Supreme Court Confirms No Change to On Sale Bar

Intellectual Property & Technology

With Helsinn, the Supreme Court confirms that secret sales trigger the on sale bar, just as before the America Invents Act. Patent applicants should be cognizant of all commercial activity related to an invention to ensure patent applications are timely filed.

In a unanimous ruling, the Supreme Court of the United States held in Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA Inc. that the America Invents Act (“AIA”) did not alter the on sale bar from pre-AIA law. The AIA included the same “on sale” language as a previous version of §102, thus Congress had adopted the pre-AIA interpretation of the on sale bar. Therefore, a sale, even if made in secret, will still trigger the “on sale bar.”

A single-phrase distinction between pre-AIA and AIA language regarding patentability created an ambiguity. The original pre-AIA language said a person was entitled to a patent unless “the invention was ... in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States.” The AIA modified this language to indicate that a person was entitled to a patent unless “the claimed invention was ... in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” Did the added “or otherwise available to the public” language limit the “on sale” phrase such that the “sale” must render the invention “available to the public” in order to trigger the “on sale bar?” The answer, we now know, is no.

The patent at issue (U.S. 8,598,219) covered a fixed dose of 0.25 mg of palonosetron in a five ml solution. The ’219 patent claimed priority to a parent, pre-AIA patent. That parent patent was filed approximately three years after protocols for a Phase III clinical trial of a 0.25 mg dose of palonosetron was submitted to the Food and Drug Administration (“FDA”), but almost two years after the patent owner, Helsinn, entered into two agreements with a third party to market, distribute, and sell the 0.25 mg dose of palonosetron, if approved by the FDA. The existence of these agreements was made public, although the specific dosing information was not released and the third party agreed to keep received proprietary information confidential. After Teva applied to market a generic 0.25 mg dose of palonosetron, Helsinn sued Teva for infringing the ’219 patent. Teva argued that the ‘219 patent was on sale more than a year before the parent of the ’219 patent was filed. The district court held that the AIA’s “on sale” provision did not apply as there was no public disclosure of the specific dosing information. The Federal Circuit disagreed, holding that public disclosure of the sale was sufficient for the AIA’s on sale bar to apply, and the Supreme Court has now affirmed the Federal Circuit’s interpretation.

Previously, the Supreme Court in Pfaff v. Wells Electronics, Inc., 525 U.S. 55, 67 (1998) determined that an invention was “on sale” when the invention was “the subject of a commercial offer for sale” and “ready for patenting.” In Helsinn, the court held that the sale or offer for sale need not make an invention available to the public. That the sale or offer for sale does not disclose the invention is immaterial. The court reasoned that when Congress enacted the same language in the AIA, it kept the same meaning for the phrase. The court indicated that adding the “or otherwise available to the public” language was not enough to evidence an intent to alter the settled meaning of “on sale.” Rather, the “or otherwise available to the public” language was a “catchall phrase” intended to capture material that does not neatly fit into the other enumerated categories. Therefore, “a commercial sale to a third party who is required to keep the invention confidential may place the invention “on sale” under the AIA.”

The ruling in Helsinn indicates that the AIA did not change the scope of the on sale bar as compared to pre-AIA cases. However, the court acknowledged that the AIA appears to expand the scope of the available prior art that possibly fell outside those categories. What that material might be is unclear, but this may indicate a shift towards a more expansive view of the public knowledge bar generally in the future.

The practical takeaway from Helsinn is the importance of timely filing a patent application within the one-year time bar if a commercial event, such as a sale or offer to sell, has occurred. In addition, inventors must be cautious about unintentionally triggering the on sale bar. The case is a good reminder that inventors and their employers should not rely too heavily on non-disclosure agreements for protection of their invention. Similarly, patent practitioners should be vigilant in investigating all commercial activity related to an invention when determining filing dates and deadlines.

© 2019 Blank Rome LLP. All rights reserved. Please contact Blank Rome for permission to reprint. Notice: The purpose of this update is to identify select developments that may be of interest to readers. The information contained herein is abridged and summarized from various sources, the accuracy and completeness of which cannot be assured. This update should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.