America-Israel Patent Law Blog

I usually leave it to other blogs to comment on recent U.S. court decisions.  However, I thought that CAFC’s decision in Solvay v Honeywell International earlier this week nicely highlights some of the differences between U.S. and Israel patent practice, as well as at least one idiosyncrasy of U.S. patent law.

Solvay’s US 6,730,817 has an earliest priority date of October 23, 1995.  The patent claims a process for making 1,1,1,3,3-pentafluoropropane (HFC-245fa).  In 1994, Honeywell’s predecessor-in-interest, Allied Signal, entered into a research agreement with a Russian research center to develop a process for making this same compound.  Research results from Russia were sent to Allied Signal in the USA in July 1994, in a report that both sides agreed disclosed the invention claimed by Solvay.  In 1995, prior to Solvay’s priority date, Honeywell personnel in the USA repeated the Russian experiments, and throughout 1995 and 1996 continued to develop improvements to the Russian process (which eventually led to the issuance of a patent for Honeywell, although Honeywell’s patent was filed after Solvay’s). 

Honeywell eventually began to practice its process in the USA, and Solvay sued for infringement.  Given the facts above, one would think that Honeywell had an iron-clad invalidity defense: 35 U.S.C. §102(a) says in pertinent part that, “A person shall be entitled to a patent unless: (a) the invention was known or used by others in this country . . . before the invention thereof by the applicant for patent”.  The Russian research report which disclosed the invention was in the possession of Allied Signal employees well before Solvay’s priority date, and those employees also practiced the invention in the USA before that date.  That would seem to constitute knowledge or use in the USA (or both) by someone other than Allied Signal before Allied Signal invented its process. 

Unfortunately for Honeywell, until the filing of its own patent application on its improved version of the Russian-developed process, Allied Signal had kept its knowledge and use secret.  It is well-established caselaw that the “known or used” clause of  §102(a) means public knowledge or use.  See e.g. Rosaire v. Baroid Sales Division, National Lead Co., 218 F.2d 72 (5^th Circuit 1955).  Consequently, Honeywell couldn’t bring a defense under §102(a).    

Lacking recourse to §102(a), Honeywell turned to 35 U.S.C. §102(g)(2), which states that a person is not entitled to a patent if “before the applicant’s invention thereof the invention was made in this country by another inventor who had not abandoned, suppressed or concealed it.”  Honeywell argued that by practicing the Russian invention before Solvay’s priority date, Honeywell qualified as “another inventor” for purposes of §102(g)(2).  (Prior to 1999, the statute read “the invention was made in this country by another . . . .”;  as noted in footnote 3 of the Solvay decision, in Dow Chemical Co. v. Astro-Valcour, Inc., 267 F.3d 1334 (Fed. Cir. 2001), the CAFC held that, under both the pre-1999 version of § 102(g)(2) and the current version of the statute . . . it must be shown that an “inventor” made the claimed invention in order to establish a first-inventor defense.)  

The CAFC rejected this assertion: as it was the Russian scientists and engineers, not Allied Signal’s, who had conceived of the invention practiced by Allied Signal in 1995, Allied Signal’s employees were not inventors for purposes of §102(g)(2).  

As a result, Honeywell was unable to invalidate the ‘817 patent on grounds of prior use.

Sitting in Rehovot, there are two aspects of this case that strike me as interesting.  The first is that under the same fact pattern in Israel, the patent may have been invalidated for lack of novelty, and even if not, Honeywell likely would still have had a prior use defense.  In terms of validity, public use of a claimed invention anywhere in the world (not just in Israel) before an applicant/patentee’s priority date is a bar to patentability in Israel.  Clearly the question of whether or not the practice of the invention, in both Russia and the U.S.A., constituted a prior public use under Israel law, would have been litigated, and I won’t speculate on how a court here would rule.  But even if the patent wasn’t invalidated on those grounds, section 53 of the patent statute creates prior user rights:

53. Right by virtue of prior exploitation

Whoever on the determinative date was exploiting in good faith in Israel the invention for which a patent is requested, or who on that date made in good faith substantial preparations for its exploitation, is entitled to exploit the same invention himself and in the course of his business [operations] without consideration; for purposes of this matter, “the determinative date” [means] the date on which the patent application was applied for in Israel, and if a [Paris Convention] priority claim is made for that application under section 10 [of the statute], the date on which the priority application was filed.

On the priority date, Allied Signal had both practiced the invention and was making substantial preparations for its exploitation.  Allied Signal would therefore presumably have benefited from section 53.  Section 54 says that the rights under section 53 may only be transferred along with the business that uses the invention; as Honeywell took over Allied Signal’s HFC-245fa production business, presumably Honeywell would have been lawfully entitled to Allied Signal’s prior user rights in Israel.

The second point is that it is somewhat ironic that in the United States, for purposes of novelty-defeating prior use under §102(a), the prior use must be public, whereas under §102(e) the filing of a patent application can defeat both the novelty and the non-obvious of a later-filed application, even if the earlier application was not published at the time of the later filing.  See e.g. In re Giacomini.  Put differently, to be effective prior art in the U.S.A., prior use must be public, unless it has the hechsher of an earlier-filed U.S. patent application.  Thus, had Allied-Signal applied for a patent in July 1995 – a time at which U.S. patent applications remained secret until their grant, and not long after provisional patent applications became an option – on the Russian process, then this application would have been invalidating “secret” prior art to Solvay’s patent application, and Honeywell would never have had to contend with Solvay’s patent.