patent on-sale

Supreme Court Affirms that Secret Sales Can Trigger the On-Sale Bar

We previously wrote, Federal Circuit Interprets AIA “On-Sale” Bar to Include Confidential Sales, Leaves Open Issue of Completely Secret Sale, about a Federal Circuit decision, Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc. (2018), which held that the patent on-sale bar is triggered by confidential sales of technology, even though the invention is not disclosed to the public, and that this law was not changed by the America Invents Act of 2011 (AIA). 

The Supreme Court has now affirmed that ruling, holding that the long-standing construction of “on-sale” in the statute was not changed by the AIA.

It often happens that parties enter into confidential agreements for the commercial exploitation of technology that is intended to be patented. These parties need to be aware that these agreements might well be deemed a “sale,” triggering the one-year clock for the on-sale bar.

Federal Circuit Interprets AIA “On-Sale” Bar to Include Confidential Sales, Leaves Open Issue of Completely Secret Sale

Companies who seek patent protection for their technology should be aware of a recent Federal Circuit decision that broadly construes the “on sale” bar to include confidential sales, and thus increasing the time pressure to file for a patent.  The Federal Circuit’s recent denial of en banc review in Helsinn Healthcare v. Teva Pharmaceuticals leaves standing a prior construction of the “on sale” bar under the America Invents Act. 

It often happens that parties enter into confidential agreements for commercial exploitation of technology they intend to patent.  These parties need to be aware that these agreements might well be deemed a “sale,” triggering the one-year clock for the on-sale bar.

The issue revolves around whether the American Invents Act of 2011 changed the scope of the patent “on sale” bar – by which protection is barred for inventions that are commercially offered for sale more than one year before filing of the patent application − to include confidential or secret sales.  The Federal Circuit opinion holds that “[i]f the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of sale.”  The Federal Circuit refused to address the broader question of completely secret transactions.

Counsel advising companies seeking patent protection should look out for any commercial exploitation – including by confidential agreement with other parties – of technology in the process of a patent application.  Where that has occurred, there may be a need to move quickly to file a patent within the one-year window.