Source: https://blog.jipel.law.nyu.edu/2019/03/supreme-court-to-hear-case-on-aia-secret-sales/
Timestamp: 2019-12-12 12:22:04
Document Index: 104281872

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

Supreme Court to Hear Case on AIA “Secret Sales.” – JIPEL Blog
Federal CircuitJIPEL Blog 2018-2019PatentSupreme Court
The path to patentability has many obstacles, and inventors’ own actions sometimes stand in the way of the U.S. Patent and Trademark Office (USPTO) granting a patent for their invention. In determining patentability, the USPTO compares a proposed invention to prior art—relevant existing inventions.
The Smith-Leahy America Invents Act (AIA) was enacted in 2011, shifting the patent process from a “first to invent” to a “first inventor to file” system to encourage inventors not to delay in filing after developing an invention. The AIA adds new language regarding a person’s right to a patent, specifically when the inventor makes it available to the public in some way. Both versions of 35 U.S.C. § 102 (pre- and post-AIA) say a prior “public use” or sale can invalidate a patent, depending on when they occur. The on-sale bar essentially prohibits a patent on an invention that’s been available for sale for more than a year before the application filing date.
This leads to the question, “How ‘public’ does use have to be?” Under pre-AIA § 102, use is usually public even if there are only a few people present, or the use falls under an “experimental use” exception. Pre-AIA, even secret use by the inventor is public use if it’s commercial. Similarly, secret sales by the inventor are “on sale.” AIA language calls into question whether this is still true.
AIA § 102 adds the phrase “in public use, on sale, or otherwise available to the public” (emphasis added). Some argue that this added language means the treatment of secret commercial use by the inventor and secret sales under pre-AIA § 102 are no longer valid. The implications of “or otherwise available to the public” are uncertain, but questions could be answered with Helsinn.
In 2007, the Federal Circuit decided Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., a case involving Helsinn Healthcare’s sale of a drug more than one year before filing a patent application for the drug. Some details about the sale were made public, but technical details about the invention were kept private. Helsinn argues that the phrase “or otherwise available to the public” means the on-sale bar is not triggered when details of the invention are kept private.
The district court found the patent was valid and would be infringed by Teva’s generic version. The Federal Circuit reversed, holding that the on-sale bar applies even if only the existence of the sale is made public, because holding otherwise would have created a “foundational change in the theory of the statutory on-sale bar.”
The question before the Supreme Court is whether, under the AIA, “an inventor’s sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention.”
In its appeal, one of Helsinn’s arguments is the statutory interpretation of the AIA. It maintains that the “plain language” of the statute supports their interpretation of the on-sale bar. According to its petitioner brief, Helsinn argues that the final phrase in the AIA version of § 102, “or otherwise available to the public,” should apply to the two previous categories “in public use” and “on sale,” meaning the use or sale must be public to trigger the on-sale bar.
One reason the Supreme Court might have agreed to hear this case is because, as has happened in the past, the Federal Circuit’s opinion contradicts the USPTO’s. USPTO examining procedure states that “the sale must make the invention available to the public.”
Pre-AIA, courts have typically held that secret sales trigger the on-sale bar to a patent. The Supreme Court will have to decide if the phrase “or otherwise available to the public” changes this interpretation. According to a Law360 article, because the Supreme Court has often corrected the Federal Circuit’s interpretation of statutes, it’s likely to reverse (Helsinn also has the USPTO’s support as well as a Congressional AIA sponsor).
Since Helsinn’s primary argument is one of statutory interpretation, the court will consider the meaning and structure of AIA § 102. A Baker Botts article explains that in at least one recent patent case before the Supreme Court, “the conservative bloc of the Court favored strict construction while the liberal wing of the Court was more swayed by policy arguments.” With this case not yet set for argument before the Supreme Court, the newly-appointed Justice Kavanaugh will have a chance to weigh in. Kavanaugh has had experience with intellectual property-related cases, though in recent pure patent cases before the Supreme Court, rulings have been unanimous. Whatever the court’s decision in Helsinn, the case is slightly unusual because it wasn’t completely secret—details of the sale, if not the invention, were made public. There may still be a lingering question about sales that are entirely confidential, meaning both the technical information about the invention and details about the sale are secret.
Paige Geier is a J.D. candidate, 2020, at NYU School of Law.