Fleming v. Escort Inc.
2014 WL 7332614, 774 F.3d 1371, 113 U.S.P.Q. 2d (BNA) 1426 (2014)
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Rule of Law:
A prior inventor's period of inactivity does not constitute abandonment, suppression, or concealment under 35 U.S.C. § 102(g)(2) if the delay is reasonable under the circumstances, such as business disruptions from bankruptcy and acquisition, particularly if the inventor resumes work before the subsequent inventor's priority date. Additionally, a patentee's failure to appreciate the full scope of their invention constitutes a correctable 'error' justifying a reissue patent under 35 U.S.C. § 251.
Facts:
- In 1988, Steven Orr, an employee at Cincinnati Microwave, conceived of a radar detector that incorporated a Global Positioning Satellite (GPS) unit to reduce false alarms.
- Orr built a working embodiment of his invention, reducing it to practice, in April 1996.
- In February 1997, Orr's employer, Cincinnati Microwave, which owned the potential patent rights to his invention, entered bankruptcy.
- During the summer of 1997, Escort, Inc. acquired Cincinnati Microwave's assets, including the potential patent rights to Orr's invention.
- Orr began working for Escort in July 1998 and was directed to resume work on his GPS radar detector invention.
- Hoyt A. Fleming filed his patent application for a similar GPS-enabled radar detector on April 14, 1999.
- Orr filed a patent application for his invention, with Escort as the assignee, on June 14, 1999.
- Fleming later sought and obtained reissue patents for his invention, stating his original patent claims failed to capture the full scope of his invention.
Procedural Posture:
- Hoyt A. Fleming sued Escort Inc. and Beltronics USA, Inc. in the U.S. District Court for the District of Idaho for infringement of two reissue patents.
- Escort asserted defenses of invalidity based on anticipation and obviousness, citing a prior invention by its consultant, Steven Orr.
- After a trial, a jury found most of Fleming's claims were infringed and not invalid, but found five claims of one patent to be invalid based on Orr's prior invention.
- Fleming moved for judgment as a matter of law (JMOL) to overturn the jury's invalidity findings.
- Escort cross-moved for JMOL, arguing all of Fleming's reissue patents were invalid because they did not meet the 'error' requirement for reissue under 35 U.S.C. § 251.
- The district court denied both parties' motions for JMOL.
- Fleming (as Plaintiff-Appellant) appealed the denial of his JMOL motion to the U.S. Court of Appeals for the Federal Circuit.
- Escort (as Defendants-Cross-Appellants) cross-appealed the denial of its JMOL motion.
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Issue:
Does a prior inventor's period of inactivity, caused by their employer's bankruptcy and the subsequent transfer of patent rights, constitute abandonment, suppression, or concealment under 35 U.S.C. § 102(g)(2) that would disqualify the invention as prior art?
Opinions:
Majority - Judge Taranto
No. A period of inactivity does not constitute abandonment, suppression, or concealment under 35 U.S.C. § 102(g)(2) if the delay is reasonable under the totality of the circumstances. The court found that the delay between Orr's reduction to practice in 1996 and his renewed work in 1998 was excused by the intervening bankruptcy of his former employer and the acquisition of the invention's rights by Escort. This business disruption provided a reasonable explanation for the pause in development. Furthermore, any inference of abandonment is defeated because Orr resumed work on his invention in July 1998, which was before Fleming's priority date of April 1999. The court also rejected Fleming's other arguments, finding that Orr's testimony was sufficiently specific and corroborated by documentary evidence. On Escort's cross-appeal, the court held that Fleming's failure to appreciate the full scope of his invention when drafting the original claims is a 'classic reason' that qualifies as a correctable 'error' under 35 U.S.C. § 251, thus validating his reissue patents.
Analysis:
This decision clarifies the application of the 'abandoned, suppressed, or concealed' doctrine within patent law, particularly in the context of corporate disruption. It establishes that reasonable business exigencies, such as bankruptcy and acquisition, can excuse a period of inactivity without forfeiting prior invention rights under § 102(g). The ruling also reinforces a broad interpretation of 'error' for reissue patents under § 251, confirming that a patentee's good-faith misapprehension of their invention's full scope is a valid basis for correction. This provides a degree of stability for patent rights during tumultuous business periods and flexibility for patentees to correct unintended claim limitations post-grant.
