I want to take a break from my series on intellectual-property (IP) decisions to review the first Supreme Court IP decision in 2019. The decision for the case titled “Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc.” was issued on Jan. 22, 2019.
The case concerned the “on-sale” bar in patent law. The on-sale bar requires an applicant for a patent to file an application covering the claimed invention within one year of the first sale of a product or instrumentality that embodies that claimed invention. This is an unusual feature of United States patent law because almost every other country in the world requires the applicant to file a patent application before its first sale.
An invention that has been on-sale for more than one year is not novel within the U.S. See 35 U.S.A. § 102(a)-(b)(the “Novelty Statute”). This statutory definition of novelty was amended in 2011 as part of The Leahy-Smith America Invents Act (“AIA”). Prior to the enactment of the AIA, the phrase “on-sale” had a settled definition in U.S. patent law.
The AIA indicated that an invention that was on-sale for more than one year was not eligible for patent protection. However, the statute also indicated that inventions that were “otherwise available to the public before the effective filing date of the claimed invention” were also ineligible for patent protection. The inclusion of this additional phrase suggested that private sales or sales that were made under the cover of a confidentiality agreement to third parties might not trigger the on-sale bar. As a result, the Supreme Court had to determine whether Congress intended to change the definition of the term “on-sale” within the AIA to allow such private sales.
The Supreme Court determined that the definition of on-sale was not changed by the passage of the AIA. As a result, a private sale to a third party will trigger the on-sale bar.
In view of the Supreme Court’s decision, a potential patent applicant should be cautious in their interpretation of the Novelty Statute and should take an approach to obtaining patent protection that is similar to John Van Buren’s advice for voting in Chicago – “file early, file often.”