Federal Circuit IP
Crown Packaging Technology, Inc., CarnaudMetalbox Engineering LTD. v. Belvac Production Machinery, Inc.
CAFC Opinion No. 2022-2299, 2022-2300, Decided December 10, 2024
(Dyk, Hughes, Cunningham; Precedential)
Overview: If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck – The duck test applied to offers for sale.
Facts/Background:
- Crown Packaging sued Belvac for patent infringement in WD of Virginia.
- Belvac raised affirmative defense of invalidity under pre-AIA 102(b), asserting that the claimed subject matter was “on sale” before the critical date of the patents in view of a quote that Crown Packaging sent to a customer.
- District Court granted summary judgment to Crown Packaging on the basis that the quote was an invitation to make an offer, not an offer itself.
- At trial, the jury finds (1) patents are not invalid, and (2) no infringement.
- Belvac appeals patent validity and Crown Packaging appeals non-infringement.
Issue: Whether Crown Packaging made an offer for sale under pre-AIA § 102(b) when it sent a quote to a customer in Colorado that was subject to Crown Packaging’s written acceptance.
Federal Circuit Analysis:
- Review: de novo review for summary judgment.
- Crown Packaging argued that document was merely a quote, not an offer for sale, particularly in view of clause requiring written acceptance by Crown Packaging.
- The Federal Circuit notes that “The written acceptance provision … does not prevent the letter from being a commercial offer for sale.”
- The Federal Circuit determined that the “quote” had several hallmarks of an offer for sale, including:
- It characterized itself as an “offer”
- It was sent to one specific customer (not broadly distributed)
- It contained a detailed description of pricing and delivery, and a number of other terms typically present in commercial contracts
- It included an obligation to pay 50% of the purchase price with the order to enable immediate manufacture; and
- It stated that Crown Packaging will “make every effort to carry out the contract”
- The Federal Circuit concluded that terms in Crown Packaging’s quote were specific and complete enough to invoke the on-sale bar.
Holding: Reversed and remanded on patent validity, infringement not reached.
Takeaways
- Carefully scrutinize facts relating to any pre-filing activity, especially potential offers for sale – instead of asking clients about “sales” or “offers for sale,” also ask about “quotes” or targeted advertisements.