266:, a patent is valid unless "the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States". Netscape prevailed in its argument; the district court judged the patent to be invalid on June 18, 2001. Konrad then appealed the decision to the
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facts are examined) to determine whether buyer and seller are indeed separate entities. A major impact of this case was that it clarified what it means to be separate entities. In particular, the
Netscape appeals court formulated a test to determine whether buyer and seller are in fact two separate entities as follows:
381:
Second, the court concluded that Konrad's demonstration cannot be considered an experiment because he provided "no objective evidence to support experimental use." Namely, Konrad failed to "maintain records of testing" and, in some cases, was not in full control of his invention—he let people try it
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Despite the clarification, the test still requires a fact-based analysis of the degree to which one entity "controls" the other. In
Netscape, the fact that the Department of Energy does not hold the national labs to a confidentiality agreement (at least, not to non-funded projects) was deemed a lack
377:
The appeals court rejected all three of Konrad's arguments. First, the court noted that even though Konrad disclosed his invention to LBNL, a common funding source is not sufficient to carry an expectation of confidentiality. In particular, the contract between LBNL and the U.S. Department of Energy
452:
Where, as in this case, both parties to an alleged commercial offer for sale receive research funds from the same entity, it may be more difficult to determine whether the inventor is attempting to commercialize his invention. Accordingly, in such cases whether there is a bar depends on whether the
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Konrad admitted offering to adapt his invention for use at the
University Research Association Superconducting Super Collider Laborator and Stanford Linear Accelerator Center in return for compensation. However, Konrad argued that this was not a sale because those labs, just like his employer LBNL,
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The application of the on-sale bar requires that the buyer and seller be "separate entities". However, prior to this case, what constitutes separate entities was considered by courts to be very vague. In fact, courts had traditionally used a "totality of circumstances" test (one in which all the
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Here the court leveraged Konrad's own testimony that the starter client used in the actual invention "is very similar to, if not the same as, software program icons created to quickly initiate a program", and hence can be easily derived from the demonstration, which featured initialization via a
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Finally, the court concluded that, even though Konrad may not have revealed every limitation, the difference between what was revealed and the actual invention would have been obvious to a person with reasonable technical skills. This, the court claimed, was supported by the legal precedent of
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Konrad admitted demonstrating his invention before the critical date without explicitly communicating to his audience that it was confidential. Regardless, Konrad argued that this demonstration does not meet the public use criteria for three reasons. First, he argued that because LBNL and the
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The appeals court rejected Konrad's argument. Legal precedent requires that in the case where seller and buyer are funded by the same entity, the existence of a sale depends on whether the funding agency can prohibit public disclosure. In this case, however, the court concluded that the
363:, the invention disclosure he made to the LBNL patent office before the demonstration allowed for an implicit expectation of confidentiality. Second, he argued that the demonstration was an experiment and thus cannot be considered public use under legal precedent established in
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out without monitoring them. In fact, the court used Konrad's own testimony that the purpose of the demonstration "was to convince the people that...there was a viable project" to conclude that his intent was to gain endorsements rather than experimentation.
339:, an invention has been offered for sale if "it rises to the level of a commercial offer for sale, one which the other party could make into a binding contract by simple acceptance." Furthermore, the sale must be between two separate legal entities per
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In his appeal, Konrad argued that the district court was wrong to conclude that his patents were invalid. In particular, he argued that he did not publicly use or attempt to sell his patents before the critical date, as required by
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requires that LBNL "provides for the protection of government property", "safeguard restricted data" and to "provide written disclosures", but says nothing about the confidentiality of U.S. Department of Energy funded projects.
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Alan M. Konrad owns U.S patents 5,544,320; 5,696,901; 5,974,444; all concerning a system for accessing and searching a database residing on a remote computer. On
February 8, 2000, Konrad filed a patent infringement suit in
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employee who devised and implemented a method for accessing and searching data objects stored on a remote computer (U.S. patents 5,544,320; 5,696,901; 5,974,444). Netscape moved to invalidate Konrad's patents in
333:, an invention has been publicly used if it was used by "a person other than the inventor who is under no limitation, restriction or obligation of secrecy to the inventor". By legal precedent set in
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and (2) tried to sell it to other legal entities, both more than one year before he filed for the patent. The appeals court, upon review, affirmed the district court decision for the same reasons.
286:(October 1990), but filed for the first of his three patents only on January 8, 1993, thus establishing a January 8, 1992 (i.e., one year prior) bar date for public use and sale under
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282:(LBNL) in 1977. On September 8, 1990, Konrad tested a method for searching a database residing on a remote computer. Shortly thereafter, Konrad disclosed his invention to LBNL's
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suit against
Netscape customers. The district court concluded that Konrad's patents were invalid because they did not meet the public-use and on-sale bar eligibility criteria of
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Konrad's patents are ineligible for patent protection in the United States because they were publicly used and commercialized more than one year prior to the patent filing date.
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doesn't exercise enough control over the labs to prevent them from leaking the invention to the public: "All indications are that the DoE funded specific projects at
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Apr. 2, 2001) (finding U.S. Patents No. 5,544,320, 5,696,901, and 5,974,444 invalid for public use and commercialization before bar date)
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Netscape
Communications Corporation, Microsoft Corporation, and America Online, Inc. v. Konrad
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434:, but never exercised such control over them, as to render all part of the same entity."
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The
Commercial Offer Prong of the On-Sale Bar, After Pfaff. IP Litigator. September 2002
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seller so controls the purchaser that the invention remains out of the public's hands.
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Netscape, acting in the interest of its customer relationships, asked the
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United States Court of
Appeals for the Federal Circuit cases
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Northern District of California
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United States Court of Appeals for the Federal Circuit
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United States Court of Appeals for the Federal Circuit
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U.S. District Court for the Eastern District of Texas
196:). The inventor in this case was Allan M. Konrad, a
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745:Netscape Communications Corp. v. Konrad
612:Group One, Ltd. v. Hallmark Cards, Inc.
513:Netscape Communications Corp. v. Konrad
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336:Group One, Ltd. v. Hallmark Cards, Inc.
173:Netscape Communications Corp. v. Konrad
86:Netscape Communications Corp. v. Konrad
24:Netscape Communications Corp. v. Konrad
653:Baxter Int'l, Inc. v. Cobe Labs., Inc.
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723:Sinskey v. Pharmacia Ophthalmics Inc.
330:Petrolite Corp. v. Baker Hugher, Inc.
280:Lawrence Berkeley National Laboratory
254:to invalidate Konrad's patents via a
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678:, 1122 n.5 (Fed. Cir. 1996).
594:Petrolite Corp. v. Baker Hughes Inc.
432:Stanford Linear Accelerator Center
304:Stanford Linear Accelerator Center
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238:against thirty-nine customers of
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696:, 1567 (Fed. Cir. 1995).
660:, 1059 (Fed. Cir. 1996).
619:, 1048 (Fed. Cir. 2001).
601:, 1425 (Fed. Cir. 1996).
100:Rehearing denied, August 2, 2002
730:, 498 (Fed. Cir. 1992).
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278:Konrad began his employment at
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240:Netscape Communications Corp.
428:Lawrence Berkeley Laboratory
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424:Department of Energy
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248:America Online, Inc.
124:Haldane Robert Mayer
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90:N. D. Cal.
69:U.S.P.Q.2d
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