United States: Non-Disclosing Sales Under The AIA's On-Sale Bar

On May 1, 2017, the United States Court of Appeals for the Federal Circuit (the "CAFC") issued an opinion in Helsinn Healthcare S.A. v. Teva Pharms USA, Inc.7 discussing the prior-art provisions of the America Invents Act (the "AIA"). The case presented an issue of first impression for the CAFC: did the AIA's prior-art provisions change the law about what kinds of activity would create an on-sale bar and, if so, how? The court's answer to this question is startling. It appears to contradict the Patent Office's own view of the law, as expressed in the Manual of Patent Examining Procedure, and to raise more questions than it answers about what triggers an on-sale bar under the AIA.

The AIA's on-sale bar

The AIA represents the most significant amendment to the U.S. patent system since 1952. In a long-awaited but radical change, the AIA altered the U.S. patent apparatus from a "first to invent" system to a "first inventor to file" system. To implement this change, Congress re-wrote 35 U.S.C. § 102.

The AIA version of § 102 defines at its outset the types of prior art that would prevent an inventor from obtaining a patent. The new phrase central to the Helsinn case is in bold:

  • NOVELTY; PRIOR ART.–A person shall be entitled to a patent unless–
    • the claimed invention 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 . . . .

In § 102(b), the statute provides a one-year grace period for certain types of disclosures made (directly or indirectly) by the inventor, and it provides some additional protection for an inventor who discloses prior to another's disclosure:


  1. DISCLOSURES MADE 1 YEAR OR LESS BEFORE THE EFFECTIVE FILING DATE OF THE CLAIMED INVENTION.–A 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–
    1. 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
    2. 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.

The U.S. patent system has traditionally emphasized the patent system's role in encouraging inventors to disclose their inventions to the public as quickly as possible. Thus, the pre-AIA on-sale bar prevented an inventor from obtaining a patent if the inventor waited to file a patent application for more than one year after putting the invention "on sale." The bar was triggered by sales and offers to sell regardless of whether the sales were public knowledge,8 and regardless of whether the public could learn anything at all about the invention from the inventor's sales activity.9

At first blush, it would appear that both the grace period and the additional protection in § 102(b) represent a continued emphasis on encouraging prompt disclosure. However, the addition of the phrase "or otherwise available to the public" in § 102(a) raises the question of whether (i) sales that do not disclose the invention, or (ii) sales made in secret, which would have triggered a bar under the old law, would still trigger the bar under the new law. If not, an inventor might be able to commercialize an invention secretly for years and still obtain patent protection later.

Factual Background and Proceedings Below

Helsinn sued Teva on four patents relating to a drug used to treat chemotherapy-induced nausea and vomiting.10 Teva's invalidity defense focused on the on-sale bar of § 102.11

Before the critical date for the patents (i.e., more than a year before the patents' effective filing date), Helsinn entered into a license agreement and a supply and purchase agreement with a third party.12 The parties included in a joint press release redacted versions of the agreements that disclosed the sale of the drug in general terms but did not contain the allegedly novel dosage of palonosetron.13 In other words, only the fact that the sale of the drug occurred was publicized; the dosage—i.e., in terms of patentability, the invention—was not publicly disclosed.

Teva argued that, under both pre-AIA and AIA § 102 (pre-AIA § 102 applying to the first three patents, and current AIA § 102 applying to the fourth), Helsinn's sale was invalidating prior art to the asserted patents.14 The district court rejected Teva's arguments, finding that, with respect to the three pre-AIA patents, the drug was not ready for patenting, and, with respect to the AIA patent, because the AIA changed the law to require a public sale or offer for sale of the claimed invention, the sale under an NDA was a "secret," non-qualifying sale, and the joint press release also did not qualify, as it did not disclose the details of the invention.15

The CAFC's Reversal

The CAFC reversed the district court's decision, but declined to address the issue of whether the AIA's amended § 102(a) abolished secret sales as prior art. Instead, the CAFC held only that, "after the AIA, if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of sale.16

The CAFC, in effect, found that the AIA did not change the pre-AIA precedent that offers for sale are prior art even if no details of the claimed invention are disclosed in the offer,17 and that a sale of a product that embodies an invention, regardless of whether the parties to the sale know that the product embodies the invention, is prior art18—as long as the fact of the sale is public knowledge.

