Invisible but Invalidating: Undisclosed Functionality Still Triggers On-Sale Bar

Written by: Douglas B. Wentzel and Alex Martin del Campo

DEFINITIVE HOLDINGS, LLC v. POWERTEQ LLC

Before Moore, Dyk, and Cunningham.  Appeal from the United States District Court for the District of Utah.

Summary: A third-party sale of a product embodying the claimed invention before the critical date can trigger the on-sale bar even if the product’s functionality was not publicly disclosed.

Definitive Holdings sued Powerteq alleging infringement of a patent directed to upgrading engine controller software. Powerteq moved for summary judgment of invalidity under the pre-AIA on-sale bar (35 U.S.C. § 102(b)), arguing that a third party, Hypertech, sold a device embodying the asserted claims more than one year before the patent’s priority date. The district court granted summary judgment, and Definitive appealed.

The Federal Circuit affirmed. The Federal Circuit agreed that the factual record, which Definitive did not dispute, established clear and convincing evidence Hypertech’s device was sold before the critical date and embodied every limitation of the asserted claims. The Federal Circuit also rejected Definitive’s argument that the on-sale bar requires public disclosure of the invention’s functionality. The court explained a commercial sale need not disclose how the invention works so long as the product sold embodies the claimed invention. Because Hypertech’s device was publicly sold and enabled users to perform the claimed methods, the on-sale bar applied.

Editor: Sean Murray