On January 22, 2019, the United States Supreme Court handed down a highly anticipated ruling that has caused measurable discrepancies amongst the patent community after the America Invents Act (AIA) was enacted. That ruling, Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc., held that the on-sale bar applies to confidential sales more than one year before the effective filing date of the claimed invention under the AIA’s 35 U.S.C. §102. The Supreme Court affirmed the Fed Circuit’s earlier decision, of which we discussed earlier on this blog.
Helsinn is a pharmaceutical company which developed a drug to treat chemotherapy-induced nausea and emesis. That drug, ALOXI®, went through FDA regulatory review, and contains the active ingredient palonosetron. By 2000, Aloxi began clinical trials and Helsinn entered into license and supply agreements with MGI Pharma, to market and distribute the drug. It was agreed that the dosage formulations would consist of 0.25 mg and 0.75 mg of palonosetron. Those agreements were subsequently announced publicly in a joint press release. MGI further reported the agreements in its SEC filing, although the agreements were redacted when filed and did not disclose the specific dosage formulations. In January 2003, two years after the executions of the agreements, Helsinn filed a provisional patent application covering the dosing formulations of palonosetron as specified in the agreements. That provisional became the head of family application for a series of nonprovisional applications, the last of which was issued as U.S. Patent No. 8,598,219 (‘219).
In 2011, Teva sought from the FDA and ANDA approval for a generic drug for 0.25 mg palonosetron. Helsinn sued for infringement of the ‘219 patent, and Teva asserted invalidity of the ‘219 patent because of the 0.25 mg dosage of palonosetron was on-sale more than one year before the effective filing date of the ‘219 patent.
The district court held that the on-sale bar did not apply. The Fed Circuit reversed, holding that “if existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of sale” in order for the on-sale bar to apply.
The opinion was extremely short – only 11 pages total – and written by Justice Thomas for a unanimous Court. He noted that the Court decided in 1998 the issue of a commercial sale of an invention, ready for patenting, which constituted a “sale” for purposes of the on-sale bar of the pre-AIA §102(b).
The AIA’s 35 U.S.C. §102(a)(1) reads:
(a) A person shall be entitled to a patent unless –
The pre-AIA statute, 35 U.S.C. §102(b), reads:
A person shall be entitled to a patent unless – (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 the application for patent in the United States.
Justice Thomas noted that certain limitations on the acquisition of a patent property right exist, one of which is the on-sale bar, as noted by a long line of precedent cases. The on-sale bar, he posited, “reflects Congress’ ‘reluctance to allow an inventor to remove existing knowledge from public use’ by obtaining a patent covering that knowledge.” The precedence Justice Thomas asserts goes back to all patent laws dating to 1836, which include the on-sale bar. Further, when the AIA was enacted in 2011, the Fed Circuit – vested with its exclusive jurisdiction over patent matters – had long held that secret sales invalidated a patent. So, evidenced by this long line of precedence, Justice Thomas noted that it could be presumed that Congressional intent when the AIA was enacted also included the same on-sale meaning as had existed before the AIA’s enactment.
If “on-sale” had a settled meaning before the AIA was adopted, then adding the phrase “or otherwise available to the public” to the statute “would be a fairly oblique way of attempting to overturn” that settled body of law . . . . The addition of “or otherwise available to the public” is simply not enough of a change for us to conclude that Congress intended to alter the meaning of the reenacted term “on-sale.”
Further, he noted:
Like other such phrases, “otherwise available to the public” captures material that does not fit neatly into the statute’s enumerated categories but is nevertheless meant to be covered. 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 to upset that body of precedent.
This decision was not surprising, but it does provide some consistency between the two most recent patent law enactments. As mentioned above, the Court affirmed the Fed Circuit’s ruling, and Helsinn’s ‘219 claims are invalidated. This ruling also clarifies that secret sales continue to be “on-sales” for invalidating purposes under §102(a)(1). The key takeaway from the Helsinn ruling is that companies will now have to begin filing patent applications, at least provisional patent applications (35 U.S.C. §111(b); MPEP 201.04), much earlier in the business and product lifecycle process, as now confidential sales or potential licensing deals can destroy patent protection for a particular product offering. While ensuring patent investment is difficult for startups because of the limited access to capital, Helsinn will certainly necessitate a strategy shift for even the smallest company.
 855 F.3d at 1360.