Crown Packaging Tech., Inc. v. Belvac Prod. Mach., Inc
Authored by: Jeremy J. Gustrowsky
In a recent decision, the Federal Circuit clarified how easily a patent can be invalidated under the “on-sale bar” rule, even when the supposed “offer” is labeled as a “quotation.” The case involved Crown Packaging Technology, Inc. and its related company CarnaudMetalbox Engineering Ltd., who sued Belvac Production Machinery, Inc. for infringing three patents (U.S. Patent Nos. 9,308,570; 9,968,982; and 10,751,784) covering high-speed can necking machines. Belvac countered by arguing that Crown’s patents were invalid because Crown had offered to sell the patented invention more than a year before filing for the patents—a violation of the pre-America Invents Act (AIA) on-sale bar under 35 U.S.C. § 102(b).
The key evidence was a letter Crown sent to a U.S. company, Complete Packaging Machinery, in November 2006. This letter, titled as a “quotation,” included detailed terms such as price, payment, delivery, and product description. Although Crown argued that this was just an invitation to negotiate and not a binding offer, the Federal Circuit disagreed. The court explained that if a communication contains all the essential terms such that the recipient could accept and form a binding contract, it counts as a commercial offer for sale—even if it’s called a “quotation” and includes a clause requiring written acceptance.
The court also addressed whether the offer was made “in this country,” since Crown is a foreign entity. The Federal Circuit held that an offer sent to a U.S. company at its U.S. address qualifies as an offer made in the United States, regardless of where the sender is located. This means that even foreign companies must be careful about sending offers to U.S. customers before filing for a patent.
As a result, the Federal Circuit reversed the district court’s decision and ruled that Crown’s patents were invalid under the on-sale bar. This outcome serves as a strong reminder to inventors and companies: even routine business communications like quotations can trigger the on-sale bar and jeopardize patent rights if sent before a patent application is filed.