by Dennis Crouch
Helsinn Healthcare v. Teva Pharma USA (Supreme Court 2019)
The Supreme Court has affirmed the Federal Circuit’s interpretation of the “on sale bar” — holding that “Congress did not alter the meaning of ‘on sale’ when it enacted the AIA.” The particular focus here was whether “secret” sales continue to qualify as prior art under the revised Section 102. Here, the court says yes — “an inventor’s sale of an invention to a third party who is obligated to keep the invention confidential can qualify as prior art under §102(a).”
In light of this settled pre-AIA precedent on the meaning of “on sale,” we presume that when Congress reenacted the same language in the AIA, it adopted the earlier judicial construction of that phrase. . . . Given that the phrase “on sale” had acquired a well-settled meaning when the AIA was enacted, we decline to read the addition of a broad catchall phrase [otherwise available to the public] to upset that body of precedent.
After deciding that the AIA did not change the law, the Supreme Court also took some time to address the question of what is the law. An interesting aspect of the decision here is that the Supreme Court has never expressly addressed the question of whether or the extent that an offer or sale must be public. However, the court noted its prior implicit precedent that secret sales count as prior art:
Although this Court has never addressed the precise question presented in this case, our precedents suggest that a sale or offer of sale need not make an invention available to the public. . . . The Federal Circuit … has made explicit what was implicit in our precedents. It has long held that “secret sales” can invalidate a patent. E.g., Special Devices, Inc. v. OEA, Inc., 270 F. 3d 1353 (2001) (invalidating patent claims based on “sales for the purpose of the commercial stockpiling of an invention” that “took place in secret”); Woodland Trust v. Flowertree Nursery, Inc., 148 F. 3d 1368 (1998) (“Thus an inventor’s own prior commercial use, albeit kept secret, may constitute a public use or sale under §102(b), barring him from obtaining a patent”). . . .
Given that the phrase “on sale” had acquired a well-settled meaning when the AIA was enacted, we decline to read the addition of a broad catchall phrase to upset that body of precedent.
The Supreme Court decision is short – nine pages of text – and unanimous – authored by Justice Thomas.
So SCOTUS has declined to apply the catchall phrase “otherwise available to the public” to “on sale”. But how should we now interpret the meaning and effect of that phrase?
That is, does it: (1) have an effect upon the interpretation of any of the other categories listed in 102(a); and/or (2) form an entirely separate category of prior art?
With regard to (1), it seems to me that all of the other categories (“patented”, “described in a printed PUBLICation” and “in PUBLIC use”) all at least implicitly include a requirement for public availability.
So does this mean that the phrase “otherwise available to the public” is superfluous for the interpretation of those categories, with the consequence that the answer to (1) above must be “no” and the answer to (2) must be “yes”?
And another thing: for all categories of prior art, is novelty to be denied only if the relevant act / disclosure is ENABLING? My understanding is that this is a requirement for disclosures in a printed publication, but is it also a requirement all of the other categories of prior art? And if is not a requirement for all of them, where in the statute is there basis to set lower standards for certain categories of prior art?
Further, if an uninformative (ie “secret”) sale represents an item of prior art under 102(a), what information should be assumed (for the purposes of assessing 103) to have been imparted by that prior art to a person having ordinary skill in the art before the filing date of the patent (application) in question?
There is of course the legal fiction that assumes that the content of unpublished patents and patent applications is imparted to those skilled in the art as of their filing date (though I am yet to be persuaded that there are good reasons to apply that fiction for 103, instead of just 102). However, is there an equivalent legal fiction for “secret” sales? Unlike patents and patent applications, there is no requirement for a secret sale to comprise an enabling disclosure – and so there is at least a prima facie reason to conclude that the “secret” (ie never publicly disclosed) information behind a secret sales should NOT be considered for the purposes of assessing 103.
Finally, what are the obligations of a patent applicant when it comes to disclosing to the US PTO the details of a prior, “secret” sale? Should this include detailed information or only scant details? And if detailed information is required, which information should be provided? Should that be all information known to the applicant at the date of the sale, even if such information was not known to the person or persons making the sale?
In the light of the above, it appears to me that the trouble with having “secret” sales as a category of prior art is that it can lead to numerous absurdities … not least the impossibility of determining (for the purposes of assessing 102 and/or 103) the PRECISE content of that item of prior art. That is not even to mention the possible “submarine” effect upon patents owned by 3rd parties – who will, of course, be happily investing in their patented products in blissful ignorance of potentially “killer” prior art that can never be uncovered by even the most diligent and comprehensive of patentability searches.
…repercussions…
Taking the “easy” often times results in MORE of a mess…
…worth noting particularly here was the direct Congress intent of simplifying the legal analysis of 102/103 in moving towards a more “One World Order” mechanism of “race” versus “registration” in regards to the (Public Franchise or Private Personal) PROPERTY aspects involved with the legal property of a granted patent.
The Court here in opting for “easy” have merely invited the opposite inevitable repercussions.
First, be thankful for the clarity of the holding here. If you don’t like the result, ask Congress to fix it. And don’t blame the Supreme Court. The briefing by the parties to this case left a lot to be desired.
Practice tip: file your provisional before selling the invention.
So SCOTUS has declined to apply the catchall phrase “otherwise available to the public” to “on sale”. But how should we now interpret the meaning and effect of that phrase?
Non-articulated categories that are available to the public are prior art.
