REG Synthetic Fuels v. Neste Oil: Hearsay Boundaries and Patent Conception

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Case Overview

Patent Background

  • Patent covered phase change materials (PCMs) for housing insulation.
  • Focused on long-chain hydrocarbons (paraffins) with an even number of carbon atoms.
  • Patent claims:
    • At least 75% even-numbered paraffins (main claim)
    • Dependent claim required 80% even-numbered paraffins.

PTAB Trial Ruling

  • PTAB excluded an inventor’s email discussing tests showing 80% even-numbered paraffins.
  • Patent owner offered the email as evidence of an earlier conception date to antedate a prior art reference.
  • Requirement for conception evidence: inventor must disclose the idea as a complete thought enabling a person skilled in the art to make and use the invention.
  • PTAB ruled:
    • Fact of sending the email = not hearsay, admitted.
    • Contents of the email = excluded as hearsay, not considered.
  • Patent owner appealed this exclusion.

Federal Circuit Decision

  • Reversed the PTAB decision.
  • Key reasoning:
    • Out-of-court statements are hearsay only if offered to prove the truth of the matter asserted.
    • Communications with independent legal significance are not hearsay.
    • The email in question proved conception because it showed the inventor had communicated the idea to a third party.
    • The patent owner was not proving the product actually reached 80% purity, only that the inventor had communicated that information.
  • Conclusion: Email contents were probative and relevant, admissible for establishing earlier conception date.

Key Takeaways

  • Clarifies that hearsay rules do not bar communications offered for purposes other than proving truth.
  • Out-of-court statements can have legal significance beyond factual assertion, particularly in patent conception evidence.
  • Emails or communications showing inventor disclosure to others are valid evidence of conception, even if they contain factual assertions about the invention.

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