On Sale Bar Doctrine Rendered Patent Invalid Where Presentation and Manufacturer's Quote Constituted Offers for Sale

by Jeffer Mangels Butler & Mitchell LLP
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Orbis Corporation ("Orbis"), a manufacturer of commercial baking trays, owns U.S. Patent 6,273,259 ("the '259 patent"), which covers a baking tray ("the NPL663 tray"). As explained by the district court, "Orbis sells the NPL663 trays solely to Bimbo Bakeries, Inc. ("Bimbo"), and Bimbo's affiliated brands. Several years ago, one of those affiliated brands, Sara Lee Corporation ("Sara Lee") approached the defendant, Rehrig Pacific Company ("Rehrig"), to request that Rehrig design a tray that was both compatible with and similar to the NPL663 tray. Rehrig obliged and designed its SLBT180 tray, which it then began selling to Sara Lee. After several years of allowing Rehrig to sell its SLBT180 tray to Sara Lee, Orbis sued Rehrig, alleging that the SLBT180 tray infringed upon Orbis' '259 patent."

Rehrig moved for summary judgment based on the "on-sale bar" doctrine pursuant to 35 U.S.C. § 102, which states that "[a] person shall be entitled to a patent unless...the claimed invention was...on sale" more than one year "before the effective filing date of the claimed invention." 35 U.S.C. §§ 102(a-b).

The district court then analyzed "whether there was a commercial sale or offer for sale of the invention in question more than one year before the filing of the patent. Specifically, the Court must ask whether Orbis sold or offered to sell the NPL655/NPL663 tray more than one year before May 9, 2000, the date on which it filed for the '259 patent. If Orbis did sell or offer to sell those trays before May 9, 1999--the "critical date," one year before filing--then the '259 patent is invalid."

To reach this determination, the district court then looked at relevant Federal Circuit law: "the Federal Circuit has made clear that the language used by the parties in communicating with one another is one of the prime factors in determining whether the requisite manifestation of intent exists. The Federal Circuit states that "[l]anguage suggesting a legal offer, such as 'I offer' or 'I promise' can be contrasted with language suggesting more preliminary negotiations, such as 'I quote' or 'are you interested.' Differing phrases are evidence of differing intent, but no one phrase is necessarily controlling."Group One, 254 F.3d at 1048. But language, alone, is not entirely dispositive, according to the Federal Circuit. Instead, the Court must also look to the circumstances surrounding the communication, such as any prior dealings between the parties, whether their communications were private or public, whether their communication occurred in reply to a request for an offer, and the detail in the terms of the communications. See, e.g., Fisher-Price, Inc. v. Safety 1st, Inc., 109 Fed. Appx. 387, 392 (Fed. Cir. 2004) (citing 1 Corbin on Contracts § 2.2 at pp. 1-2 (Joseph M. Perillo, Rev. ed. 1993); Restatement (Second) of Contracts § 26, cmt. c (1981))."

Based on this law as well as the Restatement and the UCC, the district court determined that presentations and a quote from the manufacturer constituted offers. "Given the foregoing law, it is clear to the Court that both presentations, as well as the quote from the manufacturer, constituted offers."

Accordingly, the district court found the patent was invalid due to an on-sale bar.

Orbis Corp. v. Rehrig Pacific, Co., Case No. 12-CV-1073-JPS (E.D. Wisc. Sept. 10, 2013)

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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