patent prosecution traps

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.  

Federal Circuit Decision Highlights Traps in Provisional Application Practice

Since 1995, U.S. patent law has allowed inventors to file a “Provisional Patent Application,” to establish a priority date. A provisional patent application is less expensive because it has fewer requirements, is not examined by the Patent Office, and has lower filing fees than non-provisional applications.  

With the passage in 2011 of the America Invents Act, which adopted the “first inventor to file” rule in U.S. practice, provisional patent applications have become more popular as applicants rush to get early priority dates.  Applicants have been lulled by the reduced requirements into believing that they can file a “half-baked” provisional application to secure a priority date, expecting to file a later, more complete application in which they fix any errors or inconsistencies in the first filed provisional. 

A recent Federal Circuit decision – MPHJ Technology Investment, LLC v. Ricoh Americas Corp.[1] – highlights some of the traps that can arise from employing this strategy.  We discuss the legal requirements of provisional practice, the implications of this new case, and best practices for such applications. 

Early Is Better Than Late for Strategizing Your Patents

Before a patent is issued, the Patent and Trademark Office (PTO) will forgive changes of mind and permit applicants to correct mistakes.   However, once a patent has issued, the PTO loses jurisdiction over most matters relating to that patent and few options exist to fix a mistake that is only then caught. 

On September 20, 2006, in Yoon Ja Kim v. Congra Foods, Inc., 465 F.3d 1312 (Fed. Cir. 2006), the Court of Appeals for the Federal Circuit (CAFC) provided an important reminder of the limits of one of the more important of  these options.  All clients should be reminded that if they wish to maximize the value of their patents, they should devote sufficient resources to protecting their intellectual property rights before any patent is granted.