The court thus interpreted the AIA sales bar to apply regardless of whether the sales activity teaches the public anything about the invention, just as the pre-AIA sales bar had done. However, in a nod to the "or otherwise available to the public" language in the new statute, and to the copious legislative history suggesting that the bar in the new statute was not intended to be triggered by secret sales activity, the court emphasized that the fact of the sale in this case was public.

The court's holding is contrary to the Patent Office's understanding of the law, as expressed in the M.P.E.P. In § 2152.02(d) of the Manual, the Office explains that the phrase "on sale" in the new statute has the same meaning as in the old statute, "except that the sale must make the invention available to the public." Under the Office's view, Helsinn's sales activity would not be a bar to patentability, because the sale neither taught the public anything about the claimed invention, nor placed the invention physically in the hands of the public.

Regardless of whether sales activity must "make the invention available to the public" (per the Patent Office) or whether it can create a bar even if only the fact of the sale, not anything about the invention, is public knowledge (per the CAFC), there is a second step to the analysis, one that the court did not need to reach in Helsinn. Does the one-year-grace period of § 102(b) apply in all cases? Or can there be sales activity that creates a bar but does not trigger the grace period?

Based, again, on the M.P.E.P., it appears that the Patent Office believes that all activities that trigger a bar under § 102(a) also invoke the one-year grace period of § 102(b):

The AIA does not define the term "disclosure," and 35 U.S.C. § 102(a) does not use the term "disclosure." 35 U.S.C. §§ 102(b)(1) and 102(b)(2), however, each state conditions under which a "disclosure" that otherwise falls within 35 U.S.C. §§ 102(a)(1) or 102(a)(2) is not prior art under 35 U.S.C. §§ 102(a)(1) or 102(a)(2). Thus, the Office is treating the term "disclosure" as a generic expression intended to encompass the documents and activities enumerated in 35 U.S.C. § 102(a) (i.e., being patented, described in a printed publication, in public use, on sale, or otherwise available to the public, or being described in a U.S. patent, U.S. patent application publication, or WIPO published application).19

It is not yet clear whether the CAFC agrees, or if instead the court will hold that sales activities like Helsinn's trigger the bar (because the fact of the activity was public knowledge) but are not entitled to a grace period (because they do not "disclose" the invention to the public).

This second reading would be consistent with the idea that patent systems should encourage prompt disclosure. Under this reading, the bar and the grace period would interact so that non-disclosing sales can create a bar, but only disclosing sales are permitted a grace period.

It appears likely that the CAFC will have to revisit en banc the on-sale provision of the AIA to resolve both issues (When is the bar triggered? Is there always a corresponding grace period?).

Until the issue is resolved, inventors should assume that any sales activity that would have created a bar under the old law might also create a bar under the new law, but that the new law might not provide a grace period. This means making sure to file applications—even if only "document dump"-style provisional applications—before undertaking any sales activity.


7 855 F.3d 1356 (Fed. Cir. 2017).

See, e.g., Special Devices, Inc. v. OEA, Inc., 270 F.3d 1353, 1357–58 (Fed. Cir. 2001).

See, e.g., RCA Corp. v. Data Gen. Corp., 887 F.2d 1056, 1060 (Fed. Cir. 1989), overruled in part on other grounds by Grp. One, Ltd. v. Hallmark Cards, Inc., 254 F.3d 1041, 1048 (Fed. Cir. 2001).

10  Helsinn, 855 F.3d at 1360.

11  Id.

12  Id. at 1361.

13  Id. at 1362.

14  Id. at 1360.

15  See Helsinn Healthcare S.A. v. Dr. Reddy's Labs. Ltd., Civil Action No. 11-3962 (MLC), 2016 WL 832089, at **49, 52 (D.N.J. Mar. 3, 2016).

16  Helsinn, 855 F.3d at 1371 (emphasis added).

17  See, e.g., RCA Corp., 887 F.2d at 1060.

18  See, e.g., Abbott Labs., 182 F.3d at 1319.

19  M.P.E.P. § 717 (emphasis added).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Oblon, McClelland, Maier & Neustadt, L.L.P
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Oblon, McClelland, Maier & Neustadt, L.L.P
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions