Patent infringement lawsuits are generally brought against parties that manufacture, use or sell, the patented invention without the patent owner's permission. Patent infringement can also occur when someone other has simply offered the invention for sale without the patent owner's permission. Sometimes in fact it takes very little to show that an offer has been made.
Looking to the opposite side, an offer for sale by the patent owner can be fatal to the patent owner's rights by destroying the validity of a patent. This is because offers for sale, in addition to being infringing acts, can also constitute "prior art," i.e., an act that can deprive an invention of novelty and hence patentability if the offer was made more than a year before the patent filing date. This is illustrated in recent lawsuit, where a proposal for a commercial transaction five years before the patent was applied for was deemed an offer for sale and therefore fatal to the patent. This occurred even though the transaction was never consummated and the proposal appeared to lack some of the features that were part of the patented invention.
The patent claimed a process for disposing of oil refinery waste by introducing it into a coker drum as part of the quench stream during a delayed coking process. While the introduction of refinery waste into a coker drum was already known, this patent offered certain process improvements that permitted the process to handle significantly larger amounts of waste. These improvements, performed on the waste stream before its introduction into the coker, included increasing the solids concentration of the stream to 5 to 35% by weight (which could be achieved with vertical disk centrifuge), limiting the particle size of the solids such that at least 70% of the particles were less than 15 microns, and limiting the level of "mobile organics" (water-immiscible organics that could be separated from the remainder of the waste by centrifuge) to a maximum of 6% by weight.
The owner of the patent, Scaltech, Inc., sued Retec/Tetra, L.L.C. for patent infringement, and during the course of the lawsuit Retec discovered that long before the patent application was submitted to the USPTO, Scaltech had proposed use of the process improvements to certain companies with whom Scaltech had been doing business. Retec raised this as a defense, claiming that these offers constituted placement of the invention "on sale" more than a year before the patent filing date.
One of the Scaltech clients raised in this defense was Chevron. Several years before its filing date, Scaltech was treating refinery waste at Chevron and advising Chevron on possible improvements to the process. One problem encountered in the process was that its effectiveness tended to decline rapidly, and Scaltech's founder Robert Scalliet suggested that the reason might be excess oil in the waste clogging the pores of the coke. Scalliet then offered to provide de-oiled waste to Chevron so that Chevron could test this theory, and he proposed to use a DC-6 (vertical disk) centrifuge to remove the oil. No mention was made of controlling the solids concentration or the particle size. The offer was to process all of the waste generated by the oil refining process, including dissolved air flotation (DAF) float waste whose particles were already within the size limitation that was later claimed in the patent, as well as other wastes whose particles were larger in size. Although some particle size reduction was achieved by the centrifuge, some of these other wastes would have required size reduction beyond that which the centrifuge alone could produce if they were to achieve the size limitation claimed in the patent. At the time, however, no one appreciated the significance of a small particle size, therefore particle size reduction was not part of the offer. Nor did Mr. Scalliet know that control of the particle size would also increase the throughput capacity of the process, a feature that was later emphasized as a basis for patentability.
The offer thus addressed less than all of the features that ultimately appeared in the patent claims, and neither Scaltech nor Chevron appreciated the throughput advantage that was later considered the invention's greatest value. Furthermore, the offer was never accepted, nor was the invention ever reduced to practice before the patent application was filed. Nevertheless, in the Scaltech vs. Retec lawsuit the offer was deemed an offer for sale of the invention, since the wastes that the offer extended to included one which would have met all the features claimed in the patent, and neither acceptance of the offer nor recognition or appreciation of the full scope of what was being offered are necessary to constitute an offer for sale. Since the offer was made more than one year before the patent's filing date, it rendered the patent invalid, and Scaltech was unable to enforce the patent against any infringer, including those to whom the offer was never made.