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Federal Circuit Rules That Public Sales Trigger the AIA On-Sale Bar Even If Claimed Features Are Not Publicly Disclosed

On May 1, 2017, the United States Court of Appeals for the Federal Circuit issued a decision substantively addressing, for the first time, the scope of the America Invents Act (AIA) on-sale bar. In Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc., Nos. 2016-1284, 2016-1787, slip op. (Fed. Cir. May 1, 2017), the Federal Circuit ruled that the details of the claimed invention need not be publicly disclosed in the terms of sale or offer documents to trigger the on-sale bar.

Helsinn involved a patent directed to intravenous formulations of palonosetron for reducing or reducing the likelihood of chemotherapy-induced nausea that the parties agreed was governed by the AIA. Helsinn, slip op. at 3, 4 n.1, 18. Over two years before the effective filing date, however, the patentee had entered into a “Supply and Purchase Agreement” with an oncology-focused pharmaceutical company that markets and distributes in the United States. Id. at 6. Pursuant to the terms of the agreement, the distribution company agreed to purchase exclusively from the patentee, and the patentee agreed to supply requirements of a product covered by the patent. Id. at 7. Although most of the material information concerning the transaction was publicly disclosed in a joint press release and 8-K filing with the Securities and Exchange Commission, the price terms and at least one of the patented features—the specifically claimed dosage—were not. Id. at 5-6, 8.  

Following a bench trial, the district court held that “the AIA changed the meaning of the on-sale bar” such that a sale must now “publicly disclose the details of the invention” to trigger its application. Id. at 10. Because the claimed dosage was not publicly disclosed, the district court concluded that the AIA on-sale bar did not apply. Id. The Federal Circuit disagreed.

Before enactment of the AIA, 35 U.S.C. § 102(b) barred the patentability of an invention that was “patented or described in a printed publication in this or a foreign country or 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) (2006). Under that earlier provision, the Federal Circuit had concluded confidentiality weighs against application of the on-sale bar but is not determinative. Meds. Co. v. Hospira, Inc., 827 F.3d 1363, 1376 (Fed. Cir. 2016) (en banc). By enacting the AIA, however, Congress amended § 102 to bar the patentability of an invention that was “patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” 35 U.S.C. § 102(a)(1) (2016) (emphasis added).

On appeal, the patentee, the government (including the United States Patent and Trademark Office (USPTO)) and a number of amici argued that the addition of the language “otherwise available to the public” requires that a sale be accompanied by public disclosure of “the details of the claimed invention,” relying on certain floor statements made by individual members of Congress. Helsinn, slip op. at 19-22. The Federal Circuit refused to endorse such a rule, reasoning that it “would work a foundational change in the theory of the statutory on-sale bar” and finding insufficient evidence in the legislative record that “Congress intended to work such a sweeping change.” Id. at 22, 26. Instead, the Federal Circuit concluded that, “after the AIA, if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of sale.” Id. at 27.

Significantly, the Federal Circuit in Helsinn never explicitly concluded that a secret sale would avoid the AIA on-sale bar. Rather, in light of the facts presented, which undisputedly involved a public sale, the Federal Circuit simply declined to go as far as the patentee, the USPTO, and others were advocating, which was to require that the claimed invention be publicly disclosed in addition to the transaction itself. Companies should therefore remain cautious in their approaches to pre-filing commercial activities, as the law in this area will undoubtedly continue to develop in the months to come. The safest course continues to be filing a patent application prior to an outside disclosure.

©2022 MICHAEL BEST & FRIEDRICH LLPNational Law Review, Volume VII, Number 122

About this Author

Kenneth M. Albridge III Michael Best Law Firm patent litigation

Ken helps clients resolve patent disputes, whether they are seeking to enforce their own patent rights, defend against another’s claims of patent infringement, or both. He has represented clients in all phases of patent litigation and trial preparation, including:

  • Performing patent infringement and invalidity analyses
  • Working with fact and expert witnesses
  • Examining witnesses at trial
  • Managing all facets of discovery, including taking and defending depositions
  • Defending and prosecuting major motions, including injunction motions
  • ...
Richard Kaiser, Michael Best, patent prosecution lawyer, inter partes review legal counsel,

Rich has a strong track record in intellectual property law, specializing in all stages of the patenting process for mechanical arts and technologies. He helps clients build patent portfolios, avoid or invalidate competitor patents, and defend against infringement claims.

Through his extensive experience with utility and design patents, Rich has become a trusted, long-term business partner to producers and manufacturers. Rich works closely with clients, providing meaningful guidance on their U.S. and international patent strategies. Clients...

Melanie Reichenberger, Michael Best Law Firm, Intellectual Property Attorney

Clients turn to Melanie to develop strategies for resolving intellectual property disputes both inside and outside of the courtroom. Whether patents, trademarks, trade dress, trade secrets, or unfair competition, Melanie helps clients enforce their intellectual property assets and defend against infringement allegations. Drawing on her engineering background, she also counsels clients on pre-litigation patent infringement and validity opinion matters.

Prior to becoming a lawyer, Melanie worked as a process engineer and manufacturing team manager...