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Private Sales Invoke AIA "On Sale" Bar to Patentability

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Private sale invokes on-sale bar for patentability

A private offer to sell an invention more than one year prior to filing a patent application may invalidate patent rights.

On January 22, 2019, the Supreme Court unanimously decided that private sales of inventions invoke the on sale bar to patentability of 35 U.S.C. § 102 (post-America Invents Act, or AIA). See Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., 586 U.S. __ (2019).

 

Prior to the passage of the AIA, the Court decided that sales or offers of sale did not need to be public to create a bar to patentability. See Pfaff v. Wells Electronics, Inc., 525 U.S. 55, 67 (1998). However, through the passage of the AIA, Congress revised the language of Section 102 to state that:

A person shall be entitled to a patent unless … 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). Section 102(b)(1) provides an exception to the above rule if the disclosure was made within one-year prior to the effective filing date.

 

In the Teva case, Helsinn Healthcare developed a drug to treat chemotherapy-induced nausea and vomiting. In 2000, Helsinn sought marketing partners for the drug, and entered into an agreement with a marketing/distributing company. The agreement stated that the doses of the drugs were 0.25 mg and 0.75 mg; these terms of the agreement were redacted from public documents, and were not disclosed in press releases.

 

The provisional patent application was filed in 2003, almost two years after Helsinn and the marketing partner signed the agreement. Helsinn filed four nonprovisional applications afterward, all claiming the benefit of the provisional patent application filing date. The fourth nonprovisional application was filed in 2013, and included a fixed dose of 0.25 mg, identical to a dose disclosed in the agreement.

 

The Court held that the private sale from the agreement invokes the provisions of 35 U.S.C. § 102(a)(1), even though the invention was not publicly disclosed.

 

While Congress updated the AIA to include reference to “public use” and “otherwise available to the public,” the Court refused to read the word “public” into the phrase “on sale.” Instead, the Court relied on prior precedent in stating that “we presume that when Congress reenacted the same language [of pre-AIA precedent] in the AIA, it adopted the earlier judicial construction of that phrase.” See Teva at pg. 7.

 

Importantly, the provisional patent application was filed more than one year after the signing of the agreement. As such, the exceptions of 35 U.S.C. § 102(b)(1) did not apply to the patent at issue in the Teva case.

 

For inventors, it is important to discuss potential inventions with patent counsel before offering an invention for sale, even privately, to determine the best path forward toward patentability. As seen in the Teva case, even a private and confidential sale can be a barrier to patentability under the wrong circumstances. Inventors should take steps to protect their inventions prior to offering the inventions for sale.






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