By Michelle Alamo

On May 1st, the Federal Circuit ruled that the America Invents Act (AIA) did not change the statutory meaning of “on sale” where the existence of a sale was publicly announced prior to patenting, even if the sale did not publicly disclose the invention. 

The lawsuit involved a claim by Helsinn Healthcare S.A. (Helsinn) against Teva Pharmaceuticals USA, Inc. and Teva Pharmaceutical Industries, Ltd. (“Teva”) alleging that the filing of an Abbreviated New Drug Application (ANDA) related to an intravenous formulation for reducing the likelihood of chemotherapy-induced nausea and vomiting infringed four of Helsinn’s patents related to the same. In defense, Teva argued, among other things, that the asserted claims were invalid under the on-sale bar set forth in 35 U.S.C. § 102.  

The district court rejected Teva’s defense, finding that with respect to three of the patents, which were governed by the pre-AIA version of § 102, although there was a commercial offer for sale before the critical date, the invention was not ready for patenting before the critical date. With respect to the fourth patent, which was governed by the AIA version of § 102, the district court concluded that there was no commercial offer for sale because the AIA changed the relevant standard and that, in any event, the invention was not ready for patenting before the critical date. 

The Federal Circuit reversed, finding that all of the asserted claims of the patents-in-suit were subject to an invalidating contract for sale prior to the critical date, that the AIA did not change the statutory meaning of “on sale” in the circumstances involved there, and that the asserted claims were ready for patenting prior to the critical date.   

With respect to the statutory meaning of “on sale” after the AIA, the Federal Circuit rejected the argument that the post-AIA on-sale bar did not encompass “secret sales,” meaning sales that did not make the invention available to the public, as well as the argument that the details of the claimed invention be publicly-disclosed in order to trigger the on-sale bar.  As the Federal Circuit explained in rejecting Helsinn’s arguments: 
A primary rationale of the on-sale bar is that publicly offering a product for sale that embodies the claimed invention places it in the public domain, regardless of when or whether actual delivery occurs. The patented product need not be on-hand or even delivered prior to the critical date to trigger the on-sale bar. And, as previously noted, we have never required that a sale be consummated or an offer accepted for the invention to be in the public domain and the on-sale bar to apply, nor have we distinguished sales from mere offers for sale. We have also not required that members of the public be aware that the product sold actually embodies the claimed invention. (Footnotes omitted).

Relying on prior precedent, the Court 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.” 

The Federal Circuit, however, cautioned that “we do not find that distribution agreements will always be invalidating under § 102(b).”  Rather, they simply found the particular agreement at issue was invalidating in that case, thus confirming, once again, that whether the on-sale bar will apply in a particular case remains a case-by-case inquiry based on the facts of the particular case.  For a copy of the Federal Circuit’s opinion, click here.

Michelle Alamo (Member) may be reached at the Detroit office at 313-223-3875.