Source: https://www.stinson.com/Resources/Insights/2017_Insights/Federal_Circuit_Clarifies_AIA_On-Sale_Bar_Rule.aspx
Timestamp: 2019-04-19 05:11:06+00:00

Document:
On May 1, 2017, the Federal Circuit held that the on-sale bar under 35 U.S.C. § 102(b) applies if knowledge of a sale is made public even if the details of the invention are not made public.
Helsinn Healthcare S.A. brought suit against Teva Pharmaceuticals, Inc. alleging that Teva’s Abbreviated New Drug Application constituted patent infringement of four patents. One of the defenses Teva asserted was that the claims were invalid under the on-sale bar provision of 35 U.S.C. § 102. In regards to the one patent governed by the AIA, the district court had concluded there was not a commercial offer for sale for two independent reasons: 1) the invention was not ready for patenting; and 2) there was no on-sale bar due to the changes made to the relevant standard of what constitutes on-sale made by AIA § 102.
The activities alleged to constitute an on-sale bar arose out of patentee Helsinn’s agreement with distributor MGI Pharma. On April 6, 2001, Helsinn and MGI Pharma entered into both a license agreement and a supply and purchase agreement for .25mg and .75 mg doses of palonosetron. These agreements were announced in joint press releases and MGI’s Form 8-k filing with the Securities and Exchange Commission, but the price terms and specific dosage formulations were not publicly disclosed.
On January 30, 2003, Helsinn filed a provisional application covering the .25 mg dose and the FDA approved the dosage in July 2003. Helsinn filed four more patent applications, all claiming priority to the original provisional, over the next few years with the relevant application, which matured into the ‘219 Patent, being filed in May 2013.
At issue in the case was whether the AIA changes to the statute added the requirement that a sale must involve public disclosure of the details of the invention to trigger the on-sale bar.
Because the pre-AIA statute lacked a reference to “public” with respect to the sale, it was clear that the statute did not require public disclosure. The language of AIA § 102 along with floor statements by senators during the course of enacting the AIA created some uncertainty as to the extent the AIA injected a possible public disclosure aspect to the on-sale doctrine. The district court believed the new language indicated that in order for the invention to be on-sale it was necessary for the on-sale activity to publicly disclose the details of the invention.
[T]he current on-sale bar imposes penalties not demanded by any legitimate public interest. There is no reason to fear ‘commercialization’ that merely consists of a secret sale or offer for sale but that does not operate to disclose the invention to the public . . . The present bill’s new section 102(a) precludes extreme results such as these . . . .
The Federal Circuit disagreed, holding that a sale such as the MGI-to-Helsinn sale that is public knowledge triggers the on-sale bar, even if the details of the invention are not made public by the sale. The Federal Circuit, also relying on cases cited by Senator Kyle, said the legislative history at most shows an intent to do away with precedent that dealt with inventions that were involved with public use but not disclosed to the public. The court said that even if the changes were made to overrule the secret sale cases, this sale was not a secret.
The case did not address whether a purely secret and private sale triggers the bar. But the Federal Circuit appears to think it is important to analyze what was made public in determining if § 102(b) applies. The Federal Circuit also stated that the floor statements do not identify any on-sale cases, which might suggest the court believes AIA § 102 was meant to overrule case law on the public-use bar, but not on the on-sale bar.

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