By Paul A. Ragusa and Jack Chen*

A pdf version of this article may be downloaded here.

In Pfaff v. Wells Elecs., Inc.[FN1] the Supreme Court formulated the now well known test for determining when an invention cannot be patented due to a sale or offer for sale more than one year prior to the filing of a patent application. Specifically, the Court held that an invention need not be “reduced to practice” at the time of the sale or offer to create a statutory bar against patent protection. [FN2] Instead, a sale or offer of an invention “ready for patenting,” is sufficient to raise a statutory bar. [FN3] The purpose of the on-sale bar is to encourage early disclosure of inventions to the public as well as to prevent a de facto patent term extension by those who would commercially exploit an invention for an extended period of time prior to filing a patent.

During the past twelve years, the courts have applied the Pfaff test to various technologies, some with more clarity than others. One thorny area involves the application of the Pfaff test in the context of software related inventions. Although the Pfaff Court rejected precedent that an invention needed to be “substantially complete” to provide a statutory bar, [FN4] it did not address how a software related invention can be ready for patenting where the code is incomplete, and untested. As a practical matter, how is a court to determine whether an unfinished software-related invention is ready for patenting and therefore can operate to trigger an on-sale bar? A recent district court decision addresses this issue head-on and is discussed below.

I. Background

An applicant may be barred from patenting a software method after offering it for sale even if the computer code implementing the method is incomplete at the time of the offer. The patent statute states, “[a] person shall be entitled to a patent unless…the invention was…on sale in this country, more than one year prior to the date of the application for patent in the United States.” [FN5] The purpose of the on-sale bar is to encourage early disclosure and to prevent inventors from removing existing knowledge from public use. [FN6]

The on-sale bar applies when two conditions are met: (i) the invention is the subject of a commercial offer for sale and (ii) the invention is ready for patenting prior to the statutory one-year period. [FN7] An invention is “ready for patenting” where either (i) the invention has been reduced to practice or (ii) 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. [FN8]

II. Robotic Vision Systems

The Court of Appeals for the Federal Circuit addressed the Pfaff test in the context of an invention involving software or computer programming in Robotic Vision Sys., Inc. v. View Eng’g, Inc. [FN9] There, the court addressed a software method for scanning leads on integrated circuit devices. The application for Robotic’s patent was filed on June 24, 1992, establishing a one-year date of June 24, 1991. [FN10] In March of 1991, Robotic sold one of its scanning devices to Intel Corporation and agreed to deliver the patented device to Intel by June 3, 1991, thereby establishing a commercial offer for sale in March 1991, prior to the critical date of June 24, 1991. [FN11]

The Federal Circuit determined whether the claimed invention was ready for patenting prior to the critical date. Some time between March and April of 1991, a co-inventor of the patented scanning method, William Yonescu, disclosed the claimed method to Daniel Briceno of Robotic and asked him to write the software to implement the method. [FN12] It was undisputed that Briceno ultimately completed the software program according to Yonescu’s description in March-April 1991, thereby establishing that Yonescu’s description was sufficiently specific to allow Briceno to practice the invention and that the claimed invention was ready for patenting prior to the critical date of June 24, 1991. [FN13]

According to the court, the second Pfaff requirement may be satisfied even though there is no “actual completion of such software…, provided that there is a disclosure that is sufficiently specific to enable a person skilled in the art to write the necessary source code to implement the claimed method.” [FN14]Under the Pfaff test, Robotic’s invention was therefore invalid due to an on-sale bar. [FN15]

III. Netscape Commc’ns Corp.

Netscape Commc’ns Corp. v. ValueClick, Inc. [FN16] involved the cookies feature of the popular Netscape browser in which a piece of data, called a “cookie” and stored on the user’s local computer, could be sent to the remote web server to enable the remote server to remember previous interactions with the user. For example, a remote server could identify a particular user by his or her cookie and present the user with his or her stored shopping cart of merchandise.

