En Banc Denied: Secret Sales Remain a Bar to Patentability under AIA

by Dennis Crouch

Helsinn Healthcare v. Teva Pharmaceuticals (Fed. Cir. 2018).

Without open dissent, the Federal Circuit has denied Helsinn’s petition for en banc rehearing on the definition of “on sale” under the AIA-amended prior art statute 35 U.S.C. 102.


An invention that is “on sale” prior to the associated patent application’s critical filing date is not patentable. 35 U.S.C. 102.  Although the AIA used the same “on sale” wordage as pre-AIA 102(b), many (including the USPTO and US Government) believe that it should interpreted differently based upon the statutory change.  The particular question up for dispute is whether private and non-public offers-to-sell still serve as a bar to patentability post-AIA — or instead do sales activities only count as prior art if made available to the public. In Helsinn, the Federal Circuit did not fully answer this question since some information regarding Helsinn’s pre-filing sale had been made public.  Rather, Helsinn made the limited holding that “after the AIA, if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of the sale.”

Helsinn petitioned for en banc rehearing and that petition has now been denied — setting up a likely petition for certiorari to the U.S. Supreme Court.

Apart from the direct Supreme Court challenge to Helsinn noted above, open questions remain as to (1) does a fully-secret sales offer count to bar a patent under section 102? (Imagine here an offer subject to a binding confidentiality agreement and that would be considered a trade secret); (2) Even if it serves as a bar to patentability under 102, to what extent does a secret sale count as “prior art” for obviousness purposes (rather than simply being a “bar” under 102)?

Judge O’Malley, who was also a member of the original Helsinn panel penned a solo concurring opinion explaining her view that the AIA “did not change longstanding precedent governing the on-sale bar.” The concurring opinion also attempts to highlight some mischaracterizations of the original Helsinn panel decision.

  1. The original panel stated that “after the AIA, if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of the sale.”  Judge O’Malley argues that this sentence does not mean that public announcement of a sale triggers the on-sale bar.  Rather the determination of whether an action is a sale (or offer) is based upon a multi-factor analysis that may be influenced by the public nature.
  2. O’Malley also explained her view that supply-side arrangements can still avoid the on-sale bar if structured properly.
  3. Finally, O’Malley argued that the Helsinn panel is consistent with the en banc MedCo decision.


Helsinn En Banc Status

Helsinn: Post-AIA Public Sales are Prior Art Even Without Disclosing the Invention


28 thoughts on “En Banc Denied: Secret Sales Remain a Bar to Patentability under AIA

  1. 5

    Moocow, LOL! The 13-page concurrence (“defense”) certainly includes some odd bits. At times it dips into issues far beyond what the panel actually held (e.g., we learn of the “series-modifier” and “last antecedent” doctrines for statutory interpretation). We’re given a discussion of policy, with the statement that the “overriding” policy underlying the on sale bar is to prevent inventor commercialization beyond the statutory period (I agree with that). But on the next page, the concurrence reminds us that under the Supreme Court’s “rigid” framework in Pfaff (U.S. 1998), policy can’t be considered or balanced, at least not “explicitly.” The footnotes include some strange bits, too. One asserts that section 102 “public use” is “necessarily public” (because it uses the word “public,” I suppose). It’s not that simple–see Egbert (U.S. 1881). Another footnote suggests that Congress in the AIA could not have abrogated Metallizing (2d Cir. 1946) because the Supreme Court seems to have endorsed it in Pfaff. But we are then reminded that Metallizing is not applicable to these facts, which do not involve a “secret sale.” Perhaps the peculiarity of this concurrence explains why the Circuit wasn’t inclined to post it on its website (only Pacer). The concurrence doesn’t have any precedential weight, of course. Thus my observations don’t have any weight, either. But I enjoyed formulating them.

    1. 5.1

      Janice, as you noted, the concurrence is HAS NO weight for precedent.

      At first blush, it read as if it were setting the course, but as it distills into the larger framework of what the AIA is (including how poorly that legislation was written and ALL of the proceedings to which that Act was subject to – including going from the Senate to the House and back to the Senate, I am inclined to think that this Article III pronouncement merely ADDS to the inevitable sinking of (at least parts of) the AIA.

