Supreme Court Clarifies “On Sale” Patent Bar

February 4, 2019

The U.S. Supreme Court, in a unanimous decision authored by Justice Clarence Thomas entitled, Helsinn Healthcare S.A., v. Teva Pharmaceuticals USA, Inc., held that sales of an invention that occurs more than a year before the filing date of a patent application can invalidate the subsequently issued patent.

This issue arose when Congress passed the America Invents Act (AIA) in 2011, it and rewrote the statutory section–defining the “on sale” bar by adding “or otherwise available to the public.” The patentee argued that this additional phrase loosened the strictures of the statutory bar in a manner that favored patentees. It argued that a secret sale of an invention, or a sale of an invention that does not disclose its subject matter, should not constitute invalidating sales.

The Supreme Court rejected this argument, thus holding that even “secret” sales of a patented invention invalidates the patent. Previously, the U.S. Patent and Trademark Office took the position that the on sale bar “does not cover secret sales or offers for sale.” Thus, only if the patentee made a commercial offer for sale of an invention that was ready to patent, that sale would invalidate the patent, if it occurred more than one year prior to filing of a patent application.

Of note, the decision leaves undisturbed the “experimental use” exception, and also the statutory exception for any efforts by a pharmaceutical or medical device manufacturer directed towards obtaining FDA approval to market a product or device. For example, pharmaceutical companies can conduct clinical trials without fear that these activities will defeat their patent rights.

Companies and inventors need to be diligent in filing patent applications as early as possible. Confidentiality agreements with a prospective purchaser will not save the patent. Further, the provisional or regular utility applications should preferably be filed before undertaking any sales activity. Such an approach would also preserve foreign rights, as most countries have an “absolute novelty” requirement, although some countries may not consider “secret” or “confidential” sales disqualifying.

For any questions, or for assistance with patent application preparation and filing on behalf of your clients, please contact Robert Katz in the New York office at (347) 589-8507 or by email at rkatz@offitkurman.com

ABOUT ROBERT KATZ

Robert Katz | Rkatz@offitkurman.com  | 347.589.8507

Robert Katz has practiced intellectual property law for over 30 years. His experience encompasses virtually every aspect of intellectual property law. Robert has been first chair in a large number of patent, trademark, copyright, unfair competition, and trade secret cases including jury trials, and has also handled arbitrations and mediations. He has obtained and opposed preliminary injunctions and briefed and argued appeals in State and Federal Courts throughout the country. Robert has also handled patent interferences, reissues, IPR’s and Derivation proceedings, and reexamination proceedings as well as trademark oppositions and cancellations in the United States Patent and Trademark Office.

ABOUT OFFIT KURMAN

Offit Kurman is one of the fastest-growing, full-service law firms in the mid-Atlantic region. With over 185 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our twelve offices serve individual and corporate clients along the I95 corridor in the Virginia, Washington, DC, Maryland, Delaware, Pennsylvania, New Jersey, and New York City regions. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.

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