Atlanta Attachment Co. v. Leggett & Platt, Inc.

United States Court of Appeals for the Federal Circuit

2007-1188

ATLANTA ATTACHMENT COMPANY,

Plaintiff-Appellee,

v.

LEGGETT & PLATT, INCORPORATED,

Defendant-Appellant.

Douglas D. Salyers, Troutman Sanders, LLP, of Atlanta, Georgia, argued for
plaintiff-appellee. With him on the brief was Jeffrey C. Morgan.

Theodore R. Remaklus, Wood, Herron & Evans, L.L.P., of Cincinnati, Ohio,
argued for defendant-appellant.

Appealed from: United States District Court for the Northern District of Georgia

Judge Orinda D. Evans
 UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
2007-1188

ATLANTA ATTACHMENT COMPANY,

Plaintiff-Appellee,

v.

LEGGETT & PLATT, INCORPORATED,

Defendant-Appellant.

Appeal from the United States District Court for the Northern District of Georgia in case
no. 1:05-CV-1071, Judge Orinda D. Evans.

______________________

DECIDED: February 21, 2008
_______________________

Before MAYER, DYK and PROST, Circuit Judges.

Opinion for the court filed by Circuit Judge MAYER. Concurring opinion filed by Circuit
Judge PROST, in which Circuit Judge DYK joins.

Leggett & Platt, Inc. appeals the judgment of the United States District Court for

the Northern District of Georgia granting Atlanta Attachment Co. summary judgment

that Leggett & Platt infringed claim 32 of U.S. Patent No. 6,834,603, and that the patent

was neither invalid because of the on-sale bar of 35 U.S.C. § 102(b), obviousness, or a

violation of the best mode and written description requirements, nor unenforceable due

to inequitable conduct. Atlanta Attachment Co. v. Leggett & Platt, Inc., No. 1:05-CV-

1071 (N.D. Ga. Feb. 23, 2007). Because embodiments of claim 32 of the ’603 patent

were on sale before the critical date, we reverse and remand.
 BACKGROUND

Commercial sewing machine manufacturer Atlanta Attachment Co. developed

the instant invention in response to a request from Sealy, Inc. to create an automatic

gusset ruffler machine. The two agreed that if successful, Sealy would patent the

invention, and Atlanta Attachment would sell only to Sealy. They further executed an

agreement that Atlanta Attachment would keep the development confidential, although

there was no obligation for Sealy to do the same. Both companies stated at trial that

they verbally agreed to keep the development confidential. Atlanta Attachment

developed a total of four prototypes which they presented for sale to Sealy along with

offers to sell production models. Each prototype was sent to Sealy in succession,

embodying improvements over the predecessor prototype. Atlanta Attachment claims

that they earned no profit from these sales.

The first and second prototypes were quoted to Sealy in April of 1999 and

January of 2000. Both prototype sales orders included quotations for sales of

subsequent machines. Upon delivery, both prototypes were tested at Sealy’s secure

facilities, and Sealy made no commercialized products with the machines. Both

prototypes required significant operator control. The first required the operator to

control the ruffler and determine when the pleats were created, while the second could

detect where to create a ruffle, but could only make the ruffle when commanded by the

operator. Sealy gave Atlanta Attachment verbal comments about their necessary

requirements on both machines, and then returned them to Atlanta Attachment.

Atlanta Attachment sent Sealy a quotation for a third prototype in September of

2000, and further sales orders were created for this machine on November 30, 2000,

2007-1188 2
and February 5, 2001. Sealy paid this last invoice. Instead of receiving it at their own

facilities, Sealy representatives inspected the machine at Atlanta Attachment’s facilities

on February 7, 2001. This prototype adjusted sewing speeds without operator

intervention, recognized the corner of a panel and automatically turned on the ruffling

function and turned off the ruffler when complete.

The final prototype was delivered to Sealy on April 10, 2001, after the critical date

of March 5, 2001. This prototype was substantially similar to the third prototype, the

exception being the use of a pneumatic piston instead of an eccentric drive to control

the pleat generator, and controlling the pleat generator independently of the sewing

machine. Sealy experimented with this prototype until June of 2001, at which time

improvements were made in light of the experimentation.

