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Federal Circuit Provides Guidance On 35 U.S.C. § 102(b)(2)(B)’s Public Disclosure Exception To Prior Art
08/13/2024In Sanho Corp. v. Kaijet Tech. Int’l Ltd., issued July 31, 2024, the U.S. Court of Appeals for the Federal Circuit addressed the Leahy-Smith America Invents Act (“the AIA”) public disclosure exception to prior art, 35 U.S.C. § 102(b)(2)(B).
Appellant and patent owner Sanho Corp. appealed the final decision of the Patent Trial and Appeal Board (“PTAB”) finding all challenged claims of U.S. Patent No. 10,572,429 (“the ’429 patent”) obvious over prior art. The prior art combinations included U.S. Patent Application Publication No. 2018/0165053 (“Kuo”). Both the ’429 patent and Kuo concern ports and docking stations for connecting an end-user device, such as a laptop, to peripheral devices, such as a printer.
The sole issue on appeal was whether Kuo was prior art under § 102(a)(2). While Kuo’s effective filing date predated the effective filing date of the ’429 patent, Sanho argued that Kuo was nonetheless not prior art under the public disclosure exception of § 102(b)(2)(B). Sanho asserted that Kuo was preempted by a private sale from the inventor of the ’429 patent to Sanho, contracted days before Kuo’s effective filing date, of a “Hyperdrive” product allegedly embodying the claimed invention. The PTAB concluded that the private sale did not qualify for § 102(b)(2)(B)’s exemption. The Federal Circuit affirmed.
As the Federal circuit explained, the AIA converted the U.S. patent system from a first-to-invent system to a first-to-file system for setting patent priority, including redefining what constitutes prior art. Relevant here, § 102(b)(2)(B) provides that “[a] disclosure shall not be prior art to a claimed invention” under § 102(a)(2) if “the subject matter disclosed had, before such subject matter was effectively filed . . . been publicly disclosed by the inventor.”
The Federal Circuit rejected Sanho’s argument that the phrase “publicly disclosed” should be construed to include private sales. The Federal Circuit concluded that, consistent with the statute’s plain language, “publicly disclosed” means a disclosure of the invention that is public. The Federal Circuit further explained that this reading was both consistent with the purpose of the statute, namely, to protect inventors who had made their invention available to the public before filing a patent application, and supported by the legislative history, which states that “public disclosure” requires that the invention be made available to the public, i.e., publicly accessible.
The Federal Circuit declined to extend § 102(b)(2)(B)’s “publicly disclosed” to include all of § 102(a)(1)’s potential types of disclosure, specifically “on sale,” whether or not public. The Federal Circuit explained that Congress had chosen to use the words “publicly disclosed,” not simply “disclosed.” The Federal Circuit similarly declined to read in earlier, pre-AIA judicial interpretations of “public use.” The Federal Circuit explained that “public use” and “publicly disclosed” were different terms—a commercial public use would not necessarily entail public disclosure of the invention. It therefore would not incorporate existing law on one term into the other.
The Federal Circuit then concluded that the inventor’s private sale of the Hyperdrive to Sanho did not “publicly disclose” the invention. The Federal Circuit explained that Sanho’s testimony established only that there was a private sale between two individuals arranged via private messages, and that there was no indication that the sale disclosed the inventive subject matter to the public sufficiently for the exception to apply.
The Federal Circuit thus affirmed the PTAB’s determination that Kuo was prior art and that the challenged claims were unpatentable as obvious, with costs to appellee.
