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Private Sale Means Public Fail

The US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board decision that a private sale of a product embodying the claimed invention did not qualify as a “public disclosure” under 35 U.S.C. § 102(b)(2)(B). Sanho Corp. v. Kaijet Technology Int’l Ltd, Inc., Case No. 23-1336 (Fed. Cir. July 31, 2024) (Dyk, Clevenger, Stoll, JJ.)

Sanho owns a patent directed to a port extension apparatus designed to enhance connectivity of end-user devices (such as laptops) with other devices (such as printers). Kaijet petitioned for inter partes review (IPR) challenging certain claims of Sanho’s patent, arguing that the claims were obvious based on a prior art reference. The Board found that the patent claims were invalid because of the prior art reference’s earlier effective filing date. Sanho argued that a prior sale of its HyperDrive device by the inventor of the patent should disqualify the reference as prior art. However, the Board determined that Sanho failed to demonstrate a public disclosure of the HyperDrive sale before the prior art reference’s effective filing date. Thus, the patent was invalidated. Sanho appealed.

The Federal Circuit affirmed, explaining that the America Invents Act (AIA) redefined prior art, shifting from a first-to-invent to a first-inventor-to-file system. Under the AIA, prior art includes patents and applications filed before the patent’s effective filing date subject to exceptions for public disclosures by the inventor. Sanho argued that the HyperDrive sale fell into this exception.

The Federal Circuit dismissed Sanho’s argument that the phrase “publicly disclosed” in § 102(b)(2)(B) should encompass all types of disclosures described in § 102(a)(1), including private sales. The crux of the issue was whether placing an invention “on sale” was tantamount to a “public disclosure” under § 102(b)(2)(B). The statute states that a disclosure is not prior art if the subject matter was publicly disclosed by the inventor before the effective filing date of the prior art. Sanho argued that “publicly disclosed” includes any disclosure, even private sales. The Court disagreed, explaining that the statute’s use of “publicly” implies a narrower scope than just “disclosed.” The Court noted that the purpose of this exception is to protect inventors who make their inventions available to the public before another’s patent filing.

The Federal Circuit also relied on legislative history in support of the conclusion that “public disclosure” in § 102(b)(2)(B) means the invention must be made available to the public. Sanho argued that as long as there are no confidentiality requirements, all disclosures, even private sales, should constitute public disclosures. Again, the Court rejected that argument, noting that the statute differentiates between “publicly disclosed” and general “disclosures,” implying different meanings.

The Federal Circuit determined that § 102(b)(2)(B) protects inventors who publicly disclose their inventions from subsequent disclosures by others, ensuring that prior public disclosure by the inventor prevents a third party’s disclosure from becoming prior art. This provision aims to encourage inventors to share their innovations with the public.

Practice Note: For a disclosure to qualify as “public” under the [...]

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Are You Ready for the UPC? Act Now to Prepare for its Opening on June 1

On February 17, 2023, Germany ratified the Agreement on the Unified Patent Court (UPC) and triggered the UPC’s entry into force on June 1, 2023. The UPC will revolutionize patent enforcement across Europe and impact companies around the world that hold European patents or conduct business in Europe.

Owners of existing European patents or pending applications can “opt out” of the UPC’s jurisdiction for an initial transitional period of at least seven years. Companies must act now if they want to opt out before the court officially opens.

Understanding the UPC

The UPC will have exclusive jurisdiction over patent infringement and invalidity actions in its member states for patents granted by the European Patent Office (EPO), including existing European patents and new European patents with unitary effect (unitary patents). There are currently 17 EU Member States participating in the UPC (Germany, France, Belgium, Bulgaria, Denmark, Estonia, Finland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Sweden and Slovenia). Additional EU Member States may join the UPC in the future.

The UPC will have local and regional divisions in its member states, with a central division in Paris and Munich and a Court of Appeal in Luxembourg.

As a streamlined patent enforcement venue, the UPC will provide several new benefits to patent owners, including faster decisions with limited discovery and lower cost, and the possibility of injunctive relief throughout the member states. At the same time, the UPC will allow revocation of a patent in a single action with effect for all member states, alongside the possibility to oppose a European patent before the EPO.

