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Fox Group, Inc. v. Cree, Inc.
By Dorothy Du – Edited by Suzanne Van Arsdale

Fox Group, Inc. v. Cree, Inc., No. 2011-1576 (Fed. Cir. Nov. 28, 2012)
Slip Opinion

The Federal Circuit affirmed in part and vacated in part the Eastern District of Virginia, which had granted defendant Cree’s motion for summary judgment on the invalidity of Fox Group’s (“Fox”) entire patent on low defect single crystal silicon carbide.

The Federal Circuit held that because Cree had proved by clear and convincing evidence that it was the prior inventor of the patent and Fox had failed to produce sufficient evidence to raise a triable issue on whether Cree abandoned, suppressed, or concealed the invention, claims 1 and 19 of U.S. Patent No. 6,562,130 (“’130 patent”) were invalid under 35 U.S.C. § 102(g)(2). However, because there was no justiciable case or controversy to support Cree’s counterclaim on the invalidity of the rest of Fox’s patent, the court vacated the district court with respect to that portion of its holding.

Patently-O presents the background and key holdings of the case. Photonics Patent Blog suspects that the case would have come out the same way under the AIA’s “first to file” rule, which kicks in on March 16, 2013.

The ’130 patent’s priority date is in January 1997. The patent claims a low defect silicon carbide crystal, a man-made semiconductor material that is used in the electronics industry. The fewer the defects in the crystal, the more valuable it is. Claims 1 and 19 of the ’130 patent claim a crystal with a specific low frequency of different types of density defects. Fox sued Cree for infringing the patent in 2010. Cree counterclaimed that the patent was invalid on section 102(g)(2) grounds and filed a motion for summary judgment, which was granted. Fox Group, Inc. v. Cree, Inc., 819 F. Supp. 2d 524, 536–537 (E.D. Va. 2011).

On appeal, Fox first argued that Cree had failed to show by “clear and convincing evidence” that it was the prior inventor because it did not prove that it could duplicate the process by which it made the crystal in 1995. The Federal Circuit rejected this argument, finding that a prior inventor need only either (1) reduce the invention to practice or (2) conceive of the invention first and make diligent efforts to reduce it to practice. Fox Group, Inc. v. Cree, Inc., No. 2011-1576, slip op. at 8 (Fed. Cir. Nov. 28, 2012). Since Cree reduced the invention to practice, it did not also have to prove conception. Moreover, Cree did not have to recognize the extent of the crystal’s low defect density in the same terms as those of the patent claims. Id. at 9. It was enough that Cree generally appreciated the invention’s uniquely low defect density.

Fox also argued that Cree suppressed or concealed its 1995 invention because it unreasonably delayed in making the invention publicly known. The court rejected this argument, stating that while 102(g)(2) requires that the prior inventor make the invention available to the public, filing a patent application and commercializing the product are not the only ways to meet the requirement. Id. at 11. Cree’s presentation of the invention at an international conference and publication of a paper on the invention before 1997 satisfied the requirement. Moreover, the public disclosure did not have to be enabling because the patent is for a product, not a process. Id. at 13.

Judge O’Malley concurred in part and dissented in part. She agreed with the majority that Cree was the prior inventor. However, she disagreed with the majority that Cree had not abandoned, suppressed, or concealed the invention as a matter of law. First, she found that Fox had raised a triable issue by presenting direct evidence that Cree had a broad policy of excluding all details of how to replicate discoveries in all publications. Second, she argued that by finding the same evidence that established Cree’s reduction to practice to be sufficient to avoid a finding of abandonment, the majority rendered the abandonment and suppression provision to be meaningless. Id. (O’Malley, J. dissenting) at 6–8, 10.

This decision makes a finding of invalidity under section 102(g)(2) significantly easier by holding that enablement of a product is not required for a public disclosure by a prior inventor. The outcome is based on legal formalism, rather than public policy concerns. The dissent embodies the sentiment that despite technically being the prior inventor, Cree contributed too little to the advancement of the field to be entitled to invalidate Fox’s patent. The objection to Cree’s acts is that they were analogous to patent trolling: if a party is not going to use or sell its invention, it should not have the right to sit on it and prevent others from patenting it.

Dorothy Du is a 3L at Harvard Law School.

 

Posted On Dec - 11 - 2012 Comments Off

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