by Dennis Crouch
Helsinn Healthcare S.A. v. Teva Pharma USA, Inc. (Supreme Court 2018)
In Helsinn, the Supreme Court will focus on the new definitions of prior art found in the Leahy-Smith America Invents Act of 2011 (AIA). The language and history of Section 102(a)(1) suggest that the provision is limited only to prior art that is “available to the public.” However, pre-AIA precedent held that secret sales activity and commercial uses by the patentee could negate patentability. And nothing in the AIA directly addresses that old precedent.
In its interpretation of the statute, the USPTO determined that secret sales and other secret commercialization activities do not count as prior art under the new statute. However, the Federal Circuit rejected that statutory interpretation (giving no deference to the PTO) and instead held that the new law did not change the meaning of “on sale.”
The question before the Supreme Court:
Whether, under the Leahy-Smith America Invents Act, an inventor’s sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention.
The Supreme Court granted certiori in June 2018. Helsinn has now filed its merits brief as has Rep. Lamar Smith (Namesake of the Leahy-Smith Act) and the Intellectual Property Owners Ass’n. (IPO).
We’ll provide a broad review of the petitioner’s side next week once all the Amicus briefs have been filed.
MaxDrei @3: “such headings are there simply to help bring the reader of the Statute more quickly to the words that matter, and are not themselves to be relied upon, at all, when construing the Section under the Heading.”
This is generally true in the US as well, as one must look to the actual text of the statute itself. “The title of a statute and the heading of a section cannot limit the plain meaning of the text.” Brotherhood of R. R. Trainmen v. Baltimore & O. R. Co., 331 U.S. 519, 528–29 (1947). This is particularly true when textual amendments to conform the body of the statute to the meaning behind the heading are expressly rejected in a congressional committee vote, as explained below.
Anon @1 is correct that the AIA bill managers truly intended to repeal the personal forfeiture bar for secret sales and public use – that they intended only publically-disclosed subject matter to be patent-defeating. That is why they changed the heading of Section 102 and why they inserted elaborate colloquies in the record to that effect. But the intent five members of Congress – even as the drafters and managers of the bill – does not make the law. Indeed, they tried putting that intent in the body of the statute where it counts, and failed. First, they correctly recognized that the plain language to achieve their goal is a simple exclusion of inventions that were “patented, described in a printed publication, or otherwise disclosed to the public” and that whether such disclosure was in a sale or public use is irrelevant as long as there was such disclosure to the public. Second, they proposed a Manager’s Amendment to H.R. 1249’s § 102(a)(1) as indicated by strikeout and underlined insertion as shown in the image above. Amendment to H.R. 1249 (Rep. Lamar Smith, April 14 2011). However, the House Committee rejected that part of the Managers Amendment, leaving the terms “on sale” and “public use” in the statute. Transcript HJU104000.
The reality is that repealing the secret commercialization personal forfeiture bars was never discussed in congressional hearings before enactment of the AIA. This is an important policy matter. The opportunity was there but the proponents did not dare raise the issue because they knew their proposals would be met with strong objections. Instead, they chose legislation by stealth and obfuscation, creating purposeful ambiguities, and inserting a Senate colloquy in the congressional record a day after the Senate passed the bill. They hoped that the courts would do what they failed to do by clear language. This tactic backfired on them. The legislative record of the AIA shows that “[e]ven the sponsor[’s] [remarks] are not controlling.” Chrysler Corp. v. Brown, 441 U.S. 281, 311 (1979). “Congress reject[ed] … the very language that would have achieved the result [that proponents] urges here,” which “weighs heavily against [their] interpretation.” Hamdan v. Rumsfeld, 548 U.S. 557, 579-80 (2006).
See my amicus brief in Teva v Helsinn at the CAFC for other arguments, including those based on canons of statutory interpretation, as to why the meaning of “on sale” and “public use” have not changed by the AIA. link to bit.ly
Ron,
You are correct to point out the “herding” efforts of select members of Congress, but as we have discussed, you are not correct with your statement of:
“The reality is that repealing the secret commercialization personal forfeiture bars was never discussed in congressional hearings before enactment of the AIA.”
You reference the Soliloquy, but neglect to mention that such was inserted at the tale end of the “at the Senate” portion of the proceedings – prior to going to the House, and then back to the Senate, thereby expressly being something that “was discussed” during processing of the AIA.
Sure, they (the herders) May have tried more than one tactic, but it is error to think that one of their tactics not succeeding means that the law is not as they wanted.
Instead of “all tactics must have been successful,” the truth is that but one tactic needs to have been successful.
I “get” that you have disdain for the politics involved, but that disdain clouds your view of the actual end result of the law.
Anon,
You are making too much of the fact that the colloquy (that did not take place on the Senate floor during passage but was inserted only in the Senate Record later on March 9, 2011), took place before the vote in the House. How many members of Congress knew about it to discuss it? I will grant you that members of the House Judiciary Committee knew, or should have known, about the colloquy’s significance and intent by April 14, 2011, when they voted. Why then were they not persuaded by it or by the Managers’ Amendment that was to give real textual effect to the colloquy’s meaning? Why did they vote against the amendment, insisting that the well known legal terms of art “on sale” and “public use” remain in the statute? Have you considered that by doing so one month after the colloquy, they totally negated its effect or its legislative history weight? The colloquy is not merely a “failed tactic.” That post-colloquy vote of April 14, 2011, refusing to give effect to the colloquy’s “intent,” put it in the dust bin of the AIA history, including any other similar “tactic” attempting to create an interpretation consistent with the colloquy.