European Freedom to Operate

Because of the UPC’s structure and incentives, patent litigation will likely increase in Europe, which will heighten the intellectual property (IP) infringement risk for companies doing business in Europe. If a company has not already done so, it should promptly review its competitors’ European patent estates to assess the potential risks and develop a defense strategy to avoid a surprise attack from a competitor after June 1, 2023.

European Enforcement Actions

Although the UPC is new and untried, it has the incentive to provide strong relief for those who trust it. If a company needs to bring a patent infringement action against a competitor and would like to do so in a fast, cost-effective manner, with the possibility of significant remedies, the UPC should be considered as a potential venue. The company should review its portfolio and infringement evidence to assess its opportunities.

Deciding Whether to Opt Out

The right to opt out European patent filings from the UPC’s jurisdiction will be available for an initial transitional period of seven years, which may extend to 14 years. It will be possible to reverse an opt-out, but not if the patent has been enforced or attacked in national court.

McDermott’s UPC Resource Center explores the various advantages and disadvantages of both staying in and opting out of the UPC.




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No escape from fees and sanctions for reckless litigation conduct

The US Court of Appeals for the Federal Circuit affirmed attorneys’ fees awards against EscapeX IP, LLC, finding the case “exceptional” under 35 U.S.C. § 285, and upheld sanctions under 28 U.S.C. § 1927 based on counsel’s reckless litigation conduct. EscapeX IP, LLC v. Google LLC, Case No. 24-1201 (Fed. Cir. Nov. 25, 2025) (Taranto, Stoll, Stark, JJ.)

EscapeX brought suit against Google in the Western District of Texas, alleging that Google’s YouTube Music product infringed its patent directed to systems for generating artist-specified dynamic albums. After Google pointed out that the accused features were absent from YouTube Music and later demonstrated that the accused “Auto-Add” feature predated the patent’s priority date, EscapeX amended its complaint to list the correct product and refused to dismiss the case.

Shortly after EscapeX sued Google, its patent was invalidated under § 101 in a separate litigation. EscapeX did not appeal that ruling, and Google requested that EscapeX dismiss the case. In response, EscapeX filed what it characterized as a “joint stipulation of dismissal,” which Google contested because it had not agreed to such a filing. Google moved for attorneys’ fees under § 285, arguing that EscapeX had filed frivolous claims and unreasonably prolonged the litigation. The district court agreed, awarding Google its fees.

EscapeX then filed a Rule 59(e) motion to amend the judgment, attaching declarations from its CEO and an engineer to show pre-suit diligence. The district court denied the motion, finding that the evidence was not “newly discovered” and the motion was frivolous. Google successfully sought additional fees and sanctions under § 1927, resulting in an additional $63,525 jointly and severally against EscapeX and its attorneys. EscapeX appealed.

The Federal Circuit affirmed the district court decisions and found no abuse of discretion. The Court concluded that the record supported the finding that EscapeX had not conducted any pre-suit investigation and that the case was “frivolous from the start.” This conclusion was also supported by Google’s early, detailed warnings against filing the suit and EscapeX’s general nonresponsiveness.

Regarding the Rule 59(e) motion, the Federal Circuit agreed that the declarations were not “newly discovered evidence” because they were always within EscapeX’s control and knowledge. The Court rejected arguments of “manifest injustice,” which were not raised in district court and had no merit.

Finally, the Federal Circuit affirmed the sanctions under § 1927, finding that EscapeX’s counsel acted recklessly by filing a frivolous motion that multiplied proceedings. The Court noted that zealous advocacy does not excuse filing baseless motions. The Court upheld Google’s fees and sanctions in their entirety, with costs related to the appeal also awarded to Google.




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Spooky silence: USPTO Director summarily denies 13 IPR petitions

On October 31, 2025, the Director of the United States Patent and Trademark Office (USPTO) issued a notice denying institution of inter partes review (IPR) in 13 separate proceedings. The notice listed only the docket numbers of the affected IPRs and offered no substantive explanation for the denials, stating simply: “Pursuant to 35 U.S.C. § 314(a), institution of inter partes review is denied in the [listed] proceedings.” The summary denial follows the Director’s October 17, 2025, memorandum, which stated that the authority to determine whether to institute trial for IPR and post-grant review (PGR) proceedings rests solely with the USPTO Director.

Practice note: The October 17 memorandum signaled a shift in procedural control and reflected a broader policy approach to discretionary denials. While the October 31 notice provides limited insight into the basis for denial, it underscores the importance of understanding the USPTO’s evolving stance on institution discretion. Practitioners and petitioners alike should monitor future developments closely, as they may impact strategic considerations for filing and defending IPRs.




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Stocks, recusal, and copycats: ‘No problem’ on APJ conflict

The US Court of Appeals for the Federal Circuit found that an administrative patent judge’s (APJ) recusal in an inter partes review (IPR) based on ownership of stock in one of the defendant’s corporations in an amount below the statutory monetary threshold was not erroneous but remanded the case for further consideration of the copying evidence. Centripetal Networks, LLC v. Palo Alto Networks, Inc., Case No. 23-2027 (Fed. Cir. Oct. 22, 2025) (Moore, Hughes, Cunningham, JJ.)

Palo Alto Networks petitioned for IPR of Centripetal’s patent. The assigned three-member Patent Trial & Appeal Board panel instituted an IPR proceeding on the petition. Cisco sought joinder to the then-pending petition. Centripetal requested rehearing of the institution decision by either the Precedential Opinion Panel or the Board panel. The Precedential Opinion Panel denied the request.

In September 2022, Centripetal learned that a member of the Board panel owned stock in Cisco. However, Centripetal did not move for recusal until December 30, 2022, when it sought recusal of the entire panel and vacatur of the institution decision.

In January 2023, the Board panel denied Centripetal’s rehearing request and granted Cisco’s joinder motion. Nevertheless, two of the three members of the panel withdrew to narrow the issues before the Board. The reconstituted panel then denied Centripetal’s motion for vacatur and held that the recusal motion was untimely, because Centripetal had been aware of the potential conflict since September 2022.

In May 2023, the Board found certain claims of Centripetal’s patent to be unpatentable as obvious. Centripetal appealed to the Federal Circuit, arguing that the Board’s decision should be vacated because the allegedly conflicted APJ recused himself only after institution and because the Board failed to address Centripetal’s copying arguments.

The Federal Circuit determined that it had jurisdiction to hear the appeal, noting that the case turned on the interpretation of ethics rules and was not the first instance in which the Court reviewed a conflict-of-interest challenge involving an institution decision. The Court concluded that the Board did not abuse its discretion in determining that Centripetal’s recusal motion was untimely, as Centripetal had been aware of the potential conflict for three months before its filing.

The Federal Circuit also addressed the substance of the recusal motion and explained that the APJ’s stock holding in Cisco was less than the statutory $15,000 threshold at all times. Although Centripetal argued that different statutory provisions applied to APJs, the Court concluded that those provisions did not govern a federal employee’s personal financial holdings. Under the applicable statute, which requires recusal only when an employee owns more than $15,000 in a party, the Court found that the APJ was not required to recuse himself.

The Federal Circuit further found that Centripetal’s due process rights were not violated. The Court explained that ethics rules for Article III judges do not apply to administrative proceedings before APJs. The Court further noted that a recent (USPTO) memorandum directing the Board to avoid empaneling judges with any stock ownership in a party was not [...]

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Enablement: Skilled artisan’s knowledge no substitute for adequate written description

The US Court of Appeals for the Federal Circuit affirmed the US International Trade Commission’s (Commission) decision that a water filtration patent was invalid for lack of written description and enablement because the scope of the asserted claim was not enabled by the patent’s specification. Brita LP v. International Trade Commission, Case No. 24-1098 (Fed. Cir. Oct. 15, 2025) (Prost, Reyna, Chen, JJ.)

Brita filed a complaint at the Commission alleging that Vestergaard Frandsen and Helen of Troy infringed its water filtering patent. The main dispute focused on the patent’s only independent claim, which in part recites a “gravity-fed water filter, comprising filter media including at least activated carbon and a lead scavenger” that achieves a “Filter Rate and Performance (FRAP) factor of about 350 or less.” The patent identifies several types of filter media, including carbon filters.

The administrative law judge (ALJ) construed the term “filter usage lifetime claimed by a manufacturer or seller of the filter” to mean “the total number of gallons of water that a manufacturer or seller has validated can be filtered before the filter is replaced.” Based on this construction, the ALJ issued an initial determination finding that the asserted claims met the written description and enablement requirements.