    2. 5.2

      Janice, it is somewhat strange although now largely accepted that the third-party public use become the statutory bar even though the Supreme Court clearly interpreted the statute in Egbert as being limited to the acts of the inventor. Recall in Egbert, that the patentee filed for a patent 10 years after the subject matter of his application had gone into use by the public. However Supreme Court invalidated the patent because the inventor himself had used the invention in a nonexperimental manner more than 2 years prior to filing the application. The Supreme Court’s expressly decided that the non-informing nature of the use did not protect the inventor.

      The Supreme Court, as far as I know, has not directly addressed whether third-party confidential use or nondisclosing use is prior art. Inferentially, by citing favorably to Metallizing, the Court endorses Hand’s view that third party secret sales are not prior art.

      Thus the Supreme Court jurisprudence is not confusing. What is confusing are lower court and other interpretations that forget the factual situations involved in Pennock and Egbert.

      1. 5.2.1

        the Court endorses Hand’s view that third party secret sales are not prior art.

        As I have noted in exquisite detail, even the esteemed Learned Hand nodded off on the fact that more than one time (related to more than one Constitutional section) is involved when considerations of Trade Secret time and Patent time are (improperly) mixed.

        Thus the Supreme Court jurisprudence is not confusing.

        It is NOT confusing. It is simply incorrect. And with the AIA, Congress spoke anew, and rewrote the definition of “new:” the NEW “new” is that which is “new to you,” (regardless of Trade Secret status or otherwise known to the inventor).

        As we also see, you continue to get Pennock wrong and continue to omit the statutory basis that the Court itself depended on in that decision.

        Continuing to clench tight your eyes will not help you see and understand this area of law, Ned.

  2. 4

    Thanks for calling this en banc denial to our attention, Dennis. The order is dated Jan. 16, 2018, but I am not finding it on the court’s website (link to cafc.uscourts.gov). That seems odd for such an important case, and also in view of the J. O’Malley opinion. What was your source?

  3. 3

    Assuming a fully-secret sales offer would count to bar a patent under section 102; would that also extend to offer to sell something that has not yet been invented?

    Imagine a scenario where you offer to meet a customer’s spec, i.e. to deliver a product that will do a specific job; but then it is essential for you to solve technical problems (and make an invention) in order to deliver on that promise.

    In that case, a sales offer could create prior art against an invention that does not even exist yet, but as far as I can see it’s possible the law could be interpreted that way.

    1. 3.1

      #gawa, why that would be like assigning an invention that does not yet exist. The Feds have no problem with that one.



            Shall we review the essence of an inchoate right and what exactly the Feds allow with assignments?

            You are deep into the weeds here.


          How so? In the example given, all limitations of the invention have not been developed yet, so it would not be like a POSA could make and use it in the given state. As a result, it couldn’t be a prior art event for 102. A sale to invent something that hasn’t been made yet wouldn’t count, similar to a sale to assign the rights of something not yet invented.

    2. 3.2

      The one-year time bar cannot even start to run until the invention is “ready for patenting.” Pfaff v. Wells Electronics, 525 U.S. 55, 67 (1998). If no one has even thought of the solutions to the technical problems at the time that the offer for sale has been made, then the invention is not yet “ready for patenting,” so the offer for sale cannot prejudice the patentability of the invention that is later conceived.

      1. 3.2.1

        makes sense. I guess an invention being “ready to patent” would normally be after conception, perhaps once an initial idea has been thought through and documented in an internal invention disclosure form or equivalent.
        Therefore in practical terms the date of that document being created could be considered as triggering the start of the 12 month grace period.

        Though in litigation an opponent could argue for an earlier date, for example by arguing back to conception if the implementation is trivial.

  4. 2

    I’m glad to see it acknowledged in this posting that it is still an open question whether an event which triggers the participant’s on-sale bar is also prior art for obviousness purposes.

    But another, more widely applicable issue, is whether the event is prior art with respect to a third party’s patent claim. I’ve heard comments that it would be neat and tidy if what constituted the on-sale bar was exactly the same as what constituted prior art, but I’m not sure that is correct. It’s now been pronounced by CAFC that Congress did not intend to, and did not, change the on-sale bar, but it seems they changed what constituted prior art to some extent, and in particularly prior art may need to be fully public even if an on-sale bar is not.

