An offer for sale of an invention is usually thought
of as a sale event of the invention to public by the patent owner or
designees. A recent case decided by the
Federal Circuit, Hamilton Products v. Sunbeam Products offers an interesting
twist.
Here is the fact of
the case: Hamilton Beach and Sunbeam both sell slow cookers. Hamilton Beach owns a patent for a slow
cooker, sold under the brand the "Stay or Go" cooker. Hamilton
Beach's first patent application for the Stay or Go was filed on March 1, 2006.
“Stay or Go” cooker turned out to be a big success for Hamilton Beach. In response, Sunbeam developed a competing
slow cooker, branded as "Cook & Carry.” "Cook & Carry” product has sealing
clips mounted on the lid of the slow cooker.
On June 4, 2010,
Hamilton Beach filed another patent application claiming priority to its first
application having a filing date of March 1, 2006. The second patent application claims a slow
cooker with sealing clips mounted on the lid, which covers Sunbeam’s “Cook
& Carry” product. The USPTO granted a patent on Hamilton Beach's second
application. Hamilton Beach sued Sunbeam alleging that Cook & Carry products
infringed upon the second application.
Remember that Hamilton
Beach’s second application has an effective filing date of March 1, 2006 (by
claiming the priority to the first application), so any patentability barring
event will need to happen before March 1, 2005 (critical date). Sunbeam found out that Hamilton Beach issued
a purchase order for nearly 2,000 Stay or Go slow cookers to its foreign
supplier (an OEM manufacturer) on February 8, 2005.
Because the filing
date of Hamilton Beach's first patent application for the Stay or Go slow
cooker was March 1, 2006, the critical date in this dispute was one year
earlier, or March 1, 2005. Sunbeam argued that Hamilton Beach's foreign
supplier offered to sell the Stay or Go before that critical date.
Specifically, Hamilton Beach listed its Tennessee facility as the shipping
address for the merchandise and its Virginia office as the billing address. The
supplier confirmed receipt of the purchase order on February 25, 2005, and
responded that it would begin manufacturing the slow cookers once it received
Hamilton Beach's release. This response
from the supplier was significant, according to the Federal Circuit, because it
was an offer to sell from the foreign supplier (the OEM manufacturer) of
Stay or Go slow cookers to Hamilton Beach.
According to the Federal circuit, this offer to sell from a supplier to
a brand-name owner is sufficient to satisfy “a commercial offer for sale” under
the on-sale bar, and there is no "supplier exception" rule under the
on-sale bar.
The court
subsequently decided that the invention is ready for patenting and the sale
does not qualify for an experimental use exception. Combining all three factors, the court
concluded that on-sale bar invalidates the claims against Sunbeam from the second
patent of Hamilton Beach.
Here is the lesson learned:
This case reiterates the importance of filing patent applications covering
commercial embodiments of an invention as early as possible. This case also
shows the need for potential patentees to be cautious when dealing with
suppliers, including overseas suppliers and OEM manufacturers, as those
dealings may trigger the on-sale bar.
Thanks for reading.
Connie
