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Microsoft Prevails in Fight Over Prior Art

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By Audrey Millemann

#160 #160#160 #160#160 #160#160 #160A recent decision by the Federal Circuit Court of Appeals is a victory for Microsoft Corporation and clarifies an issue of invalidating prior art.

#160 #160#160 #160#160 #160#160 #160In Eolas Technologies Inc. v. Microsoft Corporation (Fed.Cir. March 2, 2005), the University of California and its exclusive licensee, Eolas Technologies Inc., sued Mircrosoft for patent infringement.#160 The invention is a method of using a Web browser in an interactive environment.#160 The plaintiffs alleged that Microsoft’s Internet Explorer infringed the patent.

#160 #160#160 #160#160 #160#160 #160Microsoft argued that the patent was invalid as anticipated and obvious, and also unenforceable.#160 In particular, Microsoft contended that the patent was invalid under 35 U.S.C. section 102(g), that the invention was previously invented by another and not abandoned, suppressed, or concealed.#160 The previous invention was a Web browser called “Viola”, whose code had been demonstrated by its inventor to Sun Mircosystems at least seven months before the reduction to practice of the University of California’s invention.#160 Microsoft also asserted the defense of inequitable conduct based on the inventors’ failure to disclose the Viola Web browser to the Patent and Trademark Office during patent prosecution.

#160 #160#160 #160#160 #160#160 #160The district court for the Northern District of Illinois found that the Viola inventor had modified the code after disclosing it to Sun Microsystems and that the modification constituted an abandonment of the original invention.#160 Based on this finding, the district court granted judgment as a matter of law in favor of the plaintiffs on Microsoft’s defense of invalidity, and precluded Microsoft from presenting any evidence of the Viola Web browser to the jury.#160 The district court also rejected Microsoft’s inequitable conduct defense.#160 The jury found that Microsoft infringed the patent and awarded over $520 million in royalties to Eolas Technologies.#160

#160 #160#160 #160#160 #160#160 #160On appeal, the Federal Circuit vacated and remanded the district court’s decisions on invalidity and inequitable conduct.#160 The appellate court found that “abandoned, suppressed, or concealed”, within the meaning of section 102(g), exists in two situations:#160 active concealment (a deliberate withholding of the invention from the public); and conduct from which abandonment, suppression, or concealment can be inferred (such as unreasonable delay in publicly disclosing the invention).#160 The court found that the inventor of the Viola web browser did not either actively conceal, or delay in disclosing, his invention.#160 In fact, the Viola inventor did just the opposite.#160 The inventor disclosed his invention to Sun Mircosystems without a nondisclosure agreement, and, three weeks later, posted the modified code on the Internet.#160 The court held that the district court had erred in finding that the modified code was a different invention and that the original invention had been abandoned.#160

#160 #160#160 #160#160 #160#160 #160According to the court: “the law does not punish an inventor for attempting to perfect his process before he gives it to the public.#160 In fact, reasonable experimentation is frequently encouraged.”#160 (Citation omitted).#160 The court further stated that “[C]reating an improved version of an invention does not in any sense abandon the original invention….Improvements may enhance an invention prior to disclosure or patent application.#160 If improvements caused loss of the original invention under the erroneous rule adopted by the district court, the public would lose the benefit of diligent efforts to produce a more useful product.”

#160 #160#160 #160#160 #160#160 #160The court further held that the Viola inventor’s demonstration constituted a public use under section 102(b).#160 The district court had incorrectly relied on its finding of abandonment of the invention to hold that the Viola inventor’s demonstration was not a public use under section 102(b).#160 The appellate court stated that abandonment under section 102(g) is irrelevant to a determination of whether a disclosure constitutes a public use under section 102(b).

#160 #160#160 #160#160 #160#160 #160Lastly, the appellate court also held that the district court had erred in rejecting Mircrosoft’s inequitable conduct defense.#160 Based on its conclusion that the Viola Web browser was not prior art under section 103(g), the district court had found that the patent inventors were not obligated to disclose the Viola Web browser to the PTO because it was not material to patentability.#160 Because the Viola Web browser was prior art, the court remanded the case to the district court to consider the patent inventors’ conduct in failing to disclose the Viola Web browser to the PTO.

Audrey Millemann is a shareholder in Weintraub Genshlea Chediak Tobin & Tobin Sproul’s Intellectual Property and Disputes, Trials and Appeals sections. A business litigator and registered patent attorney, her practice focuses on intellectual property, unfair competition and antitrust matters.