Ultimately, Sealy decided not to purchase machines from Atlanta Attachment,

allowing Atlanta Attachment to seek sales elsewhere. On August 15, 2002, Atlanta

Attachment filed U.S. Patent Application No. 10/219,837 for an “Attachment gusset with

ruffled corners and system for automated manufacture of same,” claiming priority to

Provisional Application No. 60/362,025, filed March 5, 2002. The 10/219,837

application yielded U.S. Patent No. 6,834,603 (“’603 Patent”), issued on December 28,

2004. The patent is directed at a machine that automatically attaches a gusset to a

panel of a pillowtop mattress, rotating the panels at the corners, and pleating the

corners of the gusset.

Atlanta Attachment filed suit alleging that Leggett & Platt’s GPT-1000 series

sewing machines infringed claim 32 of the ’603 patent:

32. A system for attaching a gusset to a panel, comprising:
a. a gusset forming station for automatically forming the gusset from a

2007-1188 3
 strip of gusset material;
b. a sewing table having an upper surface supporting the panel as the
gusset is attached thereto;
c. a sewing machine adjacent the upper surface of the sewing table,
positioned along sewing path for the panel, for attaching the gusset to
the panel;
d. a pleat generator for forming at least one pleat in the gusset at a
desired location about the panel, said pleat generator operated in
timed relation with said sewing machine, sewing the gusset to the
panel; and
e. a system controller controlling a sewing operation for attaching the
gusset to the panel, wherein said system control can control the
sewing of the gusset to the panel at varying rates to enable high speed
sewing of the gusset to the panel and sewing at a different rate for
generation of the pleats in the gusset as needed.

Leggett & Platt responded that their machines do not infringe claim 32, and that claim

32 is invalid due to the on-sale bar, failing to satisfy the best mode and written

description requirements, and obviousness, and the ’603 patent is unenforceable due to

inequitable conduct.

The district court construed the claim terms and by summary judgment held that

the Leggett & Platt machines did infringe claim 32. Addressing the counterclaims, the

district court determined that claim 32 was not invalid because the three pre-critical date

prototypes were not on sale, because none of the pre-critical date prototypes reduced

the limitations of claim 32 to practice, and because the prototype sales were

experimental uses. The district court also held that Leggett & Platt had not proved a

violation of the best mode or written description requirements, nor had it shown that

claim 32 was obvious. Finally, the district court found no inequitable conduct because

since the three prototypes were experimental and not disclosed to the public, they need

not have been disclosed to the U.S. Patent and Trademark Office during prosecution.

Leggett & Platt appeals and we have jurisdiction under 28 U.S.C. § 1295(a)(1).

2007-1188 4
 DISCUSSION

We review a district court’s grant of summary judgment de novo. Bose Corp. v.

JBL, Inc., 274 F.3d 1354, 1358 (Fed. Cir. 2001). “Summary judgment is appropriate

when there is no genuine issue as to any material fact and the moving party is entitled

to judgment as a matter of law.” Vanmoor v. Wal Mart Stores, Inc, 201 F.3d 1363, 1365

(Fed. Cir. 2000). Summary judgment is improper “if the evidence is such that a

reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 248 (1986). When ruling on a motion for summary judgment,

all of the nonmovant’s evidence is to be credited, and all justifiable inferences are to be

drawn in the nonmovant’s favor. Id. at 255, 106 S.Ct. 2505.

Our patent laws deny a patent to an inventor who applies for a patent more than

one year after making an attempt to profit from his invention by putting it on sale. 35

U.S.C. § 102(b); see also Elizabeth v. Am. Nicholson Pavement Co., 97 U.S. 126, 137

(1877). An invention is so barred when it was both the subject of a commercial offer for

sale before the critical date and ready for patenting at the time of the offer. Pfaff v.

Wells Elecs, Inc., 525 U.S. 55, 67, 199 S.Ct. 304, 311-12 (1998).

The overriding concern of the on-sale bar is an inventor’s attempt to

commercialize his invention beyond the statutory term. Netscape Commc’ns. Corp. v.

