By John Presper
On December 18, 2020 the Federal Circuit issued its Opinion in Caterpillar Inc. et al. v. Int’l Trade Comm’n, No. 2019-2306. This was an appeal from the Commission’s ruling in Certain Road Construction Machines and Components Thereof (Inv. No. 337-TA-1088) that certain claims of U.S. Patent No. 7,140,693 (“the ’693 patent”) were invalid under pre-AIA 35 U.S.C. § 102(b) because of an on-sale bar.

By way of background, the Commission instituted this investigation on November 29, 2017 based on a complaint filed by Caterpillar Inc. and Caterpillar Paving Products, Inc. (collectively, “Caterpillar”) alleging violations of section 337 by Respondents Wirtgen GmbH, Wirtgen Group, Wirtgen America (collectively, “Wirtgen”), and Joseph Vögele based on the importation, sale for importation, and sale within the U.S. after importation of certain road construction machines and components thereof that infringed one or more claims of the ’693 patent, U.S. Patent No. 9,045,871, and U.S Patent No. 7,641,419. Following an evidentiary hearing and final initial determination by ALJ, the Commission found a violation of section 337 with respect to claim 19 of the ’693 patent and issued a limited exclusion order and cease-and-desist order directed to Wirtgen. The Commission determined, inter alia, that claims 1, 15-18, 24, 26-28, 36, and 38 of the ’693 patent were invalid due to the on-sale bar. Caterpillar only appealed the invalidity ruling with respect to claim 28, as the other claims of the ’693 patent were also found invalid on other grounds.

According to the opinion, the Commission’s ruling was based on a prior sale of the SF 102 C machine sold by Bitelli S.p.A. (“Bitelli”)—an Italian company and original assignee of the ’693 patent who assigned its rights in the patent to Caterpillar upon acquisition—before the critical date of the ’693 patent. Wirtgen relied on two Bitelli records as evidence of the invalidating sale: (1) a June 1999 invoice identifying a Bitelli SF 102 C machine sold to a customer with an address in California; and (2) a July 2000 spreadsheet showing that a Bitelli SF 102 C machine was sold to the same customer identified in the June 1999 invoice. Caterpillar did not dispute that the records showed that the Bitelli SF 102 C machines were on sale by 2000 (or that the machines met all of the required claims limitations), and instead contended that the records did not show that the sales were in the U.S. as required by pre-AIA § 102(b), and that the invoices showed that the machines were delivered in Italy. The ALJ focused primarily on the June 1999 invoice, and determined that “[e]ven if this machine was delivered in Italy, the invoice [was] evidence of commercial activity directed to the United States that would satisfy the ‘on sale’ bar.” The ALJ also found corroboration in the July 2000 spreadsheet record of a sale of the Bitelli SF 102 C machine to the same customer because “a machine bearing that serial number was discovered in the United States.”

On appeal, Caterpillar challenged the Commission’s determination that the Bitelli SF 102 C machine was “on sale in this country.” The Federal Circuit first noted that under the pre-AIA on-sale bar, if the “offer for sale” was made “in this country,” then the invention would be “on sale” in this country even if the invention was sold for use outside the U.S. However, in this case “where it appears that the transfer of title occurred in Italy, our cases do not hold that the mere fact that the sale was made to a United States company is sufficient.” Instead, the court observed that it “must analyze whether the invention was sold for use in the United States.” The Federal Circuit found substantial evidence to support the Commission’s finding that the Bitelli SF 102 C machine was sold to a U.S. customer for use in this country.

First, the face of the June 1999 invoice indicated that the sale was to a buyer with a U.S. address.

Second, other indicia in the June 1999 invoice showed that it was a sale for export to the U.S. For example, the invoice listed a “CUSTOMS TARIFF N. 84305000” and noted that the “goods” were “of Italian origin.” Although 84305000 appeared to refer to a tariff subheading number for the European Union, the first six digits correspond to the analogous subheading in the U.S. Harmonized Tariff System of the United States, 8430.50, which is for “[o]ther moving, grading, leveling, [or] scraping . . . machinery, for earth, minerals or ores” that are “self-propelled.” In addition, the invoice contained a description of the Bitelli SF 102 C machine in English and identified the currency as U.S. dollars.

Third, the VAT assessment in the June 1999 invoice was further evidence that the item was not for use in Italy or elsewhere in the European Union.

Fourth, the fact that another Bitelli SF 102 C machine sold in July 2000 to the same customer was found in the U.S. during the Commission’s investigation also suggested that the June 1999 sale of the Bitelli SF 102 C machine was for use in the U.S.

Finally, there were no contrary indicia that the machine in the June 1999 invoice was sold for use in Italy or anywhere else outside the U.S., and Caterpillar offered no evidence that the customer in the June 1999 invoice had a presence other than in the U.S.

The Federal Circuit therefore affirmed the Commission’s decision invalidating claim 28 of the ’693 patent under pre-AIA § 102(b).