Definitive Holdings sued Powerteq for infringement of U.S. Patent No. 8,458,689, which covers methods and apparatuses for upgrading software in engine controllers. The patent's priority date was March 30, 2001, making March 30, 2000, the critical date for the on-sale bar. Powerteq moved for summary judgment of invalidity, arguing that a non-party, Hypertech Inc., sold a device called the PP3 that embodied all limitations of the asserted patent claims as early as 1996. Definitive did not dispute the underlying facts of the sales but challenged the admissibility of the evidence, specifically the deposition testimony of Hypertech's corporate representative and the source code of the PP3, arguing they were inadmissible hearsay or lacked personal knowledge. The District Court for the District of Utah granted summary judgment of invalidity under pre-AIA 35 U.S.C. § 102(b), and Definitive appealed.
The Federal Circuit affirmed the district court's decision, addressing four main arguments raised by Definitive. First, regarding the deposition testimony of Hypertech's CEO, Mr. Ramsey, the court held that while the Tenth Circuit's approach to Rule 30(b)(6) testimony at summary judgment was not fully resolved, the portions of testimony necessary for the decision were based on personal knowledge. Mr. Ramsey testified to his personal review of sales records and his examination of a 1996 device, which was sufficient to authenticate the evidence and establish the sales occurred before the critical date. Second, the court addressed the hearsay objection to the PP3 source code. Relying on the definition of hearsay as an out-of-court statement offered for the truth of the matter asserted, the court reasoned that source code commands are instructions, not statements of fact, and therefore are not hearsay. The court distinguished this case from Wi-Lan Inc. v. Sharp Electronics Corp., noting that the source code here was authenticated and did not contain the trustworthiness issues present in that prior decision. Third, the court found that the sales records, installation guide, and source code collectively established that the PP3 was sold prior to the critical date and embodied every limitation of the asserted claims, leaving no genuine dispute of material fact. Finally, the court rejected the argument that the on-sale bar requires public disclosure of the invention's details. Citing Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc., the court clarified that the bar applies when a product embodying the invention is the subject of a commercial offer for sale, regardless of whether the sale was secret or the invention's inner workings were disclosed. The court concluded that because the PP3 was sold to the public and embodied the patented features, the on-sale bar was triggered.
The decision enforces the statutory on-sale bar against delayed commercialization, confirming that third-party sales of a product embodying a patented invention can invalidate the patent even if the sale was secret and the invention's functionality was not publicly disclosed. It also provides clarity for summary judgment proceedings, establishing that source code commands are not hearsay and that corporate representatives can provide sufficient personal knowledge to authenticate sales records and device history. The patent claims are invalid, and the infringement claim is resolved in favor of the defendant. No remand instructions were issued as the judgment was affirmed.
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