Brita sought review of the initial determination before the full Commission. On review, the Commission reversed the ALJ’s finding of a violation, concluding that the “filter usage” term was indefinite, the asserted claims lacked adequate written description, and the claims were not enabled with respect to non-carbon block filters. Brita appealed.

To satisfy the written description requirement, a patent must demonstrate that the inventor was in possession of the claimed invention at the time of filing. This means the specification must adequately support each claim. In this case, the Federal Circuit found that the specification only supported carbon block filters meeting the claimed FRAP factor, not the broader category of “filter media” as claimed. As a result, the Court found that the asserted claims failed the written description requirement.

The Federal Circuit emphasized that the patent specification failed to support the broad claim language because of its narrow focus on carbon block filters. Specifically, the specification:

  • Described only carbon blocks, with other filter media mentioned solely as tested examples for FRAP factor
  • Provided specific formulations for carbon blocks only
  • Illustrated only carbon block filters in the figures
  • Made clear distinctions between carbon blocks and other filter types.

The Federal Circuit found persuasive the inventor’s testimony that only carbon block filters were created to meet the FRAP factor.

The Federal Circuit also affirmed the Commission’s finding that the claims were invalid for lack of enablement. Under the Federal Circuit’s 1988 In re Wands decision, enablement requires that a person of ordinary skill in the art be able to make and use the invention without undue experimentation. The Court found no reversible error in the Commission’s conclusion that undue experimentation would be required for filters other than carbon blocks to meet the claimed FRAP factor. The [...]

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Failure to reassess subject matter eligibility after similar claims invalidated justifies attorneys’ fees

Following a dismissal on the pleadings, the US District Court for the Southern District of New York granted the defendant’s motion for attorneys’ fees under 35 U.S.C. § 285 after concluding that the asserted patent was objectively invalid under 35 U.S.C § 101. Linfo, LLC v. Aero Global, LLC, Case No. 24-cv-2952 (S.D.N.Y. Oct. 15, 2025).

Linfo sued Aero Global alleging infringement of a patent directed to a system with methods and a user interface for discovering and presenting information in text content with different view formats. The patented system would allow a user to sort through online hotel reviews, for example, by toggling a button to show only positive comments, or only comments related to room service.

One week after filing its complaint, Linfo proposed an early-stage settlement of $49,000, which Aero Global did not accept. Subsequently, in a separate case involving the same patent, another judge in the Southern District of New York found the patent invalid. After Aero notified the court of the decision, Linfo sought to dismiss the case without prejudice, and Aero opposed. Linfo then requested a stay pending appeal of the other’s judge’s decision, which the court denied. Linfo then contacted Aero to propose the parties “walk away to close the matter.” Aero responded that it would agree to dismissal if Linfo reimbursed Aero for its fees incurred. Linfo did not respond, after which the court concluded that Linfo was collaterally estopped from asserting infringement of the patent and granted Aero’s motion for judgment on the pleadings.

Aero thereafter sought attorneys’ fees under § 285, arguing that the asserted patent was objectively invalid under § 101. The district court agreed, finding that the litany of cases published after the Supreme Court’s 2014 Alice v. CLS decision should have made clear to Linfo and its counsel that the asserted patent was directed precisely to the kind of abstract concept that Alice deemed unpatentable. Linfo argued that since the patent was issued after the Alice decision, it was reasonable for Linfo to assume the patent examiner considered Alice as part of the USPTO’s decision-making process. The district court rejected this argument, finding no evidence that the USPTO evaluated whether the patent was directed to patent eligible subject matter and, more importantly, finding that numerous cases post-dating the patent’s issuance invalidated patents similar to Linfo’s patent.

Linfo argued that it was reasonable for it to continue the case because it received favorable claim construction rulings and litigated against other defendants that had not filed § 101 challenges. The court rejected this argument, explaining that judicial construction of a patent claim after a claim construction hearing says little about whether that claim is eligible under § 101, given that claim construction and patent eligibility are distinct inquiries.

The court considered Linfo’s and its attorney’s litigation history and found several indicia suggesting that Linfo and its counsel brought this case to induce settlement rather than to reach the merits. The court noted that Linfo had asserted the challenged patent [...]

