The dispute centered on U.S. Patent No. 8,458,689, which covers methods and apparatuses for upgrading software in engine controllers by connecting a device that can replace portions of stock engine control software with new data blocks. Definitive Holdings sued Powerteq for infringement, but the case turned when Powerteq argued that a third-party company, Hypertech Inc., had sold a device called the "Hypertech Power Programmer III" (PP3) that embodied all limitations of the asserted claims by at least 1996.
The patent's priority date was March 30, 2001, making the critical date for the on-sale bar March 30, 2000. Powerteq moved for summary judgment of invalidity under pre-AIA 35 U.S.C. § 102(b), arguing that the PP3 was sold more than one year before that critical date.
Writing for a unanimous panel, Circuit Judge Cunningham, joined by Chief Judge Moore and Judge Dyk, held that the district court properly relied on evidence establishing the PP3 was sold before the critical date. The court rejected Definitive's evidentiary challenges, holding that Mr. Ramsey's testimony within his personal knowledge adequately established his ability to authenticate the PP3 sales records, which themselves demonstrated that the PP3 was on sale prior to the critical date.
The Federal Circuit rejected Definitive's core legal argument that prior art under the on-sale bar must publicly disclose how to perform the patented method. The court emphasized that disclosure is not required under the prior sale doctrine, and that the focus should be on whether the sale relates to a device that embodies the invention.
Definitive also challenged the admissibility of source code analysis by Powerteq's expert, Dr. Brogioli. The Federal Circuit held that source code commands themselves are not hearsay because the code is not a statement. The ruling reinforces established Federal Circuit precedent that secret sales by third parties can invalidate patents under the on-sale bar, even when the sales don't publicly reveal the invention's technical details.