Federal Circuit Provides Clarity to “On-Sale Bar” for Patents Under AIA

Under the America Invents Act (AIA), 35 U.S.C. § 102(a) bars 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.” The AIA added “otherwise available to the public” to the patent statutes, which has caused much debate over whether such language changes the definitions of “on sale” or “public use” from their definitions under pre-AIA law.

On May 1, 2017, in Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, the Federal Circuit shed light on the definition of “on sale” under the AIA. The “on-sale bar” prohibits a patent on inventions that were offered for sale more than one year before filing for patent protection. The policy behind the on-sale bar is that an offer for sale places the invention in the public domain, and an inventor should not be able to remove that which has been given to the public. Under pre-AIA law, any offer for sale, including secret sales, would trigger the on-sale bar.

Helsinn sold the claimed invention more than one year before filing a patent application. The sale was public, but the sale did not disclose the invention details. Teva argued that Helsinn’s patent was invalid under the on-sale bar. The District Court for the District of New Jersey sided with Helsinn and held that “otherwise available to the public” in AIA § 102(a) requires a sale that publicly discloses the invention to trigger the on-sale bar. Teva appealed to the Federal Circuit.

The Federal Circuit, relying in part on pre-AIA law, reversed the district court and held, “if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of sale” to trigger the on-sale bar under the AIA. The court explained that the “available to the public” requirement for the on-sale bar means that “the public sale itself would put the patented product in the hands of the public.”

The Federal Circuit’s analysis suggests some continuity between pre‑AIA and AIA law. But the court acknowledged Congress’s intent to do away with currently established bars to patentability resulting from uses of inventions that do not disclose, or make available, the invention to the public. Therefore, it remains to be seen whether, under the AIA, “secret” sales, for which the parties are under obligations of confidentiality, still will trigger the on-sale bar.