Fed Circuit Watch: Cat’s Out of the Bag: Continuous Reduction to Practice is Reasonable Diligence

102 fed circuit watch patent reduction to practice

Arctic Cat Inc. has been involved in a few patent-related cases in recent years, including one case from 2018 which we discussed on this blog dealing with the law of obviousness’s motivation to combine analysis under 35 U.S.C. §103.  Its most recent foray into the Court of Appeals for the Federal Circuit resulted in its decision of March 26, 2019, in Arctic Cat Inc. v. GEP Power Products, Inc.,[1] where the Fed Circuit discussed a different area of patent law, namely, reduction to practice under the law of anticipation under 35 U.S.C. §102.

Arctic Cat owns U.S. Patent Nos. 7,072,188 (‘188) and 7,420,822 (‘822), both entitled “Power Distribution Module for Personal Recreational Vehicle.”  GEP petitioned the PTAB for inter partes review of all claims of both patents.  The PTAB subsequently instituted review, and found all claims unpatentable under §§102 and 103.  Arctic Cat appealed.

Source: U.S. Patent No. 7,072,188 B2, Jul. 4, 2006, to Darrel Janisch (inventor); Arctic Cat Inc. (assignee)

Arctic Cat argued, among others, that U.S. Patent No. 6,850,421 (Boyd) was erroneously determined by the PTAB to be prior art against the ‘188 and ‘822 patents premised on the lack of diligent reduction to practice (MPEP 2138.05).  Reduction to practice has two varieties – actual and constructive.  Constructive reduction is satisfied by the filing of the patent application.  Actual reduction to practice requires conception and reduction, and involves several factors, including testing, recognition of the invention, and utility.  The issue in this case hinged on the timing of the inventor’s diligence to reduce his invention to practice (MPEP 2138.06).  While an inventor must account for the entire period during which diligence is required,[2] an accounting of affirmative acts or acceptable excuses is required.[3]

The Fed Circuit panel was composed of Chief Judge Prost, and Judges Reyna and Taranto, with Judge Taranto writing for a unanimous court.  Judge Taranto noted, citing precedent, that:

A patent owner need not prove the inventor continuously exercised reasonable diligence throughout the critical period; it must show there was reasonably continuous diligence.[4]

He took issue with the PTAB’s rejection of Arctic Cat’s contention that the ‘188 patent antedated Boyd.  Boyd was filed April 1, 2002, and the ‘188 application was filed October 29, 2002.  The sole inventor, Darrel Janisch, conceived the invention before April 1, 2002, but the PTAB rejected conception because of what the PTAB deemed a lack of diligence to reduce to practice, specifically “Mr. Janisch’s timeline lacked ‘sufficiently detailed explanation of events occurring between the bookend communications.”  As noted in his ruling, Judge Taranto noted that GEP did not contest that Janisch’s conception occurred before April 1, 2002.  Therefore, the issue is whether there was enough diligence to reduce the invention to practice to antedate the ‘188 and ‘822 patents before Boyd 35 U.S.C. §102(e)(2) reference, which states an inventor is not entitled a patent on an invention if “the invention was described in . . . a patent granted on an application for patent by another filed in the United States before the invention by the applicant for patent.”

Applying the rule of reason enunciated in Perfect Surgical, he observed:

The point of diligence analysis is not to scour the patent owner’s corroborating evidence in search of intervals of time where the patent owner has failed to substantiate some sort of activity.  Rather, the adequacy of the reduction to practice is determined by whether, “in light of the evidence as a whole, ‘the invention was not abandoned or unreasonably delayed.”

Concluding that Janisch remained diligent in his reduction of the invention, and neither abandoned it nor unreasonably delayed it, Judge Taranto quipped that the PTAB used a too rigid of standard to determine diligence.  Janisch submitted a declaration with attached exhibits to demonstrate his reduction to practice.  However, he noted that merely missing details in the timeline does not necessarily equate to a lack of reasonable diligence.

During the identified gaps in Mr. Janisch’s personal activity, the invention was being tested at Mr. Boyd’s employer, Tyco, hired by Arctic Cat for that purpose.  Lack of diligence cannot be inferred from putting the invention into someone else’s hands for needed testing and awaiting test results for a short period commensurate with the testing need . . . That course of action, as a way of reducing an invention to practice, does not give rise to an inference of unreasonably delay or abandonment . . . .

Because the record supported that Janisch provided diligent oversight for the testing work, which filled the gaps in his timeline, the panel found that there was reasonable diligence in reduction to practice.  As such, because Janisch’s invention was conceived prior to Boyd, Boyd would not be available as prior art against the ‘188 and ‘822 patents.

The panel affirmed the invalidation of the ‘822 patent on separate grounds, but reversed-in-part and remanded the ‘188 patent.

[1] ___F.3d___ (Fed. Cir. 2019), affirming-in-part, reversing-in-part and remanding, Case No. IPR2016-01385 (P.T.A.B. Dec. 5, 2017).

[2] See Gould v. Schawlow, 363 F.2d 908, 919 (C.C.P.A. 1966).

[3] See Griffith v. Kanamaru, 816 F.2d 624 (Fed. Cir. 1987) (noting that excuses for inactivity can include vacation, sick time, and working demands, but lack of university funding and personnel changes are not).

[4] See Perfect Surgical Techniques, Inc. v. Olympus Am., Inc., 841 F.3d 1004, 1009 (Fed. Cir. 2016).