inventedhere
On-Sale Bar to Patent Protection Under the AIA
On May 1, 2017, in Helsinn Healthcare v. Teva Pharmaceuticals, Inc.,1 the Court of Appeals for the Federal Circuit (Federal Circuit) held that the America Invents Act (AIA) did not change the statutory meaning of “on sale” where the “existence of the sale or offer was public,” regardless of whether the “details of the invention are disclosed in the terms of sale,” or “when or whether actual delivery occurs.”2
Helsinn Healthcare S.A. (Helsinn), is the owner of four patents (collectively, the Helsinn patents) directed to reducing the likelihood of chemotherapy-induced nausea and vomiting (CINV).3 The Helsinn patents all claimed the benefit of a provisional patent application filed on January 30, 2003. Only one of the four patents, U.S. 8,598,219 (the ‘219 Patent) was subject to the AIA, which became effective March 13, 2013.4 All of the patents were directed to use of a known drug, palonosetron, which was the subject of an unrelated and now-expired patent.5 The claims in the Helsinn patents were all directed to formulations that covered palonosetron present in an “unexpectedly low concentration” of “0.25 mg based on the weight of its free base” in a 5 mL sterile aqueous isotonic solution (0.25 mg dosage).6
On April 6, 2001, Helsinn entered into a Supply and Purchase Agreement with MGI Pharma, Inc. (MGI). The Supply and Purchase Agreement, in a partially redacted form that excluded price terms and the 0.25 mg dosage, was filed with the Securities and Exchange Commission (SEC) and, accordingly, became publicly available on April 25, 2001.7 Therefore, the existence of the Agreement was made publicly available more than one year before first-filed provisional patent application (January 30, 2003) to which the four Helsinn patents, including the ‘219 patent, claimed the benefit.
Prior to enactment of the AIA, an offer for sale of an invention was “prior art” regardless of whether the invention was made public, but inventors were entitled to a one-year “grace period” under 35 U.S.C. § 102(b), during which an offer for sale could be made in the United States before the first-filing of a patent application.8 Under 35 U.S.C. §102(a)(1) of the AIA: “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 date of the claimed invention.”9 A one year “grace period” exists under §102(b)(1) for “disclosures made 1 year or less before the effective filing date of the claimed invention.” Onset of the one-year grace period, both prior to and under the AIA, is known as the “critical date.”10 The critical date for all four of Helsinn’s patents was January 30, 2002, one year before the filing date of the provisional application of which they all claimed the benefit.11

In 2011, Helsinn filed suit against Teva Pharmaceuticals (Teva), which had filed an abbreviated new drug application (ANDA) along with a Paragraph IV certification enabling Helsinn to file suit against Teva under the Hatch-Waxman Act for patent infringement. The United States District Court for the District of New Jersey (District Court) held that the three patents governed by pre-AIA law were not invalid because, although the Supply and Purchase Agreement was a commercial sale, the invention was not “ready for patenting” before the critical date. The fourth patent, on the other hand, was “not invalid” because, in the view of the district court, an on-sale bar under 35 U.S.C. §102(a)(1) of the AIA “requires a public sale or offer for sale of the claimed invention.” According to the district court, since the version of the Supply and Purchase Agreement available to the public did not disclose the 0.25 mg dose, so there was no public sale under the AIA of the invention claimed in the ‘219 patent.12
The Court of Appeals for the Federal Circuit (Federal Circuit) reversed the district court’s decision with respect to the three patents subject to pre-AIA law, holding that the claimed invention was, indeed, reduced to practice and, therefore, ready for patenting. The Federal Circuit also reversed the decision of the district court and held the ‘219 patent to be invalid under the on-sale bar of the AIA.13 The Federal Circuit reasoned that it was unnecessary in this case to determine whether secret sales or offers for sale trigger prohibition under the so-called “on-sale” bar of the AIA because “[o]ur cases explicitly rejected a requirement that the details of the invention be disclosed in the terms of sale.” According to the court, “there can be ‘a definite offer for sale or a sale of a claimed invention even though no details are disclosed.’”14 To hold otherwise would, for the Federal Circuit, “work a foundational change in the theory of the statutory on-sale bar,” contrary to the policy of the Supreme Court in Pennock v. Dialogue that to allow public sales that withheld “the secrets of [the] invention … would materially retard the progress of science and the useful arts, and give a premium to those who should be least prompt to communicate their discoveries.”15 The Federal Circuit stated that nothing in the AIA requires the details of an invention to be publicly disclosed in the terms of a sale prior to a critical date, nor were any floor statements made during legislation of the AIA “suggesting that the sale or offer documents must themselves publicly disclose the details of the claimed invention before the critical date.”16 As stated by the court, “[i]f Congress intended to work such a sweeping change to our on-sale bar jurisprudence and ‘wished to repeal … [these prior] cases legislatively, it would do so by clear language.’”17
