Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-14-01504/USCOURTS-ca13-14-01504-1/pdf.json

Parties Involved:
Hospira, Inc.
Cross-Appellant
Medicines Company
Appellant

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

THE MEDICINES COMPANY, 

Plaintiff-Appellant

v.

HOSPIRA, INC., 

Defendant-Cross-Appellant

______________________ 

2014-1469, 2014-1504

______________________ 

Appeals from the United States District Court for the 

District of Delaware in No. 1:09-cv-00750-RGA, Judge 

Richard G. Andrews.

______________________ 

Decided: July 11, 2016

______________________ 

EDGAR HAUG, Frommer Lawrence & Haug LLP, New 

York, NY, argued for plaintiff-appellant. Also represented by PORTER F. FLEMING, ANGUS CHEN, JASON ARI 

KANTER, LAURA KRAWCZYK, CATALIN SEBASTIAN ZONTE;

DAMON MARCUS LEWIS, Washington, DC. 

BRADFORD PETER LYERLA, Jenner & Block LLP, Chicago, IL, argued for defendant-cross-appellant. Also 

represented by SARA TONNIES HORTON, AARON A. BARLOW; 

JOSHUA SEGAL, Washington, DC. 

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2 THE MEDICINES COMPANY v. HOSPIRA, INC. 

MEGAN BARBERO, Appellate Staff, Civil Division, 

United States Department of Justice, Washington, DC, 

argued for amicus curiae United States. Also represented 

by MARK R. FREEMAN, BENJAMIN C. MIZER; THOMAS W.

KRAUSE, ROBERT MCBRIDE, JOSEPH GERARD PICCOLO,

KRISTI L. R. SAWERT, Office of the Solicitor, United States 

Patent and Trademark Office, Alexandria, VA. 

DORIS HINES, Finnegan, Henderson, Farabow, Garrett 

& Dunner, LLP, Washington, DC, for amicus curiae 

American Intellectual Property Law Association. Also 

represented by DAVID MROZ, ERIN MCGEEHAN SOMMERS;

DENISE WHELTON DEFRANCO, American Intellectual 

Property Law Association, Arlington, VA. 

EMILY CURTIS JOHNSON, Akin, Gump, Strauss, Hauer 

& Feld, LLP, Washington, DC, for amicus curiae Intellectual Property Owners Association. Also represented by 

JAMES EDWARD TYSSE; MICHAEL P. KAHN, New York, NY; 

MARK W. LAUROESCH, Intellectual Property Owners 

Association, Washington, DC; STEVEN W. MILLER, Procter 

& Gamble Company, Cincinnati, OH; KEVIN H. RHODES, 

3M Innovative Properties Company, St. Paul, MN. 

ANTHONY MILLER, Miller, Patti, Pershern PLLC, Dallas, TX, for amicus curiae Miller, Patti, Pershern PLLC. 

Also represented by JOHN JEFFERY PATTI, STEVEN SCOTT 

PERSHERN.

TAMSEN VALOIR, Boulware & Valoir, Houston, TX, for 

amicus curiae Houston Intellectual Property Law Association. Also represented by MARK JOHN GATSCHET, Mark 

John Gatschet, PLLC, Austin, TX. 

ERIC J. MARANDETT, Choate, Hall & Stewart, LLP, 

Boston, MA, for amicus curiae Biotechnology Innovation 

Organization. Also represented by IRENE OBERMAN KHAGI. 

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THE MEDICINES COMPANY v. HOSPIRA, INC. 3

CRAIG E. COUNTRYMAN, Fish & Richardson, P.C., San 

Diego, CA, for amicus curiae Gilead Sciences, Inc. Also 

represented by JARED ALEXANDER SMITH; JONATHAN 

ELLIOT SINGER, Minneapolis, MN. 

ROBERTA JEAN MORRIS, Menlo Park, CA, for amicus 

curiae Roberta Jean Morris. 

BRUCE M. WEXLER, Paul Hastings LLP, New York, 

NY, for amicus curiae Pharmaceutical Research and 

Manufacturers of America. Also represented by ERIC 

WILLIAM DITTMANN, JOSEPH M. O’MALLEY, JR., YOUNG JIN

PARK; STEPHEN BLAKE KINNAIRD, ANAND BIPIN PATEL, 

Washington, DC; DAVID EVEN KORN, JAMES MILTON 

SPEARS, Pharmaceutical Research and Manufacturers 

Association of America, Washington, DC. 

______________________ 

Before PROST, Chief Judge, NEWMAN, LOURIE, DYK,

MOORE, O’MALLEY, REYNA, WALLACH, TARANTO, CHEN,

HUGHES, and STOLL, Circuit Judges.

O’MALLEY, Circuit Judge. 

Today, we consider the circumstances under which a 

product produced pursuant to the claims of a product-byprocess patent is “on sale” under 35 U.S.C. § 102(b). This 

is important because, if “on sale” more than one year 

before the filing of an application for a patent on the 

governing claims, any issued patent is invalid and the

right to exclude others from making, using, and selling

the resulting product is lost. We conclude that, to be “on 

sale” under § 102(b), a product must be the subject of a 

commercial sale or offer for sale, and that a commercial 

sale is one that bears the general hallmarks of a sale 

pursuant to Section 2-106 of the Uniform Commercial 

Code. We conclude, moreover, that no such invalidating 

commercial sale occurred in this case. We, therefore, 

affirm the district court’s judgment that the transactions 

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4 THE MEDICINES COMPANY v. HOSPIRA, INC. 

at issue did not render the asserted claims of U.S. Patent 

Nos. 7,582,727 (“the ’727 patent”) and 7,598,343 (“the ’343

patent”), owned by Plaintiff-Appellant The Medicines 

Company (“MedCo”), invalid under § 102(b). 

I. BACKGROUND

A. The Patents and Transactions at Issue

This suit arises from the submission of two Abbreviated New Drug Applications (“ANDAs”), ANDA Nos. 90-

811 and 90-816, by Defendant-Cross-Appellant Hospira, 

Inc. (“Hospira”). In these ANDAs, Hospira sought Food 

and Drug Administration (“FDA”) approval to sell generic 

bivalirudin drug products before the expiration of the 

patents-in-suit: the ’727 patent and the ’343 patent. The 

two patents-in-suit are listed in the FDA’s Orange Book 

as covering Angiomax, the trade name of a form of bivalirudin that MedCo markets in the United States. 

The patents-at-suit have nearly identical specifications. They claim pH-adjusted pharmaceutical batches of 

a drug product comprising bivalirudin, a synthetic peptide 

comprised of twenty amino acid residues that is used as 

an anticoagulant, and a pharmaceutically acceptable 

carrier. Bivalirudin drug products are used to prevent 

blood from clotting and are regarded as highly effective

anticoagulants for use during coronary surgery. 

The bivalirudin active pharmaceutical ingredient 

(“API”), without further processing, is too acidic for human injection. MedCo thus prepares Angiomax using a 

compounding process in which it creates a bivalirudin 

solution, adjusts the solution’s pH with a base, and then 

freeze-dries the solution. A potential adverse consequence 

of the compounding process used to make the product, 

however, is the degradation of bivalirudin, which may 

form impurities such as Asp9-bivalirudin (“Asp9”). The 

bivalirudin may become unusable if high levels of Asp9

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form. The manufacture of batches with unacceptably high 

Asp9 levels led to the creation of the patented solution. 

MedCo is a specialty pharmaceutical company that 

does not have its own manufacturing facilities and is not 

capable of making its products in-house. Instead, since 

1997, MedCo has contracted with Ben Venue Laboratories

(“Ben Venue”), a third-party provider, for Ben Venue to

manufacture commercial quantities of an original formula 

of Angiomax, which is not covered under the patents-insuit. In June 2005, Ben Venue manufactured a batch of 

bivalirudin drug product with an Asp9 level of 3.6%, 

which exceeded the FDA’s approved maximum level of 

1.5%. MedCo discarded that batch and shut down production of Angiomax for six months to investigate the 

problem and revise its process. In 2006, another batch 

had an unacceptable Asp9 level, so MedCo again shut 

down production of Angiomax and hired a peptide specialist to investigate and resolve the issue. 