Konrad, 295 F.3d 1315, 1323 (Fed. Cir. 2002). When the asserted basis of invalidity is

an on-sale bar, the court should determine whether the subject of the barring activity

met each of the limitations of the claim, and thus was an embodiment of the claimed

invention. Id. (quotations removed). We focus on the third prototype because it

contains each element of claim 32. (We reach whether each element was reduced to

2007-1188 5
practice infra, in discussing the second Pfaff prong.)

To meet the first, commercial offer, prong, the offer must be sufficiently definite

that another party could make a binding contract by simple acceptance, assuming

consideration. Netscape, 295 F.3d at 1323. In determining such definiteness, we

review the language of the proposal in accordance with the principles of general

contract law. Id. The law has long recognized a distinction between experimental

usage and commercial exploitation of an invention. While “[a]ny attempt to use [an

invention] for profit . . . would deprive the inventor of his right to a patent,” an inventor’s

use “by way of experiment” does not bar patentability. Elizabeth, 97 U.S. at 137 (1877).

Therefore, we must consider whether the suspect activities were experiments as

opposed to an attempt to profit from the invention, that is, whether the primary purpose

of the offers and sales was to conduct experimentation. Allen Eng’g Corp. v. Bartell

Indus., 299 F.3d 1336, 1354 (Fed. Cir. 2002). Neither profit, revenue, nor even an

actual sale is required for the use to be a commercial offer under section 102(b) – an

attempt to sell is sufficient if it rises to an offer upon which a contract can be made

merely by accepting it. Although the third prototype was never actually delivered to

Sealy, it was indeed sold to Sealy because Atlanta Attachment sent Sealy an invoice for

the machine (an offer), and Sealy paid for the machine (an acceptance).

Atlanta Attachment responds that its sales to Sealy were experimental, because

they were prototypes submitted to determine if the invention fit Sealy’s requirements.

However, experimentation conducted to determine whether the invention would suit a

particular customer's purposes does not fall within the experimental use exception.

Allen Eng’g, 299 F.3d at 1355 (citing In re Theis, 610 F.2d 786, 792 (CCPA 1979)).

2007-1188 6
Therefore, we are interested only in the actions of Atlanta Attachment (and not Sealy’s

experiments) in determining whether the machine was suitable to the purpose of the

invention.

Additionally, Leggett & Platt is correct to emphasize that Atlanta Attachment did

not retain control over the prototypes when they were in Sealy’s possession. While we

have held that control may not be the lodestar test in all cases, we have also said that it

is important, and sometimes dispositive. Electromotive Div. of Gen. Motors Corp. v.

Transp. Sys., 417 F.3d 1203, 1213 (Fed. Cir. 2005) (citing In re Hamilton, 882 F.2d

1576 (Fed. Cir. 1989)). In Allen Engineering, we simply catalogued a set of factors that

previous cases had found instructive, and in some cases dispositive, for determining

commercial offers versus experimental uses. 299 F.3d at 1353. The issue of control is

dispositive here, therefore we need not review each factor set out there. Atlanta

Attachment was not experimenting within the contemplation of the experimental use

doctrine when it sold its invention to Sealy because Sealy performed the testing and

because Atlanta Attachment did not have control over the alleged testing to establish

experimentation. See Electromotive Div., 417 F.3d at 1213. The fact that Sealy

experimented with the prototypes is immaterial because the experimental use exception

only concerns the actions of the inventors and their agents, and Sealy was not under

the inventors’ control.

The first Pfaff prong is also met, and experimental use negated, because Atlanta

Attachment had presented a commercial offer for sale of the invention en masse.

Atlanta Attachment gave a quotation to Sealy dated September 27, 2000, for 50

production units, with “anticipate[d] installation of Production units to begin no later than

2007-1188 7
March 2001.” This offer occurred before the critical date of March 5, 2001.

Furthermore, as Atlanta Attachment confirmed, the quotation became a contract with

the signature of a purchasing entity. Therefore, this quotation constitutes an offer for

sale that cannot avoid the on-sale bar via the experimental use exception. An offer to

mass produce production models does not square with experimentation under any

standard; it is commercial exploitation.

We now turn to the second Pfaff prong, ready for patenting. Contrary to Atlanta

Attachment’s argument, once there has been a commercial offer, there can be no

experimental use exception. We also conclude that the third prototype was a reduction

of claim 32 to practice, and therefore the invention was ready for patenting.

