PublishedJanuary 22, 2019

“On Sale” Means What It Says: Helsinn v. Teva

Today, the Supreme Court issued its opinion in Helsinn v. Teva.  In a unanimous decision, the Court upheld the Federal Circuit’s determination that “on sale” means “on sale”, not “on sale, unless it’s under NDA or we didn’t tell the public about the sale.”

A Long and Consistent Sales History

The idea that you can’t sell an invention and then, after you’ve started selling it, try to patent it has a long history in patent law.  In fact, it goes all the way back to the 1836 Patent Act.

That’s because allowing someone to sell their invention and patent it later would allow, for example, a drug manufacturer to start selling their drug and only file for a patent when a competitor was getting close to figuring out how to make the drug.  That, in turn, would allow the drug company to extend their period of exclusivity beyond the Congressionally-determined patent term.

Beyond that, the patent system uses the on-sale bar to prevent patent owners from taking inventions out of public availability, to incentivize them to promptly disclose inventions once they’re made, and to avoid giving exclusivity beyond the statutorily authorized period.

Throughout the history of U.S. patent law, the courts have applied that limit to implement these principles, ensuring that patentees can’t hide sales and later patent their inventions.  So why did we need a Supreme Court case to tell us that “on sale” means “on sale”?

Grasping at AIA Straws

In order to overcome 180 years of settled law, Helsinn—and those supporting expanding patent rights beyond their proper bounds—needed to find a hook to convince the courts that “on sale” no longer meant any sale, but only sales to the public.  They found it in the AIA, which consolidated a number of different bars to patentability—including the on-sale bar—and added the words “or otherwise available to the public” as a catch-all provision.

Helsinn, as well as amici like the AIPLA (the trade association for patent lawyers), argued that the new “otherwise available to the public” catch-all provision modified the long-standing “on sale” prohibition, thereby overturning settled law and requiring sales to be public sales.  This would allow secret sales and sales under NDA not to trigger the on-sale bar, thereby allowing patent owners to hold off on patenting an invention until such time as a competitor was ready to commercially exploit it. That, in turn, would frustrate the purposes of the on-sale bar.

The Court disagreed, holding that “on sale” means just what it says—any sale, not just the subset of sales that would allow patent owners to extend their monopoly beyond the term Congress intended.

Josh Landau

Patent Counsel, CCIA

Joshua Landau is the Patent Counsel at the Computer & Communications Industry Association (CCIA), where he represents and advises the association regarding patent issues.  Mr. Landau joined CCIA from WilmerHale in 2017, where he represented clients in patent litigation, counseling, and prosecution, including trials in both district courts and before the PTAB.

Prior to his time at WilmerHale, Mr. Landau was a Legal Fellow on Senator Al Franken’s Judiciary staff, focusing on privacy and technology issues.  Mr. Landau received his J.D. from Georgetown University Law Center and his B.S.E.E. from the University of Michigan.  Before law school, he spent several years as an automotive engineer, during which time he co-invented technology leading to U.S. Patent No. 6,934,140.

Follow @PatentJosh on Twitter.

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