The Fox Group, Inc. v. Cree, Inc. (Fed. Cir., 2012)

What kind of showing must an infringement defendant make to demonstrate a prior invention under Section 102(g), and what must a patentee do to show that the prior inventor abandoned, suppressed, or concealed?  If the prior inventor makes an oral presentation and publishes a paper mentioning the composition but not revealing how to make it, is that enough?  In The Fox Group, Inc. v. Cree, Inc., decided November 28, 2012, the Federal Circuit affirmed the U.S. District Court for the Eastern District of Virginia, which granted summary judgment of patent invalidity in favor of Cree.  The panel disagreed about whether Fox met its burden of production on the abandon/suppress/conceal issue, but I think dissenting Judge Kathleen O’Malley has the more wily view.

Fox owns U.S. Pat. No. 6,562,130, which describes and claims axially grown, single-crystal silicon carbide (Si-C) having a low level of defects.  Claim 1, for instance, requires Si-C having a “density of dislocations of less than 104 per square centimeter, a density of micropipes of less than 10 per square centimeter, and a density of secondary phase inclusions of less than 10 per cubic centimeter.”  When Fox sued Cree, Cree argued that it had shown an image of just such a low-defect Si-C crystal at a 1995 conference.  In 1996, Cree published a paper in which a cropped image of the crystal was shown, and the caption identified it as having a “total line defect density of about 1000 cm-2.”

The district court granted Cree’s motion for summary judgment and declared Fox’s claims invalid in August 2011, prompting Fox’s appeal to the CAFC.  Fox argued that Cree had not conclusively shown prior invention.  Moreover, Cree had abandoned, suppressed, or concealed the invention by not publishing it and failing to commercialize within a reasonable time.

The Federal Circuit disagreed with Fox and upheld the lower court.  It ruled that Cree’s presentation and paper evidenced prior invention.  As Judge Wallach wrote: “The test for establishing reduction to practice requires that ‘the prior inventor must have (1) constructed an embodiment or performed a process that met all the claim limitations and (2) determined that the invention would work for its intended purpose’ . . . Cree met both prongs  . . .  It developed  . . . a SiC wafer that met all three defect density limitations of claims 1 and 19 of the ‘130 patent.”  The court explained that, contrary to Fox’s contention, Cree had no burden to show that it had repeatedly made low-defect Si-C crystals.  It concluded that there was no genuine issue of material fact as to whether Cree had reduced the invention to practice.

On the issue of abandonment, suppression or concealment, the majority held that Fox had not met its burden to produce evidence sufficient to raise a genuine issue of material fact.  “Fox contends that the presentation and publication . . . are not enough to enable one skilled in the art to make the invention, because Cree never disclosed how it got its results.”  The court noted that Fox relied on cases reciting process rather than product claims.  “Fox argues that any distinction between product and process claims is irrelevant.  We disagree . . .  Cree promptly made its invention, a SiC material with low defect densities, known to the public.  Fox has not produced sufficient evidence raising any genuine issues of material fact to show that Cree suppressed or concealed its invention.”

Judge O’Malley’s dissent is thorough and compelling.  She agreed that Cree showed that it grew a Si-C crystal that met Fox’s claim limitations, and that Cree appreciated the qualities.  This was enough to establish a prior reduction to practice by Cree.  However, she disagreed that the record supported the majority’s conclusion that Cree was entitled to judgment as a matter of law on the issue of abandonment, suppression, or concealment.  According to Judge O’Malley, summary judgment was “inappropriate because (1) Fox presented evidence of both direct and inferential abandonment, suppression, or concealment, and (2) Cree’s written publication . . . was insufficient standing alone to rebut Fox’s evidence.”

Judge O’Malley pointed to evidence offered by Fox to support its view, including deposition testimony from Dr. Calvin Carter, a Cree inventor, regarding the “company’s policy to exclude all details as to how to replicate discoveries in any publications regarding them.”  Fox argued that Cree “made a choice” not to disclose the invention or teach the public how to make it, then delayed nine years before filing a patent application.  In Judge O’Malley’s view, Fox presented evidence “sufficient to encompass both intentional and inferential abandonment, suppression, or concealment.”  Fox’s showing shifted the burden to Cree to rebut by clear and convincing evidence.  “Here, Cree’s only rebuttal argument was that it disclosed the Kyoto wafer, together with an x-ray topography and a description of its low-defect nature . . . .  In short, the district court and now the majority here, find that the same evidence which established Cree’s prior reduction to practice was sufficient to prohibit a finding of abandonment, suppression, or concealment.”

Judge O’Malley criticized the majority for ignoring Apotex USA, Inc. v. Merck & Co., 254 F.3d 1031 (Fed. Cir. 2001).  “Apotex makes clear that a prior inventor must show that the public was clearly given the benefit of an invention, via reverse-engineering, a detailed disclosure, or otherwise, if it wants to rely on § 102(g) to invalidate a patent.  Despite the majority’s finding to the contrary, simply disclosing the existence of the product, without more, is insufficient to make an invention publicly known . . .  Because Cree made the fact of its invention known to the public, the majority . . . concludes that Fox can never establish abandonment, suppression, or concealment.  Under the majority’s approach, an inventor could publicly announce that it made a product, with no explanation as to how it did so, and then hide it away in a closet indefinitely . . .  The majority’s approach cannot be the law.  If a prior inventor could disclose the mere existence of a product and take no further action for nine years, the concept of abandonment, suppression, or concealment would be rendered meaningless.”

Judge O’Malley is on target.  Section 102(g) prevents mischief by requiring full disclosure in some form, be it commercialization or publication.  You could call me crazy for siding with the dissent here, but I’m not that kind of crazy . . . just crazy like a fox.


–Jon Schuchardt
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