In denying institution for the first derivation petition considered on the merits, the Patent Trial and Appeal Board (the Board) found that the petition was fatally flawed in two independent ways. In doing so, the Board devised a triangular diagram summarizing the three separate inquiries required under the controlling rule, and also stressed that the necessary analysis requires a focus on conception, not mere possession of invention.  Catapult Innovations Pty Ltd v. Adidas AG, Case DER2014-00002 (PTAB, July 18, 2014) (Lee, APJ).

The petitioner, Catapult, filed a petition to institute a derivation proceeding against claims of an application belonging to the respondent, Adidas. The invention claimed in the Adidas application relates to activity monitoring for groups of people during athletic activities.  Catapult’s copending application claimed similar subject matter.

The threshold for institution of a derivation proceeding is whether the petition demonstrates substantial evidence, which, if unrebutted, would support the assertion of derivation. The Board explained that even under the America Invents Act (AIA), derivation proceedings apply the same jurisprudence for derivation as the body of law developed under the old interference practice.  Thus, a petitioner must show that the respondent, without authorization, filed an application claiming the allegedly derived invention.  The party asserting derivation must establish prior conception of the claimed subject matter and communication of that conception to an inventor of the other party. Any challenged claim which the petitioner demonstrates is “the same or substantially the same” as the disclosed invention constitutes a derived invention.

The Board explained that the applicable rule (37 C.F.R. § 42.405) requires that at least “one claim of the petitioner must be both (i) the same or substantially the same as a claimed invention of the respondent, and (ii) the same or substantially the same as the invention disclosed to the respondent.” The Board concluded that the determination of whether the “same or substantially the same” is claimed looks to at least one claim of the petitioner and a claim of the respondent and is properly a two-way analysis, while a one-way analysis is used for the determination of whether a claim of the petitioner is substantially the same as the invention disclosed to the respondent.

Under this analysis, the Board found that Catapult had failed to “identify and keep a consistent” the invention disclosed to the respondent. While Catapult’s petition described technical disclosures made by Catapult’s founder to a division of Adidas, and these disclosures were corroborated by declaration testimony, nowhere did the petition or declarations define what the “invention” was.  The Board further explained that no application claim of Catapult was identified as constituting or representing the disclosed invention disclosed to Adidas.  Although Catapult regarded the entire collection of information disclosed as its “invention disclosed to the respondent,” the Board explained that Catapult failed to map any of the claims of its application to the disclosed invention. The Board also explained that under the (prior, interference based) case law, Catapult had failed to establish prior conception of invention as its arguments were based on “possession of invention.”

Practice Note:  To be successful, future derivation petitioners are well advised to map of at least one claim of its application to the invention it alleged was disclosed to the respondent. Practitioners may consider tailoring such a claim in its pending application prior to filing a derivation petition.

Catapult Innovations Pty Ltd v. Adidas AG  - AIA / Derivation