Cellulose Material Solutions, LLC v. SC Marketing Group, Inc.

Background

Cellulose Material Solutions, LLC alleged that SC Marketing Group, Inc., also known as Thermal Shipping Solutions, infringed U.S. Patent No. 11,078,007, concerning packaging insulation designed to keep package contents cool and fresh without refrigerant packs. Cellulose’s product was called InfinityCore, and Thermal Shipping’s product was called Renewliner. The parties were competitors.

Thermal Shipping previously moved for summary judgment of invalidity on two grounds: first, that Cellulose’s offer to sell a prototype before the patent’s filing date triggered the patent-law on-sale bar; and second, that Renewliner was prior art that anticipated the patent. The court denied that motion in two earlier orders. Thermal Shipping then sought reconsideration of the second ground after the Federal Circuit decided Sanho Corp. v. Kaijet Technology International Ltd.

Legal Standard and Analysis

The court explained that reconsideration may be appropriate when there is a material change in law, newly discovered evidence, clear error, manifest injustice, or another unusual circumstance. The court focused on whether Sanho, which was decided after the earlier summary-judgment order, changed the law governing the result.

Under 35 U.S.C. § 102(a)(1), a claimed invention is generally invalid if it was patented, described in a printed publication, publicly used, offered for sale, or otherwise made available to the public before its effective filing date. Section 102(b) provides exceptions, including circumstances involving an inventor’s disclosure within the one-year period before filing or an earlier public disclosure by the inventor.

The court identified two relevant purchase orders. A February 2016 order involved Cellulose shipping product labeled Renewliner directly to Thermal Shipping’s customer DinnerThyme. An April 2016 order involved a Renewliner sale fulfilled for Thermal Shipping by its vendor Turner Fiberfill for customer Juicero.

The court previously treated the February purchase order as a public disclosure by Cellulose, which would have prevented the April purchase order from invalidating the patent. But Sanho held that a private sale by a patent owner is not itself a public disclosure of the invention. The court concluded that Sanho’s reasoning applied to the statutory provision at issue here because both provisions require the invention to have been publicly disclosed by the inventor. The February private sale therefore did not qualify as a public disclosure.

The court held that the April 2016 purchase order reflected a commercial offer for sale before the patent’s filing date. An offer need not be accepted to trigger the on-sale bar, and delivery after the critical date does not prevent the offer from qualifying. Because Cellulose alleged that Renewliner satisfied all claims of the patent, the court concluded that the April sale was anticipating prior art.

The court rejected Cellulose’s arguments that the April sale could not qualify because Turner Fiberfill did not manufacture or ship the product until after the filing date, that the February purchase order was an earlier public disclosure, and that Thermal Shipping had not met its evidentiary burden. The court explained that Thermal Shipping had the ultimate burden to prove invalidity by clear and convincing evidence and had met its initial burden of going forward with evidence. Cellulose’s arguments did not provide sufficient rebuttal evidence.

The court also rejected Cellulose’s additional arguments. It found that Cellulose had not shown that the April sale involved subject matter obtained directly or indirectly from Cellulose, reasoning that Cellulose had not identified an earlier disclosure to Thermal Shipping establishing derivation. The court characterized as speculation Cellulose’s contention that the April product might have been based on Cellulose samples or product literature. It also held that samples provided to Thermal Shipping and its customer at Thermal Shipping’s request were not public disclosures. Finally, the court found no factual dispute about whether the April purchase order concerned prior art, relying on evidence that the 2016 Renewliner was materially identical to the version accused of infringement.

Disposition

Judge Laurel Beeler reconsidered the court’s earlier orders and granted summary judgment to Thermal Shipping as to patent invalidity. The order resolved the motions identified as ECF Nos. 141 and 238.