There are at least two ways to meet the ready for patenting prong: prior to the

critical date the device was reduced to practice, or there is proof that “prior to the critical

date the inventor had prepared drawings or other descriptions of the invention that were

sufficiently specific to enable a person skilled in the art to practice the invention.” Pfaff,

525 U.S. at 67-68. An invention is reduced to practice when it works for its intended

purpose. Honeywell Int’l Inc. v. Universal Avionics Sys. Corp., 488 F.3d 982, 997 (Fed.

Cir. 2007) (citing Eaton v. Evans, 204 F.3d 1094, 1097 (Fed. Cir. 2000)). An invention

is said to work for its intended purpose when there is a demonstration of its workability

or utility. Id. (citing Fujikawa v. Wattanasin, 93 F.3d 1559, 1563 (Fed. Cir. 1996)).

Because the third prototype demonstrated the workability and utility of the invention of

claim 32 during Atlanta Attachment’s February 2001 demonstration to Sealy, claim 32

was reduced to practice, and thus ready for patenting.

The third prototype demonstrated its workability because the machine adjusted

2007-1188 8
sewing speeds without operator intervention, and appropriately at the corners of the

panel (the desired locations) where it turned on the ruffler and attached a ruffled gusset

corner. After passing the corner, it increased the speed again as intended.

Atlanta Attachment received comments from Sealy about the third prototype, and

in response improvements to the prototype were included in a fourth prototype. The

amount Sealy had paid for the third prototype was refunded upon delivery of the fourth

prototype. The district court erred in concluding that these facts showed the third

prototype was not suitable for its intended purpose. This is because an invention can

be considered reduced to practice “even though it may later be refined or improved.”

New Railhead Mfg. L.L.C. v. Vermeer Mfg. Co., 298 F.3d 1290, 1297 (Fed. Cir. 2002).

As to the “high speed” limitation of the system controller, the district court noted that the

fourth prototype differed from the third in that the pleat generator was pneumatic driven

instead of eccentric driven, and that the sole reason for the change was that the

eccentric drive caused the machine to vibrate when operated at high speed. However,

the court erroneously applied the reasoning of Electromotive Division, which said that

an inventor is entitled to perfect claimed features as part of reducing the invention to

practice. 417 F.3d at 1211. This refers to the applicability of the experimental use

exception to the first prong of Pfaff, not whether or not an invention is reduced to

practice. Consistent with the rule that later refinements do not preclude reduction to

practice, it is improper to conclude that an invention is not reduced to practice merely

because further testing is being conducted. Moreover, because vibration-free operation

was not a claimed feature, it would only be relevant if the vibration actually prevented

workability or utility of the invention. Atlanta Attachment has not presented such

2007-1188 9
evidence.

Atlanta Attachment also argues that the desired locations element was not

reduced to practice in the third prototype because the pleat generator was coupled to

the sewing head, limiting the machine to perform one ruffle and one stitch at a time.

This it argues disallowed the placement of pleats in “desired locations” and multiple

stitches per pleat (“timed relation”). However, claim 32 does not require an uncoupled

pleat generator. The claim also does not require multiple stitches per pleat. In fact, the

specification enables one pleat, one stitch operation. The district court construed the

pleat generator element as “a device that generates a pleat in the gusset at a location

about the panel where a pleat is wanted, in an operation timed with said sewing

machine, sewing the gusset to the panel.” Additionally, the specification of the ’603

patent reads at column 4, lines 37-45: “The plunger assembly 446, in one embodiment,

includes a pneumatic piston that is controlled so as to push the gusset material 314 into

a ruffle when the needle 442 is in an ‘up’ position and to retract the ruffler foot 440 when

the needle is in a down position.” While improvements were possible and ultimately

manufactured in the fourth prototype, these deficiencies in the third prototype did not

prevent reduction to practice of the invention actually claimed. Therefore, because the

third prototype was both the subject of a commercial offer for sale before the critical

date and was reduced to practice at the time, claim 32 is invalid due to the on-sale bar

of section 102(b).

