## Facts

- Sandt owned U.S. Patent No. 5,509,057 covering a stainless-steel security cover for coin-operated pay telephones, intended to deter theft from the upper housing.
- Resco manufactured and marketed a competing security cover for pay telephones known as the “Protector.”
- Sandt sued Resco for patent infringement; Resco sought declaratory relief that the patent claims were invalid.
- Resco relied on testimony from its president, Frederick Zausner, asserting he conceived and reduced to practice a similar security cover in 1990 and filed a patent application in 1991 that was later rejected.
- Resco offered corroborating evidence for Zausner’s prior-invention account, including the 1991 application, contemporaneous documentation/physical evidence, and testimony from other witnesses.
- The district court granted Resco summary judgment that all claims (asserted and unasserted) of the ’057 patent were invalid (anticipation/obviousness) and denied Sandt’s motion for summary judgment that the “Protector” infringed.

## Issues

1. Whether Zausner’s asserted prior invention was sufficiently corroborated under the “rule of reason” to qualify as prior art under 35 U.S.C. § 102(g)(2), and, if so, whether it anticipated claim 1.
2. Whether claims 3 and 19 were invalid as obvious under 35 U.S.C. § 103 in view of the prior art.
3. Whether the district court could invalidate the remaining dependent claims without an independent, claim-specific obviousness analysis.

## Decision

- Affirmed summary judgment that claim 1 was invalid as anticipated by Resco’s prior invention qualifying as § 102(g)(2) prior art.
- Affirmed summary judgment that claims 3 and 19 were invalid as obvious in light of the prior art.
- Reversed the invalidity judgment as to dependent claims 2, 4–18, and 20–21 because the district court did not separately assess their validity.
- Remanded for an obviousness determination for the remaining dependent claims.
- Left undisturbed the district court’s denial of Sandt’s infringement summary judgment motion.

## Legal Principles

- A patent may be invalidated based on a prior invention qualifying as prior art under 35 U.S.C. § 102(g)(2) when that prior invention is established with sufficient corroboration and meets each limitation of the challenged claim.
- Oral testimony offered to prove prior invention to invalidate a patent must be corroborated; courts evaluate corroboration under a “rule of reason” considering all pertinent evidence collectively (e.g., patent applications, contemporaneous records, physical exhibits, and witness testimony).
- Obviousness under 35 U.S.C. § 103 can be established where claimed differences from the prior art reflect routine design choices (such as substituting one known attachment method for another) rather than a nonobvious advance.
- Invalidity must be decided on a claim-by-claim basis; dependent claims require evaluation of their additional limitations and cannot be invalidated wholesale without individualized analysis and supporting proof.

## Conclusion

The Federal Circuit upheld invalidity of claim 1 based on a corroborated prior invention that anticipated the claim and affirmed obviousness of claims 3 and 19, but rejected blanket invalidation of the remaining dependent claims and required a separate obviousness analysis for each on remand.


Sandt Tech., Ltd. v. Resco Metal & Plastics Corp., 264 F.3d 1344 (Fed. Cir. 2001)