June 2017 Newsletter

Vol 10, Issue 2

The Evolving On-Sale Bar Post-AIA

By William W. Adolfsen
A product “sale” prior to the filing of a patent application has long been an obstacle that may significantly impact a patentee’s ability to obtain patent rights covering inventive features of the product.  Known as the “on-sale bar,” if a patentee has sold (or offered to sell) its  product, the patentee has a one-year grace period to file a patent application in the United States directed to patentable features of the product. Failing to file such an application results in the patentee forfeiting any patent rights it may have had in the product. Furthermore, while the on-sale bar and corresponding one-year grace period is available for United States patents, no such grace period exists in many countries outside the United States.  Consequently, selling or offering to sell a product may immediately result in the forfeiture of foreign patent rights.
The Leahy-Smith America Invents Act (“AIA”), signed into law in 2011, changed the statutory basis for the on-sale bar in the United States and in doing so has left the scope of the bar uncertain.  Prior to the AIA, 35 U.S.C. §102(b) read:
(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. (emphasis added)  
The AIA introduced 35 U.S.C. §102(a)(1), which reads:
(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)
Although it used the same phrase “on sale,” the AIA removed the geographical limitation of the on-sale bar and added the new ambiguous phrase – “or otherwise available to the public.”  These six words have raised numerous questions surrounding the contours of the on-sale bar post-AIA.  To name just a few – 
  • What exactly is the meaning of “or otherwise available to the public?”
  • Does this phrase modify the other preceding categories of prior art or does the phrase define an additional category of publicly-available prior art?
  • Does the AIA on-sale bar extend to secret processes used to make a sold product as it did under the pre-AIA Metallizing Engineering line of case law?
  • Does the AIA on-sale bar cover sales that do not disclose the particulars of the invention?
  • Does the AIA on-sale bar cover public sales, private sales, or both?  And if it does cover public sales, when is the bar triggered—the date of the sale itself or the date of the public disclosure of the sale?
The Federal Circuit recently shed light on some of these questions in Helsinn Healthcare, S.A. v. Teva Pharmaceuticals USA (Fed. Cir. May 1, 2017). In Helsinn, Helsinn Healthcare entered into a Supply and Purchase Agreement with MGI Pharma, Inc. to supply a drug formulation of palonosetron pending FDA approval.  Although the exact details of the palonosetron formulation were not publicly disclosed, MGI publicly announced the existence of the Supply and Purchase Agreement in its 8-K filing with the SEC. The Court held that the public disclosure of Supply and Purchase Agreement did trigger the post-AIA on-sale bar even though the specific details of the invention were not disclosed. Because the bar was triggered, Helsinn’s claims at issue were found to be invalid. Importantly, the Court furthered noted that its holding was only reached based on the particular Supply and Purchase Agreement before it. Thus, although the court clarified that the post-AIA on-sale bar may apply when the existence of a sale is made public, it provides little guidance about what types of public distribution agreements may trigger the bar and no guidance regarding sales that remain secret.
While Helsinn surely marks the beginning of the courts carving the contours of the post-AIA on-sale bar, patentees are wise to stick to some conservative best practices to ensure that patent rights in their products are not jeopardized by selling or offering to sell those products. Before selling or contracting to sell a product (i.e., supply and purchase agreements), patentees should seek out competent IP counsel to review whether filing a patent application to aspects of the product or the process used to make the product would be appropriate to help reach the patentee’s commercial objectives. To err on the side of caution, patentees should take these steps regardless of whether the patentee plans to make the sale of the product or sales contract publicly known. Should these steps be difficult for some reason, patentees should also be discerning about entering into agreements with other parties that do not have appropriate confidentiality provisions. While doing so may not be sufficient to prevent triggering the post-AIA on-sale bar, not doing so will likely start the clock ticking.


U.S. Supreme Court Shakes Up Patent Lawsuits – Is Inter Partes Review Next?

In an article recently published in Inside Track, the bi-weekly newsletter of the State Bar of Wisconsin, Christopher R. Liro and Aaron T. Olejniczak explained a recent U.S. Supreme Court decision narrowing where plaintiffs alleging patent infringement may file suit, and discussed challenges to Inter Partes Review (IPR) proceedings. 

Click here to read the full article. 


Joseph D. Kuborn, Aaron T. Olejniczak and George Solveson Named IP Stars by Managing IP

Attorneys Joseph D. Kuborn, Aaron T. Olejniczak and George H. Solveson were selected for inclusion in Managing Intellectual Property's 2017 edition of the IP Stars list. 


Andrus Ranked in Chambers USA 2017

Andrus was selected as a ranked law firm in Chambers USA 2017, identifying our firm as one of the best firms in Wisconsin in the field of intellectual property law. In addition to the firm-wide ranking, Attorney Aaron Olejniczak was included in their Spotlight Table, being hailed as an "outstanding" IP litigator. 


Andrus Sponsors PEARLS Scholarship

Andrus contributed to the 2017 PEARLS Colleen Fitzgerald Scholarship Fund Program, which provides college funds for PEARLS girls and alumnae. In addition to monetary support, scholarship recipients are paired with a PEARLS mentor to create more holistic support. PEARLS is a unique leadership development program serving girls middle school and beyond in Milwaukee, Wisconsin through group programs, mentoring and college readiness programs.