The investigation led to the development of the new 

compounding process claimed in the patents-in-suit. 

MedCo incorporated the new process into a revised Master Batch Record, and Ben Venue has made all batches 

since October 2006 using the new process. According to 

MedCo, the new compounding process produces an improved Angiomax product that does not have randomly 

high Asp9 levels, but instead has a maximum Asp9 level of 

0.6%. The ’727 and ’343 patents contain product and 

product-by-process claims, respectively, for pharmaceutical batches of the improved drug product with a maximum impurity level of Asp9 of 0.6%. 

The patents, respectively, claim: 

Pharmaceutical batches of a drug product comprising bivalirudin (SEQ ID NO: 1) and a pharmaceutically acceptable carrier for use as an 

anticoagulant in a subject in need thereof, wherein the batches have a pH adjusted by a base, said 

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pH is about 5-6 when reconstituted in an aqueous 

solution for injection, and wherein the batches 

have a maximum impurity level of Asp9-

bivalirudin that does not exceed about 0.6% as 

measured by HPLC.

Claim 1 of the ’727 patent. 

Pharmaceutical batches of a drug product comprising bivalirudin (SEQ ID NO: 1) and a pharmaceutically acceptable carrier, for use as an 

anticoagulant in a subject in need thereof, said 

batches prepared by a compounding process comprising:

(i) dissolving bivalirudin in a solvent to form a 

first solution;

(ii) efficiently mixing a pH-adjusting solution with 

the first solution to form a second solution, wherein the pH adjusting solution comprises a pHadjusting solution solvent; and 

(iii) removing the solvent and pH-adjusting solution solvent from the second solution;

wherein the batches have a pH adjusted by a 

base, said pH is about 5-6 when reconstituted in 

an aqueous solution for injection, and wherein the 

batches have a maximum impurity level of Asp9-

bivalirudin that does not exceed about 0.6% as

measured by HPLC.

Claim 1 of the ’343 patent. 

The applications for the ’727 and ’343 patents were 

filed on July 27, 2008. The critical date from which the 

on-sale bar of § 102(b) must be measured is, therefore, 

July 27, 2007. 

In late 2006, MedCo paid Ben Venue $347,500 to 

manufacture three batches of bivalirudin according to the 

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THE MEDICINES COMPANY v. HOSPIRA, INC. 7

patents-at-issue. Ben Venue completed the first such 

batch on October 31, 2006 for $67,500. That batch contained 5,746 vials of commercially saleable bivalirudin. 

On November 21 and December 14, 2006, Ben Venue 

completed two more batches of bivalirudin containing 

27,594 and 26,918 vials, respectively, for $140,000 each. 

Each full commercial-sized batch of 28,000 vials of Angiomax has a market value of approximately $10 million

when sold on the open market as anticoagulants. Thus, 

collectively, the three batches had a market value of well 

over $20 million. Specifically, Hospira represents that the 

three batches were “worth between $23 million and $45 

million.” Hospira’s En Banc Br. 7. 

The manufacturing protocol between MedCo and Ben 

Venue governing the three batches stated that “[t]he 

solution will be filled for commercial use” and that the 

three batches “will be placed on quality hold until all 

testing has been successfully completed.” Joint Appendix 

(“J.A.”) 14884. The invoice for each of the three batches 

stated: “Charge to manufacture Bivalirudin lot,” and 

indicated that the bivalirudin lot was or will be released 

to MedCo. J.A. 17177-83. Each batch received a “Commercial Product Code,” a customer lot number, and each 

stated that the batch was “[r]eleased [to MedCo] for 

commercial and clinical packaging.” J.A. 14959-60; J.A. 

15210-11; J.A. 15452-53. 

Once manufactured by Ben Venue, the batches were 

placed in quarantine with MedCo’s distributor and logistics coordinator, Integrated Commercialization Solutions 

(“ICS”), pending FDA approval. MedCo and ICS entered 

into a Distribution Agreement effective February 27, 

2007. The Distribution Agreement made ICS the exclusive authorized distributor of Angiomax in the United 

States and stated that title and risk of loss would pass to 

ICS following release from quarantine. Under the Distribution Agreement, ICS would place individual purchase 

orders with MedCo on a weekly basis, which MedCo could 

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8 THE MEDICINES COMPANY v. HOSPIRA, INC. 

accept or reject. J.A. 14676. It was not until August 

2007, after the July 27, 2007 critical date, that MedCo 

released the three batches from quarantine and made 

them available for sale. 

B. The Procedural History

On August 19, 2010, MedCo sued Hospira in the 

United States District Court for the District of Delaware, 

alleging that Hospira’s two ANDA filings infringed claims 

1-3, 7-10, and 17 of the ’727 patent and claims 1-3 and 7-

11 of the ’343 patent. The district court construed the 

asserted claims, and, after a three-day bench trial in

September 2013, found the patents not invalid and not 

infringed. 

Hospira contended that MedCo failed to prove infringement of three claim limitations: “efficient mixing,” 

“pharmaceutical batches,” and “a maximum impurity

level of Asp9-bivalirudin that does not exceed about 0.6%.” 

Meds. Co. v. Hospira, Inc., No. 1:09-cv-00750-RGA, 2014 

U.S. Dist. LEXIS 43126, at *5 (D. Del. Mar. 31, 2014). 

The district court found that Hospira’s generic product 

met the “pharmaceutical batch” and “maximum impurity 

level” limitations, but did not meet the “efficient mixing” 

limitation either literally or under the doctrine of equivalents. Id. at *15-26. Based on this conclusion, the district 

court held that Hospira’s generic product did not infringe 

the asserted claims. 

Hospira also alleged several grounds of invalidity. 

First, Hospira argued that the invention was sold or 

offered for sale before the critical date under § 102(b) 

based on two sets of transactions. Hospira contended that 

the on-sale bar was triggered when MedCo paid Ben 

Venue to manufacture Angiomax before the critical date. 

Hospira also contended that the on-sale bar was triggered 

because MedCo offered to sell the Angiomax produced 

according to the patents to its distributor, ICS, before the 

critical date. Hospira also contended that the asserted 

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THE MEDICINES COMPANY v. HOSPIRA, INC. 9

claims were obvious under § 103 and invalid under § 112 

because they lack written description, are not enabled, 

and are indefinite. Id. 

Applying the two-step framework of Pfaff v. Wells

Electronics, Inc., 525 U.S. 55 (1998), the district court 

found that the three batches Ben Venue manufactured for 

MedCo did not trigger the on-sale bar. Pfaff’s two-step 

framework requires that the claimed invention was (1) 

the subject of a commercial offer for sale; and (2) ready for 

patenting. 525 U.S. at 67-68. The court held that the 

claimed invention was ready for patenting under the 

second prong of Pfaff because MedCo had developed two 

enabling disclosures prior to the critical date, or, alternatively, reduced the invention to practice before the critical 

date. Meds. Co., 2014 U.S. Dist. LEXIS 43126, at *33-34. 

Specifically, the enabling disclosures were: (1) the Master 

Batch Record, which was printed on October 25, 2006, 

and which Ben Venue followed in order to manufacture a 

batch on October 31, 2006; and (2) the validation study 

protocol, which the inventors signed in November 2006. 

In the alternative, the court concluded that the invention 

was reduced to practice before the critical date because 

Ben Venue produced batches according to the invention in 

October 2006. 

