific also was not placed under any restrictions or supervision regarding the use of the locomotives containing new planetary bearings. Nor was Union Pacific given any design details for the new planetary bearings or required to monitor or document its usage of the subject locomotives during the field program. On September 29, 1994, EMD filed a patent application for its new planetary bearings.

The court compared these facts to those in Lough v. Brunswick Corp., 86 F.3d 1113 (Fed. Cir. 1996):

The facts here are closely analogous to those in Lough, where, as noted
above, this court rejected an inventor’s claim that a pre-critical date public
use of his liquid seal assembly invention was made for experimentation. In
Lough, the inventor distributed six prototypes of his liquid seal assembly
invention to his friends for use in their boats. After distribution, the Lough
inventor did not maintain any supervision over his friends’ use of the liquid
seal assemblies or follow-up with them for comments as to the operability of the
liquid seal assemblies. Similarly, EMD allowed Union Pacific unsupervised use of
the new planetary bearings. EMD neither monitored the conditions under which
Union Pacific used the new planetary bearings nor solicited any feedback from
Union Pacific regarding the bearings’ performance. What is more, EMD, like the
inventor in Lough, did not maintain any records of the alleged testing or
require Union Pacific to do so. As we stated in Lough, "Lough’s failure to
monitor the use of his prototypes by his acquaintances, in addition to the lack
of records or reports from those acquaintances concerning the operability of the
devices, compel the conclusion that, as a matter of law, he did not engage in
experimental use." 86 F.3d at 1122. We are equally compelled to conclude as a
matter of law that EMD did not engage in any experimentation on its new
planetary bearings.

Professor Wegner has already commented that "This case is a grand synthesis of the law of experimental use insofar as § 102(b) is concerned. Surely, it will be regarded as a leading case. Electromotive Division takes a hard ball approach that limits the circumstances under which an 'experimental' use will be found."