{"id":1520,"date":"2017-05-01T12:22:53","date_gmt":"2017-05-01T16:22:53","guid":{"rendered":"https:\/\/patents.harnessip.com\/?p=1520"},"modified":"2017-05-03T19:56:32","modified_gmt":"2017-05-03T23:56:32","slug":"the-federal-circuit-holds-that-a-public-non-disclosing-sale-is-prior-art-but-do-the-102b1-exceptions-apply","status":"publish","type":"post","link":"https:\/\/patents.harnessip.com\/?p=1520","title":{"rendered":"The Federal Circuit Holds that a Public, Non-Disclosing Sale is Prior Art; But Do the 102(b)(1) Exceptions Apply?"},"content":{"rendered":"

In Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc.<\/em>, [2016-1284, 2016-1787] (May 1, 2017), the Federal Circuit reversed the district court’s determination that U.S. Patent Nos. \u00a07,947,724, 7,947,725, 7,960,424, and 8,598,219, were not anticipated, finding that\u00a0the patents-in-suit\u00a0were subject to an invalidating contract for sale prior to\u00a0the critical date, and the AIA did not\u00a0change the statutory meaning of \u201con sale.\u201d \u00a0The product covered by the patents was subject to a Supply and Purchase Agreement, contingent on FDA approval of the formulation, the terms of which were public except for the price and the specific dosage formulation covered by the agreement.<\/p>\n

As to the \u2019724, \u2019725, and \u2019424 patents, the district court\u00a0found that pre-AIA law applied under \u00a7 102(b) and that\u00a0the Supply and Purchase Agreement was a contract\u00a0for a future sale of a commercial product embodying the
\n0.25 mg dose and therefore constituted a sale under (old) \u00a7102(b). But, the district court found that the claimed invention\u00a0was not reduced to practice before the critical date, and therefore was not ready for patenting
\nunder the second prong of Pfaff<\/em>.<\/p>\n

As to the \u2019219 patent governed by the AIA, the court\u00a0held that the AIA changed the meaning of the on-sale bar\u00a0and \u00a7 102(a)(1) now \u201crequires a public sale or offer for sale\u00a0of the claimed invention.\u201d The district\u00a0court concluded that, to be \u201cpublic\u201d under the AIA, a sale\u00a0must publicly disclose the details of the invention, and thus the Supply and Purchase Agreement\u00a0did not constitute a public sale or commercial offer\u00a0for sale because, although it disclosed the sale agreement\u00a0and substance of the transaction, it failed to publicly\u00a0disclose the 0.25 mg dose. The district court also found that the invention was not ready for patenting before the critical date.<\/p>\n

On the issue of the post-AIA meaning of “on sale,” the Federal Circuit acknowledged the arguments that the statutory language “otherwise available to the public” and various statements by individual members of Congress, meant that “on sale” in post-AIA 102 does not include non-disclosing sales. \u00a0After first noting that “floor statements are typically not reliable,” the Federal Circuit distinguished these statements as directed to non-disclosing public uses, not non-disclosing offers for sale. \u00a0The Federal Circuit noted that the comments did not identify any sale cases that would be overturned by the amendments, and noted that even if they were intended to overrule prior secret sale cases, the comments still did not apply because the case before it involved a public but non-disclosing sale.<\/p>\n

The Federal Circuit said that requiring disclosure as a condition of the on-sale bar would work a “foundational change” in the theory of the statutory on-sale bar. \u00a0The Federal Circuit noted that both the Supreme and its own precedent had rejected the requirement that the sale be disclosing:<\/p>\n

[O]ur prior cases have applied the on-sale bar\u00a0even when there is no delivery, when delivery is set after\u00a0the critical date, or, even when, upon delivery, members\u00a0of the public could not ascertain the claimed invention.<\/p><\/blockquote>\n

The Federal Circuit found no indication in the floor statements that these
\nmembers intended to overrule these cases, and in fact the Federal Circuit found the statements to be consistent. \u00a0The Federal Circuit found\u00a0no floor statements suggesting that the\u00a0sale or offer documents must themselves publicly disclose\u00a0the details of the claimed invention before the critical
\ndate, and said that if Congress intended to work such a sweeping\u00a0change to our on-sale bar jurisprudence and wished to\u00a0repeal these prior cases legislatively, it would do so\u00a0by clear language.<\/p>\n

