Source: http://www.dority-manning.com/legal-news/sales-that-do-not-publicly-disclose-invention-details-may-still-bar-patentability-under-the-aia/
Timestamp: 2019-04-24 01:50:58+00:00

Document:
Summary: Details of an invention under a commercial sale, or offer to sell, need not be publicly disclosed to trigger the “on sale” bar under 35 U.S.C. § 102(a) of the Leahy-Smith America Invents Act (AIA).
The Supreme Court of the United States upheld a decision from the Court of Appeals for the Federal Circuit finding that a commercial sale of an invention to a third party, in which the third party was required to keep the invention confidential, may constitute invalidating prior art under § 102(a) of the AIA. See Helsinn Healthcare, S.A. v. Teva Pharmaceuticals USA, Inc., No. 17-1229, slip op. at 1-2 (Jan. 22, 2019). In reaching this decision, the Supreme Court held “that Congress did not alter the meaning of ‘on sale’ when it enacted the AIA.” Id. at 8. Therefore, the Supreme Court held that the pre-AIA precedent interpreting the meaning of the “on sale” phrase applies to the AIA without alteration. Id.
While the “on-sale” bar is codified similarly in both pre-AIA and AIA § 102, the statutes are not identical. More specifically, under the AIA, “a person shall be entitled to a patent unless the claimed invention was. . . on sale, or otherwise available to the public before the effective filing date of the claimed invention.” 35 U.S.C. § 102(a)(1) (2013) (emphasis added). However, “a disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention” if the disclosure was made by the inventor or another who obtained the subject matter from the inventor. 35 U.S.C. § 102(b)(1)(A). Similarly, pre-AIA § 102 stated that a person shall be entitled to a patent unless “the invention was. . . on sale in this country, more than one year prior to the date of application for patent in the United States.” 35 U.S.C. § 102(b) (2006) (emphasis added). Accordingly, uncertainty regarding whether AIA § 102 changed the scope of the pre-AIA “on-sale” bar is founded upon the fact that the AIA “retained the on-sale bar . . . [but] added the catchall phrase ‘or otherwise available to the public.’” Helsinn, slip op. at 6. (citing 35 U.S.C. § 102(a)(1) (2012)). The Supreme Court granted certiorari in Helsinn to address this uncertainty.
In Helsinn, the patent holder, Helsinn Healthcare S.A. (Helsinn Healthcare) sued Teva Pharmaceuticals USA, Inc. (Teva) for patent infringement related to a drug used to treat chemotherapy-induced nausea and vomiting. Helsinn, slip op. at 3. In 2000, Helsinn Healthcare submitted proposals to the Food and Drug Administration for clinical trials and further solicited marketing partners for the drug. Id. Helsinn Healthcare entered into a license agreement and a supply and purchase agreement (collectively, the Agreement) with MGI Pharma, Inc. (MGI), in which any proprietary information received under the Agreement was to remain confidential. Id. Helsinn Healthcare and MGI disclosed the existence of their Agreement in a press release and further filed versions of the Agreement with the Securities and Exchange Commission. Id. at 2-3. However, details of the invention were redacted in the filed versions and remained undisclosed to the public. Id. In 2003, nearly two years after signing the Agreement, Helsinn Healthcare filed a provisional patent application directed to the drug. Id. at 3. In May 2013, an application for the patent at issue, U.S. Patent No. 8,598,219 (’219 patent), was filed, claiming priority to the 2003 provisional patent application. Id. By virtue of the ’219 patent’s effective date, it is governed by the AIA. Id.
In its defense against patent infringement, Teva asserted that the ’219 patent was invalid because the drug claimed in the ’219 patent was “on sale” via the Agreement more than one year before Helsinn Healthcare filed the provisional patent application. Id. In response, Helsinn Healthcare argued that the catchall phrase “or otherwise available to the public” under AIA § 102 requires that the “on sale” phrase be limited to disclosures that make the claimed invention available to the public. Id. at 8.
The Supreme Court disagreed with Helsinn Healthcare, noting that the AIA was enacted “against the backdrop of a substantial body of law interpreting §102’s on-sale bar.” Id. at 6. Indeed, the Supreme Court first noted that in Pfaff v. Wells Electronics Inc., 525 U.S. 55 (1998), it held that the on-sale bar under pre-AIA §102 applied when 1) the object of the commercial sale or offer to sell was the claimed subject matter and 2) the subject matter was ready for patenting without regard for whether the offer discloses details of the invention. See Pfaff, 525 U.S. at 67. The Court further noted that pre-AIA precedent “has long held that ‘secret sales’ can invalidate a patent.” Helsinn, at 7 (citing Special Devices, Inc. v. OEA, Inc., 270 F.3d 1353, 1357 (Fed. Cir. 2001); Woodland Trust v. Flowertree Nursery, Inc., 148 F.3d 1368, 1370 (Fed. Cir. 1998)). Notably, Helsinn Healthcare did not argue against the claimed invention being “on sale” under pre-AIA §102, nor did Helsinn Healthcare assert that the Court should re-interpret the pre-AIA construction of “on sale.” Id. at 8.
As a result, the Supreme Court focused its analysis on the meaning and effect of the “catchall” phrase under AIA § 102. Id. at 7-8. In considering this issue, the Supreme Court reasoned that when language previously used in an earlier act of Congress is adopted in the newer act, Congress is presumed to have also adopted the previous interpretation by the courts in regard to such language. Id. at 6. Since pre-AIA and AIA § 102 each retain the same “on sale” language, and only the catchall phrase “or otherwise available to the public” was added to AIA § 102, the Court concluded that Congress did not intend to overturn the pre-AIA construction of “on sale.” Id. at 7-8.
Accordingly, the Supreme Court held that commercial sales and offers to sell an invention more than one year before the effective filing date of the patent application may trigger the on-sale bar under AIA § 102 regardless of whether details of the invention are publicly disclosed.

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