My understanding is that [enablement] is a requirement for disclosures in a printed publication, but is it also a requirement all of the other categories of prior art?
A sale is more like a prior public use of the invention. Presumably a sale of something that is not enabled (i.e., not ready for patenting because it doesn’t work) would not anticipate a properly claimed invention that is enabled. Note that reliance on functional language in your claim can mess you up here.
if an uninformative (ie “secret”) sale represents an item of prior art under 102(a), what information should be assumed (for the purposes of assessing 103) to have been imparted by that prior art to a person having ordinary skill
All of the information that was known to the parties involved in the sale.
There is of course the legal fiction that assumes that the content of unpublished patents and patent applications is imparted to those skilled in the art as of their filing date (though I am yet to be persuaded that there are good reasons to apply that fiction for 103, instead of just 102). However, is there an equivalent legal fiction for “secret” sales?
Yes.
there is at least a prima facie reason to conclude that the “secret” (ie never publicly disclosed) information behind a secret sales should NOT be considered for the purposes of assessing 103.
Statute completely contradicts this notion. There is a reason, perhaps, to want a better statute but the “prima facie reason” you refer to does not exist. The statute is very clear on this point.
what are the obligations of a patent applicant when it comes to disclosing to the US PTO the details of a prior, “secret” sale? Should this include detailed information or only scant details?
Duty of candor requires everything to be disclosed. If you previously sold your invention, then you can’t get a patent on it. That’s the law.
it appears to me that the trouble with having “secret” sales as a category of prior art is that it can lead to numerous absurdities … not least the impossibility of determining (for the purposes of assessing 102 and/or 103) the PRECISE content of that item of prior art.
Nothing impossible about it. It could be difficult, to be sure. But very possible.
That is not even to mention the possible “submarine” effect upon patents owned by 3rd parties – who will, of course, be happily investing in their patented products in blissful ignorance of potentially “killer” prior art
Happens all the time. Don’t play the game if you can’t accept the risks.
“If you previously sold your invention, then you can’t get a patent on it”.
Hmmn. Depends upon how the definition of your invention compares to the PRECISE nature of the article or process that was sold.
There are two situations where patenting may still be possible.
The first is where the evidence does not make it possible to determine (with the necessary level of precision) the description of the article or process that was know to the parties at the time of the sale.
The second is where the claims include a feature not present in the article or process that was (demonstrably) know to the parties at the time of the sale.
Of course, whilst novelty should be acknowledged in both of these scenarios, there is still the issue of inventive step…
As to your practice tip, I don’t think that will be much use to those independent (ie 3rd party) inventors who have no knowledge of the relevant sale.
With the AIA, knowledge of that pertinent relevant sale is knowledge across ALL languages, anywhere in the world.
(another wrinkle that the Court in their quest for “easy” forgot to include in their deliberations)
[H]ow should we now interpret the meaning and effect of [“otherwise available to the public”]?… [D]oes it… have an effect upon the interpretation of any of the other categories listed in 102(a)…?… [I]t seems to me that all of the other categories (“patented”, “described in a printed PUBLICation” and “in PUBLIC use”) all at least implicitly include a requirement for public availability.
The Helsinn Court was distressingly uninterested in considering the actual statutory text. Under Helsinn‘s slipshod statutory analysis, I think that the above is correct.
If one actually looks carefully at the (completely re-drafted relative to pre-AIA) statute, however, then I think that 5.1.1.3.2 below has the better analysis. The (a)(1) paragraph creates three categories of prior art: (1) “patented”; (2) “described in a printed publication”: and (3) “in public use, on sale, or otherwise available to the public.” In other words, “otherwise available” has nothing to do with either (1) or (2). That is made clear by the “_____, ______, or ______” construction.
Rather, “otherwise available” refers only to the (3) category. Within the context of category (3), “otherwise available” serves to indicate that (a) “on sale” and “in public use” are just exemplary species within the genus “available to the public” and (b) “on sale” and “in public use” only function as prior are under AIA §102 when the sale or public use provide enough information as to make the claimed subject matter available to the public.
Unfortuntely, SCotUS did not care to spend the effort reading the statute.
I’m interested in whether a prior “sale” has to be “enabling”. That is to say, I’m interested in this:
“Section III of the opinion suggests that the court would entertain the notion that the invention must actually be made available to the public through the sale.
i.e. When all is said and done, there might be a rule that the sale/use disclosure must meet the enabling requirement. That would harmonize the use/sale rules with the publication rules. This, of course, would create a distinction between an offer for sale versus completed delivery for many products.”
………which was posted yesterday by Random Guy at 5113221.
Might there be the “rule” he suggests?
Not in the SC opinion.
That opinion does NOT include the notion of enablement.
At all.
MD: When all is said and done, there might be a rule that the sale/use disclosure must meet the enabling requirement.
Whatever it is that is sold or offered for sale, that is the thing that is prior art. If the thing works, it’s enabled.
The holding, once again: an inventor’s sale of an invention to a third party who is obligated to keep the invention confidential can qualify as prior art under §102(a).
In other words, nothing at all needs to be “disclosed” to anybody except for the third party in order for the thing to be prior art under 102(a). If nothing is in fact disclosed in the offer (“I have a secret invention that I will sell to you for 1 dollar!” or “I have a secret invention that turns queries into statements that I will sell for 1 dollar”), then I would argue that the effect of this “prior art” on an otherwise competently drafted patent claim is going to be minimal compared to other published art floating out there.
