Prior Conception Defeats Otherwise Sufficient Derivation Showing

In its second-ever Final Written Decision in a derivation proceeding, the Patent Trial and Appeal Board ("PTAB") determined that a patent application for a biocidal composition and method of producing said biocidal composition did not derive from the work of another inventor. The decision illustrates that even if a petitioner is able to otherwise make the complex showings required for derivation, the petitioner can still be defeated by a showing of prior conception.

Previously, in April 2022, the PTAB instituted a derivation proceeding in Global Health Solutions LLC v. Selner, DER2017-00031 ("GHC"). The Institution Decision addressed the showings required for derivation and analyzed Petitioner's evidence with respect to those showings. (For a summary and analysis of the Institution Decision, refer to our prior blog post.) Although the PTAB identified a few shortcomings in the Petition, it nevertheless determined that there was sufficient evidence to support the assertion of derivation.

In its Final Written Decision, the PTAB reaffirmed the analysis of the prima facie showings required for derivation. Nevertheless, the PTAB found that Petitioner failed for a separate reason: the Respondent proved conception of the alleged "invention disclosed to Respondent" prior to Petitioner's conception and disclosure to Respondent. To show "prior conception," the Respondent must (1) demonstrate that it conceived of each element of "the invention disclosed to the respondent" before the Petitioner's disclosed conception and (2) must provide sufficient independent corroboration of prior conception to satisfy the "rule of reason" standard.

Here, Respondent made several attempts to demonstrate prior conception. All but one failed because they were missing disclosures of certain elements of the disputed invention, or because they were not independently corroborated as having those elements. The final attempt, a pair of email communications, succeeded in stating every element of the disputed invention. (Interestingly, these two emails were sent only hours before the disclosure that Petitioner relied on to obtain institution.)

Petitioner did not dispute the presence of every element of the disputed invention, but rather argued that the communication lacked third-party corroboration of conception. To overcome the problem of obtaining corroboration directly from the emails' recipient (i.e., the Petitioner), the Respondent took advantage of the "rule of reason" standard and submitted a declaration from a law clerk of Respondent's counsel, who testified she independently accessed Respondent's AOL email files and printed the two emails without alteration. The PTAB found these facts, coupled with the fact that AOL is a well-known email service provider, were sufficient to show independent corroboration. Though it was not necessary, the PTAB continued its analysis, showing that Petitioner's disclosure evidence bore a substantial resemblance to the language used by Respondent in its prior email communications. This was found to be circumstantial evidence that Respondent did send the emails to Petitioner. Thus, Respondent successfully showed that Respondent conceived of the invention before it was disclosed by Petitioner.

Takeaway: This case provides a rare glimpse into the derivation process as well as potential strategies for both future petitioners and respondents. Petitioners are shown the stringent requirements they must meet to establish derivation and are reminded that this may still be insufficient if respondents can demonstrate prior conception.

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