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Supreme Court Upholds Pre-AIA Meaning of “On Sale” as a Bar to Patentability Under the AIA

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On January 22nd, the Supreme Court issued a unanimous opinion in Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc. et al., No. 17-1299, 586 U.S. ___ (2019), and addressed the meaning of “on-sale.”  In particular, the Court considered whether the sale of an invention to a third party who is contractually obligated to keep the invention confidential places the invention “on sale” under 35 U.S.C. § 102(a). Slip. op. at 1. The Court concluded that under the Leahy-Smith America Invents Act (AIA), such a sale qualifies as prior art for purposes of determining the patentability of the invention, and thus affirmed the Federal Circuit.  Id. at 4-5.

Under 35 U.S.C. § 102(a)(1), a person is not entitled to a patent on an invention that was “in public use, on sale, or otherwise available to the public before the effective filing data of the claimed invention.”  While the pre-AIA version of the statute likewise precluded patent protection on an invention if it was “on sale” in the United States “more than one year prior to the date of the application for patent in the United States,” it did not include the catchall phrase “or otherwise available to the public.” 35 U.S.C. § 102(b) (2006 ed., Supp. IV). The Court held that the addition of this phase did not alter the meaning of the “on sale” bar. Slip. op. at 8.

In making its determination, the Court looked to both pre-AIA Supreme Court precedent suggesting that a sale or offer of sale “need not make an invention available to the public,” and pre-AIA Federal Circuit precedent holding that “secret sales” may invalidate a patent. Id. at 6-7. The Court noted that “[i]n light of this settled pre-AIA precedent on the meaning of ‘on sale,’ we presume that when Congress reenacted the same language in the AIA, it adopted the earlier judicial construction of that phrase.”  Id. at 7.  Moreover, the Court determined that the addition of the catchall phrase “or otherwise available to the public” was not enough to conclude that Congress intended to alter the meaning of “on sale” in the AIA. Id. at 8.  According to the Court, “[g]iven that the phrase ‘on sale’ had acquired a well-settled meaning when the AIA was enacted, we decline to read the addition of a broad catchall phrase to upset that body of precedent.”  Id

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