Because the third prototype was on sale, we agree with Leggett & Platt that it

was material to the examination. See Digital Control Inc. v. Charles Mach. Works, 437

F.3d 1309, 1318 (Fed. Cir. 2006) (noting that a reasonable examiner would have

2007-1188 10
considered the true nature of the invention’s reduction to practice to be important in

deciding to allow the claim). However, materiality does not presume intent. Manville

Sales Corp. v. Paramount Sys. Inc., 917 F.3d 544, 552 (Fed. Cir. 1990). The district

court did not consider intent after deciding the third prototype was an experimental use,

leaving this issue of fact unresolved. We therefore must remand the case for the district

court to reconsider the allegation of inequitable conduct.

CONCLUSION

Accordingly, the judgment of the United States District Court for the Northern

District of Georgia is reversed, and the case is remanded for further proceedings in

accordance with this opinion.

COSTS

Costs to Leggett & Platt.

REVERSED and REMANDED

2007-1188 11
 United States Court of Appeals for the Federal Circuit
2007-1188

ATLANTA ATTACHMENT COMPANY,

Plaintiff-Appellee,

v.

LEGGETT & PLATT, INCORPORATED,

Defendant-Appellant.

Appeal from the United States District Court for the Northern District of Georgia in case
no. 1:05-CV-1071, Judge Orinda D. Evans.

PROST, Circuit Judge, concurring, with whom DYK, Circuit Judge, joins.

I agree with the majority opinion and fully join it. I write separately, however, to

point out the confusion in our caselaw regarding the applicability of the experimental use

doctrine to the two prong test for the on-sale bar. The Supreme Court’s decision in Pfaff

v. Wells Electronics, Inc. redefined our test for the on-sale bar and affected how the

experimental use doctrine applies to alleged instances of invalidating prior use. 525

U.S. 55 (1998). Without considering these issues in a comprehensive manner in future

cases, we will never escape from the confused status of our current caselaw.

The Supreme Court in Pfaff introduced an explicit test for the on-sale bar.

Specifically, it created the two prongs of commercial sale and “ready for patenting,” and

distinguished “ready for patenting” from reduction to practice. As to the second prong,

the Court stated, “one can prove that an invention is complete and ready for patenting

before it has actually been reduced to practice.” Id. at 66. This court, following pre-

Pfaff decisions, has stated on several occasions, post-Pfaff, that the experimental use
doctrine cannot provide an exception to the on-sale bar once an invention is reduced to

practice. Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1371 (Fed. Cir. 2007)

(quoting Allen Eng’g Corp. v. Bartell Indus., Inc., 299 F.3d 1336, 1354 (Fed. Cir. 2002)

(quoting EZ Dock, Inc. v. Schafer Sys., Inc., 276 F.3d 1347, 1357 (Fed. Cir. 2002) (Linn,

J., concurring))); Allen Eng’g, 299 F.3d at 1354 (quoting EZ Dock, 276 F.3d at 1357

(Linn, J., concurring)); New Railhead Mfg., LLC v. Vermeer Mfg. Co., 298 F.3d 1290,

1297, 1299 (Fed. Cir. 2002); EZ Dock, 276 F.3d at 1357 (Linn, J., concurring); Zacharin

v. United States, 213 F.3d 1366, 1369 (Fed. Cir. 2000)

If we were to accept that reduction to practice eliminates availability of the

experimental use doctrine as a whole, the continuing viability of that doctrine would exist

only between the time an invention is ready for patenting and the time it is reduced to

practice. Such a result would severely restrict the rights of inventors to conduct ongoing

work on an invention; they could do so only in private without using outside resources

that may be necessary. Private work that is primarily experimental would not trigger the

on-sale or public use bars to patentability in the first place, and thus has no need for the

experimental use doctrine.

Pfaff indicates that the experimental use doctrine should apply more broadly than

the limited period suggested by a reduction to practice cutoff. First, the Pfaff Court

explicitly discusses the experimental use doctrine as it relates to the first prong, offering

it as an example of how an “inventor can both understand and control the timing of the

first commercial marketing of his invention.” 525 U.S. at 67. This statement confirms

the ongoing viability of the experimental use doctrine under the Pfaff prongs, calling into

2007-1188 2
question the idea that the doctrine only applies during the limited time between when an

invention is ready for patenting and when it is reduced to practice.