The district court concluded that the first prong of 

Pfaff was not met, however, because the claimed invention was not commercially offered for sale prior to the 

critical date. The court agreed with MedCo that the 

transactions between MedCo and Ben Venue were sales of 

contract manufacturing services in which title to the 

Angiomax always resided with MedCo. It found that “this 

does not end the inquiry,” however. Id. at *35. The 

district court identified the purpose of § 102(b) as precluding attempts by an inventor or its assignee to profit from 

the commercial use of an invention for more than a year 

before filing for a patent. Because the batches were for 

“validation purposes,” the court held—sua sponte—that 

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the batches were not made for commercial profit, but were 

for experimental purposes, thereby avoiding the on-sale 

bar. 

Next, the court held that MedCo’s distribution agreement with ICS also did not constitute an invalidating 

sale. It held that the agreement was merely “an agreement for ICS to be the sole U.S. distributor of Angiomax.” 

Id. at *38. The court concluded that the contract was 

merely “a contract to enter into a contract” for future 

sales of the Angiomax product. Id. See In re Kollar, 286 

F.3d 1326, 1330-1331 (Fed. Cir. 2002) (“We have held that 

merely granting a license to an invention, without more, 

does not trigger the on-sale bar of § 102(b).”). 

As to Hospira’s other alleged grounds of invalidity, 

the district court held that the asserted claims were not 

obvious under § 103(a). The court also held that the 

asserted claims satisfied the written description and

enablement requirements of, and were not indefinite

under, § 112. 

MedCo appealed two of the district court’s claim construction rulings and the district court’s non-infringement 

ruling. Hospira cross-appealed the district court’s decisions regarding the on-sale bar, obviousness, and indefiniteness. Because the district court found the invention 

was “ready for patenting,” Hospira focused only on the 

first prong of Pfaff on appeal: whether the invention was 

the subject of a commercial offer for sale. Among other 

things, Hospira criticized the district court’s conclusion 

that the batches of Angiomax were for experimental 

purposes, pointing out that MedCo had not relied upon 

the experimental use exception to § 102(b) and that 

Hospira, accordingly, had no incentive or opportunity to 

address the issue. Hospira contended that, had the 

question of experimental use been debated before the 

district court, Hospira would have pointed to the fact that 

there were eight additional batches of Angiomax manuCase: 14-1504 Document: 4-2 Page: 10 Filed: 07/11/2016
THE MEDICINES COMPANY v. HOSPIRA, INC. 11

factured by Ben Venue after the original three, all of 

which Hospira says occurred after MedCo was satisfied 

that the inventive process would result in a product that 

did not exceed the desired Asp9 level of 0.6%. Hospira’s 

En Banc Br. 38, 41. 

Hospira also disagreed with the district court’s conclusion that no commercial sale or offer for sale occurred. 

Hospira contended that any transaction that provides a 

commercial benefit to the inventor is enough to trigger the 

on-sale bar. Because MedCo was able to stockpile its 

product for future sale, and, thus, replenish the pipeline 

that had been depleted when it had to cease use of its 

previous manufacturing methods, Hospira argued that 

MedCo received a commercial benefit from the transactions with Ben Venue. According to Hospira, the fact that 

title did not transfer—a point the district court found 

important—was irrelevant because the immediate financial benefit to MedCo of having a ready supply of product 

for sale constituted “commercialization” or “commercial 

exploitation,” which is enough to trigger the on-sale bar. 

Hospira’s Opening Br. 30-31 (citing D.L. Auld Co. v. 

Chroma Graphics Corp., 714 F.2d 1144, 1147 (Fed. Cir. 

1983)). 

A merits panel of this court agreed with Hospira and 

reversed the district court’s ruling regarding the applicability of the on-sale bar. Meds. Co. v. Hospira, Inc., 791 

F.3d 1368 (Fed. Cir. 2015). The panel acknowledged that 

“Ben Venue invoiced the sale as manufacturing services 

and title to the pharmaceutical batches did not change 

hands,” but disagreed with the district court’s conclusion 

that Ben Venue’s sale of services did not constitute a 

commercial sale of the claimed product. The panel explained that, “where the evidence clearly demonstrated 

that the inventor commercially exploited the invention 

before the critical date, even if the inventor did not transfer title to the commercial embodiment of the invention,” 

the on-sale bar applies. Id. at 1370-71 (emphasis added). 

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The panel found no distinction between the offer to 

sell products prepared by a patented method in D.L. Auld, 

714 F.2d at 1147, and the commercial sale of services that 

result in a patented product-by-process. Id. at 1371. The 

panel reasoned that, because MedCo paid Ben Venue for 

services that resulted in the patented product, the transactions were commercial sales. Id. According to the 

panel, to hold otherwise would conflict with the “no ‘supplier’ exception” under Special Devices, Inc. v. OEA, Inc., 

270 F.3d 1353, 1355 (Fed. Cir. 2001). The panel also

found that the transactions between MedCo and Ben 

Venue were “not the type of ‘secret, personal use’” described in Trading Technologies International, Inc. v. 

eSpeed, Inc., 595 F.3d 1340, 1362 (Fed. Cir. 2010), but 

rather were “batches prepared for commercial exploitation.” Meds. Co., 791 F.3d at 1371. 

The panel also found that the district court erred in 

applying the experimental use exception to Ben Venue’s 

batches. Id. at 1372. Because the invention had been 

reduced to practice, the panel concluded that the inventor

could not have been experimenting to determine whether 

the process by which the product was formulated achieved 

the desired results. Id. 

Finally, the panel affirmed the district court’s determination that the claimed invention was ready for patenting prior to the critical date “because the invention was 

sold.” Id. at 1372. Because it found that the invention 

was both commercially exploited and ready for patenting, 

the panel held the asserted claims invalid under § 102(b). 

The panel neither reached the district court’s claim construction and non-infringement rulings that MedCo had 

appealed nor addressed the other grounds of invalidity 

raised in Hospira’s cross-appeal. 

MedCo petitioned for panel rehearing or rehearing en 

banc. On November 13, 2015, we granted rehearing en 

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banc, vacated the panel’s decision, reinstated the appeal, 

and ordered new briefing on the following issues: 

(a) Do the circumstances presented here constitute a commercial sale under the on-sale bar of 35 

U.S.C. § 102(b)? 

(i) Was there a sale for the purposes of 

§ 102(b) despite the absence of a transfer 

of title? 

(ii) Was the sale commercial in nature for 

the purposes of § 102(b) or an experimental use? 

(b) Should this court overrule or revise the principle in Special Devices, Inc. v. OEA, Inc., 270 

F.3d 1353 (Fed. Cir. 2001), that there is no “supplier exception” to the on-sale bar of 35 U.S.C. 

§ 102(b)?

Order Granting En Banc Rehearing at 2, Meds. Co., 791 

F.3d 1368 (No. 2014-1469, -1504), ECF No. 68. MedCo 

asks that we hold en banc “that the on sale bar is not 

triggered by an inventor’s retention of a third party to 

develop or manufacture the claimed invention confidentially and under the inventor’s direction and control.” 

MedCo’s En Banc Br. 3. MedCo contends that stockpiling 

does not constitute commercial activity under § 102(b) 

and that § 102(b) should not apply because no products 

were placed in the public domain prior to the critical date, 

which it says is the overriding concern of § 102(b). 

For its part, Hospira argues that MedCo’s transactions with Ben Venue constitute a commercial sale under 

§ 102(b) because “this arrangement constituted commercial exploitation from the standpoint of both companies.” 

Hospira’s En Banc Br. 29. Hospira points to the fact that 

MedCo requested that the batches be “filled for commercial use,” were given a “commercial product code” and 

were “[r]eleased for commercial and clinical packaging.” 

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Id. at 28-29. Hospira contends that the fact that title to 

the patented product and/or invention did not transfer is 

of no moment because the on-sale bar is triggered by “any 

commercialization” that confers a commercial benefit. Id.

at 26. Finally, Hospira contends that the confidential 

nature of the relationship between Ben Venue and MedCo 

does not remove the transactions between them from the 

purview of § 102(b) because this court has never held that 

only public sales can trigger the on-sale bar. Hospira’s En 

Banc Reply Br. 22. 

