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“Secret Sales” of an Invention Continue to Be a Potential Bar to Patent Rights, Even After the America Invents Act



On January 22, 2019, the United States Supreme Court decided an important question in patent law: After the America Invents Act (AIA), does the sale of an invention to a third party, who is contractually obligated to keep the invention confidential, make the invention “on sale” within the meaning of the patent statutes?

The unanimous opinion holds that the AIA did not change the previous rule that such “secret sales” of inventions implicate the on-sale bar for patent rights, even though the details of the invention itself were not made public by the sale.

Specifically, the post-AIA version of the patent statutes prevents a person from receiving a patent on an invention that was “in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” 35 U. S. C. §102(a)(1). The “on sale” part of this language is known as the on-sale bar, and the categories of disclosures listed in §102(a) are known as prior art. The patent statutes in effect before the AIA had similar provisions.

The question considered by the Court was whether the addition of the catchall phrase “or otherwise available to the public” in the AIA meant that pre-AIA interpretations of the on-sale bar were no longer applicable.

But the Court decided not to make such a drastic change. In the words of the Court, “[g]iven that the phrase ‘on sale’ had acquired a well-settled meaning when the AIA was enacted, we decline to read the [different phraseology in the AIA version of the statute] to upset that body of precedent.”

Accordingly, an inventor’s sale of an invention to a third party who is obligated to keep the invention confidential can qualify as prior art under §102(a).

The case is Helsinn Healthcare S. A. v. Teva Pharmaceuticals USA, Inc., No. 17–1229 (S. Ct. January 22, 2019).

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