Now, if the undescribed thing is actually sold and it works I think that’s a different story. In that case, the thing itself is the prior art and — once the sale is discovered and revealed — the thing can’t be patented anymore, by anybody.
An offer for sale NEED NOT be to a working item.
Such remains an offer.
Interestingly enough, Random highlights one of my oft asked – never answered issue below at 5.1.1.3:
“Let’s not make too much of this here. The office still waits, what is it? 14 months before publishing – but it is prior art as of its filing date. And you can request not to publish and not have any disclosure of it for 2-5 years as its examined and prosecuted. That’s more dangerous “secret” prior art than a “secret sale.”
Note that this is expressly an Office choice, and a previous choice was to make a preliminary rejection, placing the prosecution into stasis pending whether or not the possible prior art matured into actual prior art (noting as well that such maturation was NOT a given, and that an applicant could very well decide to abandon the unpublished application prior to any publication and that at such time, the reference would cease to exist as prior art).
Agree with Random, that the more “dangerous” category of secret prior art is the disclosure content of all those earlier filed but later published patent applications of others. Mainly because, as MM reminds us at 5.2:
“secret prior art is available for 103 purposes as well”.
So what’s the issue?
?
The choice of the Office in switching and NOT using the secret prior art.
Are you that new there?
The choice of the Office in switching and NOT using the secret prior art.
The office has no discretion.
Note that this is expressly an Office choice,
The publication timeframe is set by statute (35 USC 122). The ability to seek nonpublication is set by statute (122 again). The fact that it is prior art is set by statute (35 USC 102). The director has special circumstances authority to break confidentiality, but not general authority. The director has no authority to keep confidentiality that is unrequested. Each application SHALL be published promptly after 18 months.
The office isn’t choosing anything other than to follow the statutory command.
Regardless, I’d obviously prefer they publish immediately, as would pretty much everyone else who doesn’t check the nonpublication request box (a very small number of applicants). How is this an issue?
Wow did you miss the boat here, Random.
Stop. Think. Try again.
(Hint: this has nothing to do with any Office choice of publishing items, and everything to do with the choice of how to treat secret art KNOWN and possessed by the Office)
Six, do you have any insight regarding POPA’s approval of the MOU and the new PAP?
nah sorry bruh, will keep you updated.
see newest thread for update.
Given the ease with which an opinion could be written, to the effect that the AIA did not change anything, and the extreme difficulty of crafting a respectable opinion that it did, was it not a foregone conclusion that this would be the outcome?
I understand that the Supreme Court delights in schooling the Federal Circuit judges. Presumably it is not averse also to schooling the Congress.
Are you implying that the “easy” is the “right” path? Or that it is “OK” to not apply critical thinking because applying critical thinking may be difficult?
Or are you implying that the Supreme Court think itself above the co-equal status under the Constitution, and deigns for itself a position of “schoolmaster” above the other branches of our government (including the branch that was expressly delegated the authority to write the statutory law that is patent law under that very same Constitution)…?
Cough. Scoreboard.
That is all.
Yes, the score board is (and remains) broken.
That you fail to see this is a major problem of yours. And of the resulting patent law as written through Common Law.
I continue to feel like the phrase “secret sale” is misleading, at least with respect to this case. As the Fed. Cir. was careful to note, the existence of the sale was not secret – it was publicly announced. See Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., appeal no. 2016-1284, slip op. at 21 (Fed. Cir. May 1, 2017) (“the existence of the sale—i.e., the Supply and Purchase Agreement between Helsinn and MGI—was publicly announced in MGI’s 8-K filing with the SEC.”)
The Fed. Cir. noted this, and reasonably refused to accept any “suggestion [] that Congress required that the details of the claimed invention be publicly disclosed before the on-sale bar is triggered.” Id. at 22.
This was directly in accord with established Supreme Court precedent where “[i]t is not a public knowledge of his invention that precludes the inventor from obtaining a patent for it, but a public use or sale of it.” Elizabeth v. Pavement Co., 97 U. S. 126, 136 (1878).
The Supreme Court maintained and appreciated this distinction (between a confidential sale and confidential details of an invention) in its decision, specifically “hold[ing] that an inventor’s sale of an invention to a third
party who is obligated to keep the invention confidential
can qualify as prior art under §102(a).” Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., no. 17-1229, slip op. at 8-9 (January 22, 2019).
The Supreme Court did also “determine that Congress did not alter the meaning of ‘on sale’ when it enacted the AIA,” Id. at 8, but this doesn’t immediately strike me as unreasonable, especially if one assumes that a contrary position involving reading in a requirement for public availability of the invention into the term “on sale” might involve requiring public knowledge of the invention itself (which would be a big departure from prior precedent), and not just a public sale.
[T]his doesn’t immediately strike me as unreasonable, especially if one assumes that a contrary position involving reading in a requirement for public availability of the invention into the term “on sale” might involve requiring public knowledge of the invention itself (which would be a big departure from prior precedent), and not just a public sale.
Yes, this reading would require public knowledge of the invention itself to achieve anticipation, and yes, this would be a big departure from prior precedent. That was the whole point.