II. DISCUSSION

A. Legal Standard

Whether the on-sale bar applies is a question of law 

based on underlying factual findings. See Grp. One, Ltd. 

v. Hallmark Cards, Inc., 254 F.3d 1041, 1045-46 (Fed. Cir. 

2001). We review the district court’s factual findings with 

deference, but examine the ultimate question of validity 

de novo. See Leader Techs., Inc. v. Facebook, Inc., 678 

F.3d 1300, 1305 (Fed. Cir. 2012) (“Whether a patent is 

invalid for a public use or sale is a question of law, reviewed de novo, based on underlying facts, reviewed for 

substantial evidence following a jury verdict.”); Electromotive Div. of GMC v. Transp. Sys. Div. of GE, 417 F.3d 

1203, 1209-10 (Fed. Cir. 2005) (“Whether an invention 

was on sale within the meaning of § 102(b) is a question of 

law that we review de novo based upon underlying facts, 

which we review for clear error.”). 

We provide a brief overview of the development of the 

on-sale bar for context. Section 1 of the Patent Act of 

1793 required that an invention for which a patent was 

sought be “not known or used before the application.” Act 

of Feb. 21, 1793, ch. 11, § 1, 1 Stat. 318. The Supreme 

Court interpreted this statute in Pennock v. Dialogue, 27 

U.S. (2 Pet.) 1 (1829), holding that an inventor loses his 

right to a patent “if he suffers the thing invented to go

into public use, or to be publicly sold for use, before he 

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makes application for a patent. His voluntary act or 

acquiescence in the public sale and use is an abandonment of his right.” Id. at 23-24 (emphases added). The 

Court noted “that under the common law of England, 

letters patent were unavailable for the protection of 

articles in public commerce at the time of the application, 

and that this same doctrine was immediately embodied in 

the first patent laws passed in this country.” Bonito 

Boats v. Thunder Craft Boats, 489 U.S. 141, 149 (1989)

(describing Pennock, 27 U.S. at 20-22); see also Shaw v. 

Cooper, 32 U.S. 292, 320-21 (1833) (third-party sale 

invalidating where statute required invention not be 

“known or used before the [patent] application”). 

Against this backdrop, Congress first codified the onsale bar in Section 6 of the Patent Act of 1836, prohibiting 

the patenting of any invention that, at the time the application was filed, was “in public use or on sale, with [the 

inventor’s] consent or allowance.” Act of July 4, 1836, ch. 

357, § 6, 5 Stat. 117, 119. See Brief for the United States 

as Amicus Curiae 9-11. As a leading 19th century commentator explained, the early public-use and on-sale 

statutory restrictions were premised on the principle that 

“no invention, which has already passed from the control 

of the inventor into the possession of the public is entitled 

to protection.” 1 William C. Robinson, The Law of Patents 

for Useful Inventions § 71, 109 (1890). Congress retained 

the public-use and on-sale bars in subsequent amendments to the patent laws, although it soon softened the 

effect of those bars “by enacting a 2-year grace period” 

after the public use or sale “in which the inventor could 

file an application.” Pfaff, 525 U.S. at 65; see Act of Mar. 

3, 1839, ch. 88, 5 Stat. 353, 354 (“1839 Act”). Congress 

also eliminated the “consent or allowance requirement” in 

1839. See 1839 Act, 5 Stat. at 354; see also Andrews v. 

Hovey, 123 U.S. 267, 274 (1887). 

In 1939, Congress reduced the grace period from two 

years to one. See Act of Aug. 5, 1939, ch. 450, 53 Stat. 

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1212. And when Congress reenacted and recodified the 

patent laws in the Patent Act of 1952, it again provided 

that “[a] person shall be entitled to a patent unless,” inter 

alia, “the invention was . . . 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).1 

For many years this court applied a “totality of circumstances” standard in applying the on-sale bar. Lacks 

Indus. v. McKechnie Vehicle Components USA, Inc., 322 

F.3d 1335, 1347 (Fed. Cir. 2003) (citing Envirotech Corp. 

v. Westech Eng’g Inc., 904 F.2d 1571, 1574 (Fed. Cir. 

1990)). “Under that test ‘no single finding or conclusion of 

law [was] a sine qua non’ to a holding that the statutory 

bar arose.” Id. We considered all the facts and circumstances surrounding any particular transaction and 

considered those in light of the policies underlying section 

§ 102(b), finding an on-sale bar in circumstances where 

the policies were furthered. See, e.g., Micro Chem., Inc. v. 

Great Plains Chem. Co., 103 F.3d 1538, 1544 (Fed. Cir. 

1997) (“all of the circumstances surrounding the sale or 

offer to sell, including the stage of development of the 

invention and the nature of the invention, must be considered and weighed against the policies underlying section 102(b)”); Ferag AG v. Quipp Inc., 45 F.3d 1562, 

1566 (Fed. Cir. 1995) (“While a wide variety of factors 

may influence the on sale determination, no single one 

controls the application of section 102(b), for the ultimate 

conclusion depends on the totality of the circumstances.”); 

 

1 Congress amended 35 U.S.C. § 102 in 2011 as part 

of the America Invents Act (“AIA”). See Leahy-Smith 

America Invents Act, Pub. L. No. 112-29, § 35, 125 Stat. 

84, 341 (2011). References to § 102 and other sections of 

Title 35 of the United States Code in this opinion refer to 

the pre-AIA version of the statute, the version that applies here. 

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UMC Elecs. Co. v. United States, 816 F.2d 647, 656 (Fed. 

Cir. 1987) (stating that the on-sale bar “does not lend 

itself to formulation into a set of precise requirements”). 

We identified several policies underlying § 102(b): to 

promote the early filing of patent applications—i.e., to 

foster disclosure of patented inventions to the public; to 

prevent an inventor from profiting from the commercial 

use of an invention for a prolonged period before filing a 

patent application claiming that invention; to discourage 

the removal of inventions from the public domain; and to 

give inventors a reasonable time to discern the potential 

value of an invention. See, e.g., Ferag AG, 45 F.3d at

1566; Envirotech, 904 F.2d at 1574; King Instrument 

Corp. v. Otari Corp., 767 F.2d 853, 860 (Fed. Cir. 1985); 

Gould Inc. v. United States, 579 F.2d 571, 580 (Ct. Cl. 

1978). 

Although, applying this test, we held that a “definite 

offer for sale” was required, we found that this did not 

necessarily require commercial activity that rose to the 

level of a formal “offer” under contract law principles. 

Lacks Indus., 322 F.3d at 1347 (citing RCA Corp. v. Data 

Gen. Corp., 887 F.2d 1056, 1062 (Fed. Cir. 1989)). And, 

we reviewed transactions and their impact without strict 

regard to whether they qualified as commercial activity 

under any definable standard. See id.; Ferag AG, 45 F.3d 

at 1566. 

This changed with Pfaff, in which the Supreme Court 

replaced the “totality of the circumstances” test—which 

the Court noted had been criticized as “unnecessarily 

vague”—with a two-pronged test. 525 U.S. at 66 n.11. As 

discussed above, Pfaff clarified that the on-sale bar under 

35 U.S.C. § 102(b) applies when, before the critical date, 

the claimed invention (1) was the subject of a commercial 

offer for sale; and (2) was ready for patenting. Id. at 67-

68. Pfaff itself focused on the second prong of its newly 

articulated test—ready for patenting. Id. at 57. It held 

that the “ready for patenting” requirement can be met in 

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at least two ways: (1) proof of a reduction to practice; or 

(2) drawings or other descriptions sufficiently specific to 

enable a person of ordinary skill to practice the invention. 

