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Recent Cases
United States
Court of Appeals for the Federal Circuit
03-1151
(Interference No.
103,894)
JOHN M. TASKETT,
Appellant,
v.
DALE H.
DENTLINGER,
Appellee.
Sid
Leach, Snell & Wilmer, L.L.P., of Phoenix,
Arizona, argued for appellant. Of counsel were Thomas J. Finn
and Michael K. Kelly.
David
G. Wille, Baker Botts L.L.P., of Dallas,
Texas, argued for appellee. With him on the brief were Jeffrey
D. Baxter and Charles S. Fish.
Appealed from: United
States Patent and Trademark Office,
Board of
Patent Appeals and Interferences
United
States Court of Appeals for
the Federal Circuit
03-1151
(Interference No. 103,894)
JOHN M. TASKETT,
Appellant,
v.
DALE H. DENTLINGER,
Appellee.
__________________________
DECIDED: September 26, 2003
__________________________
Before
MICHEL, DYK, and PROST, Circuit Judges.
MICHEL, Circuit
Judge.
John M. Taskett appeals from the decision of the United
States Patent and Trademark Office, Board of Patent Appeals and
Interferences ("Board") awarding priority to junior party, Dale H.
Dentlinger. Dentlinger v.
Taskett, Patent Interference No. 103,894, slip op. (Bd. Pat. App. &
Int. Aug. 28, 2002). Because the Board correctly
concluded that Dentlinger had proven reduction to practice of the invention
claimed in the count before Taskett's filing date, we affirm.
Background
Taskett filed his patent
application on June 1, 1995
and Dentlinger filed his on June 7,
1995. The Board
declared an interference between the two applications on July 9, 1997. The interference involves a single count
covering a process for the automated purchasing of prepaid telephone
services. Because of the filing dates, Taskett
was designated the senior party.
Ultimately, however, the Board concluded that Dentlinger was
entitled to priority because Dentlinger showed that he was the first to
reduce to practice the subject matter of the count.
The Board's acceptance of Dentlinger's
assertion that he conceived the invention no later than July 15, 1994 is not
contested. Taskett contests the
Board's conclusion that Dentlinger's reduction to practice occurred no
later than October 11, 1994,
arguing that the October 11, 1994
test was not sufficiently complete.
The Board disagreed for two reasons. First, the Board explained that it
concluded that the October 11, 1994 test achieved reduction to practice
because, in contrast to what Taskett argued, Dentlinger was not required by
the count to obtain actual "financial authorization" from a
third-party institution; the Board found that the use of a switch at EDS
(Dentlinger’s employer) and a dummy account could satisfy the
count. Dentlinger,
Patent Interference No. 103,894, slip op. at 11-13. Second, the Board concluded that the
testimony of two of Dentlinger's employees,
and the test receipt dated October
11, 1994, showed by a preponderance of the evidence that
Dentlinger had reduced the invention to practice by October 11, 1994. Id.
Taskett had also filed a motion to strike
witness Rhonda Landa's re-direct testimony on the ground that the scope of
the re-direct examination exceeded that of the cross-examination. The Board denied Taskett's
motion. The Board explained
that even if it exceeded the scope of cross examination, the re-direct
examination was proper because its purpose was "to bring out omitted
facts and circumstances concerning the invention." Id.
at 8.
Taskett maintains that Dentlinger's October 11, 1994 test failed to perform a
process that met all of the limitations of the count and that Dentlinger
failed to prove adequate testing to show that the process actually worked
for its intended purpose.
Taskett appeals to this court, arguing that the Board erred in
concluding that Dentlinger deserved priority because Dentlinger did not
prove he successfully reduced the invention of the count to practice before
Taskett's filing date. Taskett
specifically identifies the "financial authorization" limitation,
and the descriptions of the printed receipt as reflecting
"purchase" of "prepaid telephone services," as not
performed by the October 11, 1994
test. Taskett essentially
argues that the count can only be fulfilled if real money, from a real bank
account at a third-party financial institution is actually debited and
actual telephone calls are made based on the printed receipt.
Taskett also appeals the denial of his motion to strike
Rhonda Landa's re-direct testimony.
We have jurisdiction pursuant to 28 U.S.C.
§ 1295(a)(4)(A).
Discussion
"Priority
and its issues of conception and reduction to practice are questions of law
predicated on subsidiary factual findings." Brown v. Barbacid, 276 F.3d
1327, 1332 (Fed. Cir. 2002) (citation omitted). "Accordingly, this court
reviews without deference the Board's legal conclusions on . . . reduction
to practice, and reviews for substantial evidence the Board's factual
findings." Id.