This is why Congress wrote in a big dollop of new text (“or otherwise available to the public”). This why Congress changed the subject heading of pre-AIA §102 from “Conditions for patentability; novelty and loss of right to patent” to simply “Conditions for patentability; novelty” in the AIA text. This is why Congress got rid of paragraphs (c), (d), and (f) from the AIA §102 text. The whole point was to make §102 turn on enabling disclosure. Read Rep. Lamar Smith’s (as in, “Leahy Smith America Invents Act” Smith) amicus brief. Congress reworked §102 to effect a particular policy, and the SCotUS is digging in their heals—acting willfully obtuse about the change in statutory text—in order not to give effect to that policy change.
Furthermore, wasn’t the change to the on-sale bar the policy trade for removing the one year grace period that existed in the prior statute?
No.
There remains (a shadow of) the one year grace period.
But the fact does remain that we moved to a “race” system, and that race system was in part to remove the concern of delayed filings.
Where is there a one year grace period in the statute?
Never mind. 102(b) Exceptions.—
(1)Disclosures made 1 year or less before the effective filing date of the claimed invention.—A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if—
(A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or
(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.
reasonably refused..?
Not so.
That’s the crux here – the Court has chosen to ignore an Amicus Brief that provided the very reasoning that should have been applied. They did not even bother acknowledging the matter.
For convenience, link to on point posts prior to the start of this thread: link to patentlyo.com
Secret Sales are Still Prior Art
To be more precise, I believe that this title should read “Secret Sales are Still a Bar to Patentability.” That is to say, my understanding of the (rubbish) Pennock rule is that MGI’s sale to Helsinn is not prior art against (e.g.) Pfizer, if Pfizer were to have filed on this invention more than a year after MGI’s sale, but before MGI’s or Helsinn’s enabling disclosure of the technology. It is only a bar against Helsinn patenting the technology. In other words, it is not really “prior art” (which would hold against anyone), but rather a personal bar.
No – that would not be the correct take-away. There is NO discussion leading (back to) a notion of personal bars, as the sum total of the “discussion” is the larger “prior art” that is prior art for all.
Does that create unforeseen** consequences?
Absolutely.
**not quite unforeseen, given a certain Amicus Brief by one of the named parties of the AIA, but who cares about that
Re: Helsinn Healthcare v. Teva Pharma USA (Supreme Court 2019)
Agreed. There is no support in this decision for interpreting this 102 interpretation as not retaining secret sales as 102 prior art and being merely a “personal bar.” Nor any support for any such two different legal effects.
It is a retention of secret prior art, which the AIA drafting contributors had hoped to avoid with the new 102(a) end phrase “or otherwise available to the public”. They failed. As I had noted earlier, the Supremes would not be in favor of being able to delay filings and reap commercialization of inventions indefinitely and then still get 20 more years of patent protection on top of that.
Also significant is the Courts favorable citation of “Woodland Trust v. Flowertree Nursery, Inc., 148 F. 3d 1368, 1370 (1998) (“Thus an inventor’s own prior commercial use, albeit kept secret, may constitute a public use or sale under §102(b), barring him from obtaining a patent”).” Is this not also a likely Sup. Ct. blessing of that aberrant decision that a secret commercial USE is a “public use” in spite of the direct conflict with “public”? Is this not raising the secret commercial use of the Metallizing Engineering doctrine [not even mentioned in this decision] to the status of 102 prior art rather than just an equitable pe rsonal “forfeiture”? Contrary to the prior PTO gratuitous FR commentary that the AIA has overuled the Metallizing Engineering doctrine?
“Supremes would not be in favor of being able to delay filings and reap commercialization of inventions indefinitely and then still get 20 more years of patent protection on top of that.”
I hear you – and will only too gladly point out the error in this thinking, as it conflates two very different sections of law (patent clause and commerce clause) and two very different sense of timings.
Additionally, your note carries with it a sense of what the Supreme Court would allow — on a policy basis.
That is just not their call.
your note carries with it a sense of what the Supreme Court would allow — on a policy basis.
That is just not their call.
Sure it is. They can’t do so in a vacuum but they can certainly interpret statutes based on the policies articulated by Congress as the purposes for those statutes. That’s exactly what they should do in most cases. The only exceptions would be where Congress has plainly messed up and unambiguously dropped something into a statute which undermines the entire point of the statute. The Court can’t then “interpret” it’s way out of the problem by, say, giving a term the opposite meaning or some out-of-bounds meaning in order to “save” the statute (e.g., interpreting a phrase such as “no more than five” to include “six”, or the phrase “non-citizen” to include “citizen”). It can certainly declare such an infirm statute unconstitutionally vague, however (or unconstitutional, if it happens to be so).
See how I use my words to explain stuff, Billy? And how I give examples to illustrate my points? Grow up and try it sometime.
That is NOT interpretation, Malcolm.
See also, the handy “scissors” that have been provided by Justice Kavanaugh in the oral arguments of California Franchise Tax Board v. Hyatt.
That is NOT interpretation
Billy, you need to learn to indicate exactly what you are responding to and provide an explanation. Unless of course you are just kicking up dust and trying to be a little sh tstain, as usual.
And yes, HERE, your reply is very much closer to being “grown-up.”
But let’s not kid ourselves – this is an EXTREME rarity from you.
(but hey, kudos on the baby steps)
Here as well, you have decided to be obtuse as to what intent Congress had, given the explicit link that I provided to an Amicus Brief that discussed that very point.
You don’t even have to rely on MY words – use the words of the guy in charge of the actual legislation.
