The Supreme Court granted Helsinn v Teva certiorari on June 25, and is expected to provide a much-needed interpretation of the on-sale bar described in the 2011 America Invents Act (AIA).
Christopher Loh, partner at Fitzpatrick, comments: “As statutory interpretation is the focus of certiorari here, I think it will be difficult for the Supreme Court to avoid crafting a bright-line ruling as to how the bar should apply.”
Pre-AIA, inventors were barred from patenting their inventions if they failed to apply for a patent within a year of its commercialisation.
The current uncertainty comes from new language introduced in the AIA. It states: “A person shall be entitled to a patent unless 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.”
The question is whether the added phrase “or otherwise available to the public” implies that in order to be “on sale,” an invention has to be on sale in a way that places it in the public domain.
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“As statutory interpretation is the focus of certiorari here, I think it will be difficult for the Supreme Court to avoid crafting a bright-line ruling as to how the bar should apply” – Christopher Loh, partner at Fitzpatrick |
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In the case of Helsinn v Teva, Helsinn is a small, family-owned pharmaceutical company with rights to a secret drug-creation process. Without the means to use the process on a large scale, Helsinn negotiated an NDA with MGI Pharma, a publicly traded company, and licensed MGI to manufacture drugs on their behalf. The tricky part of this case is that as a publicly traded company, MGI disclosed the existence of the licensing agreement to the SEC. Importantly, the disclosure did not include the actual invention; details such as dosage amounts were redacted.
The district court ruled that because the claimed invention itself was not publicly disclosed, Helsinn’s process is patentable. The Federal Circuit disagreed, finding that the fact that the sale of the invention was public is all that is required to disqualify the invention from patentability.
Justin Krieger, partner at Kilpatrick Townsend, says that the purpose of the Patent Act – to encourage public disclosure of inventions – is important to remember. He says: “There's a real benefit to disclosing processes to the public, whether it's by patent applications or otherwise. Suppose someone has a trade secret process they've been using to their benefit for 10 to 15 years. The public would certainly benefit from that process being made public. That they are filing a patent application after 15 years should be good.”
Only the US has an on-sale bar; in most other countries, prior art is defined by what is in the public domain. One purpose of the AIA was to harmonise US patent laws with the rest of the world. Krieger says the US system “can create traps for foreign companies. It’s another reason why having a harmonised system of prior art would be of tremendous benefit to patent applicants worldwide.”
After the AIA was enacted, the USPTO issued guidelines for examiners, which included some examples of what “or otherwise available to the public” means: “an oral presentation at a scientific meeting; a demonstration at a trade show; a lecture or speech; a statement made on a radio talk show; [or] a YouTube video, website, or other online material.” According to the guidelines, it seems clear that confidential deals are not considered prior art under the AIA.
Eight amicus briefs have been filed to support Helsinn’s arguments, while none have been filed supporting Teva’s arguments that the AIA could have included “publicly on sale” instead of just “on sale” if that’s what it meant. Additionally, two amicus briefs have been filed that don’t advocate for either side, but merely emphasize the importance of the issue.
Regarding the eight amicus briefs in favor of Helsinn, Krieger comments: “It makes sense, because most companies are going to want harmonisation and they're going to support making the US system more in line with international standards.”
This case is important because it affects inventors who haven’t yet applied for patents but are entering into various confidential agreements to commercialise their invention – a common scenario.
Before a bright line is drawn, Krieger advises inventors to file patent applications sooner rather than later: “The safest course right now is for individuals faced with this situation to make sure that if they are going to reach out to somebody else in a way that could be characterised as an offer for sale, that they file a US application within one year of that. Even though we don't know if that's required or not, that is definitely the safest approach. Get an NDA, but don't take any chances; file your application within one year of that first offer for sale even if you have an NDA in place.”
