On 11 July 2016, the US Court of Appeals for the Federal Circuit
issued an unanimous en banc ruling in the The Medicines Company v. Hospira Inc.
case that the mere sale of manufacturing services by a contract
manufacturer to an inventor to create embodiments of a patented
product for the inventor is no ground for invalidity under the
In US patent law, the on-sale bar is a limitation on
patentability codified in 35 U.S.C. § 102. It provides that an
invention cannot be patented if it has been for sale before the
effective filing date of the claimed invention. In 2011, as part of
the America Invents Act (AIA), US Congress amended 35 U.S.C. §
102. The pre-AIA Version of the statute that was applicable in the
Court of Appeals' case read that "[a] person shall be
entitled to a patent unless," inter alia, "the
invention was [...] in public use or on sale in this country, more
than one year prior to the date of the application for
The Court of Appeals concluded that, "to be 'on
sale' under § 102(b), a product must be the subject of a
commercial sale [...] that bears the general hallmarks of a sale
pursuant to Section 2-106 of the Uniform Commercial Code."
However, the use of third-party services to manufacture the
patented products was not the type of commercial activity with
which the on-sale bar is concerned. The Court of Appeals agreed
that applying the on-sale bar to outsource manufacturing
"would only make the drug development process more costly,
punish efficient use of resources, and deter future investments in
innovation." There was no room in the statute to penalize a
company for relying, by choice or by necessity, on the confidential
services of a contract manufacturer, instead of manufacturing
Originally published July 21, 2016
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