There is no support in this decision for interpreting this 102 interpretation as not retaining secret sales as 102 prior art and being merely a “personal bar.”
This is a case of missing the forest for the trees. As the Court observes (slip op. at 6) “Congress enacted the AIA in 2011 against the backdrop of a substantial body of law interpreting §102’s on-sale bar.” The essential logic of today’s decision is that “we presume that when Congress reenacted the same language in the AIA, [Congress] adopted the earlier judicial construction of [‘on sale’].” Because the Court was not convinced that anything in the AIA displaced that presumption, the conclusion was that the law on this point stays exactly the same as it had been before the AIA. In other words, today’s decision does not change the law. The law is the same today as it was yesterday (or as it was back in 1983 when the CAFC decided DL Auld Co. v. Chroma Graphics, 714 F.2d 1144, 1147 (Fed. Cir. 1983)). The distinction between personal bar and full scale prior art is still intact because the Court did not overturn (indeed, did not even address) that distinction.
[W]hen Congress reenacted the same language in the AIA, [Congress] adopted the earlier judicial construction of [‘on sale’].”
Just to be clear, the earlier judicial construction of “on sale” included the distinction between personal bar (for sales that do not constitute an enabling disclosure) and full scale prior art. That distinction is part of the law that today’s decision considers to have been ratified by the AIA, and which continues in effect from today’s holding.
Except the “consideration” of what the AIA ratified is wrong and a mere application of legislating from the bench…
But is that important?
Dozens, the Metallizing Engineering personal forfeiture doctrine is for secret commercial use of a manufacturing process to commercially make products which do not contain or disclose the invention, NOT secret sales of a product containing the invention, albeit sometimes misrepresented as such. It is an equitable doctrine not based on 102 statutory language and not prior art. As the case you cite, DL Auld Co. v. Chroma Graphics, 714 F.2d 1144, 1147 (Fed. Cir. 1983), and others make clear. Yes, that doctrine is not mentioned or overruled by this decision.
As for arguments that an “on sale” event could only apply to the inventor and not be prior art if done by someone else, that the opposite of the position of respected patent law treatise writer Robert Harmon, citing In re Epstein (Fed Cir. 1994), J.A. LaPorte Inc. v. Norfolk Dredging Co. (Fed Cir. 1986), and Milliken Res. Corp. v. Dan River Inc. (Fed Cir. 1984) and Baker Oil Tools Inc. v. Geo Van Inc. (Fed Cir. 1987)
Where the sale puts the patented item into the public’s possession, of course that is prior art as against the whole world. Where the “sale” discloses nothing to the public, however, then the sale is only art in the sense of “non-enabling art.” In the same way that the mere mention of a rose cultivar in a catalog does not stand as an obstacle to patentability if the catalog does not teach the reader how to make and use that rose cultivar (In re LeGrice, 301 F.2d 929, 935 (C.C.P.A. 1962)), so too a sale between Helsinn and MGI does not stand as an obstacle to Pfizer if the sale does not teach the public how to make and use the palonosetron that is sold.
It will now.
Per THIS Court’s rendition of the AIA (regardless of what the architect expressly indicated as a friend of the Court).
It is a retention of secret prior art, which the AIA drafting contributors had hoped to avoid with the new 102(a) end phrase “or otherwise available to the public”. They failed.
Let’s not make too much of this here. The office still waits, what is it? 14 months before publishing – but it is prior art as of its filing date. And you can request not to publish and not have any disclosure of it for 2-5 years as its examined and prosecuted. That’s more dangerous “secret” prior art than a “secret sale.”
Is this not also a likely Sup. Ct. blessing of that aberrant decision that a secret commercial USE is a “public use” in spite of the direct conflict with “public”?
Except the word “public” generally means “at least one person not an agent of the of the entity” and only was used in the patent context to distinguish from experimental usage.
Use by a third party (i.e. a member of the public) is both public use and public knowledge, would be prior art under the catchall of “otherwise known to the public” in any event. It’s no different than if it was written down and indexed in a library – the fact that few people did come by the knowledge doesn’t change the fact that the public could have had the knowledge.
Exploitative first party usage has always been subject to a loss of rights as well – if it was for commercial gain it was called public use, and if it was for personal enjoyment it was called abandonment.
The underlying doctrine has always been to either choose secrecy and accept that at some point you will face competition or to choose disclosure and get your timed monopoly. There is no statutory language which suggests that is not still the case. The question is what Congress did, not what Congress tried to do. You don’t go diving into Congressional intent unless you have statutory language which is vague or ambiguous.
You need to grasp how wrong that underlying doctrine has been, how the doctrine confuses and conflates two diffferent Constitutional drivers (patent clause and commerce clause), is controlled at two different levels of government (patents at Federal level, trade secrets at state level — no Federal Preemption, even with the change to create a Federal cause of action), and involve two different timings and sense of timings.
Just because the confusion and conflation has been long standing, does not make it any less a confusion and conflation.
…additionally, this point is a policy point — thus, this is not within the realm of the Court to be making.
You don’t go diving into Congressional intent unless you have statutory language which is vague or ambiguous.
Um, no. You have it completely backwards. “In the interpretation of statutes, the function of the courts is easily stated. It is to construe the language so as to give effect to the intent of Congress.” United States v. Amer. Trucking Assns., 310 U.S. 534, 542 (1940). Congressional intent is the whole point, the alpha and the omega.
