IP Law Daily Supreme Court agrees to weigh in on AIA change to ‘on-sale bar’ provision
Monday, June 25, 2018

Supreme Court agrees to weigh in on AIA change to ‘on-sale bar’ provision

By Cheryl Beise, J.D.

The U.S. Supreme Court has agreed to consider whether the America Invents Act of 2011 ("AIA") altered the Patent Act’s "on-sale bar" provision, 35 U.S.C. §102(b). The petition for certiorari was filed by patent owner Helsinn Healthcare S.A., seeking review of a Federal Circuit decision holding that the America Invents Act did not change the statutory meaning of "on sale" under 35 U.S.C. §102 by adding the phrase "otherwise available to the public." The Federal Circuit ruling has sparked controversy among patent practitioners.

Before passage of the AIA, Section 102(b) barred the patentability of an invention that was "patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent." 35 U.S.C. §102(b) (2006) (emphasis added). The AIA amended Section 102 to bar the patentability of an invention that 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) (2011) (emphasis added).

The dispute arose in the context of Hatch-Waxman litigation. Following a bench trial, the federal district court in Trenton, New Jersey, ruled that the asserted claims of four related Helsinn patents—claiming intravenous formulations of palonosetron for reducing or reducing the likelihood of chemotherapy-induced nausea—were valid and infringed by Teva’s ANDA product. With respect to three patents governed by the pre-AIA version of Section 102—the district court determined that there was a commercial offer for sale before the January 30, 2002, critical date based on Helsinn’s supply and purchase agreement with an oncology-focused pharmaceutical company, MGI Pharma, Inc. However, the court also found that the invention was not ready for patenting before the critical date. With respect to one patent governed by the AIA version of Section 102, the district court held that there was no commercial offer for sale because the AIA changed the standard by requiring public disclosure and the agreement with MGI Pharma contained a confidentiality provision.

The Federal Circuit reversed, concluding that the district court erred by holding that the AIA altered the meaning of "on sale" under 35 U.S.C. §102 and by applying too stringent a standard in determining whether the claimed invention was "ready for patenting" before the critical date. According to Helsinn, the "otherwise available to the public" language in the statute suggested that the on-sale bar did not apply unless the details of the claimed invention were publicly disclosed. The Federal Circuit disagreed. "Requiring such disclosure as a condition of the on-sale bar would work a foundational change in the theory of the statutory on-sale bar," the court said. The Federal Circuit surmised that the legislators "evidently meant that the public sale itself would put the patented product in the hands of the public." In this case, the supply and purchase agreement between Helsinn and MGI was publicly disclosed in MGI’s 8-K filing with the SEC.

The question presented by Helsinn’s petition is: "Whether, under the Leahy-Smith America Invents Act, an inventor’s sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention."

Various amici siding with Teva and filing briefs in the Federal Circuit case and in the present Supreme Court appeal contend that the AIA’s retention of the existing statutory term "on sale" indicates that Congress did not change the meaning of the on-sale bar or disturb settled law. The government and other amici argue that the AIA’s addition of the phrase "otherwise available to the public" indicates that Congress intended to require that a sale make the invention available to the public in order to trigger application of the on-sale bar. This argument points to floor statements made by individual members of Congress and is supported by the USPTO’s interpretation of the statute.

The petition in Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc. was filed on February 28, 2018. Certiorari was granted on June 25.

The case is No. 17-1299.

Attorneys: Kannon K. Shanmugam (Williams & Connolly LLP) for Helsinn Healthcare S.A. Steffen Nathanael Johnson (Winston & Strawn LLP) for Teva Pharmaceuticals USA, Inc.

Companies: Helsinn Healthcare S.A.; Teva Pharmaceuticals USA, Inc.

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