Id. at 67-68. Pfaff itself said little about the first prong of 

the two-prong test—what constitutes a patent-defeating 

“commercial offer for sale”—however. The Court did 

emphasize that “[a]n inventor can both understand and 

control the timing of the first commercial marketing of his 

invention,” and that a transaction that is “experimental in 

character” is distinct from one that is for purposes of such 

commercial marketing. Id. at 67 (emphasis added). 

Since Pfaff, this court has applied the Supreme 

Court’s “two-part test ‘without balancing various policies 

[of the bar] according to the totality of the circumstances.’” Electromotive Div. of GMC, 417 F.3d at 1209 (citation omitted); see also Dana Corp. v. American Axle & 

Mfg., Inc., 279 F.3d 1372, 1377 (Fed. Cir. 2002) (district 

court “erroneously invoked the ‘totality of the circumstances’ test that was disavowed by Pfaff.”); EZ Dock, Inc. 

v. Schafer Systems, Inc., 276 F.3d 1347, 1351 (Fed. Cir. 

2002) (“Before the Supreme Court’s decision in Pfaff, this 

court used a multifactor, ‘totality of the circumstances’ 

test to enforce the on-sale bar. . . . [This court] now 

follows the Supreme Court’s two-part test.”) (internal 

quotation marks and citations omitted). 

Unlike Pfaff itself, the focus of this en banc appeal is 

on the first prong of the Pfaff test: whether the invention 

was the subject of a commercial sale or offer for sale. We 

have held that “the question of whether an invention is 

the subject of a commercial offer for sale is a matter of 

Federal Circuit law, to be analyzed under the law of 

contracts as generally understood.” Group One, Ltd. v. 

Hallmark Cards, Inc., 254 F.3d 1041, 1047 (Fed. Cir. 

2001). We also have held that, to be true to Pfaff when 

assessing prong one of § 102(b), we must focus on those 

activities that would be understood to be commercial sales 

and offers for sale “in the commercial community.” Id. 

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We have also indicated that, “[a]s a general proposition, 

we will look to the Uniform Commercial Code (‘UCC’) to 

define whether . . . a communication or series of communications rises to the level of a commercial offer for sale.” 

Id. And we have made clear that, post-Pfaff, “[t]he transaction at issue must be a ‘sale’ in a commercial law 

sense,” and that “[a] sale is a contract between parties to 

give and to pass rights of property for consideration which 

the buyer pays or promises to pay the seller for the thing 

bought or sold.” Trading Techs., 595 F.3d at 1361 (quotation marks omitted). 

Applying § 102(b) in light of Pfaff, we conclude that 

the transactions between MedCo and Ben Venue in 2006 

and 2007 did not constitute commercial sales of the patented product. We, thus, affirm the district court’s 

conclusion that those transactions were not invalidating 

under § 102(b). In the discussion that follows, we first 

clarify that the mere sale of manufacturing services by a 

contract manufacturer to an inventor to create embodiments of a patented product for the inventor does not

constitute a “commercial sale” of the invention. We then 

address the issue of “stockpiling” by an inventor and 

clarify that “stockpiling” by the purchaser of manufacturing services is not improper commercialization under 

§ 102(b). We explain that commercial benefit—even to 

both parties in a transaction—is not enough to trigger the 

on-sale bar of § 102(b); the transaction must be one in 

which the product is “on sale” in the sense that it is 

“commercially marketed.” There are, broadly speaking, 

three reasons for our judgment in this case: (1) only 

manufacturing services were sold to the inventor—the 

invention was not; (2) the inventor maintained control of 

the invention, as shown by the retention of title to the 

embodiments and the absence of any authorization to Ben 

Venue to sell the product to others; and (3) “stockpiling,” 

standing alone, does not trigger the on-sale bar. 

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20 THE MEDICINES COMPANY v. HOSPIRA, INC. 

B. No Commercial Sale of the Invention 

We begin with the language of § 102(b), which requires that “the invention” be “on sale.” The “invention” 

is defined by the patent’s claims. See 35 U.S.C. § 112, ¶ 2 

(“The specification shall conclude with one or more claims 

particularly pointing out and distinctly claiming the 

subject matter which the applicant regards as his invention.”). In this case, all of the asserted claims cover 

products. The asserted claims of the ’727 patent cover 

“pharmaceutical batches,” while the asserted claims of the 

’343 patent “claim[ ] the same subject matter as that of 

claim 1 of the ’727 patent, but as a product-by-process,” 

viz. “pharmaceutical batches . . . prepared by a compounding process comprising” the claimed steps. Meds. Co.,

2014 U.S. Dist. LEXIS 43126, at *3-4. For validity purposes, the “invention” in a product-by-process claim is the 

product. See Amgen Inc. v. F. Hoffman-La Roche Ltd., 

580 F.3d 1340, 1369 (Fed. Cir. 2009) (“In determining 

validity of a product-by-process claim, the focus is on the 

product and not on the process of making it.”); SmithKline 

Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1317 (Fed. 

Cir. 2006) (“Regardless of how broadly or narrowly one 

construes a product-by-process claim, it is clear that such 

claims are always to a product, not a process.”); In re 

Lyons, 364 F.2d 1005, 1016 (C.C.P.A. 1966) (“a productby-process claim is a product, not a process.”). 

Hospira argues that, by manufacturing embodiments 

of the patented product for MedCo, Ben Venue put the 

invention “on sale.” But we have never espoused the 

notion that, where the patent is to a product, the performance of the unclaimed process of creating the product, 

without an accompanying “commercial sale” of the product itself, triggers the on-sale bar. The cases on which

Hospira relies uniformly involve process or method patents in which the (1) inventors sought compensation (2) 

from the buying public for (3) performing the claimed 

processes or methods. In Metallizing Engineering Co. v. 

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Kenyon Bearing & Auto Parts Co., the patentee used a 

secret process to recondition worn metal parts for its 

customers, for compensation, before the critical date. 153 

F.2d 516, 517-18 (2d Cir. 1946). In D.L. Auld, the patentee offered to sell a product made by the claimed method to 

prospective customers, i.e., it offered to practice the 

method in return for compensation. 714 F.2d at 1148. 

Similarly, in both Plumtree and Scaltech, we found that 

offering to perform the steps of the patented methods for 

customers in exchange for payment triggers the on-sale 

bar. Plumtree Software, Inc. v. Datamize, LLC, 473 F.3d 

1152, 1163 (Fed. Cir. 2006); Scaltech, Inc. v. Retec/Tetra, 

LLC, 269 F.3d 1321, 1328-29 (Fed. Cir. 2001).

Though those cases are distinguishable on multiple 

grounds, we find particularly significant the fact that the 

inventions-at-issue there were processes or methods. 

Hospira even acknowledges as much. Hospira’s En Banc 

Br. 31 (“To be sure, the above-cited cases involve patented 

processes or methods.”). While “a process is a series of 

acts, and the concept of sale as applied to those acts is 

ambiguous,” “[t]he sale of a tangible item is[, by contrast,] 

usually a straightforward event; the item is transferred 

from the seller to the buyer, who normally owns it outright.” Minton v. Nat’l Ass’n of Sec. Dealers, Inc., 336 

F.3d 1373, 1378 (Fed. Cir. 2003). Similarly, in In re 

Kollar, we vacated a decision that “fail[ed] to recognize 

the distinction between a claim to a product, device, or 

apparatus, all of which are tangible items, and a claim to 

a process, which consists of a series of acts or steps” in 

applying the on-sale bar. 286 F.3d at 1332. We stated 

that, while “[a] tangible item is on sale when . . . the 

transaction ‘rises to the level of a commercial offer for 

sale’ under the Uniform Commercial Code,” “[a] process, 

however, is a different kind of invention . . . [and] thus [is] 

not sold in the same sense as is a tangible item.” Id. 

