## Facts

- Datamize owned two patents (’040 and ’418) directed to software and methods for an “authoring tool” used to create customized electronic kiosk applications; both were continuations sharing a common specification.
- Kevin Burns developed the authoring tool by December 1994 through his company, Multimedia Adventures (MA).
- The relevant patent application was filed on February 27, 1996, making February 27, 1995 the § 102(b) critical date.
- In January 1995, MA presented the authoring tool to the Ski Industry of America (SIA) in anticipation of a March 1995 trade show.
- On January 25, 1995, SIA sent a letter stating that, in exchange for a waived sponsorship fee and trade-show floor space, MA would provide the software package needed to produce a touch-screen information kiosk.
- Plumtree filed a declaratory judgment action seeking declarations of noninfringement and invalidity, asserting the patents were barred by § 102(b) based on MA’s pre-critical-date commercial activity.
- The district court denied Datamize’s motion to dismiss for lack of declaratory judgment jurisdiction and granted Plumtree summary judgment that the patents were invalid under the on-sale bar.
- Datamize appealed both jurisdiction and the on-sale-bar summary judgment.

## Issues

1. Whether an actual controversy existed to support declaratory judgment jurisdiction under 28 U.S.C. § 2201.
2. Whether summary judgment of invalidity under the § 102(b) on-sale bar was proper under *Pfaff v. Wells Electronics, Inc.*, requiring (a) a commercial offer for sale and (b) readiness for patenting before the critical date.

## Decision

- The Federal Circuit affirmed the exercise of declaratory judgment jurisdiction.
- The court vacated the summary judgment holding the patents invalid under § 102(b) and remanded for further proceedings.
- The record did not establish, as a matter of law, that MA’s pre-critical-date dealings constituted a commercial offer for sale of the claimed inventions on a claim-by-claim basis.
- Material factual disputes remained as to the content and legal effect of the SIA arrangement, whether any asserted method claims were performed for consideration before the critical date, and whether the evidence satisfied *Pfaff*’s readiness-for-patenting requirement for the asserted claims.

## Legal Principles

- Declaratory judgment jurisdiction in patent cases exists where patentee conduct creates sufficient adversity (including reasonable apprehension of enforcement) and the declaratory plaintiff has current or sufficiently concrete potentially infringing activity.
- The § 102(b) on-sale bar applies when, before the critical date, (1) the invention is the subject of a commercial offer for sale and (2) the invention is ready for patenting (*Pfaff*).
- Whether there is a “commercial offer for sale” is evaluated using contract-law principles and requires careful attention to the actual terms and scope of the alleged offer.
- For method or software-related claims, § 102(b) may be triggered by commercial performance of the claimed process for consideration, and in some circumstances by commercialization through sales of products made by the claimed process.
- Summary judgment of invalidity is improper where genuine disputes of material fact remain on the offer-for-sale and readiness-for-patenting elements, including how pre-critical-date activity maps to the asserted claim limitations.

## Conclusion

The Federal Circuit held that Plumtree’s declaratory judgment action presented a justiciable controversy, but vacated the district court’s on-sale-bar invalidity judgment because the evidentiary record did not eliminate factual disputes necessary to decide, under *Pfaff* and contract-law offer principles, whether the asserted patent claims were commercially offered or placed on sale and ready for patenting before the critical date.


Plumtree Software, Inc. v. Datamize, LLC, 473 F.3d 1152 (Fed. Cir. 2006)