ValueClick argued that the cookie feature was the subject of an offer for sale as early as July or August of 1994, more than one year prior to the filing of the corresponding patent application on October 6, 1995. [FN17] Netscape countered that no software product could have included the cookie feature prior to the one-year date (October 6, 1994) because the public release of the Netscape browser did not occur until after that date (October 13, 1994). Thus, Netscape argued that the cookie feature was not reduced to practice prior to the on-sale bar date. [FN18]

According to the District Court, “this statement misunderstands the law governing the ‘ready for patenting’ Pfaff prong because it assumes that an invention is only reduced to practice, and thus the on-sale bar can only be applied, after the source code has been perfected.” [FN19] Testimony by Netscape’s expert revealed that a draft version of source code pertaining to the cookie feature was entered into Netscape’s software repository on October 4, 1994. [FN20] Netscape also testified that part of the method was completed by October 6, 1994, and that an early version of the code was entered into the software repository on October 3, 1994. [FN21] Thus, the District Court concluded that the existence of the draft source code prior to October 6, 1994, although perhaps incomplete, demonstrated that the method was ready for patenting prior to the critical date.

The court went further. “Moreover, with respect to inventions involving computer code, Pfaff simply requires complete conception of the invention, not the source code’s actual completion, provided that there is an enabling disclosure that would allow one skilled in the art to complete the invention.”[FN22] In a declaration to the Patent and Trademark Office, Netscape’s Chief Technology Officer, John Giannandrea, stated that Netscape’s software developer, Lou Montulli, disclosed the cookie invention, which corresponded to claim 1 of the patent-in-suit, during design review meetings in July and August of 1994. [FN23] According to Giannandrea, the meetings involved Giannandrea and Montulli drawing the software architecture for the cookie invention on a white board. [FN24]

The District Court found that Giannandrea, a software developer with more years of experience than Montulli, was a person of ordinary skill in the art for purposes of the Robotic test. [FN25] The July/August disclosure to Giannandrea and Montulli’s completion of the source code in October of 1994, coupled with Giannandrea’s years of software programming experience, constituted an enabling disclosure that would have enabled Giannandrea to write the source code. Accordingly, the District Court held that the evidence showed that the cookies invention was “ready for patenting” under the second prong of the Pfaff test.

IV. Conclusion

The Netscape case highlights the risk of offering for sale software products that are under development. A simple investigation concerning whether software code was complete is insufficient to establish the critical date for the purposes of § 102(b). Instead, an investigation should determine when the invention was disclosed in sufficient detail to enable one of ordinary skill in the art to write software, regardless of the state of software development.


*Paul A. Ragusa is a partner and Jack Chen an associate in the New York office of Baker Botts LLP, where they practice intellectual property law with an emphasis on patent litigation, patent portfolio management, counseling, and licensing.

[FN1] 525 U.S. 55 (1998).

[FN2] Id. at 67.

[FN3] Id. at 68.

[FN4] Id. at 66.

[FN5] 35 U.S.C. § 102(b).

[FN6] Pfaff, 525 U.S. at 64.

[FN7] Id. at 67-68.

[FN8] Id. at 68.

[FN9] 249 F.3d 1307, 1312 n.2 (Fed. Cir. 2001).

[FN10] Id. at 1309.

[FN11] Id. at 1311.

[FN12] Id.

[FN13] Id. at 1311-12.

[FN14] Id. at 1312 n.2.

[FN15] Id. at 1312-13.

[FN16] No. 1:09cv225, 2010 U.S. Dist. Lexis 8733 (E.D. Va 2010).

[FN17] Id. at 8779-80.

[FN18] Id. at 8779.

[FN19] Id. at 8780.

[FN20] Id. at 8779.

[FN21] Id.

[FN22] Id. at 8780 (citing Robotic Vision Sys., 249 F.3d at 1311-13).

[FN23] Id. at 8745-8746 n.8, 8782-83.

[FN24] Id. at 8782-83.

[FN25] Id. at 8782.