In Helsinn Healthcare S.A., v. Teva Pharmaceuticals USA, Inc., 855 F.3d 1356 (Fed. Cir. 2017), the Federal Circuit interpreted, for the first time, what constitutes an "on-sale" bar under 35 U.S.C. 102(a)(1) of the Leahy-Smith America Invents Act ("AIA"). Under the AIA, a person will not be entitled to a patent if "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," if such actions by an inventor are more than a year prior to the effective filing date of the invention. 35 U.S.C. 102(a)(1) (emphasis added).

Under the pre-AIA Section 102 of the statute, the "on sale" language is interpreted in a way that the on-sale bar applies if the patented product was subject of a commercial offer for sale, as understood under the law of contracts. See, Medicines Co. v. Hospira, Inc., 827 F.3d 1363, 1373 (Fed. Cir. 2016). Courts have held that the on-sale bar applies for pre-AIA patents even for secret sales or offers for sale. See, e.g. Woodland Trust v. Flowertree Nursery, Inc., 148 F.3d 1368 (Fed. Cir. 1998); J.A. LaPorte, Inc. v. Norfolk Dredging Co., 787 F.2d 1577 (Fed. Cir. 1986).

Is the interpretation of the "on sale" language under AIA Section 102(a)(1) different than the interpretation of the same language under pre-AIA Section 102(b)? According to the Federal Circuit in Helsinn, it is not, at least when it comes to public sales.

In Helsinn, a sales agreement, which was disclosed publicly, included "all the pertinent details of the transaction other than the price and dosage levels." Id. at 1369. The dosage levels, however, were a key element of the claimed invention. Helsinn, the owner of the patent, argued that the AIA changed the law by adding the "otherwise available to the public" phrase to AIA 35 U.S.C. 102(a)(1). Because of this language, Helsinn argued that the on-sale bar does not encompass secret sales, and requires that a sale make the invention available to the public in order to trigger application of the on-sale bar.

The Federal Circuit disagreed. According to the court, the public disclosure of the sales agreement more than year prior to the filing for a corresponding patent application was enough for the on-sale bar to apply, even if the dosage levels were not disclosed. Id. at 1371. This public disclosure of the agreement thus barred the obtaining of the corresponding patent. The court noted that pre-AIA cases have applied the on-sale bar even when the public could not ascertain the claimed invention. Id. The Federal Circuit found no indication that members of Congress intended to overrule these cases.

The Federal Circuit further reasoned:

Requiring such disclosure as a condition of the on-sale bar would work a foundational change in the theory of statutory on-sale bar. Indeed, the seminal Supreme Court decision in Pennock addressed exactly such a situation – the public sale of an item but the withholding from "the public the secrets of [the] invention." Pennock v. Dialougue, 27 U.S. (2 Pet.) 1, 19 (1829). Failing to find such a sale invalidating, said the Court, "would materially retard the progress of science and the useful arts, and give a premium to those who should be least prompt to communicate their discoveries."

Id. at 1369.

Thus, under Helsinn, "if the existence of the sale is public, the details of the invention need not be publicly disclosed," in order for the on-sale bar to apply to a post-AIA patent. Id. at 1371 (emphasis added).

The holding in Helsinn is contrary to the interpretation of the AIA "on sale" language taken by the U.S. Patent and Trademark Office (USPTO). According to the USPTO, "[t]he phrase 'on sale' in AIA 35 U.S.C. 102(a)(1) is treated as having the same meaning as 'on sale' in pre-AIA 35 U.S.C. 102(b), except that the sale must make the invention available to the public." MPEP 2152.02(d) (emphasis added).

Thus, patent practitioners must tread carefully in interpreting post-AIA law, even if there is guidance by the USPTO, as courts might interpret the laws differently than the USPTO.

What is still unclear after the Helsinn decision is whether private and non-public offers-to-sell still count as prior art post-AIA. Clients are therefore urged to consult with their patent attorneys prior to engaging in sales discussions of products incorporating potentially patentable inventions, as such talks could negatively impact the ability to obtain patents for those inventions.

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