Conception and the 'On-Sale' Bar

A corporation in need of an innovative solution has sent a request for proposals to a number of suppliers. Your client has responded with a bid proposal that discloses her inventive solution. Her solution is both novel and nonobvious. Your client is highly skilled in the art but has not yet reduced her invention to practice or tested it to determine its suitability. The proposal, although offered and held in confidence, was made over one year ago. Has your client waived her right to patent protection by placing her invention “on sale” with the bid proposal?This scenario is both common and deserving of close attention. The Court of Appeals for the Federal Circuit in UMC Electronics Co. v. United States and RCA Corp. v. Data General Corp. probably would have precluded patent protection in this situation. Such a result, however, is uncertain at best in light of Envirotech Corp. v. Westech Engineering, Inc. and Manville Sales Corp. v. Paramount Systems, Inc., two cases in which the Federal Circuit appeared to back away from its earlier position. Does an “on sale” event occur with the submission of a proposal? What factors does the Federal Circuit consider in deciding this question? How should *394 you advise your client? How should any court analyze these cases in the future?This Article will attempt to answer these questions in view of current case law and will propose a framework by which “on sale” events, including bid proposals, should be analyzed. This new test for “on sale” deemphasizes reduction to practice and introduces a dichotomy to the notion of conception: conception of embodiment and conception of result. We hope that our proposal will lead to more consistent and equitable holdings by the courts and more predictable results for inventors.