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On March 3, 2016, a U.S. District Court judge held that the entering into and publicizing of a licensing and supply agreement did not constitute an on-sale bar under the America Invents Act.

The pre-AIA statute relating to the on-sale bar, 35 U.S.C. § 102(b), stated that:

A person shall be entitled to a patent unless –

(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of application for patent in the United States.

Decades of case law had construed that statute so that "public" in the phrase "in public use or on sale" modifies "use" but not "sale." In other words, a confidential, i.e., non-public sale, would trigger the pre-AIA on sale bar. For example, in the 1971 decision Hobbs v. United States, 451 F.2d 849, 171 USPQ 713, the Fifth Circuit, in explaining why a sale of a G valve under the conditions of secrecy nevertheless constituted an on-sale bar, stated that:

"We cannot attach any relevance to any conditions of secrecy which may have existed at the time the G valve was placed 'on sale.'"

The passage of the America Invents Act rewrote 35 U.S.C. § 102 such that the on-sale bar is now found in 35 U.S.C. § 102(a)(1):

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.

Following passage of the AIA, observers were split as to whether non-public sales under the new statute could constitute an on-sale bar.

In a 167-page supplemental opinion in the case Helsinn Healthcare SA et al. v. Teva Pharmaceuticals USA Inc., U.S. District Court Judge Mary L. Cooper found that:

"The new requirement that the on-sale bar apply [only] to public sales comports with the plain language meaning of the amended section, the USPTO's interpretation of the amendment, the AIA Committee Report, and Congress' overarching goal to modernize and streamline the U.S. patent system."

Furthermore, Judge Cooper noted that Helsinn's press releases and the Form 8-K filed with the Securities and Exchange Commission, which were the only public disclosures before the bar date and related to the sale, were redacted and only contained information that the two parties were working on the product, and that Teva had failed to show that those documents made Helsinn's claimed invention available to the public.

Based on this, Judge Cooper also found that, although the supply agreement was publicized by the entities involved, the sale was nevertheless not public, as only the use of the active ingredient palonosetron, which was already known in the prior art, was disclosed, and the invention itself, which was the specific formulation, was not made available by the publicity:

"(t)he post-AIA on-sale bar inquiry is not focused on the public disclosure of the sale or offer for sale; rather, the 'sale' prong of the on-sale bar requires that the sale make the claimed invention available to the public one year prior to its critical date."

It is important to note that the Federal Circuit has not yet visited this issue. However, at this point, AIA can be viewed as enlarging the scope of the on-sale bar with respect to territoriality but diminishing the scope with respect to the required level of publicity.