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IP Alert: Shhh! Secret Prior Art May Be Used for Obviousness

December 17, 2014

On December 4, 2014, in Tyco Healthcare Grp. LP v. Ethicon Endo-Surgery, Inc., the U.S. Court of Appeals for the Federal Circuit held that a prior invention of another under the former 35 U.S.C. 102(g) can qualify as prior art for purposes of an obviousness analysis under 35 U.S.C. 103. Significantly, the case establishes a category of “secret prior art” for purposes of the obviousness analysis.

Tyco sued Ethicon on patents relating to ultrasonic cutting and coagulating surgical devices. Ethicon defended on several grounds, including its assertion that a prototype Ethicon device constituted prior art under 35 U.S.C. 102(g). This statute, applicable to patents issued before the passage of the America Invents Act (AIA), specifies in pertinent part that “A person shall be entitled to a patent unless . . . before such person’s invention thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it.” Such inventions of another are known as “102(g) prior art.” Because it is often not possible to learn of such 102(g) prior art until a lawsuit has been filed and discovery taken, such prior art is sometimes known as “secret prior art.”
The district court held that the Ethicon prototype anticipated 26 of the asserted claims under section 102(g). For other asserted claims, though, the district court held that the Ethicon prototype could not serve as prior art for purposes of an obviousness analysis under 35 U.S.C. 103. The court reasoned that Ethicon had not established reduction to practice on a date before Tyco reduced its invention to practice, and that the prototype was not known in the art at the time of Tyco’s invention. Ultimately, the court awarded Tyco $176 million in damages.
On appeal, the Federal Circuit reversed and vacated the damages award. The court held that section 102(g) allows Ethicon to establish that its prototype was prior art for purposes of a section 103 obviousness analysis by proving “either that it reduced its invention to practice first or that it conceived of the invention first and was diligent in reducing it to practice.”
Relying on an earlier Federal Circuit case, Kimberly-Clark Corp. v. Johnson & Johnson, Tyco argued that the prototype could not qualify as prior art for purposes of reaching a conclusion of obviousness because there had been no reduction to practice before Tyco’s priority date. Also, relying on In re Clemens, a 1980 case from the Court of Customs and Patent Appeals, Tyco asserted that section 102(g) prior art cannot be prior art under section 103 if it was unknown to both the applicant and the art at the time the applicant makes the invention, because doing so would establish a standard for patentability in which an applicant’s contribution would be measured against secret prior art.
The Federal Circuit disagreed. The court held that the language of section 102(g) does not require prior reduction to practice so long as the inventor can prove that he or she conceived of the invention first and was diligent in later reducing it to practice. Explaining its reasoning in Kimberly-Clark, the court held that that prior holding did not preclude an invention from satisfying section 102(g) through prior conception and later diligent reduction to practice. Put another way, the court therefore held that neither section 102(g) nor section 103 requires a prior reduction to practice before 102(g) prior art can constitute prior art for obviousness under section 103. Additionally, the court held that the statute contained no requirement that a prior invention under section 102(g) be known to the art or the patentee in order to constitute prior art under section 103. The court observed that a later Federal Circuit case, E.I. du Pont de Nemours & Co. v. Phillips Petroleum Co., had held that any language in the Clemens case to this effect was dicta.
The Tyco case is significant for those patents subject to the pre-AIA version of section 102. It remains to be seen whether the reasoning of the case may apply to post-AIA obviousness analyses. In any event, at least for pre-AIA patents—the majority of patents in force today—it is now established that secret prior art may be used in an obviousness challenge.
For more information on this case, please contact Fitch Even partner David M. Kogan, the author of this alert.

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