I think that what you meant to say was that one does not dive into the legislative history unless the intent of Congress is unclear from the statutory language. I would agree with you on that, but really the legislative history is not necessary here, and no one in particular is relying on legislative history. I have cited Rep. Lamar Smith’s amicus brief, but not for its value as legislative history, but rather because it makes a very clear explanation of the logic of statutory construction that should have led the Court in the opposite direction of the one It chose here.
Consider:
[emphases added].
There are a few things to notice right off the bat here. First of all, the pre-AIA §102 began “102. Conditions for patentability; novelty and loss of right to patent…” (emphasis added). In other words, there used to be two categories of §102 prior art: (1) art that defeated novelty; and (2) art that does not really speak to novelty, but nonetheless forfeited one’s right to a patent. The old §102(a), (b), (e), & (g) were part of the first category, while the old § 102(c), (d), & (f) were part of the second.
Congress got rid of (c), (d), & (f) from §102 in the AIA, and deliberately changed the name of §102 from “novelty and loss of right to patent” to “novelty,” full stop. This evidences that Congress wanted to do away with the categories of prior art that do not speak to prior disclosure, and to focus §102—going forward—entirely on disclosure to the public.
The second thing to notice (coming back to the block quote text above) is highlighted by my “[***1***]” notations above. The statute creates three categories of novelty-defeating disclosure (N.B. the “_____, _____, or ______” construction). The three categories are “patented,” “described in a printed publication,” and “in public use, on sale, or otherwise available to the public.”
Under the canon of noscitur a sociis (and simple common sense), the right way to read that third category is that the whole category is “available to the public,” with “in public use” and “on sale” as merely two illustrative examples of the broader category. In other words, the sovereign factor that we are supposed to consider in view of the words of the statute is availability to the public.
The Helsinn court did not even trouble to ask what those words meant. It just skipped back to “on sale,” said “we have interpreted ‘on sale’ before, see Pennock,” and called it a day. That really is not good enough. Statutory language is given meaning by its overall context. When the context changes, one has to stop and reconsider the meaning anew, in view of the changed context. As the Court has elsewhere (King v. Burwell, 135 S. Ct. 2480 (2015)) observed:
[internal quotations and citations omitted]
I don’t think anybody is going to argue that this case could have come out a different way, Greg, using your exact reasoning.
But now that it has come out differently, at least be thankful that the holding is clear so we now can be quite certain what the law is (regardless of what the statute might have been interpreted to mean, if different “canons” had been used).
Under the canon of noscitur a sociis (and simple common sense), the right way to read that third category is that the whole category is “available to the public,” with “in public use” and “on sale” as merely two illustrative examples of the broader category.
Well, if “on sale” is an example of “available to the public” then the invention here was “available to the public” because … it was “on sale.”
Below you write:
the intended distinction [in the statute] is between a sale that puts the public in possession of the claimed invention. The more I think about this, the more clear it becomes to me that the best way to express this intention is exactly the way that the Congress did express it—i.e., with the words “or otherwise available to the public” as a modifier of “in public use” and “on sale.”
Well, I completely disagree with that and the evidence (this case) bears that out. If Congress wants to make the distinction you identified, then Congress should use its words to make the distinction. First, Congress should make clear that any public disclosure of the invention before the filing date is prior art. Then Congress should state (if Congress really means it) that a pre-filing sale of the invention is prior art only if the sale, or public news of the sale, is sufficient to enable at least one member of the public besides the seller and the seller’s customer to practice the invention. Would that satisfy you, Greg? Note that the policy being implemented is rather transparent here. And I’m not sure that it’s a great policy. I am pretty sure that referring to events that don’t disclose the claimed inventions as “prior art” is …. weird.
Gah! I meant to type: I don’t think anybody is going to argue that this case could not have come out a different way, Greg
I think that what you meant to say was that one does not dive into the legislative history unless the intent of Congress is unclear from the statutory language.
Yes. Obviously the intent is the point, but the first cannon of construction is that clear language in the statute controls the meaning.
In other words, there used to be two categories of §102 prior art: (1) art that defeated novelty; and (2) art that does not really speak to novelty, but nonetheless forfeited one’s right to a patent. The old §102(a), (b), (e), & (g) were part of the first category, while the old § 102(c), (d), & (f) were part of the second.
Hate to point this out to you, but public use and on sale are pre-AIA 102(b), so removing the words “and loss of right to patent” doesn’t encompass 102(b) under your logic. But I take your argument for its goal, if not its means –
Congress got rid of (c), (d), & (f) from §102 in the AIA, and deliberately changed the name of §102 from “novelty and loss of right to patent” to “novelty,” full stop.
Except a public use or sale does not, and has never, implicated ONLY loss of right. When you give (or sell) a corset to your ladyfriend (whether openly and notoriously or secretly), the public is in possession of your invention. It was, under pre-AIA 102(a) – “Known or used by others in this country”
If your ladyfriend documented your invention and published it, that entirely legal act would be prior art under pre-AIA 102(b) – “described in a printed publication” (if more than one year prior). (A still-existing loss of novelty)
The thing that *used* to save you was that, in a first to invent system, your *invention* predated the public control and knowledge of the invention and thus a prior art challenge would ultimately fail – the fact that the embodiment was derived from your reduction to practice meant you had a defense to the non-use/sale 102(a)/(b) rejections leveled at your application based on the filing date. Consequently, the caselaw applies the only theory that mattered – that your act of giving the corset was a loss of right to the patent under the use/sale prongs of (b). But let’s not confuse the fact that a sale/use indeed met the prongs of 102(a) but for the fact that they are not “prior” under pre-AIA critical date calculation.
But *now* the same giving of the corset predating the filing constitutes its own prior art, because it is unquestionable that there was an intended change to the critical date – it is not the date of invention but the date of filing. If pre-AIA 102(a) read “(a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the *filing of a patent application* thereof by the applicant for patent” then 102(a) would read on the situation.
Under the canon of noscitur a sociis (and simple common sense), the right way to read that third category is that the whole category is “available to the public,” with “in public use” and “on sale” as merely two illustrative examples of the broader category. In other words, the sovereign factor that we are supposed to consider in view of the words of the statute is availability to the public.
I agree. But a single act to a single person is “the public” – that’s always been the case and is clear from Egbert. “Public” means one not under agency, and is not synonymous with “wide dissemination.” In other words, there is no conflict with reading the statute as requiring a “public sale” but then concluding that a single sale to a single person under a secrecy order still constitutes a “public sale.”
The only excuses for non-inventor knowledge of the invention have always been 1) knowledge necessary for experimentation and 2) knowledge necessary for preparing an application for patent. Any other knowledge of the invention by a single non-inventor in this country fell under the ambit of 102(a), and the only defense for it was “prior invention by the inventor.” That defense is now gone.
I agree with what I assume is your sentiment that it is unfortunate that when the AIA mashed together 102(a) and (b) it had the effect of expanding prior art because non-enabling use/sales will trigger use/sale jurisprudence and still be prior art. But it’s hard to look at AIA 102 and not conclude that it is intended to include all of pre-AIA 102(a) and further broadened by First to File dating. Pre-AIA 102(a) explicitly referred to all knowledge and use by another.
As a side note to the last paragraph, Section III of the opinion suggests that the court would entertain the notion that the invention must actually be made available to the public through the sale.
i.e. When all is said and done, there might be a rule that the sale/use disclosure must meet the enabling requirement. That would harmonize the use/sale rules with the publication rules. This, of course, would create a distinction between an offer for sale versus completed delivery for many products.
There already are distinctions between sale and offer for sale (the offer portion written in at a later date by Congress).
It’s not clear what you are driving at.
(btw, your first reply above at 5.1.1.3.2.2 is nicely written – thanks for that)
Section III of the opinion suggests that the court would entertain the notion that the invention must actually be made available to the public through the sale.
Could you be more specific about this? What exact language gives you reason to suppose that the Court might entertain that notion. The holding is wholly at odds with such a notion.
Could you be more specific about this? What exact language gives you reason to suppose that the Court might entertain that notion. The holding is wholly at odds with such a notion.
No, it’s not.
More than 20 years ago, this Court determined that an invention was “on sale” within the meaning of an earlier version of §102(a) when it was “the subject of a commercial offer for sale” and “ready for patenting.” Pfaff v. WellsElectronics, Inc., 525 U. S. 55, 67 (1998). We did not further require that the sale make the details of the invention available to the public.
Statement of fact as to what the law was. Note that the second sentence, like the first one, is a statement of fact. We’re not in the analysis step yet.
In light of this earlier construction,
Statement of criticality of fact.
we determine that the reenactment of the phrase “on sale” in the AIA did not alter this meaning.
Rule.
Accordingly, a commercial sale to a third party who is
required to keep the invention confidential may place the
invention “on sale” under the AIA.
Application of Rule/Conclusion.
We said a thing, we conclude the thing wasn’t changed. Previous thing applies. To highlight this, jump to section IIB, which I won’t quote in its entirety here, but suffice to say it is “We said a thing” (pgs. 6-7, first para), “CAFC expanded on our thing” (pg. 7 second para), “Thing wasn’t changed, previous thing applies” (Pg. 7, last para to pg. 8)
The opinion could have been over after Section IIB. That’s all the lower courts need in order to properly apply the rule. But there’s a Section III. The denouement is always an invitation to the next debate.
Helsinn does not ask us to revisit our pre-AIA interpretation of the on-sale bar. Nor does it dispute the Federal Circuit’s determination that the invention claimed in the ’219 patent was “on sale” within the meaning of the preAIA statute.
I’m editorializing here, but Statement of critical fact.
Because we determine that Congress did not
alter the meaning of “on sale” when it enacted the AIA,
Rule.
we hold that an inventor’s sale of an invention to a third party who is obligated to keep the invention confidential can qualify as prior art under §102(a).
Application of Rule, Conclusion.
Bluntly, the question decided was “did the AIA change the meaning of the on sale bar.” i.e. is Pre-AIA and post-AIA non-harmonized? The answer is no.
What was the previous meaning of the on sale bar? You’re told up front. More than 20 years ago, this Court determined that an invention was “on sale” within the meaning of an earlier version of §102(a) when it was “the subject of a commercial offer for sale” and “ready for patenting.” Pfaff v. WellsElectronics, Inc., 525 U. S. 55, 67 (1998). We did not further require that the sale make the details of the invention available to the public.
So why do these words exist? Helsinn does not ask us to revisit our pre-AIA interpretation of the on-sale bar. Nor does it dispute the Federal Circuit’s determination that the invention claimed in the ’219 patent was “on sale” within the meaning of the preAIA statute.
