Is your Confidential Sale Prior Art Against You? The Supreme Court has Decided to Weigh In.June 26, 2018

You have a new idea and have found an interested buyer. If you sell your product or process to the buyer prior to filing a patent application, have you created your own prior art? If it is prior art, it would bar a later filed patent under 35 USC §102. Prior to the change in patent law that moved from first to invent to first to file for a patent application, such a sale would be a bar to patenting. However, under the America Invents Act (AIA) that went into effect in March 2013, the new law stated one was entitled to a patent unless the invention was in public use, on sale “or otherwise available to the public”, which was believed to indicate that sales had to be publicly available to bar a later filed patent application.

However, there was a debate about whether such an interpretation was correct. This was the situation for Helsinn Healthcare SA, a pharmaceutical company in Switzerland that sold its drug to alleviate nausea more than one year prior to filing a patent application. Details of the sale were required to be kept confidential, although the fact that a sale occurred was publicly available through an SEC filing. In a lawsuit with Teva Pharmaceuticals USA, the Federal Circuit said it was a bar because the existence of the sale was made public. Helsinn v. Teva, 2016-1284, 2016-1787 (Fed. Cir 2017).

The U.S. Patent and Trademark Office has interpreted the new law as providing a confidential sale was not a bar and Lamar Smith, a representative from Texas involved in moving the law through Congress, agreed this was the intent, saying “[C]ontrary to current precedent, in order to trigger the bar in the new [Section]102(a) in our legislation, an action must make the patented subject matter ‘available to the public’ before the effective filing date.” See the Petition for Writ of Certiorari, Helsinn v. Teva, p. 8.

On June 25, 2018, the Supreme Court decided to take the issue up on certiorari. This news was greeted with applause by many patent attorneys, companies and inventors. The fact that the Court decided to take the decision on certiorari is encouraging. Regardless of the decision, it is expected to provide certainty on the particular issue of a public announcement of a sale without details of the sale as a bar to patenting. It is a decision that will be closely watched.

In the meantime, best practices provide filing a patent application before any sale occurs.

Patricia Sweeney is an Intellectual Property Attorney in the Biotechnology & Chemical Patent Practice Group at McKee, Voorhees & Sease, PLC. For additional information please visit www.ipmvs.com or contact Pat directly via email at patricia.sweeney@ipmvs.com.

 

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