Under the AIA, 35 U.S.C. § 102 was modified to define various categories of prior art appearing before the effective filing date of the patentee.
35 U.S.C. § 102(a) under the AIA states in part:
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).
The phrase “or otherwise available to the public” is newly inserted and was not in the pre-AIA 35 U.S.C. § 102(a). What this new phrase means has not been interpreted by a federal court until earlier this year.
Teva Challenges District Court Interpretation of “Otherwise Available to the Public”
Teva Pharmaceuticals USA challenged a post-AIA patent owned by Helsinn Healthcare SA on the drug palonosetron for treating chemotherapy-induced nausea and vomiting. Teva alleged that Helsinn’s patent was filed over a year after a secret licensing and supply contract for the drug, thus triggering the on-sale bar under AIA 35 U.S.C. § 102(a)(1). The district court disagreed and determined that Helsinn’s patent was valid and infringed by Teva because, among other things, the supply contract did not make the claimed invention “available to the public” under AIA 35 U.S.C. § 102(a)(1). Was the district court correct in interpreting the new phrase “or otherwise available to the public”?
On October 4, 2016, the U.S. Court of Appeals for the Federal Circuit heard oral arguments in this case. Objecting to the district court’s interpretation of AIA 35 U.S.C. § 102(a)(1), Teva argued that such an interpretation would throw decades of precedent out the window; Notably, 42 intellectual property professors agreed with Teva’s position in an amicus brief filed with the court. In addition, Teva argued the new phrase is meant solely to enumerate a new area of prior art, including “tweets” and online videos, that the drafters of the 1952 statute did not contemplate. In other words, according to Teva, this new phrase refers to a new category of prior art and does not change how statutory terms, such as “on sale” or “public use,” are to be interpreted.
Meanwhile, the U.S. government argued in support of Helsinn, contending that only sales that make an invention available to the public trigger the on-sale bar, and that the AIA merely confirmed that this was already the rule pre-AIA. Thus, according to the U.S. government, this new phrase provides a new catchall provision to explicitly distinguish secret sales from public sales, allowing inventions to be kept secret without forfeiture of any patent rights.
What’s at Stake
If Teva prevails, accused infringers may continue to challenge and even invalidate patents based on private, secret or nonpublic sales and business transactions. On the other hand, if Teva loses, companies and inventors may be allowed to profit from their inventions through secret sales without jeopardizing their patent rights in the long term.
Regardless of the outcome, in the AIA first-to-file regime, a best practice is still to file a patent application before any “public” disclosure, including secret sales or sales offers, to avoid a potential on-sale bar under 35 U.S.C. § 102(a).
