Under contract, Sparton submitted to the Navy in 1971 a proposed revision to improve the sonobuoy device it was providing. Continuing product development lead Sparton to file, in 1973, two patents: 3,921,120 and 4,029,233.

In 1992, Sparton sought damages from the Navy's unlicensed use of Sparton's patented sonobuoy technology. The government successfully argued before the court in the first round that the patents were invalid owing to the law regarding one-year on-sale bar (35 USC 102 (b)). The Federal Circuit Court of Appeals (CAFC) just reversed the lower court ruling:

In order for a patent to be held invalid under the on-sale bar, two conditions must be satisfied before the critical date:

First, the product must be the subject of a commercial [sale] or offer for sale. . . . Second, the invention must be ready for patenting. That condition may be satisfied in at least two ways: by proof of reduction to practice before the critical date; or by proof that prior to the critical date the inventor had prepared drawings or other descriptions of the invention that were sufficiently specific to enable a person skilled in the art to practice the invention.

Pfaff v. Wells Elec., Inc. 525 U.S. 55, 67-68 (1998). While the Supreme Court has not explained what is necessary for a "commercial offer for sale," we have held that two elements are necessary. Namely, a court must find that (1) there was a "commercial offer"; and (2) that offer was for the patented invention. Scaltech, Inc. v. Retec/Tetra, L.L.C., 269 F.3d 1321, 1328 (Fed. Cir. 2001).

The government had argued that Sparton's March 1971 proposed revision invalidated the 1973 patent filings, all the while conceding that the drawings and description of that revision had not described what was subsequently patented. As the CAFC observed:

Under the Claims Court’s analysis, the patented single part release plate was the subject of an offer for sale before it was even conceived. Such a result is illogical. The court even noted that such an outcome would defy logic at the outset of its opinion. Sparton, No. 92-580C, slip op. at 18 (“Logic dictates, however, that a device that does not completely exist cannot be the subject of an offer for sale.”). The court thus improperly reached an unwarranted result by relying on contract principles.

With no conception of an invention, there cannot be an offer for sale or a sale of that invention.

Download the CAFC decision in Spartan Corp. v. United States (03-5169).