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REG Synthetic Fuels, LLC v. Neste Oil OYJ: Conception and Reduction to Practice, and the Limits of the Hearsay Doctrine

In a decision clarifying the borders of the hearsay doctrine, the US Court of Appeals for the Federal Circuit reversed a Patent Trial and Appeal Board (PTAB or Board) decision to exclude certain emails used as evidence of an earlier conception date on hearsay grounds, finding that those email communications had separate legal significance, were probative of and relevant to an issue in the case, and were not being offered to prove the truth of the matter asserted. REG Synthetic Fuels, LLC v. Neste Oil OYJ, Case No. 2015-1773 (Fed. Cir., Nov. 8, 2016) (Chen, J).

The case relates to a patent on phase change materials (PCMs) used in housing insulation. Long chain hydrocarbons, also known as paraffins, are particularly useful as PCMs when the paraffins have an even number of carbons. The patent in this case covered a PCM where at least 75 percent of the material was made up of even-numbered paraffins prepared by a certain process. A dependent claim required at least 80 percent to be even-numbered paraffins.

At trial, the PTAB excluded an email from the inventor to a third party that discussed tests showing that the product reached 80 percent even-numbered paraffins. The patent owner offered the email, along with several others, as evidence of an earlier conception date than was necessary to antedate a prior art reference. Proving an earlier conception date requires showing that the inventor disclosed the idea to others as a completed thought expressed with enough clarity to enable a person of skill in the art to make and use the invention. The PTAB held that the fact of the contact itself was not hearsay and admitted the email for this limited purpose. However, the PTAB refused to consider the contents of the email on hearsay grounds. The patent owner appealed.

In reversing the PTAB, the Federal Circuit noted that an out-of-court statement is only hearsay when it is used to prove the truth of the matter asserted. Conversely, when a communication itself has independent legal significance, it is not hearsay. The statements in the subject email communication fell into the latter category because they were relevant as proof of conception. The patent owner did not offer the email to prove that the product in fact reached 80 percent purity as of the date the email was sent, but only offered it to show that the inventor had communicated that information to a third party; an act that is probative of conception.

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About this Author

Alex M. Grabowski, McDermott Will Emery, Chicago, Intellectual Property Litigation Lawyer, Pharmaceutical Patents Attorney

Alex M. Grabowski is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office. He focuses his practice on intellectual property litigation, including patents covering chemical and medical device technologies. Alex has litigated a variety of patent matters, including those related to hip and knee surgical devices and pharmaceuticals. He also has experience prosecuting patents, litigating copyright disputes and counselling small businesses on their copyright and trademark portfolios.


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