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Supreme Court Holds AIA Did Not Alter the Settled Meaning of “On Sale”

Today the United States Supreme Court unanimously affirmed the Federal Circuit and held that it remains the law under the America Invents Act (AIA) that a confidential sale to a third party can trigger the “on sale” bar to patentability.

Whether the AIA changed the contours of the “on sale” bar was first addressed by the United States District Court for the District of New Jersey, then the Federal Circuit and now the Supreme Court.  As previously reported, the Federal Circuit reversed the district court and held that 35 U.S.C. § 102(a)(1), as revised by the AIA, did not change settled law that a sale to a third party can invalidate a patent even if the sale does not disclose the details of the invention.  The Supreme Court granted certiorari on June 25, 2018 and heard oral arguments on December 4, 2018, as previously reported

In reaching its decision, the Supreme Court noted that the pre-AIA patent statute included an “on sale” bar that did not contain an exception for “secret sales” to a third party.  Accordingly, as an initial matter, the Supreme Court presumed that the phrase “on sale” carried the same meaning in the AIA.  Slip Op. at 6-7.  “In light of this settled pre-AIA precedent on the meaning of ‘on sale,’ we presume that when Congress reenacted the same language in the AIA, it adopted the earlier judicial construction of that phrase.”  Id. at 7. 

The Supreme Court then addressed whether the new “catchall clause” added by the AIA—“or otherwise available to the public”—altered this settled pre-AIA precedent.  The Court answered that question in the negative, reasoning that the addition of the catchall “is simply not enough of a change for us to conclude that Congress intended to alter the meaning of the reenacted term ‘on sale.’”  Slip Op., at 8.  The Court found that the broad “catchall clause” captures circumstances that do not fit neatly into the statute’s enumerated categories and does not limit the preceding terms in Section 102, as argued by Helsinn.  Id. 

This decision from the Supreme Court puts the question to rest and confirms that even a confidential sale to a third party can trigger the “on sale” bar under the AIA.

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About this Author

Brad Scheller, Mintz Levin Law Firm, New York, Intellectual Property and Litigation Law Attorney
Member

Brad focuses his practice on patent disputes in Federal District Courts and at the US Court of Appeals for the Federal Circuit.  With over 12 years of experience, Brad has handled disputes involving a variety of technologies, including electrical components, electronic payment and financial systems, computer software and various consumer products, including cosmetics, video game systems and personal watercraft.

Brad also has significant experience representing clients in inter partes review (IPR) and cover business method patent review...

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Peter Snell, Mintz Levin Law Firm, New York, Intellectual Property and Litigation Law Attorney
Member

Peter litigates patent infringement, patent invalidity, and other intellectual property disputes in courts all across the country, including US district courts and the US Court of Appeals for the Federal Circuit. He has examined witnesses at trial, taken and defended depositions of fact and expert witnesses, and conducted discovery.

The areas of technology in which Peter has particular experience include communications systems and networking, packet switching, integrated circuits, semiconductor technology, powerline networks, RFID, electronics components, broadband applications for cable and satellite television systems, Internet and e-commerce applications, machine learning, software, business methods, and medical devices. Peter has a degree in Electrical Engineering, summa cum laude.

Representative Matters

  • Defending an electronics manufacturer in a patent infringement action, involving RFID systems, in the Northern District of Texas

  • Representing an owner of GPS and media sharing patents in the International Trade Commission, the District of Delaware and the Eastern District of Texas

  • Defending an electrical components manufacturer in a patent infringement action, involving multilayer capacitors, in the Southern District of California and before the Federal Circuit

  • Represented the owner of a portfolio of communications and computing patents from the former enterprise communications business unit of a large multinational company in the International Trade Commission

  • Representing an owner and inventor of patents concerning excimer laser catheters in a patent infringement action in the Southern District of New York

  • Defending an electronics manufacturer in a patent infringement action, concerning smartphone technology, in the District of Delaware

  • Defending a medical device manufacturer in an action involving breach of contract and patent misuse in the Central District of California

  • Defending a provider of network switches in a patent infringement action in the Eastern District of Texas

Recognitions & Awards

  • Included on the New York Super Lawyers: Rising Star – Intellectual Property list (2012 – 2017)

  • Tau Beta Pi

  • Eta Kappa Nu

  • Golden Key Honors Society

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Vincent M. Ferraro, Mintz Levin, Patent Litigation Licensing & Technology Transactions Strategic IP Monetization & Licensing IPRs & Other Post-Grant Proceedings Federal District Court
Associate

Vincent’s practice focuses on patent disputes in Federal District Courts and before the U.S. Patent Trial and Appeal Board. With over 10 years of experience, Vincent has handled patent disputes involving telecommunications, cellphone and smartphone technology, digital photography, image processing, electronic circuitry, electrical components, computer software and hardware, LCD technology, data mining, financing, mechanical devices, medical devices and implants, consumer products, GPS technology, e-commerce, and Internet security. In patent litigation cases, he guides...

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