by Dennis Crouch
In The Medicines Co. v. Hospira an en banc Federal Circuit confirmed the validity of MedCo’s Angiomax product-by-process patent claims over an on-sale challenge. More than one-year before filing the patent application, MedCo had hired a third-party supplier to provide three batches of the drug using an embodiment of the claimed processes. The question was whether this ‘supply contract’ constituted a commercial offer for sale sufficient to trigger the on-sale bar of Section 102(b) (pre-AIA). In the appeal, the Federal Circuit held that the supply contract was “for performing services” rather than a triggering sale. “[A] contract manufacturer’s sale to the inventor of manufacturing services where neither the title to the embodiments nor the right to market the same passes to the supplier does not constitute an invalidating sale.”
The en banc MedCo opinion focuses on a pre-AIA patent, but it seems clear to me that the limits here are equally applicable to post-AIA patents. Of course, many (including the USPTO and DOJ) argue that this type of activity would also be disqualified as on-sale because it was done under cover of secrecy rather than publicly.
In the pending case of Helsinn v. Teva is set to answer the AIA question – whether under the AIA “on sale” activity is limited to activity that is “available to the public.” In a new filing, the accused infringer (Teva) has looked to distinguish the MedCo — noting that “[u]nlike the MedCo. contract, where the patent-holder paid another party to manufacture its drug, the distribution contract [in Helsinn] was an offer for sale.” The letter-of-authority goes on to point the court to the language on MedCo supporting the Metallizing Engineering policy:
MedCo. also reaffirmed multiple precedents finding “confidential transactions to be patent invalidating sales under §102(b).” Although a transaction’s “confidential nature … weighs against the conclusion that [it was] commercial,” it remains “a condition upon an inventor’s right to a patent that he shall not exploit his discovery competitively after it is ready for patenting.” (quoting Metallizing Eng’g). That is what Helsinn did here.
Oral arguments have not been scheduled in the case, but I expect that it will be scheduled for early Autumn 2016. While the Helsinn case is not yet en banc, it has drawn significant amicus interest.
- Secret Sales and Offers Should Still Count as Prior Art under the AIA: 42 IP Professors [Professor Brief]; Ron Katznelson [HelsinnRonKatznelson]
- The AIA Overruled Metallizing Eng’g and Eliminated Secret Sales as a form of Prior Art: US Government [HelsinnGovernmentAmicusBrief]; Naples Roundtable [HelsinnNaplesBrief]; Cong. Lamar Smith [HelsinnLamarSmith]; AIPLA [HelsinnAIPLA]; BIO [HelsinnBIO]; and PhRMA [HelsinnPhRMA].
Of these positions, the former would make it easier to invalidate patents and the latter would make it more difficult. If the Overrule-Metallizing-Engineering position prevails, I expect that the “on sale” question become an evolutionary vestige and the whole prior art focus of 102(a) will be on whether purported prior art was sufficiently “available to the public.”