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Associational standing requires concrete, non-speculative harm

The US Court of Appeals for the Federal Circuit affirmed a district court decision dismissing a lawsuit against the United States Patent and Trademark Office (USPTO) for lack of associational standing since no member of the association had standing to sue. US Inventor, Inc. v. United States Patent and Trademark Office, Case No. 24-1396 (Fed. Cir. Oct. 3, 2025) (Lourie, Reyna, Stark, JJ.)

US Inventor and National Small Business United (collectively, the plaintiffs) jointly filed a petition for rulemaking at the USPTO to amend the regulations that control the USPTO’s discretion to institute inter partes review (IPR) or post-grant review (PGR) proceedings. The plaintiffs proposed five instances in which the USPTO would have no discretion to institute an IPR or PGR. Separately, the USPTO issued a request for public comments regarding institution discretion two months after the plaintiffs filed their petition.

Eventually, the USPTO denied the petition, citing redundancy with the request for public comment. The USPTO assured the plaintiffs that their request would be considered as a public comment.

In response, the plaintiffs filed a complaint in federal court claiming that the USPTO had committed three errors:

  • The USPTO’s assurance that the plaintiffs’ requests would be considered “in unspecified ‘future rulemaking’” violated its duty to conclude the matter in an appropriate amount of time, as required by the Administrative Procedure Act (APA).
  • Under the APA, the USPTO failed to state adequate grounds for denial.
  • The USPTO violated the America Invents Act (AIA) by “fail[ing] to promulgate notice-and-comment rulemaking.”

The USPTO filed a motion to dismiss, arguing that the plaintiffs lacked standing. The district court granted the motion, finding that the plaintiffs had neither organizational nor associational standing. The plaintiffs appealed.

Because the issue of associational standing was not specific to patent law, the Federal Circuit applied the law of the US Circuit Court for the District of Columbia, which reviews standing de novo.

Of the three requirements for associational standing (standing of at least one associational member, applicability of the issue to the association’s purposes, and individual member participation not required for the claim or relief), only the first was at issue.

The Federal Circuit concluded that since no member of the plaintiffs’ organizations had standing to sue, the plaintiffs themselves did not have associational standing. The Court noted that the plaintiffs had failed to claim anything more than speculative harm to any member resulting from the USPTO’s denial of plaintiffs’ petition. The Court found the “risk” of patent cancellation during an IPR or PGR proceeding insufficiently “actual or imminent” to afford any member standing to sue.

The Federal Circuit explained that a requisite third-party action outside of the plaintiffs’ control would need to occur before any harm to the plaintiffs’ members could be concretely realized. Third-party actions, including the filing of a petition for an IPR or PGR proceeding, the USPTO’s institution of such proceeding, and the USPTO’s ultimate decision in such proceeding, constitute multiple steps in the chain of events that might result in harm [...]

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Prevailing party: Dismissal with prejudice will do it

The US Court of Appeals for the Federal Circuit found that a district court erred in denying fees and costs to the prevailing party (here, the defendant), but upheld the district court’s denial of Rule 11 sanctions. Future Link Sys., LLC v. Realtek Semiconductor Corp., Case Nos. 23-1056; -1057 (Fed. Cir. Sept. 9, 2025) (Stoll, Reyna, Bryson, JJ.)

Future Link sued Realtek for patent infringement in the Western District of Texas. Realtek challenged service and personal jurisdiction and subsequently moved for Rule 11 sanctions. During discovery, Future Link produced a licensing agreement with a third party, under which the third party had agreed to pay a lump sum if Future Link sued Realtek. Shortly afterward, Future Link entered into a separate licensing agreement with Realtek covering the accused products and voluntarily dismissed the case.

Realtek moved for attorneys’ fees under 35 U.S.C. § 285 and costs under Rule 54(d)(1), and asserted that Future Link had filed objectively baseless lawsuits. The district court denied Realtek’s motions for fees and sanctions, did not address the motion for costs, and converted Future Link’s voluntary dismissal to a dismissal with prejudice.

Fees and costs

To seek fees and costs, a party must qualify as “the prevailing party.” In reviewing the district court’s decision on fees and costs, the Federal Circuit addressed Realtek’s prevailing party status under both § 285 and Rule 54(d).

