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IP Alert
IP Alert: Federal Circuit Interprets AIA “On Sale” Bar for the First Time

May 2, 2017

On May 1, 2017, in Helsinn Healthcare S.A. v Teva Pharmaceuticals USA, Inc., the Federal Circuit interpreted the “on sale” bar under AIA 35 U.S.C. 102(a)(1), holding that patent claims may be invalidated by “on sale” activity that does not make details of an invention available to the public.

The statute provides, in pertinent part,

(a) NOVELTY; PRIOR ART.—A person shall be entitled to a patent unless—

(1) 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; . . . (emphasis added)

The Federal Circuit declined to decide whether the AIA’s inclusion of the words “or otherwise available to the public” has changed the scope of the on-sale bar to prevent secret sales from serving as prior art, instead addressing the specific issue of whether a sale prior to the critical date was invalidating when details of the invention were not disclosed to the public prior to the critical date.

Background

The case involves patent claims covering intravenous formulations of a pharmaceutical composition, specifically covering particular dosages. The composition was known in the prior art, but the dosages were purportedly novel. Prior to the critical date, Helsinn, the patent owner, had entered into a Supply and Purchase Agreement with a third party, MGI Pharma, Inc., in which Helsinn agreed to sell the pharmaceutical composition to MGI in the particular dosage amounts specified in the patent claims. Helsinn and MGI publicly disclosed the existence of the Supply and Purchase Agreement, but did not disclose that the agreement specified the particular dosages at issue.

District Court Decision

The district court held that the AIA changed the on-sale bar, and that section 102(a)(1) now requires a public sale or offer for sale of the claimed invention. The court concluded that to be “public” under the AIA, a sale must publicly disclose the details of the invention. Because there was no public disclosure of the purportedly novel dosages, the court concluded that there was no on-sale bar here.

Federal Circuit Decision

The Federal Circuit reversed, stating,

We conclude 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. For the reasons already stated, the Supply and Purchase Agreement . . . constituted a sale of the claimed invention—the 0.25 mg dose—before the critical date, and therefore both the pre-AIA and AIA on-sale bars apply.

The Federal Circuit decision provides a bit of long-awaited guidance on how the AIA on-sale bar will be interpreted, but its holding is narrow. As to the broader open question of how to construe “otherwise available to the public,” the Federal Circuit declined to rule. The court acknowledged floor statements made by individual members of Congress during deliberations on the AIA, indicating, e.g., that the AIA was intended to do away with precedent holding that private or secret offers for sale may be invalidating. The court left open the possibility that it may interpret the AIA’s inclusion of “otherwise available to the public” as changing the scope of the on-sale bar in future cases. In this case, however, the court expressly declined to decide the case more broadly than necessary, simply holding that a sale that is publicly disclosed can be invalidating without public disclosure of the invention’s details.

For more information on this decision, please contact Fitch Even partner Joseph E. Shipley, author of this alert.


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