(citations omitted).
I.
"In
order to establish an actual reduction to practice, the inventor must prove
that: (1) he constructed an embodiment or performed a process that met all
the limitations of the interference count; and (2) he determined that the
invention would work for its intended purpose." Cooper v. Goldfarb, 154 F.3d
1321, 1327 (Fed. Cir. 1998).
A.
To satisfy the first requirement of the test for reduction
to practice, Dentlinger must prove that he practiced every limitation of
the count. See, e.g., Eaton
v. Evans, 204 F.3d 1094, 1097 (Fed. Cir. 2000). In this regard, Taskett argues that
the October 11, 1994
test did not meet every limitation of the count because the test did not
seek either “financial authorization” or authorization from a third-party
financial institution, but rather received authorization based on a dummy
checking account at EDS itself.
According to Taskett, the “financial authorization”
limitation in the count requires communication with and approval from an
actual third-party financial institution holding actual money in an actual
account. The Board found to the
contrary, and we agree.
Although it is true that in many commercial applications
“financial authorization” will be obtained from a third-party
financial institution, the count, we conclude, does not so require. The language of the count is simply:
“obtaining financial authorization for said request by a central
terminal.” Nothing in the
count, read on its face or in light of either or both specifications,
requires that the “central terminal” be located at a
third-party financial institution.
According to Taskett, interpretation of the term
“financial authorization” must be limited by the
specification. Though it is true
that we must read a claim in light of the specification, rarely will we
limit the claim to the preferred embodiments described in that
specification. Amgen Inc. v.
Hoechst Marion Roussel, Inc., 314 F.3d 1313, 1325 (Fed. Cir. 2003)
(“Because
the claims are best understood in light of the specification of which they
are a part, however, courts must take extreme care when ascertaining the
proper scope of the claims, lest they simultaneously import into the claims
limitations that were unintended by the patentee.”). This is not such a case. Nothing in the specifications
suggests that “central terminal” means a central computer at a
third party institution.
Specifically, in the Summary of the Invention,
Dentlinger’s application describes one of its objects as providing a
system and method for “electronically debiting a designated
account,” and does not limit the “designated account” to
one at a third-party financial institution. Even where the specification does
suggest that authorization be obtained from a third-party financial
institution, the discussion is limited to the preferred embodiments. The specification makes clear,
however, that the claims are not limited to those embodiments. For example, the specification
states “there are numerous known ways for obtaining authorization,
any of which are compatible with the system and method of the present
invention,” and that “the present description is provided only
by way of illustrative example . . . [and] [n]umerous modifications and alternate
embodiments of the invention will occur to those skilled in the
art.” To require
“financial authorization” from a third-party financial
institution would be to impermissibly import limitations from the
specification into the claims.
Accordingly, we hold that “financial authorization” does
not require approval from a third-party financial institution.
In addition, we discern substantial evidence supporting
the Board’s finding that the “authorization” requirement
was met. Taskett does not
dispute that the October 11, 1994 test obtained approval from a sample
checking account using the EDS switch.
During the October 11, 1994 test, the “initiating
terminal,” an ATM device, received a request to purchase a specified
amount of prepaid telephone service.
The ATM device communicated with the EDS switch, which operated as
the “central terminal.”
The EDS switch checked the amount of available “funds”
in a sample checking account to ascertain whether there were sufficient
funds for the prepaid telephone services. Upon confirming sufficient
funds, fifty dollars was withdrawn from the sample checking account. A printed receipt reflected this
withdrawal and provided a call-in number and PIN. Thus, “financial
authorization” was provided by the central terminal to the ATM upon
receiving a request for the purchase of prepaid telephone services. Though the funds in the sample
checking account were not real, the “financial authorization”
was.
Because the count does not require actual authorization
from a third party and because “authorization” was received for
the sample checking account here, we agree that all limitations of the
count were met in the October 11, 1994 test.
B.
As for Taskett's argument that Dentlinger did not prove
reduction to practice because he did not show that he "determined that
the invention would work for its intended purpose," Cooper, 154
F.3d at 1327, we agree with the Board that to meet this requirement, the
test need not occur under conditions of actual, commercial use. See Scott v. Finney,
34 F.3d 1058, 1063 (Fed. Cir. 1994) ("In tests showing the
invention’s solution of a problem, the courts have not required
commercial perfection nor absolute replication of the circumstances of the
invention’s ultimate use. . . .
[Although,] more scrupulous testing [is prescribed] under
circumstances approaching actual use when the problem includes many
uncertainties.").