The Federal Circuit concluded that “after the AIA, if the existence of the\u00a0<\/strong><\/em>sale is public, the details of the invention need not be\u00a0publicly disclosed in the terms of sale<\/strong><\/em>.” \u00a0Thus the\u00a0Supply and Purchase Agreement constituted a sale of the\u00a0claimed invention before the critical
\ndate, and therefore both the pre-AIA and AIA on-sale bars apply.<\/p>\n

Finally, the Federal Circuit found the invention was ready for patenting, so that the pre-filing sales did, in fact, invalidate the four patents in suit.<\/p>\n

The Federal Circuit’s construction makes some sense, relying on the addition of a clause, and some remarks of a few Congressmen does not seem a proper way to over rule a century of cases surrounding the meaning of “on sale.” \u00a0However, the overall structure of the statute raises a further question — assuming that the Federal Circuit is correct, does the statute provided any\u00a0any grace period for non-disclosing sales? \u00a0In the rearrangement of Section 102 by the AIA, the grace period was separated into its own section (\u00a7102(b)(1)), and by its express terms, only applies to disclosures<\/em><\/strong>:<\/p>\n

(b)(1) Disclosures made 1 year or less before the effective filing date of the claimed invention.\u2014A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if\u2014<\/p>\n

(A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or<\/p>\n

(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.<\/p>\n

It would seem either a non-disclosing offer for sale or sale is<\/em><\/strong> a disclosure, which does not make linguistic sense, or a non-disclosing offer for sale or sale is an absolute bar to patentability because there is no exception for non-disclosures. which does not make practical sense. \u00a0The result would be that a public non-disclosing sale is an immediate bar to patentability, but a public disclosing sale is not.<\/p>\n

It is possible that the\u00a0\u00a7102(b)(1) exception could be found to apply by treating the disclosure<\/em> of the offer for sale or sale as a\u00a0disclosure that triggers the exception, but such an interpretation strains the language of the statutory exceptions, which refer to “subject matter.” \u00a0It also raises further questions, such as: Does the public disclosure of a non-disclosing offer for sale or sale, count as a disclosure that bars third parties from filing on the undisclosed subject matter? \u00a0Does the public siclosure of a non-disclosing offer for sale or sale count as a\u00a0\u00a7102(b)(1)(B) disclosure that would remove subsequent third party disclosures of the subject matter as prior art?<\/p>\n

If a\u00a0public, non-disclosing offer for sale, is in fact a disclosure, it would seem that this would provide a peculiar incentive for inventors to make a public but non-disclosing offer for sale of an invention immediately, the subject matter of which would be prior art to all subsequent third parties under 102(a), and would remove the prior art effect of subsequent third party disclosures under 102(b)(1)(B), all without actually disclosing what was invented.<\/p>\n

The definitions of what is and what is not patentable, and what is and what is not prior art, are fundamental to a patent system. \u00a0It is disappointing that something optimistically titled the America Invents Act could not have been better thought out.<\/p>\n

 <\/p>\n

 <\/p>\n

T<\/p>\n","protected":false},"excerpt":{"rendered":"

In Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., [2016-1284, 2016-1787] (May 1, 2017), the Federal Circuit reversed the district court’s determination that U.S. Patent Nos. \u00a07,947,724, 7,947,725, 7,960,424, and 8,598,219, were not anticipated, finding that\u00a0the patents-in-suit\u00a0were subject to an … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[42],"tags":[],"class_list":["post-1520","post","type-post","status-publish","format-standard","hentry","category-anticipation"],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/posts\/1520","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1520"}],"version-history":[{"count":4,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/posts\/1520\/revisions"}],"predecessor-version":[{"id":1524,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=\/wp\/v2\/posts\/1520\/revisions\/1524"}],"wp:attachment":[{"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1520"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1520"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/patents.harnessip.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1520"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}