The most natural conclusion to draw from all of the 

evidence presented in this case is that Ben Venue sold 

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22 THE MEDICINES COMPANY v. HOSPIRA, INC. 

contract manufacturing services—not the patented invention—to MedCo. Under MedCo’s instructions and using

an API supplied by MedCo, Ben Venue acted as a pair of 

“laboratory hands” to reduce MedCo’s invention to practice. The invoices for the manufacturing service stated, 

“Charge to manufacture Bivalirudin lot.” J.A. 17177-83

(emphasis added). In addition, MedCo paid Ben Venue 

only about 1% of the ultimate market value of the product 

Ben Venue manufactured. As described above, MedCo 

paid Ben Venue a total of $347,500 to make the three 

batches, even though these batches were commercially 

valued at well over $20 million. Unsurprisingly, therefore, the district court chose MedCo’s description of the 

transaction as one in which “Ben Venue was paid to 

manufacture Angiomax for [MedCo],” over Hospira’s 

description of the transaction as a “sale of the validation 

batches.” Meds. Co., 2014 U.S. Dist. LEXIS 43126, at *35. 

As the original panel of this court stated, “the district 

court is correct that Ben Venue invoiced the sale as manufacturing services and title to the pharmaceutical batches 

did not change hands.” Meds. Co., 791 F.3d at 1370. 

Thus, under the plain text of § 102(b), there was no sale of 

the “invention.” 

The absence of title transfer further underscores that

the sale was only of Ben Venue’s manufacturing services. 

Because Ben Venue lacked title, it was not free to use or 

sell the claimed products or to deliver the patented products to anyone other than MedCo, nor did it do so. Section 

2-106(1) of the Uniform Commercial Code describes a 

“sale” as “the passing of title from the seller to the buyer 

for a price.” U.C.C. § 2-106(1). The passage of title is a

helpful indicator of whether a product is “on sale,” as it 

suggests when the inventor gives up its interest and 

control over the product. A “sale” under § 102(b) “occurs 

when the parties . . . give and pass rights of property for 

consideration.” Special Devices, 270 F.3d at 1355 (quoting 

Zacharin v. United States, 213 F.3d 1366, 1370 (Fed. Cir. 

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2000)); see also Trading Techs., 595 F.3d at 1361 (“The 

transaction at issue must be a ‘sale’ in a commercial law 

sense.”). 

As noted, since Pfaff, we have generally looked to the 

UCC for the definition of a “sale.” In Group One, an early 

post-Pfaff case reversing the district court’s grant of 

summary judgment based on the on-sale bar, we stated 

that: 

As a general proposition, we will look to the 

Uniform Commercial Code (“UCC”) to define 

whether, as in this case, a communication or series of communications rises to the level of a 

commercial offer for sale. As this court has previously pointed out, “[t]he UCC has been recognized 

as the general law governing the sale of goods and 

is another useful, though not authoritative, source 

in determining the ordinary commercial meaning 

of” terms used by the parties. 

254 F.3d at 1047-48 (quoting Enercon GmbH v. Int’l 

Trade Comm’n, 151 F.3d 1376, 1382 (Fed. Cir. 1998)). We 

have since reaffirmed the usefulness of the UCC in analyzing the on-sale bar. See In re Kollar, 286 F.3d at 1332; 

Linear Tech. Corp. v. Micrel, Inc., 275 F.3d 1040, 1048 

(Fed. Cir. 2001) (stating that “Group One further instructs that the Uniform Commercial Code (‘UCC’) should 

inform the analysis of the contractual issues” in connection to the on-sale bar). 

While we agree with Hospira that the UCC does not 

have “talismanic significance” with respect to the on-sale 

bar, and we decline to draw a bright line rule making the 

passage of title dispositive, we find the absence of title 

transfer significant because, in most instances, that fact 

indicates an absence of commercial marketing of the 

product by the inventor. As Hospira points out, an inventor could commercially exploit a newly invented machine 

by charging others a fee to use it without transferring 

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24 THE MEDICINES COMPANY v. HOSPIRA, INC. 

title to it. Hospira’s En Banc Reply Br. 8. In such a case, 

the “invention” would still likely be considered “on-sale” 

because use of the invention is on-sale for a price. That is 

not what occurred here, however.

It is with vigilance that we have held that the sale of 

products made using patented methods triggers the onsale bar, even though title to the claimed method itself did 

not pass. See, e.g., D.L. Auld, 714 F.2d at 1147; Plumtree, 

473 F.3d at 1163. In such cases, the literal subject matter 

of the claims is incapable of being sold. Similarly, we held 

that sales of software licenses to end-users can trigger the 

on-sale bar. See Group One, 254 F.3d at 1049 n.2 (stating 

that “[couching] a sale of an interest that entitles the 

purchaser to possession and use of the machine, unrelated 

to any patent present or future, . . . as a ‘license’[ ] would 

not prevent the transaction from triggering the on-sale 

bar”); In re Kollar, 286 F.3d at 1330 n.3 (stating that 

certain transactions framed as a “license” but that are to 

an embodiment of the claimed invention “may be tantamount to a sale (e.g., a standard computer software 

license)”). 

Like the absence of title transfer, the confidential nature of the transactions is a factor which weighs against 

the conclusion that the transactions were commercial in 

nature. Again, this factor is not disqualifying in all 

instances—it too is not of talismanic significance. Indeed, 

we, and our predecessors, have found confidential transactions to be patent invalidating sales under § 102(b). See 

In re Caveney, 761 F.2d at 676 (“It is well established . . .

that a single sale or offer to sell is enough to bar patentability” even if kept secret from the trade) (citing Gen. Elec. 

Co. v. United States, 654 F.2d 55, 60 (1981); Mfg. Research Corp. v. Graybar Elec. Corp., 679 F.2d 1355, 1362 

(11th Cir. 1982)); Gould, 579 F.2d at 580 (“[A] sale . . . 

pursuant to a secret military contract . . . was still held to 

be a sale proscribed by 35 U.S.C. § 102(b).”) (citing Piet v. 

United States, 176 F. Supp. 576 (S.D. Cal. 1959), aff’d,

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283 F.2d 693 (9th Cir. 1960)); Hobbs v. U.S. Atomic Energy Comm’n, 451 F.2d 849, 860 (5th Cir. 1971) (stating 

that the court “cannot attach any relevance to any conditions of secrecy which may have existed at the time the 

[invention] was placed ‘on sale.’”). In this case, however, 

we find that the scope and nature of the confidentiality 

imposed on Ben Venue supports the view that the sale 

was not for commercial marketing purposes. 

Rather than rest our decision on formalities, our focus 

is on what makes our on-sale bar jurisprudence coherent: 

preventing inventors from filing for patents a year or 

more after the invention has been commercially marketed, whether marketed by the inventor himself or a third 

party.2 Pfaff itself quoted two seminal cases reciting this 

principle: “[a]ny attempt to use it for a profit, and not by 

way of experiment, for a longer period than two years 

before the application, would deprive the inventor of his 

right to a patent,” 525 U.S. at 65 (quoting Elizabeth, 97 

U.S. at 137) (emphasis added), and “it is a condition upon 

an inventor’s right to a patent that he shall not exploit his 

discovery competitively after it is ready for patenting,” id. 

at 68 (quoting Metallizing, 153 F.2d at 520) (emphasis 

added). See also Atlanta Attachment Co. v. Leggett & 

Platt, Inc., 516 F.3d 1361, 1365 (Fed. Cir. 2008) (“The 

overriding concern of the on-sale bar is an inventor’s 

attempt to commercialize his invention beyond the statutory term.”) (citing Netscape Commc’ns. Corp. v. Konrad, 

295 F.3d 1315, 1323 (Fed. Cir. 2002)); Plumtree, 473 F.3d 

 

2 We have held that sales by third parties can be 

invalidating sales under § 102(b) in certain circumstances. See, e.g., J.A. La Porte, Inc. v. Norfolk Dredging Co., 

787 F.2d 1577, 1581 (Fed. Cir. 1986); see also Zacharin v. 

United States, 213 F.3d 1366, 1371 (Fed. Cir. 2000); 

Evans Cooling Sys., Inc. v. Gen. Motors Corp., 125 F.3d 

1448, 1453 (Fed. Cir. 1997). 