Applying de novo review, the Federal Circuit concluded that Realtek was the prevailing party, despite the voluntary dismissal, because the district court had converted that dismissal to one with prejudice. The Federal Circuit emphasized that prevailing party analysis turns on whether there has been a material alteration of the legal relationship between the parties. Citing its own precedent, the Court explained that a dismissal with prejudice constitutes such a change because it bars the plaintiff from reasserting the same claims against the same products.
The Court explained that a favorable ruling on the merits is not required. A defendant that successfully avoids liability, such as through dismissal with prejudice, can still be deemed the prevailing party.

Since the dismissal with prejudice prevented Future Link from reasserting its patent claims against the accused products, Realtek was the prevailing party. The Federal Circuit vacated the district court’s denial of attorneys’ fees under § 285 and remanded the issue for consideration of whether the case was exceptional and fees were warranted. It likewise remanded the Rule 54(d) costs issue for initial determination.

Rule 11 sanctions

The Federal Circuit affirmed the district court’s denial of Rule 11 sanctions. Realtek had argued that Future Link’s prefiling investigation was inadequate and that the lawsuit was improperly motivated by a third-party payment arrangement, making that arrangement the but-for cause of the lawsuit.

The Federal Circuit rejected both arguments. First, it found that Future Link’s pre-suit investigation met Rule 11 standards: Future Link obtained and analyzed three accused products, prepared claim charts comparing asserted patent claims to the accused products, and investigated relevant optional features that it reasonably believed [...]

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Derivation proceedings highlight race to file under AIA

In one of the first decisions regarding derivation proceedings under the America Invents Act (AIA), the US Court of Appeals for the Federal Circuit affirmed the Patent Trial & Appeal Board’s finding that an application earlier filer had not derived his claimed invention from a later-filing petitioner. Global Health Solutions, LLC v. Marc Selner, Case No. 2023-2009 (Fed. Cir. Aug. 26, 2025) (Stoll, Stark, JJ.) (Goldberg, J., sitting by designation).

Global Health Solutions (GHS) and Marc Selner filed patent applications governed by the AIA and covering similar subject matter. Selner filed his application first. GHS filed a petition to institute derivation under 35 U.S.C. § 135, alleging that Selner’s patent claims were derived from Burnam, the single inventor on the GHS application.

During Board proceedings, the parties submitted evidence regarding the timing of their respective conceptions of the claimed inventions, including several email communications. Based on Selner’s evidence, the Board determined that he could not have derived the claimed invention from Burnam. The Board also rejected GHS’s argument that actual reduction to practice was necessary to complete conception of the claimed invention. GHS appealed.

The Federal Circuit explained that while pre-AIA patent interference proceedings required a party alleging derivation to establish prior conception and communication of the invention to the opposing party, the AIA does not expressly define the evidentiary requirements for derivation petitions. Nevertheless, the Court, borrowing from its interference jurisprudence, reasoned that an AIA derivation proceeding similarly requires a showing of both conception and communication of the claimed invention. The Court emphasized, however, that standards articulated in case law from pre-AIA interference proceedings must be applied with caution and considered in light of the AIA’s distinct statutory framework.

The Federal Circuit determined that although the Board focused on which party had proof of the earliest conception (typically the dispositive issue in interference proceedings), it was harmless error. Under the AIA first-to-file framework, determination of the first to invent is not dispositive. The Court noted that because Selner was first to file, he only needed to show that his conception was independent of Burnam’s. Here, Selner’s proof of earlier conception was also proof of conception independent of Burnam, the Court noted.

The Federal Circuit also determined that the Board did not err in rejecting GHS’s argument that Selner failed to demonstrate invention in the absence of evidence of actual reduction to practice. The Court found that the Board appropriately addressed whether such a requirement (often applied in interference proceedings to complicated, unpredictable technology) applied to the invention at issue. The Court explained that Selner’s conception was complete either when he could define the invention by its method of preparation or when he had formed a definite and permanent idea of the complete and operative invention. Selner’s earlier email communication to Burnam supported the finding that Selner had reached the requisite understanding to establish complete conception without the need for actual reduction to practice. Accordingly, the Court affirmed the Board’s decision in favor of Selner, finding no derivation.

Practice note: [...]

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