On December 10, 2024, the Federal Circuit issued a significant ruling in Crown Packaging Technology, Inc. v. Belvac Production Machinery, Inc., reversing a district court’s decision on patent validity and reinforcing the strength of the on-sale bar under pre-AIA 35 U.S.C. § 102(b). This case highlights the importance of commercial offers for sale and their impact on patent rights.
Background
Crown Packaging Technology and CarnaudMetalbox Engineering (collectively, “Crown”) sued Belvac for allegedly infringing U.S. Patent Nos. 9,308,570, 9,968,982, and 10,751,784. These patents cover high-speed, multi-stage necking machines, which are used to shape the tops of metal beverage cans.
Belvac, in turn, argued that the patents were invalid under the on-sale bar, contending that Crown had offered to sell a machine embodying the patented technology before the critical date—one year before the patent applications were filed.
The district court ruled in favor of Crown, finding that the cited pre-critical date communications were not commercial offers for sale and that, even if they were, they did not constitute offers made “in this country.” On appeal, Belvac challenged this ruling.
Key Patent Law Issues
1. The On-Sale Bar and What Constitutes a Commercial Offer for Sale
Under pre-AIA § 102(b), a patent is invalid if the invention was on sale in this country more than one year before the patent application was filed. The Supreme Court’s decision in Pfaff v. Wells Electronics, Inc. established that an invention is “on sale” if:
- It is the subject of a commercial offer for sale
- It is ready for patenting
Crown did not dispute that the machine was ready for patenting before the critical date. However, it argued that its communications with third parties did not constitute a commercial offer for sale because they were merely quotations and not binding agreements.
The Federal Circuit disagreed, holding that Crown’s letter to Complete Packaging Machinery in Colorado—which provided a description, price, and delivery terms for its CMB3400 necking machine—was an offer for sale.
2. When a Quotation Becomes a Binding Offer
Crown attempted to argue that its “Quotation Number Q22764” was not a formal offer but rather an invitation to negotiate. However, the court found several key elements indicating a definite and binding offer:
- The letter included a specific price and payment terms (50% upfront, 50% before shipment).
- It contained detailed delivery terms, specifying the shipment location and timeline.
- It referenced Crown’s standard conditions of sale, which typically apply to formal purchase agreements.
- Crown’s own internal order processing records treated similar letters as actual offers that led to binding contracts.
Because this letter met the standard of a “commercial offer for sale”—one that could be accepted to create a binding contract—the court ruled that the on-sale bar applied.
3. What It Means for an Offer to Be “In This Country”
Crown also argued that, even if its letter constituted an offer, it was not an offer “in this country” because the seller (Crown) was based in the UK. The Federal Circuit rejected this argument, citing prior case law (In re Caveney and Hamilton Beach Brands v. Sunbeam Prods.), which established that an offer is “in this country” if it is directed to a U.S. entity at its place of business in the U.S.
Since Crown’s letter was sent to Complete Packaging Machinery’s Colorado address, it qualified as an offer made in the U.S., regardless of where Crown was located.
Conclusion: A Cautionary Tale for Patent Owners
This case serves as a stark reminder that early commercial discussions can jeopardize patent rights. Companies should be cautious when providing detailed price quotes and delivery terms for products that embody their inventions before filing a patent application.
Key takeaways for patent practitioners and businesses:
✔ A detailed price quotation can be an offer for sale.
✔ Offers sent to U.S. companies count as being “in this country,” even if sent from abroad.
✔ Internal company treatment of pre-sale communications matters—if similar communications have led to orders, they will likely be seen as binding offers.
By reversing the district court’s decision and finding Crown’s patents invalid, the Federal Circuit reinforced the need for strategic patent filing and commercial restraint to avoid unintentional patent forfeiture.
Would you like to discuss how this ruling might impact your patent strategy? Drop a comment below!
By Charles Gideon Korrell