    1. 2.1


      You alight on one aspect that I think that Judge O’Malley does not have correct: Congress explicitly removed the notion of “personal bars being carried over as if those items were “prior art”

      This is clearly reflected in the deliberate renaming of the sections of law (if not changed, then why bother with changing the section titles?).

      Clearly, there is some “wrestling” to do with what O’Malley states.

      1. 2.1.1

        Actually, I understood Judge O’Malley’s language on page 8 – “a separate rule for third-party disclosures” – as distinguishing between personal bars and third party prior art.


          There are NO more “personal bars.”

          Any attempt at “distinguishing” is thus pure legal error.


            We have had this discussion before. I think what you call “personal bar” is more commonly known as the inventor’s forfeiture of the patent right, as explained in Pennock. It has nothing to do with prior art – it is an equitable bar which applies only to the inventor. As I have pointed out to you last time we discussed this, the AIA statute as written did not abrogate Pennock and its progeny, and as Helsinn v Teva holds, it did not change the meaning of “on sale.”

            This is contrary to the narrative of some AIA proponents who thought that one can legislate by stealthy obfuscation through text changes in section headings (removing “right to a patent”) and a colloquy among three Senators a day after their bill had passed. This was too cute, as demonstrated by serious statutory interpretation . They misled you – your proclamation that “there are NO more ‘personal bars’” is simply wrong. The American forfeiture bar is retained and this CAFC decision exposes the infirmity of the purported grace period under the AIA.


              a day after their bill had passed

              I fixed that incorrect perception of yours Ron, as I noted that the passing, then the Soliloquy, THEN came back to the Senate to be finally passed after the House, fully places the Soliloquy firmly in the record.

              You continue to act as if this were not so.

              I “get” that you do not like it, but let’s leave out the revisionist history.

              Also – I am not wrong about the removal of the personal bars. The very stated intent of the changes to 102/103 were to massively change the law in this area. Trying to pretend that no changes were intended is simply not believable.


                Why do you argue with me? Are you ignoring what Judge O’Malley said? I thought you understood her – and that you have been able “to digest this and integrate it into [your] view on the AIA (including the Soliloquy).” While we have agreed to disagree on this issue in the past, it is perhaps time for you to better digest her explanations. She said exactly the same thing on the Senate colloquy as I did. The “very stated intent” you speak of is not the law. Judge O’Malley explained as much. And just because somebody mentioned the Senate colloquy later in the House floor does not make it law either, particularly given the rejection of an amendment to the actual text of the statute in the House that would have made the statute read the way you prefer to interpret it.

                1. Why do you argue with me? Are you ignoring what Judge O’Malley said?

                  I am arguing with you because I refuse to close my eyes to what Congress actually did in the AIA.

                  And if you read the rest of my posts here, you would see that I am certainly NOT ignoring what Judge O’Malley said.

                  And as much as I respect at least the efforts of Judge O’Malley to dutifully apply the law, her opinion carries NO weight of precedent and quite in fact is NOT settling well with the actions of Congress.

                  As I noted this morning, this may have less to do with O’Malley’s attempts and more to do with the mess of the law that is the AIA itself.

                2. Anon,
                  I could not agree with you more that it “is the mess of the law that is the AIA itself.” I also agree that to the extent that judge O’Malley’s concurrence does more than articulate that which the original panel decision held, it is the holding of the panel that controls. But O’Malley merely articulated what the panel has itself held. Read the panel’s decision rejecting the Colloquy’s construction and effect. If you can, please identify any difference in the conclusions of the panel and those that Judge O’Malley arrived at.


            Of course, there are. If that was not clear before, it is after Helsinn. Notwithstanding that you disagree, it’s not legal error if the entire Federal Circuit agrees on that point.


              I am correct not because I say so.

              I say so because what I say is itself correct.

              Thus, this has nothing at all to do with “my disagreeing.”

              Courts are wrong on the law. Even the Supreme Court.

              You should appreciate that.

  5. 1

    I am moved by Judge O’Malley’s concurrence, and find it compelling. I will have to digest this and integrate it into my view on the AIA (including the Soliloquy).

    1. 1.1

      I, too, am deeply moved by the lonely concurrence. Its measured re-re-characterization of the facts really helped me understand how profoundly the original panel opinion was misunderstood by everyone. Glad it’s now all cleared up.

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