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26 THE MEDICINES COMPANY v. HOSPIRA, INC. 

at 1163 (“the intent of [§ 102(b)] is to preclude attempts 

by the inventor or his assignee to profit from commercial 

use of an invention for more than a year before an application for patent is filed”) (emphasis added) (quoting D.L. 

Auld, 714 F.2d at 1147) (internal quotation marks omitted). 

Despite this fairly constant refrain in the case law, 

Hospira argues that finding the bar inapplicable here 

“would improperly permit an inventor to commercially 

stockpile his invention,” in order to “restock its longdepleted commercial pipeline.” Hospira’s En Banc Br. 19, 

47. But commercial benefit generally is not what triggers 

§ 102(b); there must be a commercial sale or offer for sale. 

The statute itself says the invention must be “on sale,” or 

that there must be an offer for sale of the invention. Pfaff 

made this distinction clear and explained that we are not 

to look to broad policy rationales in assessing whether the 

on-sale bar applies; we are to apply a straightforward 

two-step process—one which permits an inventor to “both 

understand and control the first commercial marketing of 

his invention.” 525 U.S. at 67. For this reason, we find

that the mere stockpiling of a patented invention by the 

purchaser of manufacturing services does not constitute a

“commercial sale” under § 102(b). Stockpiling—or building inventory—is, when not accompanied by an actual 

sale or offer for sale of the invention, mere pre-commercial 

activity in preparation for future sale. This is true regardless of how the stockpiled material is packaged. The 

on-sale bar is triggered by actual commercial marketing 

of the invention, not preparation for potential or eventual

marketing. Contrary to Hospira’s assertions, not every 

activity that inures some commercial benefit to the inventor can be considered a commercial sale. Instead, stockpiling by an inventor with the assistance of a contract 

manufacturer is no more improper than is stockpiling by 

an inventor in-house. 

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It is well-settled that mere preparations for commercial sales are not themselves “commercial sales” or “commercial offers for sale” under the on-sale bar. See, e.g., In 

re Kollar, 286 F.3d at 1334 (holding that “[t]he precommercialization process aimed at making the invention 

commercial” does not implicate the on-sale bar); Intel 

Corp. v. Int’l Trade Comm’n, 946 F.2d 821, 830 (Fed. Cir. 

1991) (“It is not a violation of the on-sale bar to make 

preparations for the sale of a claimed invention—an 

actual sale or offer to sell must be proved.”). Instead, 

when no actual sale is present, “[o]nly an offer which rises 

to the level of a commercial offer for sale, one which the 

other party could make into a binding contract by simple 

acceptance (assuming consideration)” triggers the on-sale 

bar. Group One, 254 F.3d at 1048. 

Indeed, we have held that an inventor that has publicized that a product will soon be placed on sale has not 

created an offer that another party could make binding by

simple acceptance. See, e.g., Linear Tech. Corp. v. Micrel, 

Inc., 275 F.3d 1040, 1050 (Fed. Cir. 2001) (holding that 

promotional activity was insufficient to create an on-sale

event: “[p]reparation alone cannot give rise to an on-sale 

bar under Group One”). To the contrary, such an inventor 

has told buyers that it cannot have access to the invention 

yet, regardless of a customer’s interest in buying. 

And, we have never held that stockpiling by an inventor in-house triggers the on-sale bar. See Leah C. Fletcher, Equal Treatment Under Patent Law: A Proposed

Exception To The On-Sale Bar, 13 TEX. INTELL. PROP. L.J.

209, 235-36 (2005) (“The unchallenged ability of the inhouse manufacturer to stockpile strongly suggests that, in 

fact, the on-sale bar is not really intended to deter stockpiling.”); Christopher G. Darrow, Recent Developments: 

Recent Developments in Patent Law, 10 TEX. INTELL.

PROP. L.J. 379, 388 (2002) (“Inventors having manufacturing capacity can begin the sometimes long manufacturing 

process, and even stockpile commercial embodiments of 

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28 THE MEDICINES COMPANY v. HOSPIRA, INC. 

the invention, before filing a patent application.”). Stockpiling is merely a type of preparation for future commercial sales. If Congress wanted to prevent stockpiling or 

any form of commercial benefit, it could have added “or 

stockpiled” or “engaged in a transaction conferring commercial benefit” to the list of statutory bars in § 102(b), in 

addition to “public use or on sale.” It did not. Stockpiling 

by the purchaser of manufacturing services is not a trigger to the on-sale bar; discouraging it is not even an 

identifiable goal of the on-sale bar. 

Expanding the on-sale bar to encompass stockpiling

by inventors that outsource manufacturing might encourage earlier filing of patents. But we cannot endorse any 

blunt instrument that rewards earlier patent applications 

when so doing ignores the wording Congress chose when

enacting the on-sale bar. See Gould, 579 F.2d at 580 (“It 

appears certain that the purpose of the on sale bar and 

the 1-year grace period is an attempt by Congress to 

balance the interests of the inventor with the interests of 

the public.”). Unlike those in cases to which Hospira 

cites, such as D.L. Auld, in which we applied the on-sale 

bar to the performance of patented methods for commercial gain, MedCo’s transactions with Ben Venue did not 

involve invalidating sales or offers for sale of the invention. MedCo did not market or release its invention to 

any purchasers by contracting with Ben Venue, nor did it 

give Ben Venue approval to do so. Rather, MedCo made a 

pre-commercial investment—an outlay of $347,500—

when it paid Ben Venue for the service of reducing its 

invention to practice. We see no reason to treat MedCo 

differently than we would a company with in-house manufacturing capabilities. 

Hospira itself concedes that “[w]hether the on-sale bar 

applies should not depend on differences that do not alter 

a transaction’s basic economics.” Hospira’s En Banc Br. 

32, 35. Yet, penalizing a company for relying, by choice or 

by necessity, on the confidential services of a contract 

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THE MEDICINES COMPANY v. HOSPIRA, INC. 29

manufacturer, does exactly that. Applying the on-sale bar 

to the transaction-at-issue would be: (1) arbitrary, as it 

treats companies making the same pre-commercial preparations differently; (2) ineffective to discourage stockpiling, as it does not penalize or prevent companies with inhouse manufacturing capabilities from stockpiling; (3) 

and unnecessary, as stockpiling by the purchaser of 

manufacturing services is not the type of commercial 

activity with which the on-sale bar is concerned. See 

Brief for Roberta J. Morris as Amicus Curiae 6-7. There 

is no room in the statute and no principled reason raised 

by the parties or any of the amici to apply a different set 

of on-sale bar rules to inventors depending on whether 

their business model is to outsource manufacturing or to 

manufacture in-house. In fact, the amici uniformly argue 

that applying the on-sale bar to the type of transaction 

that occurred here would only make the drug development process more costly, punish efficient use of resources, and deter future investments in innovation. See 

e.g., Brief for Biotechnology Innovation Organization as 

Amicus Curiae 11; Brief for American Intellectual Property Law Association as Amicus Curiae 3, 19; Brief for 

Gilead Sciences, Inc. as Amicus Curiae 17-18; Brief of 

Pharmaceutical Research and Manufacturers of America 

as Amicus Curiae 4, 6. 