Further, the Court stated that “invention” as used in 35 U.S.C. § 102(b) “must

refer to a concept that is complete, rather than merely one that is ‘substantially

complete,’” and that “one can prove that an invention is complete and ready for

patenting before it has actually been reduced to practice.” Id. at 66. Such statements

minimize the relevance of a distinction between “ready for patenting” and reduction to

practice, other than as relaxing evidentiary requirements for proving the on-sale bar.

Indeed, if the justification for eliminating the experimental use exception upon reduction

to practice comes from completeness of the invention—and therefore a lack of need for

further experimentation—then the exception should also not apply to protect an

invention ready for patenting, a proposition flatly contradicted by Pfaff. 1

In other words, Pfaff suggests that the experimental use doctrine continues to

provide a way for patentees to avoid invalidation through the on-sale bar. Because an

invention is complete when it is either ready for patenting or reduced to practice, the

experimental use doctrine must remain available after that stage. In my view, therefore,

experimental use in this respect represents the counterpoint to commercial sale or

public use. Assuming a complete invention, ready for patenting, inventors should be

able to continue to privately develop any claimed aspect of that invention without risking

1
Use of the phrase “experimental use exception” does not imply that the
experimental use doctrine is a free-standing doctrinal exception to a statutory bar; the
experimental use doctrine is more accurately characterized as a negation of a statutory
bar. EZ Dock, 276 F.3d at 1351 (noting that “[t]his court has repeatedly stressed that
evidence of experimental use does not give rise to a free-standing doctrinal exception to
statutory bars, but instead operates to negate application of section 102(b)”).

2007-1188 3
invalidation, if they conduct development activities in a way that is neither public nor

simply commercial, even if there is some commercial benefit to the inventor in

connection with the experimental use. 2 Such development should fall under the post-

Pfaff application of the experimental use doctrine, and should be protected if it satisfies

the first prong of Pfaff—i.e., it is neither a simply commercial offer for sale nor a public

use.

When the inventor conducts a commercial transaction in order to facilitate

development, but the development activity meets the requirements of the experimental

use doctrine, the inventor avoids the on-sale bar. This exception to the on-sale bar

does not evaporate upon reduction to practice. In essence, just as inventors could

develop any aspect of the invention privately, they may employ the concepts of agency

and confidentiality to also accomplish the same result.

In the present case, as the majority opinion demonstrates, Atlanta Attachment

cannot use the experimental use doctrine to avoid the first prong of the on-sale bar

because it did not demonstrate experimental, rather than simply commercial, purposes

for the sale. Similarly, the quote for fifty “production unit” machines separately

demonstrates an offer to sell with simply commercial intent. Both the sale and offer to

sell conclusively demonstrate satisfaction of the first Pfaff prong. The experimental use

doctrine is inapplicable.

2
The experimental use doctrine would apply if the use or sale was primarily
experimental. See, e.g., Electromotive Div. of Gen. Motors Corp. v. Transp. Sys. Div. of
Gen. Elec. Co., 417 F.3d 1203, 1210 (Fed. Cir. 2005) (“[W]e observe that the first prong
of the Pfaff test entails an assessment of whether the circumstances surrounding a pre-
critical date sale objectively show that it was primarily made for experimentation.”).

2007-1188 4
 While the experimental use doctrine, as such, is not pertinent to the second Pfaff

prong, an inventor’s experimentation may have relevance to that prong. As to the

second prong, a patentee may still avoid the on-sale or public use bars by proving that

the “invention” required additional experimentation, and was not in fact complete. Such

a showing parallels the pre-Pfaff experimental use doctrine, but instead of involving an

exception to the on-sale or public use bars, takes effect as merely avoiding the ready for

patenting prong in the first place. Experimentation of this type must concern claimed

aspects of the invention, because those aspects control whether the invention is ready

for patenting or not.

In the present case, Atlanta Attachment’s argument that the third prototype did

not work for its intended purpose attempts to avoid the second Pfaff prong. As the

majority opinion demonstrates, however, because all of Atlanta Attachment’s arguments

concern unclaimed features, they cannot avoid the conclusion that the third prototype

was a reduction to practice and therefore met the second Pfaff prong.

2007-1188 5