In the recent holding in Helsinn Healthcare S.A. v. Teva Pharmaceuticals (Fed. Cir. May 1, 2017), the Federal Circuit addressed the question of whether the Leahy–Smith America Invents Act (the “AIA”) changed the meaning of the on-sale bar under 35 U.S.C. § 102.
The pre-AIA version of section 102 barred patentability of an invention that was “patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent.” 35 U.S.C. § 102(b) (2006) (emphasis added). Under the Supreme Court’s two-prong test in Pfaff v. Wells Electronics, Inc., 525 U.S. 55 (1998), application of the pre-AIA on-sale bar requires that (1) “the product must be the subject of a commercial offer for sale” and (2) “the invention must be ready for patenting.” 525 U.S. at 67.
With the passage of the AIA, Congress amended section 102 to bar patentability of an invention that was “patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” 35 U.S.C. § 102(a)(1) (2012) (emphasis added).
In Helsinn, defendant Teva argued that, by reenacting the existing statutory term “on sale,” Congress did not change the meaning of the on-sale bar or disturb the Pfaff test. Plaintiff Helsinn argued that the addition of the phrase “otherwise available to the public” changed the law to make public disclosure of the claimed invention a condition of the on-sale bar. Helsinn’s argument was in line with the interpretation accepted by the USPTO and codified in the Manual for Patent Examination Procedure (MPEP). See MPEP § 2152.02(d) (“The phrase ‘on sale’ in AIA 35 U.S.C. 102(a)(1) is treated as having the same meaning as ‘on sale’ in pre-AIA 35 U.S.C. 102(b), except that the sale must make the invention available to the public.”).
The District Court sided with Helsinn and concluded that, to be “public” under the post-AIA version of the on-sale bar, a sale must publicly disclose the details of the invention. The court found that the supply agreement between Helsinn and Teva did not constitute a “public” sale or commercial offer for sale because, although it was publicly disclosed in an SEC filing, it failed to disclose the specific dose of palonosetron (a drug for reducing the likelihood of chemotherapy-induced nausea and vomiting) that purportedly rendered Helsinn’s claimed invention novel and non-obvious over the prior art.
The Federal Circuit overturned the District Court’s holding. The court cited its own precedent, as well as evidence of Congressional intent, and concluded that a claimed invention need not be publicly disclosed in the terms of a public sale in order for the public sale to trigger the on-sale bar. The court reasoned that a public disclosure of the claimed invention as a condition of the on-sale bar would cause a foundational change in the theory of the statutory on-sale bar. That theory was summarized by Senator Jon Kyl of Arizona during debate of the AIA, when he stated that “once a product is sold on the market, any invention that is inherent to the product becomes publicly available prior art and cannot be patented.”
The USPTO will need to change its practices and rules related to the on-sale bar to make clear that a public sale need not make the invention available to the public for the on-sale bar to apply.
Inventors should disclose their invention in a patent application before any public sale of a product that embodies the invention.
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