In Derivation Hearing, Judges Rule in GED’s Favor

Nearly six years after the Leahy-Smith America Invents Act (AIA) overhauled the U.S. patents system, diverting it from a “first to invent” to a “first to file” line of ruling, door and window manufacturer Andersen Corp. was at the front of the line for putting the system’s derivation proceedings to the test. That process ended recently, in a ruling that came down in favor of GED Integrated Solutions, the holder of the contested patent.

At the heart of the debate were inventors from both companies, along with patents filed by GED for an insulating spacer frame. The U.S. Patent and Trademarks Office Patent Trial and Appeal Board (PTAB) took exclusive jurisdiction over the matter in May 2017.

Through a derivation proceeding launched in March 2018, Andersen sought to overtake a patent issued in August 2016, for a concept that company officials allege was first conceived by one of Andersen’s employees. To prove such derivation, the asserting party must “establish prior conception of the claimed subject matter and communication of that conception to an inventor of the other party,” an official PTAB document declares.

Following initial proceedings, a response was filed by GED, after which Andersen filed an official reply. Both sides then put their arguments to the test in November before a panel of administrative patent judges, amid the first session for oral argument held under the new AIA-based system. In his argument, Andersen’s attorney, Cyrus A. Morton of Robins Kaplan LLP in Minneapolis, alleged that one of his client’s employees, Samuel Oquendo, first had the idea that was later patented. Oquendo then communicated that idea to GED inventor Bill Briese, leading directly to a patent, Morton alleged. The idea at stake was developed to solve the problem of leakage around the fourth corner of insulating glass units.

“Mr. Briese eventually took that idea from Mr. Oquendo, put it in his own inventor notebook, handed the CAD drawing showing that idea to his engineers to make GED’s new corner plus product and patented the idea in the ‘953 patent,” Morton alleged.

Oquendo came up with a prototype in March 2009, or spring 2009, Morton claimed, after which officials for GED denied ever seeing such a design, he said. Meanwhile, “… I submit that the evidence still shows that it’s more likely than not that they did,” he alleged. “… I’ve never seen anything that’s quite as clear, quite as much of a frankly a smoking gun piece of evidence as taking the drawing that came straight from our inventor, putting it in your inventor notebook and calling that your invention … They introduce it and all of a sudden Andersen comes to the commercial debut of the introduced new system and someone says you know, that kind of looked like what Sammy Oquendo was talking about,” he alleged.

Judges saw the evidence in a different light, however, instead concluding that, “Andersen has not shown that an inventor named in the ‘953 patent derived any of the inventions recited … from an inventor named in Andersen’s ‘862 application.”

The judge said the timing of events described by both parties supports GED’s position that the claimed invention was not derived.

“Andersen’s position is that Mr. Oquendo communicated details of his spacer frame idea to GED in 2009 and 2011,” the judges’ official ruling states. “If that were true, though, rather than immediately beginning work to manufacture a device as allegedly conveyed by Mr. Oquendo, or immediately filing a patent application on the concept, Mr. Briese did not document any details of the idea or file a patent application until more than three years later in 2014.”

Those timing of events, the judges concluded, support GED’s position, therefore disproving derivation, they ordered.

Jurisdiction over the involved application and patent has now returned to appropriate officials under the Commissioner for Patents.

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