C. Post-Pfaff Cases Applying § 102(b) to 

Supplier/Inventor Transactions

Hospira argues that a number of our post-Pfaff cases 

are inconsistent with the district court’s failure to find 

§ 102(b) to have been triggered by MedCo’s transactions 

with Ben Venue and, by extension, would be inconsistent 

with the conclusion we reach here. Specifically, Hospira 

points to Brasseler, U.S.A. I, L.P. v. Stryker Sales Corp., 

182 F.3d 888, 891 (Fed. Cir. 1999), Special Devices, Inc. v. 

OEA, Inc., 270 F.3d 1353 (Fed. Cir. 2001), and Hamilton 

Beach Brands, Inc. v. Sunbeam Products, 726 F.3d 1370, 

1375 (Fed. Cir. 2013). In each, according to Hospira, we 

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30 THE MEDICINES COMPANY v. HOSPIRA, INC. 

invalidated patent claims under § 102(b) based on transfers of product by a supplier to an inventor. Indeed, as 

Hospira emphasizes, in Special Devices, we expressly held 

that there is no “supplier exception” to the on-sale bar,

Special Devices, 270 F.3d at 1357, a point we reiterated in 

Hamilton Beach. 

In none of those cases were the precise facts and arguments we consider today presented by the parties. In 

Brasseler, we noted that the transaction was indisputably

one in which the rights in the patented invention passed 

between the parties for consideration. Brasseler, 182 F.3d 

at 890 (“The transaction at issue undisputedly was a ‘sale’

in a commercial law sense.”). In Brasseler, we found that 

“[t]he transaction was invoiced as a sale of product, and 

the parties understood the transaction to be such,” id. at 

891, and that the transaction was for purposes of marketing by Brasseler. Id. Brasseler argued that it and the 

supplier from whom the purchase was made were not 

truly separate entities, that we should apply a joint 

development exception to the on-sale bar because Brasseler and its supplier each employed co-inventors, and 

that the fact that Brasseler retained equitable, though not 

legal, title to the patented product was meaningful. We 

rejected each of those specific contentions, but did not say 

transactions with suppliers should always be deemed 

commercial sales. 

Similarly, in Special Devices, while we declined to 

adopt a “supplier exception” to the on-sale bar, we did so 

in the face of a concession by the inventor that the transaction between it and its supplier was a commercial sale. 

Thus, the import of Special Devices is simply that the fact 

that a sale is made by a supplier is not, standing alone, 

sufficient grounds upon which to characterize a transaction having all of the hallmarks of a commercial sale 

under the UCC as something other than a commercial 

sale. 

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THE MEDICINES COMPANY v. HOSPIRA, INC. 31

So, too, in Hamilton Beach. The inventor made only 

two arguments against the application of § 102(b): (1) that 

the offer for sale was insufficiently firm under contract 

law and the UCC to constitute a commercial offer for sale; 

and (2) that the invention was not yet ready for patenting 

under the second prong of Pfaff. The inventor did not 

even urge a supplier exception to § 102(b) or argue that no 

commercial sale of the patented product would occur if the 

inventor purchased it from its supplier. 

Thus, examining the arguments made by the parties 

and the facts not in dispute in those cases, the precise 

holdings in those cases are not inconsistent with the 

analysis we employ or conclusions we reach here. Lest 

there be any doubt, however, to the extent language in 

those cases might be viewed as dictating a different result 

here, they are overruled with one important caveat. We 

still do not recognize a blanket “supplier exception” to 

what would otherwise constitute a commercial sale as we 

have characterized it today. While the fact that a transaction is between a supplier and inventor is an important 

indicator that the transaction is not a commercial sale, 

understood as such in the commercial marketplace, it is 

not alone determinative. Where the supplier has title to 

the patented product or process, the supplier receives 

blanket authority to market the product or disclose the 

process for manufacturing the product to others, or the 

transaction is a sale of product at full market value, even 

a transfer of product to the inventor may constitute a 

commercial sale under § 102(b). The focus must be on the 

commercial character of the transaction, not solely on the 

identity of the participants. 

 We believe our focus on those characteristics that 

make a sale “commercial” in the most well-understood 

sense of that term and on what constitutes commercial 

marketing of a product, as distinct from merely obtaining 

some commercial benefit from a transaction, best adheres 

to the language of § 102(b), the Supreme Court’s guidance 

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32 THE MEDICINES COMPANY v. HOSPIRA, INC. 

in Pfaff, and the policy and jurisprudential concerns, 

respectively, underlying both.3 

D. Experimental Use

MedCo argues that because its transactions with Ben 

Venue were for purposes of validating whether its processes (1) would continue to work as claimed and (2) 

generate consistently acceptable product, those transactions were for experimental purposes. Specifically, it 

asserts that, even if ready for patenting, the transactions 

with Ben Venue were not for commercial purposes, only 

experimental ones. Hospira counters that MedCo never 

asserted an experimental use exception below and cannot 

do so now, especially when Hospira was never given an 

opportunity to present evidence regarding the other eight 

batches of product prepared for MedCo by Ben Venue. 

Hospira also argues that validation of a manufacturing 

process for purposes of satisfying FDA requirements is 

not experimental within the meaning of § 102(b). 

While the parties spend significant time addressing 

the question, most amici, including the government, urge

that, if we conclude the transactions between Ben Venue 

and MedCo were not commercial sales for other reasons, 

we refrain from reaching the district court’s experimental 

use finding. The only exception to this fairly unanimous 

view is an oft-repeated request that we make clear that 

the panel’s statement that there can be no experimental 

use after a reduction to practice is inaccurate. See, e.g., 

Brief for the United States as Amicus Curiae 25-26; Brief 

 

3 The government argues that recent amendments 

to § 102 in the AIA reflects Congress’s view that the 

public use bar and the on-sale bar both turn on the “public” nature of the activity at issue. We do not address here 

whether or to what extent § 102(b) may differ post-AIA 

from the pre-AIA description we now employ. 

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THE MEDICINES COMPANY v. HOSPIRA, INC. 33

for the Houston Intellectual Property Law Association 9-

12; Brief for Gilead Sciences, Inc. as Amicus Curiae 10-11. 

Given our conclusion that there was no “commercial 

sale” of the inventions in the ’727 and ’343 patents, we 

agree that we need not reach the question of experimental 

use. Since the panel opinion has been vacated, we also

decline to parse individual statements therein that are 

not determinative of the question presented. For the 

same reason, we do not reach the second prong of Pfaff—

whether the invention was ready for patenting—despite 

the fact that MedCo argued at the district court that it 

was not and challenges the district court’s finding to the 

contrary on appeal. 

Ultimately, we reach the same conclusion the district 

court did regarding the inapplicability of the on-sale bar

to MedCo’s transactions with Ben Venue, but do so on 

modified grounds. All other issues are remanded to the 

merits panel for consideration in the first instance. 

CONCLUSION

We hold today that a contract manufacturer’s sale to 

the inventor of manufacturing services where neither title 

to the embodiments nor the right to market the same 

passes to the supplier does not constitute an invalidating 

sale under § 102(b). We, therefore, affirm the district 

court’s holding that the transactions between Ben Venue 

and MedCo did not trigger the on-sale bar. Because the 

original panel held that the ’727 patent and the ’343

patent were invalid under the on-sale bar as a result of 

MedCo’s transactions with Ben Venue, it did not reach 

the other issues raised on appeal. Specifically, the original panel did not reach the issue of whether the invention 

was ready for patenting at the time of the 2006 and 2007 

transactions, or whether the Distribution Agreement 

between MedCo and ICS triggered the on-sale bar. It also

did not reach either MedCo’s appeal of the district court’s 

claim construction and non-infringement rulings or HosCase: 14-1504 Document: 4-2 Page: 33 Filed: 07/11/2016
34 THE MEDICINES COMPANY v. HOSPIRA, INC. 

pira’s cross-appeal of the district court’s obviousness and 

indefiniteness rulings. We, therefore, remand the appeal 

to the original panel for further proceedings consistent 

with this opinion. 

AFFIRMED-IN-PART AND REMANDED TO THE 

MERITS PANEL

Case: 14-1504 Document: 4-2 Page: 34 Filed: 07/11/2016