Courts have found testing sufficient to prove that the
invention is suitable for its intended use in situations similar to the one
here. For instance, in Williams
v. Adm’r of NASA, 463 F.2d 1391 (CCPA 1972), this court’s
predecessor court held that laboratory testing of an invention intended for
attitude control of a yet-to-be-launched communications satellite was
sufficient. The court found
nothing in the record that would “raise significant doubts”
that the system tested in the laboratory would be operative when used with
the communications satellite. Id.
at 1399. Thus, it found the
simulation adequate. Similarly,
in Scott, this court held that the second requirement for a showing
of reduction to practice did not mandate testing of a prosthetic penile
implant device under conditions of actual use. Scott, 34 F.3d at 1063. The court found that prior art
prosthetic devices had “fully tested the workability of most
features” of the invention and that subsequent testing need only show
the workability of the new features of the claimed invention. Id.
Here, there is substantial evidence that the
"obtaining financial authorization" limitation of the count was
well-known, well-tested, and even commercialized in the fields of credit
cards and banking. We also
discern substantial evidence that the printed receipt shows the process
would in fact work for making telephone calls. Rhonda Landa's testimony,
corroborated in part by the testimony of Kathleen Davis, and the receipt
dated October 11, 1994, provided direct and ample evidentiary support for
the Board's finding. Dentlinger,
Patent Interference No. 103,894, slip op. at 12. That Dentlinger did not test this
step of the count under conditions of actual use does not mean that he did
not reduce it to practice. His
test was sufficient to determine that the invention would work for its
intended purpose. To hold
otherwise would be to require an inventor to have created a viable
commercial embodiment before the Board or a court could find reduction to
practice. This the law does not
require. See Scott,
34 F.3d at 1061-63; Mattor v. Coolegem, 530 F.2d 1391, 1395 (CCPA
1976) (“Although, as Coolegem asserts, there is no indication that
the OPC’s made and tested were capable of being commercially
exploited without further refinement, this is not necessary for a reduction
to practice of the count.”); Barmag Barmer Maschinenfabrik AG v.
Murata Mach. Ltd., 731 F.2d 831, 838 (Fed. Cir. 1984) (“On the
other hand, ‘there is no requirement for a reduction to practice that
the invention, when tested, be in a commercially satisfactory stage of
development.’”) (citation omitted).
Because there was at least substantial evidence supporting
the Board's conclusion and the Board's analysis was free of legal error, we
hold the process invention of the count was reduced to practice on October
11, 1994.
II.
Dentlinger
maintains that Taskett waived a number of the arguments he presents on
appeal by not raising them below.
As we have already explained, Taskett loses on the lack of merit of
all of the arguments he presents.
Having already rejected them, it is unnecessary for us to decide
whether Taskett waived any of those arguments. Moreover, because the arguments for
waiver are not very strong and the rebuttal arguments are powerful, the
substantive arguments form a more appropriate basis for our decision. We, therefore, decline to reach the
waiver issues.
III.
Dentlinger
argues in the alternative that he is entitled to priority because he was
diligent in his efforts at reduction to practice up until the filing of his
application. The Board did not
reach the question of Dentlinger's diligence because of its conclusion that
Dentlinger reduced his invention to practice before Taskett's filing
date. Because we affirm the
Board's decision on the same basis, we also need not reach this argument.
IV.
With
respect to Taskett's appeal of the denial of his motion to strike portions
of the re-direct testimony of Rhonda Landa, we conclude that the Board did
not abuse its discretion. The
Board has ample authority and discretion to admit relevant testimony of the
kind given by Landa. We think
it unclear that anything Landa said on re-direct was, as argued, beyond the
scope of the cross-examination.
But even if it were, it was entirely appropriate for the Board to
admit it anyway in order to clarify facts that were not made sufficiently
clear by either cross examination or direct examination, as the Federal
Rules of Evidence, and thus the Board’s rules, so permit. See 37 C.F.R. §
1.671(b); Fed. R. Evid. 611(b).
Conclusion
We
conclude that the Board was correct in determining the count did not
require actual financial authorization from a third-party financial
institution. We also observe
substantial evidence supporting both the Board's finding that all steps of
the count were performed by October 11, 1994 and its finding that, on that
date, Dentlinger proved he duly determined that his process would work for
its intended purpose. Both
findings were reached by a process that was in accordance with law. We
hold, therefore, that the Board correctly concluded Dentlinger was the
first to reduce to practice the process invention of the count. As priority was correctly awarded to
Dentlinger, we AFFIRM
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