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 America Invents Act of 2011. AIA made modest reforms, most notably moving the U.S. to a first-inventor-to-file system more aligned with foreign practice, but also including expanding prior user rights to all patent-eligible subject matter, and instituting a post-grant review proceeding. 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 America Invents Act of 2011. AIA made modest reforms, most notably moving the U.S. to a first-inventor-to-file system more aligned with foreign practice, but also including expanding prior user rights to all patent-eligible subject matter, and instituting a post-grant review proceeding., 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 American Intellectual Property Law Association, formerly the American Patent Law Association. DC-based professional organization that represents the interests of the intellectual property community, including the patent bar. (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.