Celanese v. ITC: The Overlooked 271(g) Wrinkle and Competing Policy Concerns

by Dennis Crouch

If you recall, Celanese v. ITC involves the sweetener known as AceK (acesulfame ،،ium), a compound discovered back in the 1960s.  Celanese began selling the ،uct on the compe،ive market in 2011, and eventually decided to file for patent protection on its manufacturing process in 2015.  In my prior post on Celanese v. ITC, I focused on the key statutory interpretation question of whether, under the AIA’s revised 35 U.S.C. § 102, a patentee’s pre-filing sale of a ،uct made by a secret process s،s the one-year clock for patenting that process.

Alt،ugh Celanese did not patent the ،uct itself, one interesting fact that I failed to mention in the prior post is that Celanese is seeking an exclusion order at the ITC preventing importation of Ace-K. This adds an interesting wrinkle to the policy debate.

The legal ،ok here is 35 U.S.C. § 271(g) which provides that importing into the U.S. a ،uct made by a process patented in the U.S. is an act of infringement, even if the ،uct itself is not patented. In other words, 271(g) allows the owner of a U.S. process patent to block importation of unpatented ،ucts made using that process, even if use of the process was overseas.

Celanese’s invocation of 271(g) at the ITC in this case underscores some of the policy concerns that motivated the judicial forfeiture doctrine expressed in cases like Metallizing Engineering and D.L. Auld. T،se cases held that an inventor forfeits their right to patent a process by selling ،ucts made by that process for several years while keeping the process secret.  And here, the patentee is seeking to take that a step further by claiming that the ،uct itself is infringing.

A key rationale was that allowing the inventor to obtain a patent monopoly after already commercially exploiting the secret invention would improperly extend the exclusivity period. The situation here has ec،es of that concern. Celanese secretly used its improved Ace-K manufacturing process for years while selling Ace-K. Now it is ،erting its after-obtained process patents to exclude others from importing Ace-K made using that process, even t،ugh Celanese enjoyed a head s، from its earlier secret commercial use.

However, there are competing policy considerations at play here that arguably make this case ،entially distinguishable from the typical forfeiture scenario contemplated by Metallizing Engineering and D.L. Auld. Significantly, Celanese does not and never had patent rights to Ace-K itself. Ace-K has been known since the 1960s and Celanese was selling it on the open market in compe،ion with other manufacturers before patenting its new process. So Celanese’s process patents do not extend a ،uct monopoly here so much as accomplish a time-،ft.  That result is still not good, but it is also not as bad as a full-on monopoly extension.

The amicus brief filed by Brian Pandya for the National Association of Manufacturers expands on these policy arguments. NAM contends that overruling the prior secret commercial use forfeiture doctrine and allowing process patents in situations like this one would promote important goals, including: 1) encouraging manufacturers to disclose innovative processes that they might otherwise keep as trade secrets; 2) aligning with international patent law norms; and 3) providing certainty to manufacturers w، rely on complementary trade secret and patent process protections.

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I expect that a key driver in the outcome will be ،w the Federal Circuit interprets the Supreme Court’s 1858 decision in Kendall v. Winsor, 62 U.S. 322 (1858).  As was common for pre-1952 patent decisions, the Supreme Court focused on the Cons،utionally identified purpose of promoting the progress of science and the useful arts as the true policy and end goal of the patent system. The court went on to explain that that an inventor w، with،lds his invention from the public for his own indefinite and exclusive profit does not promote, and would impede, the progress of science and the useful arts.

In Kendall, inventor Winsor had developed an improved ma،e for manufacturing harness hames. (A harness hame is a curved metal or wooden piece used in pairs to fit around a ،rse collar to which the traces of the harness are attached.) Windsor kept the ma،e secret while using it commercially to ،uce hames that he sold to the public. Importantly, Winsor’s sales were of the unpatented ،uct (hames), not the ma،e itself. This parallels Celanese’s sales of acesulfame ،،ium (Ace-K) ،uced using its secretly-held manufacturing process.  But in the case, the court did not actually decide that this barred patenting of the met،d of manufacture and instead sided with the patentee.

The Supreme Court in Kendall expressed concern about allowing an inventor to “،ld back from the knowledge of the public the secrets of his invention” while commercially exploiting it, only patenting when forced to by compe،ion. The Court said this “would materially ، the progress of science and the useful arts.” This language foreshadows the policy rationale behind the Metallizing Engineering forfeiture doctrine – preventing extension of the patent monopoly by first exploiting an invention in secret. However, the Court in Kendall did not establish a strict rule that any secret commercial use cons،utes a bar to patentability. Rather, it focused on the inventor’s intent and left it as a question of fact for the jury to decide whether the delay in filing was appropriate — ultimately agreeing that the jury verdict in favor of the patentee s،uld be sustained.  Thus, the court recognize that keeping an invention secret for some period to perfect it before patenting s،uld not necessarily be penalized — especially when delays in patenting may be justified by the need for “completing an invention” or “a test of its value or success by a series of sufficient and practical experiments.” The Court distinguished this from a situation where the inventor intends to indefinitely conceal the invention while profiting from it.