Further, my disdain for the politics involved has nothing to do with how I objectively reach my conclusion, which I outline in my amicus brief linked above. Ascribing such disdain as a factor in my analysis is uncalled for; I reached the conclusion that the CAFC had also reached, presumably having no such disdain.
You should at least acknowledge that these are objectively powerful arguments in support of the CAFC decision in this case, notwithstanding numerous (not unreasonable) arguments to the contrary. That is why this matter reached the SCOTUS.
As I noted: this is NOT a case of “all tactics must work,” and is instead merely “that one of the tactics need work.”
I will give your brief a serious look this weekend (and truth be told, I do enjoy your writing).
We usually agree on most patent issues. Reasonable minds can disagree, as we do on this specific issue. We will agree to disagree and see how the Court rules. As always, thanks for the cogent debate.
Ron,
I read your brief with a deliberate (if perhaps too critical) eye over the weekend (but not your earlier paper referenced within).
As this thread has now dropped “below the fold” (an admittedly archaic newspaper term), would posting my response here make sense to you, or should I wait until the topic arises again?
Quick question: In the USA, when it comes to statutory construction, is it proper to give any weight at all to the words of the “heading” to a Section of the Statute?
I recall something about the Rules of statutory construction in the UK, to the effect that such headings are there simply to help bring the reader of the Statute more quickly to the words that matter, and are not themselves to be relied upon, at all, when construing the Section under the Heading.
How is it in the USA, please.
The reverse of the statutory canon of often not proscribing weight to selected headings is also in play – one does not “get” to not answer the question of “Why DID they change the heading AND REMOVE something with the view that “meh, it’s only a heading.”
If it were merely – and only – a heading, then why any effort whatsoever TO change that heading?
The fact remains: Congress choose to change and remove personal bars.
The notion being offered here is NOT an answer.
Friendly reminder that contrary to how the CCPA defined “public” (something akin to an “open and notorious” standard) that term has largely been used by the supreme court as “anyone not the inventor or his agent.”
That’s why the operative term in the question is not “secret” but “third party.” When the words of the statute (“the claimed invention was…in public use, on sale…or otherwise available to the public”) are read with the proper definition of “the public” the fact question becomes “did a single person who was not the inventor or his agent have the invention available to them?” Even the petitioner admits that’s the case.
Under Supreme Court caselaw, the only exempt acts are those which would otherwise trigger the generation of prior art are uses and sales but which are made for the purpose of experimentation (i.e. generating an invention). The hallmark of that activity is an obligation of secrecy to the inventor.
In other words – secrecy qua secrecy is irrelevant, it is merely a means of showing that the person with knowledge is an agent of the inventor and therefore is not a member of the public. A single “secret” use or sale of a ready-to-be-patented invention to a third party is an availability to a member of the public and triggers the bar.
The word “public” is used often in other statutes and may mean one person. The Supremes aren’t going to fracture definitions and invite a bunch of argument over how many people need to know something in order for them to constitute “the public.” Presumably, under the petitioner’s view of the case, there is some magic number of secret sales that can be made in order for the invention to not be “available to the public.” They’re not going to wade into that. The sale was made to one person who was not the inventor or his agent – a third party – and therefore was available to the public.
Your “proper definition” is not in accord with the man that wrote the legislation.
In other words, your “proper” isn’t.
This isn’t a matter for the Court to “interpret” by selecting its own different meaning for a word that has been pointed out to mean something else. Such is not interpreting, but rewriting.
This isn’t a matter for the Court to “interpret” by selecting its own different meaning for a word that has been pointed out to mean something else. Such is not interpreting, but rewriting.
Statutory construction is a known process (well, known to people besides you apparently) and it is unquestioned that the best indicator of congressional intent is the plain meaning of the words of the statute, and that you only resort to the congressional record when the words impart some sort of ambiguity. Leahy himself is simply not relevant to the issue to be decided.
The question is never what Congress wanted to do, the question is what Congress did. Leahy certainly *wanted* to omit secret sales from prior art, but then he went and wrote a document which made prior art anything which makes the invention “available to the public.” That language is not ambiguous. The public is everyone and every thing which is not the inventive entity. It’s clear that this sale was not for the purpose of experimentation (the purpose was to get money which they intended to put toward R&D, so commercial exploitation), so the entity to whom the sale was offered (i.e. the invention was made available) was a member of the public.
MGI didn’t decide to give the patentee money for fun. MGI gave them money because they offered to make their invention available to MGI for resale. If MGI didn’t want to buy, the patentee would have gone to someone else (probably including the defendant) to make the invention available to them. The patentee offered the invention to the public to fund its FDA trials. The fact that only one member of the public ended up being an exclusive supplier doesn’t change the fact that the invention was available to the public at the point the offer was made.
