## Facts

- EMD owned two patents covering locomotive turbocharger bearings: U.S. Patent No. 5,169,242 (compressor bearing) and U.S. Patent No. 5,567,056 (planetary bearing).
- EMD used a two-phase program for new bearings: (1) indoor in-house testing, then (2) field “verification” by installing bearings in locomotives sold to customer railroads for routine operations.
- In the field program, bearings were incorporated into turbochargers and locomotives sold under ordinary customer orders; EMD generally inspected bearings only if a turbocharger failed and was returned.
- Compressor bearing facts:
  - By mid-1989, the compressor bearing completed in-house testing and was cleared for field use by substitution into customer locomotive orders.
  - EMD documents showed customer railroads agreed to accept the new bearings in purchased locomotives.
  - On August 28, 1989, EMD modified at least one customer order to provide additional new compressor bearings as spare parts beyond prior order requirements.
  - EMD did not obtain confidentiality agreements, did not tell customers the bearings were experimental, and did not impose use restrictions or reporting obligations.
  - Application filed November 27, 1990 (critical date November 27, 1989).
- Planetary bearing facts:
  - Designed in 1992; indoor testing began January 1993; field use began March 1993.
  - EMD installed planetary bearings in two locomotives shipped to Union Pacific in August 1993 without confidentiality or testing documentation.
  - EMD did not restrict Union Pacific’s use or require monitoring, reports, or documentation; EMD did not systematically supervise performance.
  - Application filed September 29, 1994 (critical date September 29, 1993).
- EMD sued GE (and a bearing supplier) for infringement; GE asserted both patents were invalid under the § 102(b) on-sale bar based on pre-critical-date commercial activity.
- The district court granted summary judgment for GE on invalidity; EMD appealed, arguing the pre-critical-date activity was protected experimental use.

## Issues

1. Whether EMD’s pre-critical-date delivery of locomotives (and spare parts) containing the claimed bearings constituted commercial offers for sale/sales under 35 U.S.C. § 102(b).
2. Whether EMD’s asserted field-testing activities qualified as experimental use sufficient to avoid the § 102(b) on-sale bar.

## Decision

- The Federal Circuit affirmed summary judgment that both patents were invalid under the § 102(b) on-sale bar.
- The court applied the Pfaff test and treated the incorporation of the claimed bearings into locomotives sold under ordinary customer orders as commercial sales/offers for sale.
- The court held the experimental-use exception did not apply because the alleged field testing lacked key objective indicia of experimentation, including customer awareness and patentee control.

## Legal Principles

- Under Pfaff v. Wells Electronics, Inc., the § 102(b) on-sale bar applies if, before the critical date, (1) the invention was the subject of a commercial offer for sale, and (2) the invention was ready for patenting.
- Experimental use is a narrow exception; the patentee bears the burden to show the primary purpose of the pre-critical-date activity was experimentation rather than commercial exploitation.
- Relevant experimentation factors include inventor supervision and control, customer awareness of experimentation, confidentiality or testing agreements, use restrictions, and requirements for reporting or data collection.
- A patentee’s internal intent to gather performance information does not convert an objectively commercial transaction into experimental use when the invention is placed in routine customer service without meaningful controls.

## Conclusion

The Federal Circuit held that EMD’s pre-critical-date placement of the claimed bearings into locomotives sold to customers (and related spare-part supply) constituted commercial sales under § 102(b), and EMD failed to show experimental use because customers were not informed of experimentation and EMD did not retain sufficient supervision or control over the alleged field tests; both patents were therefore invalid.


Electromotive Div. of Gen. Motors Corp. v. Transp. Sys. Div. of Gen. Elec. Co., 417 F.3d 1203 (Fed. Cir. 2005)