Source: https://www.nixonpeabody.com/en/ideas/articles/2019/12/06/scotus-helsinn-decision
Timestamp: 2020-07-15 18:13:15
Document Index: 165939621

Matched Legal Cases: ['§ 102', '§ 102', '§ 102', '§ 102', '§ 102', '§ 2152']

SCOTUS Helsinn decision - Intellectual Property Alert
Author(s): Ravinderjit Braich, Ph.D., Sydney Pritchett, Benjamin Rosborough
In the December 2019 edition of Intellectual Property & Technology Law Journal, our IP attorneys authored an article that examines the impact of the U.S. Supreme Court’s decision in Helsinn Healthcare S.A. et al. v. Teva Pharmaceuticals USA, Inc. This decision held that the America Invents Act may have actually broadened the scope of what counts as a sale by clarifying the confusing catchall phrase “otherwise available to the public.” Until Helsinn, it was unclear whether this catchall phrase rendered more inventions ineligible for patent protection. This article highlights what companies need to know in light of this decision.
Reproduced with permission from Wolters Kluwer’s Intellectual Property & Technology Law Journal, December 2019.
Earlier this year, the U.S. Supreme Court held in Helsinn Healthcare S.A. v. Teva Pharmaceuticals U.S. that the America Invents Act (AIA) may have actually broadened the scope of what counts as a sale. As patent practitioners know, 35 U.S.C. § 102 prohibits applicants from obtaining patents for any invention that has been “on sale” for more than a year before the effective patent-filing date. This on-sale restriction existed previously, but the AIA added a confusing catchall phrase barring patents for inventions that were “otherwise available to the public,” and also removed the requirement that the sale be in the United States. Until Helsinn, it was unclear whether this catchall phrase rendered more invention ineligible for patent protection.
Helsinn Healthcare S.A. entered into a confidential agreement with MGI Pharma, Inc., to market and sell a new drug. Details about the drug were not made public, but the existence of the sale was. Nearly two years later, Helsinn filed a provisional patent application for their new drug, which eventually led to U.S. Patent No. 8,598,219. Helsinn filed suit against Teva Pharmaceuticals U.S., asserting infringement of the ‘219 patent. The district court ruled that the AIA had changed the definition of “on sale,” and that sales where details of the invention were not disclosed to the public now did not qualify as “sales” for the purpose of § 102. The U.S. Court of Appeals for the Federal Circuit reversed the district court’s ruling, and the Supreme Court granted certiorari to resolve the question.
In his unanimous opinion, Justice Clarence Thomas noted that the new language of the post-AIA on-sale bar was adopted in light of a well-developed body of law holding that a sale did not need to disclose invention details to bar patenting. Because post-AIA § 102 retained the same “on sale” phrase, the new catch-all phrase did not now require invalidating sales to publicly disclose details of the invention. According to Justice Thomas, attempting to alter the well-settled meaning of “on sale” in this manner would be “fairly oblique,” and thus was “not enough of a change for us to conclude that Congress intended to alter the meaning of the re-enacted term ‘on sale.’” As such, Justice Thomas concluded that “an inventor’s sale of an invention to a third party who is obligated to keep the invention confidential can quality as prior art under § 102.”
The broad language in the Supreme Court’s opinion does not clarify whether private sales that do not reveal invention details prohibit patenting.
The broad language in the Supreme Court’s opinion does not clarify whether private sales that do not reveal invention details prohibit patenting. The Federal Circuit’s opinion distinguished Helsinn’s sale from prior cases where the existence of the sale itself was a secret, and specifically concluded that “if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of sale.” However, the Supreme Court did not distinguish between public sales that keep invention details private and private sales whose existence is never revealed.
It remains to be seen if a trade secret or private commercial use by one party can trigger the on-sale bar against another party.
Almost a year after the Court’s decision in Helsinn, no lower courts have answered this question about unrevealed private sales. In Barry v. Medtronic, the Federal Circuit held that the on-sale bar was not implicated because the invention was not ready for patenting at the time of the alleged sale, prior to the critical date.[1] And in Quest Integrity USA, LLC v. Cokebusters USA Inc., the Federal Circuit confirmed that the sale of a product “produced by performing a claimed process implicates the on-sale bar.”[2] The U.S. District Court for the Southern District of Texas addressed Helsinn more directly in Schlumberger Tech. Corp. v. BICO Drillings Tools, Inc., but simply noted that even under Helsinn, it is only private sales by the patentee that implicate the on-sale bar, not private sales by third parties.[3]
Helsinnalso did not distinguish between secret commercial sales and secret commercial uses. However, the Supreme Court did endorse the dictum from the Federal Circuit’s 1998 Woodland Trust decision (“... an inventor’s own prior commercial use, albeit kept secret, may constitute public use or sale under 102(b), barring him from obtaining a patent.”). In doing so, the Court seems to be saying secret commercial sale and secret commercial use are to be treated similarly. Thus, a trade secret or private commercial use may also now trigger the on-sale bar.
Are any of their sales affected by the USPTO’s interpretation of the post-AIA on-sale bar? Beginning with the 9th Edition published in 2014, the MPEP indicated that sales under post-AIA § 102 “must make the invention available to the public.[4] Companies that have made potentially invalidating sales in reliance of this statement will want to ensure that they file an application prior to the end of the one-year grace period.
Are their sales private, or publicly disclosed? Because neither the Helsinn opinion nor any subsequent opinions determined whether such private sales trigger the on-sale bar, it is still possible that these private sales, if occurring prior to the critical date, could invalidate any future patents on the invention.
914 F.3d 1310, 1331 (Fed. Cir. 2019). [Back to reference]
924 F.3d 1220, 1227 (Fed. Cir. 2019). [Back to reference]
2019 WL 2450948, *6 and *9-*10 (S.D. Tex., June 12, 2019). [Back to reference]
M.P.E.P. § 2152.02(d). [Back to reference]
PDF: SCOTUS Helsinn decision