Supreme Court Affirms Prior On-Sale Bar Law Applies to AIA

By Condo Roccia Koptiw LLP // January 25th, 2019

Under 35 U.S.C. § 102(b) (pre-AIA), a person was not entitled to a patent if “the invention was . . . on sale in this country, more than one year prior to the date of the application for patent in the United States.”  This provision was known as the “on sale” bar.  Under Federal Circuit case law, the pre-AIA on sale bar applied to invention sales even if the sales did not disclose the details of the invention to the public (e.g., the invention was subject to a nondisclosure agreement).

The Supreme Court and the Federal Circuit had established a two-part test to determine whether a sale constituted a pre-AIA on sale bar.  First, a product must be the subject of a commercial offer for sale.  Second, the invention must be “ready for patenting.”  Pfaff v. Wells Elecs., Inc. 525 U.S. 55, 67 (1998).  An invention could be shown to be “ready for patenting” by proof of a reduction to practice, drawings, and other evidence showing that the invention was sufficiently developed to enable a person skilled in the art to practice the invention.  Id. at 67-68.  The Federal Circuit had held that the pre-AIA on sale bar applied to so-called “secret sales” or sales which did not disclose the technical nature of the invention.  Special Devices, Inc. v. OEA, Inc., 270 F.3d 1353, 1357 (Fed. Cir. 2001).

Although the AIA contains an “on sale” bar provision, the statutory language surrounding the “on sale” language was changed:

A person shall be entitled to a patent unless . . . the claimed invention 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) (emphasis added).  In Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc., 2019 LEXIS 807 at *13 (Jan. 22, 2019), Helsinn Healthcare argued that the language “or otherwise available to the public” meant that “secret sales” or sales that did not disclose the invention to the public were not “on sale” under 35 U.S.C. 102(a)(1).    The Federal Circuit had rejected Helsinn Healthcare’s argument and held that the AIA did not change the prior on sale law that secret sales triggered the on sale bar.  Id. at *8.

In a unanimous and relatively short opinion, the Supreme Court affirmed the Federal Circuit and held that a sale of an invention that is ready for patenting by the patent owner to a third party, who is contractually obligated to keep the invention secret, qualifies as prior art under the “on sale” language of 35 U.S.C. §102(a)(1).  Id. at *12-*13.  The Supreme Court reasoned that there is no indication that Congress attempted to change the prior “on sale” case law with the words “or otherwise available to the public before the effective filing date of the claimed invention.”  Id. at *12.  Rather, this language was added by Congress as a catch all for disclosures that did not fit within the other enumerated prior art provisions.  Id. at *12.

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