Addressing the requirements for proving an inventor’s diligence in reducing an invention to practice, the US Court of Appeals for the Federal Circuit found that the Patent Trial and Appeal Board (PTAB or Board) applied an erroneous standard and remanded for factual findings under the proper standard. Perfect Surgical Techniques, Inc. v. Olympus America, Inc., Case No. 15-2043 (Fed. Cir., Nov. 15, 2016) (Moore, J) (Schall, J, concurring in part, dissenting in part).

This appeal arose from an inter partes review of a patent directed to surgical instruments. Olympus challenged the claims based on a prior art Japanese publication. The patent owner, Perfect Surgical Techniques (PST), tried to antedate this publication, arguing that the inventor conceived of the invention and exercised reasonable diligence in reducing it to practice until the critical date.

In its final written decision, the PTAB rejected PST’s attempt to antedate the Japanese publication. The PTAB found that PST had not proven that the inventor was reasonably diligent in reducing his invention to practice over the entire critical period, identifying several gaps in the critical period for which PST did not account. After finding the Japanese publication to be prior art, the PTAB concluded that the publication anticipated or rendered obvious the challenged claims. PST appealed.

On appeal, the Federal Circuit found the PTAB’s standard for proving diligence to be “too exacting and in conflict with our precedent.” Judge Moore, writing for the majority, explained the proper standard:

A patent owner need not prove the inventor continuously exercised reasonable diligence throughout the critical period; it must show there was reasonably continuous diligence. Under this standard, an inventor is not required to work on reducing his invention to practice every day during the critical period. And periods of inactivity within the critical period do not automatically vanquish a patent owner’s claim of reasonable diligence.

After finding that the PTAB applied the wrong standard, the Court found the PTAB’s fact findings to be unsupported by substantial evidence. The Court vacated and remanded with instructions for the PTAB “to reconsider the whole record and make a fact finding on diligence in the first instance.”

Judge Schall dissented. He reasoned that substantial evidence supported the PTAB’s finding that the inventor failed to demonstrate reasonable diligence during the entire critical period.