January 30, 2019

An Inventor’s Efforts to Exploit the Invention Before Filing A Patent Application Can Adversely Impact Whether a Patent Will Be Granted

Inventors will be denied a patent on their invention if the invention was in public use, on sale or otherwise available to the public more than one year before the effective filing date of their patent application. If an inventor has sold the invention or a product or service embodying the invention, even if specific details of the invention are not made public by virtue of such sale, the “on sale” bar to patentability will apply. In Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc. (January 22, 2019) the US Supreme Court reaffirmed this standard, notwithstanding the change to 35 USC 102(a) that was made by Congress in 2011.

Helsinn, a Swiss pharmaceutical company, acquired the right to develop palonosetron, the active ingredient in Aloxi, a drug that treats chemotherapy-induced nausea and vomiting. Helsinn entered a license agreement and a supply and purchase agreement that granted a Minnesota pharmaceutical company (MGI) the right to distribute, market and sell palonosetron products in the US. MGI agreed to keep confidential all proprietary information that it received from Helsinn. Two years after Helsinn entered these agreements with MGI, Helsinn filed its first patent application covering the specific dosage range for palonosetron. Even though the details of the dosage levels of palonosetron were not publicized by Helsinn or MGI, Helsinn’s supply and purchase agreement with MGI qualified as placing the invention “on sale”. This “secret” sales activity qualified as “prior art” that could be cited to invalidate Helsinn’s patents. The Supreme Court explicitly held: “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).”

In 2011, Congress changed the wording of 35 USC 102(a) (changes underlined):

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…

In Helsinn, the Supreme Court refused to modify the meaning of “on sale” to require that a sale make the details of the invention “public.” “In light of this settled pre-AIA precedent on the meaning of “on sale,” we presume that when Congress reenacted the same language in the AIA, it adopted the earlier judicial construction of that phrase … . Given that the phrase “on sale” had acquired a well-settled meaning when the AIA was enacted, we decline to read the addition of a broad catchall phrase [otherwise available to the public] to upset that body of precedent.”

Lesson learned: Any effort to exploit the invention prior to filing a patent application can qualify as “prior art”. Be diligent and file your patent application promptly. Otherwise, your own work could harm your opportunity to receive a US patent or enforce US patent rights.

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