AIA Does Not Redefine the Meaning of On-Sale Bar

June 2017

Helsinn Healthcare S.A. v. Teva Pharmaceutical Industries, LTD., No. 2016-1284, -1787 (Fed. Cir. May 1, 2017)

In Helsinn Healthcare, the Federal Circuit reversed a decision by the U.S. District court for the District of New Jersey, and held that the meaning of the on-sale bar had not changed following the passage of the America Invents Act.  It remains unnecessary for enabling details of an invention to be disclosed in a sale for the sale to trigger the on-sale bar.

Helsinn is the owner of a patent relating to specific dosages of the drug palonosetron for use in treating chemotherapy side effects.  Teva filed an application with the FDA to produce a generic version of the drug, provoking litigation under the Hatch-Waxman Act.  Prior to the critical date for the on-sale bar, Helsinn entered into a supply and purchase agreement with MGI Pharma, in which MGI agreed to purchase two dosages of palonosetron exclusively from Helsinn if and when either such dosage was approved by the FDA.  The published version of the purchase and sale agreement did not disclose the drug dosage or price information.  Teva argued that the supply and purchase agreement constituted a sale of the patented product prior to the critical date, which invalidated the patent under Section 102(a)(1) of the post-AIA Patent Act.

Prior to the passage of the AIA, Section 102 of the Patent Act barred applicants from obtaining a patent where the invention was “in public use or on sale” in the United States more than one year prior to the application date.  Under the AIA, an applicant is not entitled to a patent where the invention is “in public use, on sale, or otherwise available to the public” prior to the effective filing date.  Helsinn argued that the addition of the clause “otherwise available to the public” was intended to modify the on-sale bar to only cover public sales of the claimed invention.

The district court agreed with Helsinn, and found that the supply and purchase agreement was not an invalidating sale.  Because the public version of the supply and purchase agreement did not disclose the dosage form claimed in the patent, the district court concluded that the patented product was not subject to a public sale, and therefore was not invalid.

The Federal Circuit reversed, holding that the amendments to Section 102 were not intended to change the on-sale bar to permit secret sales.  The modified language was only intended to convey that the sale must put the patented product in the hands of the public, not that the sale must disclose the claimed features of the product.  The Court rejected Helsinn’s contention that its position was supported by Congressional floor statements, holding that requiring disclosure as a condition of the on-sale bar would work a foundational change in the theory of the statutory on-sale bar, which was not clearly intended by Congress.

Key Takeaway: The AIA did not materially change the operation of the on-sale bar in Section 102 of the Patent Act.  A sale prior to the critical date that would place the patented product in the hands of the public will bar an applicant from obtaining a patent, even if the sale itself did not disclose the claimed features of the invention.