The United States patent laws preclude patenting an invention that was offered for sale or sold more than a year before the application filing date. Before the Leahy-Smith America Invents Act (“AIA”) in 2013, it was established that the details of the invention need not be disclosed in the terms of the sale for this on bar to apply. The AIA changed the wording of the statute and cast doubt on whether sales activities that did not disclose the invention details would still bar patentability. The Supreme Court has granted certiorari to address this question.
On June 25, 2018, the United States Supreme Court granted review of the Federal Circuit’s decision in Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc.1 that found, inter alia, an anti-nausea patent invalid under the AIA’s rewritten on-sale bar. The particular question presented in the Petition is:
Whether, under the Leahy-Smith America Invents Act, an inventor’s sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention.
Prior to the AIA’s enactment, 35 U.S.C. § 102(b) barred the 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 . . . .” The AIA amended § 102 to bar patentability if “the claimed invention 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) (emphasis added).
Helsinn brought suit against Teva, alleging that the filing of Teva’s Abbreviated New Drug Application (“ANDA”) constituted an infringement of various claims of four asserted patents covering formulations of a drug that reduces the likelihood of chemotherapy-induced nausea and vomiting. Three of the patents were governed by the pre-AIA version of § 102, while the fourth was governed by the post-AIA version. The district court found that the patents-in-suit were not invalid, despite Helsinn and a third party entering into a purchase and sale agreement covering the applied-for drug nearly two years before filing for a patent. The agreements were each publicly disclosed, except for the price terms and specific dosage formulations. With respect to the pre-AIA patents, the district court found that the agreement triggered an on-sale bar, but found that the claimed invention was not yet reduced to practice. More controversial was the district court’s ruling that the revised statutory wording of the AIA changed the scope of the on-sale bar and that § 102(a)(1) now “requires a public sale or offer for the sale of the claimed invention.” The district court concluded that, to be “public” under the AIA, a sale must publicly disclose the details of the invention.
On appeal, the Federal Circuit reversed and found the asserted claims invalid. Referring to its recent en banc decision in Medicines Co. v. Hospira, Inc.,2 the Federal Circuit held that the invention was “on sale” prior to the critical date by applying “the law of contracts as generally understood” and “focus[ing] on those activities that would be understood to be commercial sales and offers for sale ‘in the commercial community.’” The panel also rejected the argument put forward by Helsinn, the government, and other amici that the AIA changed the law by adding the “otherwise available to the public” phrase such that an invention must be available to the public in order to trigger application of the on-sale bar. Citing numerous precedential decisions, the panel explained that “an invention is made available to the public
when there is a commercial offer or contract to sell a product embodying the invention and that sale is made public. Our cases explicitly rejected a requirement that the details of the invention be disclosed in the terms of sale.” 3 Finding that the legislative history was not sufficiently clear to trump years of on-sale bar precedent, the panel concluded that “after the AIA, if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of sale.”4
The Supreme Court is expected to hear the case during its Fall 2018 term, with a decision to follow in early 2019.
Endnotes:
1 855 F.3d 1356 (Fed. Cir. May 1, 2017)
2 827 F.3d 1363 (Fed. Cir. 2016)
3 Helsinn, 855 F.3d at 1370.
4 Id., at 1371.