§ 102(g) "Secret" Prior Art Need Not Be Reduced to Practice Before Priority Date to Qualify as Prior Art Under § 103

Tyco Healthcare Grp. LP v. Ethicon Endo-Surgery, Inc., ___ F.___ (Fed. Cir. Dec. 4, 2014) (PROST, Reyna, Hughes) (D. Conn.: Arterton) (3 of 5 stars)
Federal Circuit affirms invalidity determination under 102(g), reverses nonobviousness determination and vacates a $176 million damages award. The patents in suit covered surgical devices that use ultrasonic energy to cut and coagulate tissue.

ANTICIPATION – § 102(g): The district court properly concluded that certain claims were anticipated in view of Ethicon's prototype prior art under § 102(g). Ethicon's prototype—conceived before Tyco's conception date and diligently reduced to practice—anticipated 26 claims. That design changes occurred after conception did not preclude the prototype from being anticipatory art where those changes were not features of the claims. Federal Circuit also concluded that 1) there was no gap in activity during the period of reduction to practice and 2) Tyco's arguments regarding written description and enablement of the patents that cover the prototype were irrelevant to the question of whether the prototype qualifies as § 102(g) art.
OBVIOUSNESS – § 102(g) Prior Art as § 103 Prior Art: In view of the statute, § 102(g) prior art does not require a reduction to practice before the priority date so long as the inventor can prove prior conception and diligence in reduction to practice. The court stated: "[w]e therefore hold that neither § 102(g) nor § 103 make prior reduction to practice the only avenue through which § 102(g) prior art can constitute prior art under § 103." Slip op. at 12. Federal Circuit acknowledged the tension of applying "secret" § 102(g) prior art to the patentee's claims, but cited the statute's requirement that the prior invention not be abandoned, suppressed or concealed after reduction to practice as addressing those concerns: "Thus, absent the application of a statutory exception, § 102(g) prior art may serve as prior art under § 103." Id. at 13. Combining Ethicon's prototype prior art with other prior art of record, Federal Circuit determined that two classes of patentee's claims would have been obvious because they are combinations of familiar elements that yield predictable results and because the secondary reference is analogous art. Because all remaining claims were invalid, Federal Circuit vacated the damages award.

Authors: Cherylyn Esoy Mizzo, Adam Shartzer