Again, this case got taken because the Federal Circuit held that whether the existence of the sale is public what doomed the invention (i.e. that it got reported that patentee and MGI made a deal) which creates the incorrect negative suggestion that if you did away with the reporting of the deal, there would be no prior art.
The thing that doomed the invention is that patentee offered to make its invention to someone who would pay, and that offer was not for the purpose of experimentation. There is no question that saying “I need money to pass this FDA trial so I can make more money – I will sell embodiments of my invention to someone who gives me money so I can accomplish that” is an attempt to make the invention available to anyone who will pay for non-experimental commercial purposes. Whether that offer gets accepted and whether it gets reported to the public is not relevant, the question is whether an embodiment of the ready-for-patenting invention was the subject of a commercial offer of sale. Neither Pffaf nor Bonito Boats, nor Elizabeth v. Pavement Co and Egbert, for that matter, were changed by the AIA. All of those cases say that when you have an invention and you make it available to a member of the public for non-experimental purposes, your prior art timer ticks.
“Neither Pffaf nor Bonito Boats, nor Elizabeth v. Pavement Co and Egbert, for that matter, were changed by the AIA”
Why would you say that? Do you really think that a specialized invitation must announce all case law that is changed?
[Hint: no, no such invitation is needed when Congress announces a radical change – such is enough to remove the things that you (and the CAFC) want to depend upon]
As to “ambiguity,” and referring to the plain words – THAT is my position, and if you want a different one, then it is you that is attempting to inject ambiguity. As I noted – the most obvious and simple indicator was the deliberate change to the headings of law themselves.
Or are you of the “unambiguous” notion that they changed them, but somehow “didn’t really mean it?”
As to “Statutory construction is a known process (well, known to people besides you apparently)” – with all due respect, BITE ME. I am far better than you at statutory construction (even if – and especially in light of – the broken scoreboard that is the Supreme Court legislates from the bench to change the clear words (and intent) of Congress.
Anyone other than the inventor and his agent is a member of the public? Methinks that goes a bit too far. I think confidentiality obligations matter, even between parties that aren’t in an agent-principal relationship. It also seems the Supreme Court in Pennock and Egbert and City of Elizabeth used the term “public” more in the common sense of “available without restriction,” or “ascertainable by others.” Why else would their opinions stress how widely the invention was available on the open market (Pennock) or how it was made available without condition to someone who was free to regift, sell, replicate, or exhibit it (Egbert)?
I agree that the Supreme Court probably thought of the corset-wearing Mrs. Egbert as a member of the public, but that’s because she received and used the gift from the inventor without limitation, restriction, or “injunction of secrecy.” And I agree that one public use (or one public sale) can be enough to make an invention publicly available; no magic number required.
Don’t agree.
Just one person is enough, OK.
But that one person has to be free from constraints under law or equity, to refrain from “making available” their privileged knowledge of the invention to anybody outside the informal/implicit/understood/mutually beneficial confidentiality circle.
It is perverse to assert that a single sale to, say, a joint venture partner, where the buyer itself has an interest in not divulging the invention further, amounts to “making available” the invention to “the public”.
“And nothing in the AIA directly addresses that old precedent.”
except for the elimination of personal bars, you mean?
That’s a rather important change directly from the AIA.
Explain?
Really?
Do you think that the entirely reformulated 102 changed the section headings on a whim and “didn’t really mean it?”
(and that’s just the most obvious observation – plenty of others are captured in the history of the passage of the AIA.
Yeah, it is a bit conspicuous, how they changed the heading from “Conditions for Patentability; Novelty and Loss of Right to Patent” to just: “Conditions for Patentability; Novelty.”
And I personally think that the phrase “… the invention was … in public use, on sale, or otherwise available to the public” most naturally means that the invention must have been available to the public. But then again I’m not a grammarian. But really, what’s the alternative reading? “… the invention was … in public use, secretly or publicly on sale, or otherwise available to the public?” Does that really make more sense?
To date, no one has advanced a cogent reasoning for the new title to capture the well-publicized massive redo of 102/103.
As I noted, this is but the most obvious indicator. But if no “answer” is forthcoming for the most obvious, how much more “digging” need there be?
(We do not even have to venture into the otherwise rather poor grammar used by the Legislature in the AIA).
One shouldn’t presume that removal of “Loss of Right to Patent” was directed to the “on sale” bar as opposed to the removal of pre-AIA 102(c), or that it was even considered to be a significant change. That being said, the use of “otherwise available to the public” as opposed to simply “available to the public” is a strong indicator that “on sale” means “on sale to the public.” Without “otherwise”, “available to the public” could be read in isolation.
“One shouldn’t presume that removal of “Loss of Right to Patent” was directed to the “____” bar as opposed to the removal of ____, or that it was even considered to be a significant change.”
What planet are you on? Do you ALWAYS shade the law to be what you think is should be? The removal was to ALL personal bars, and there is EVERY indication that this was considered part and parcel of the announced significant changes.
NS II – you need to get yourself into some other area of law.
Comments are closed.