Prior to enactment of the AIA, secrecy of a sale or offer was a consideration, but, as recited by the Federal Circuit in Helsinn, “not determinative.”18 Further, the Supreme Court in Pfaff v. Wells Electronics stated that a claimed invention need only be “ready for patenting,” and not necessarily “reduced to practice.”19 As recited by the court in Helsinn, “[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.”20 The court further stated that “[w]e have also not required that members of the public be aware that the product sold actually embodies the claimed invention.”21
While the court was correct in stating that, “[r]equiring such disclosure as a condition of the on-sale bar would work a foundational change in theory of the statutory on-sale bar,”22 all of the case law cited by the court in Helsinn rejecting any requirement that the details of an invention be disclosed in the terms of a sale predated the AIA.23 Instead, as explained below, that precise “foundational change” recited by the court goes to the heart of the first-to-file system now in place, and was the explicit intent of Congress, at least according to the legislative history of the AIA.
Among the changes made in United States patent law under the AIA was transition of precedence from the first inventor to the first inventor to file a patent application directed to an invention. Moving to a “first-to-file” system was intended to remove much of the incentive to delay filing of a patent application in the United States, thereby eliminating the need, or even making counterproductive, recognition, either by Congress or the courts, of nonpublic activities by inventors or third parties that take place prior to filing.24 As stated by the legislative history of the AIA, “[p]rior art will be measured from the filing date of the application and will include all art that publicly exists prior to the filing date, other than disclosures by the inventor within one year of filing.”25 The legislative history of the AIA also included a statement that “[t]he word ‘otherwise’ makes clear that the preceding clauses describe things that are of the same quality or nature as the final clause–that is, although different categories are listed, all of them are limited to that which makes the invention ‘available to the public’”26 Claimed inventions “on sale” were among the enumerated items that must be “available to the public.”27
Public availability under the AIA made unnecessary the pre-AIA policy of the Supreme Court in Pennock against “public sale of an item but the withholding from ‘the public the secrets of [the] invention,’” that was relied upon by the court in Helsinn.28 As stated in the legislative history of the AIA:
homegpluslinkedInmail
mail
NEWSLETTER ARCHIVE
Volume 48, Issue 3
BPLA-logo
N-Scott-Pierce
Index
Community Calendar Read more >
Table of Contents
Message from the President Monica Grewal
Read more >
Harvesting Innovation: 3 Tips for IP Managers
Read more >
< Back
Save the Date: BPLA Annual PCT Seminar and Madrid Protocol Seminar
Read more >
The Annual Dinner to Honor the Federal Judiciary, May 12, 2017
Read more >
Patent Attorneys Give Back to Local Entrepreneurs and Artists
Read more >
PTAB/Hatch-Waxman Parallel Proceedings
Read more >
Helsinn Healthcare S.A. et al. v. Teva Pharmaceuticals USA, Inc.
Read more >
In memoriam of Douglas C. Doskocil
Read more >
On-Sale Bar to Patent Protection Under the AIA
Read more >
Chemical Patent Practice Lamplighter Brewery tour
Read more >
Fashion and Intellectual Property: Many Options to Protect Your Design, But No One-Stop Shop
Read more >
Patent Eligibility as a Function of New Use, Aggregation and Preemption Through Application of Principle
Read more >
calendarcalendar__2_
“Making Connections in Boston’s IP Community”
Read more >
Settlement Agreements Can Provide a Yardstick for Measuring Damages in Subsequent Patent Infringement Lawsuits
Read more >
The Federal Circuit Limits the Scope of Covered Business Method Proceedings
Read more >
The Supreme Court’s 2016-2017 Term – An IP Case Summary
Read more >
Members On The Move
Read more >
Message from the Editor-in-Chief
Read more >
BPLA Biotechnology Committee Announcement
Read more >
Officers and Board of Governors
Read more >
Community Calendar
Read more >
Announcement of BPLA’s 7th Annual Invented Here! Program
Read more >
Save The Date: BPLA’s Second Annual PTAB Summit
Read more >
TOCTOC