Secret Sales Are No Fun (For Inventors): Re-Evaluating the Scope of the On-Sale Bar as Adopted in the America Invents Act
Aaron Scheinman
Cite as: 3 GEO. L. TECH. REV. 203 (2018)
"On sale" in the Patent Act has historically meant any commercial sale, but the adoption of the America Invents Act (AIA) has led some to assert that this meaning was abandoned—that "on sale" now only means certain sales.1See Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 67 (1998); City of Elizabeth v. Am. Nicholson Pavement Co., 97 U.S. 126, 134 (1877). Even though the AIA still categorizes inventions that have been "on sale" as prior art, some claim that a newly-added catch-all clause in the AIA should allow patents to issue even after the invention has been marketed and sold, as long as all of the parties to the sale are bound to keep the details of the invention secret.
In 2017, in Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., the Federal Circuit considered whether the AIA had changed the meaning of "on sale."2Helsinn Healthcare S.A. v. Teva Pharm. USA, Inc., 855 F.3d 1356, 1360 (Fed. Cir. 2017). After evaluating the text of the statute and legislative history, the court determined that Congress, when enacting the AIA, did not modify the meaning of "on sale" to require a public disclosure.3Id. at 1369, 1371. The court cited pre-AIA precedent to apply the on-sale bar to an invention that had been the subject of the so-called "secret sale," i.e., a transaction where the fact of the sale was disclosed in regulatory filings, but no details about the claimed invention were publicized.4Id. at 1370. The Supreme Court has granted certiorari to review whether such a transaction is patent-invalidating under the AIA.
This comment argues that the text of the AIA cannot support a legislative repeal of the on-sale bar, and therefore the term's historical meaning should stand: "secret sales" outside of the one-year grace period should remain patent-invalidating. Viewing the AIA as a repeal would have serious knock-on effects in other areas of patent law. Additionally, this comment briefly addresses how the construction of the AIA adopted by the Federal Circuit further muddies the waters by evaluating the public disclosure of the sale itself rather than the disclosure of details of the invention. While the statutory text alone is sufficient to support the conclusion that the AIA did not modify the on-sale bar, this comment examines the legislative history of the AIA to show that Congress has had opportunities to impose a public disclosure requirement on the on-sale bar but did not. Finally, this comment demonstrates that the shift to first-to-file does not justify adding a publicity requirement to the on sale-bar.
GLTR Staff Member; Georgetown Law, J.D. expected 2020; University of New Hampshire, B.S. 2017.