The reason they exist is to point out that it is, at a minimum, the court is non-unanimous on whether this fact pattern is “on sale,” but the issue is not before them. There are some members of the court who agree that the CAFC correctly applied prior on sale jurisprudence, but that jurisprudence leads to the wrong conclusion on these facts. That’s why Section III exists.
Helsinn did hit on a persuasive argument, it just formulated it the wrong way, from the CAFC opinion:
Helsinn argues that the AIA did more than overrule the “secret sale” cases, and relies on the “otherwise available to the public” language in the statute and the floor statements. Helsinn argues that those statements suggest that the on-sale bar does not apply unless the sale “disclose[s] the invention to the public” before the critical date. 157 Cong. Rec. 3424 (2011) (remarks of Sen. Kyl). It urges that since the 0.25 mg dose was not disclosed, the invention was not disclosed and the on-sale bar does not apply. The suggestion is that Congress required that the details of the claimed invention be publicly disclosed before the on-sale bar is triggered.
That’s the critical fact that distinguishes the case from Pfaff and makes the Pfaff rule incomplete. In Pfaff the inventor disclosed the invention to TI, then sold embodiments of the invention to TI, so the sale to TI imparted enabling knowledge after conception (so no 102(a)) but before the 102(b) critical date. The argument that the AIA changed the law is unavailing. The persuasive argument (to at least some members) was that the on-sale bar does not apply, not because of the secrecy but because of the non-enabled disclosure, and the non-application would be in both pre-aia and aia cases.
The only Supreme support for on sale absent the knowledge actually transferring to the public is one sentence in Pennock. Pfaff’s citation to Pennock couches in terms of the public already having the knowledge. The fact that Pfaff did not include that as part of the rule is simply a statement of jurisprudential fact and not an endorsement that the test should not have it.
Random,
Your detailed post here only shows how very deep into the weeds you have gone with section III.
You are seeing things that just are not there.
Thanks, RG. That is helpful.
RandomGuy, I’m often on an opposing side of issues from you, but just wanted to say for the record that this is a great and thought provoking post!
Hate to point this out to you, but public use and on sale are pre-AIA 102(b), so removing the words “and loss of right to patent” doesn’t encompass 102(b) under your logic… [P]ublic use or sale does not, and has never, implicated ONLY loss of right.
Evidently I was not quite successful at conveying my point, because what you have taken for “my logic” is not at all my logic. I would have thought from the fact that I classed §102(a) and (b) in the novelty section that it was clear enough that I did not mean to insert “public use” and “on sale” in the “loss of right” category. Indeed, nothing about the rest of my argument makes sense if one considers “public use” and “on sale” as “loss of right” prior art instead of “novelty defeating” prior art.
Given that you have so thoroughly misunderstood the point that I was making, I am not sure that there is further response to be made.
Excellent counter.
I would have thought from the fact that I classed §102(a) and (b) in the novelty section that it was clear enough that I did not mean to insert “public use” and “on sale” in the “loss of right” category.
I recognized that, and thought it was a goof on your part (Historically, they have generally been considered to be in the loss of right category might I point out).
So if your logic is
First of all, the pre-AIA §102 began “102. Conditions for patentability; novelty and loss of right to patent…” (emphasis added). In other words, there used to be two categories of §102 prior art: (1) art that defeated novelty; and (2) art that does not really speak to novelty, but nonetheless forfeited one’s right to a patent. The old §102(a), (b), (e), & (g) were part of the first category
That use and sale were in the first category and
Congress got rid of (c), (d), & (f) from §102 in the AIA, and deliberately changed the name of §102 from “novelty and loss of right to patent” to “novelty,” full stop.
Why do you conclude that anything about use and sale have changed? Congress kept part one (the part having use and sale) the same, and changed part two. That’s evidence that part one’s jurisprudence should stay put. Instead you somehow draw the opposite conclusion:
This evidences that Congress wanted to do away with the categories of prior art that do not speak to prior disclosure, and to focus §102—going forward—entirely on disclosure to the public.
No, it evidences that they considered the things to change – two groups of things – and following their consideration they cut out the second group, removed the header of the second group, and left the first group as it was. That evidences the second group is to be removed and the first group is to stay as it was. If they wanted to modify the first group, they could have. In fact, the fact that they modified the second group but did not modify the first group makes it even more likely that the first group was working as intended.
Your logic is like saying if I have a first group, plants, and a second group, animals, and I modify or remove all references to animals, that I *must have* intended to change the definition of tree. There’s absolutely no logical basis for that leap.
Random,
Now you are just making things up.
Read the Amicus Brief from the architect of the AIA.
[A] single act to a single person is “the public”…
Sometimes, but the devil really is in the details here. If I get you to sign a confidential disclosure agreement before I explain my invention to you, this is confidential, not public. If the contention is that MGI is “the public,” such that the sale from Helsinn to MGI put “the public” in possession of the invention, we would need to know a good deal more about the nature of the deal between Helsinn and MGI. Were the confidentiality provisions in the contract? I am not aware that this detail was ever made part of the record, which makes me skeptical that the case could have been decided on the putative basis that MGI was “the public.”
If I get you to sign a confidential disclosure agreement before I explain my invention to you, this is confidential, not public.
No, I disagree, because the only confidence that the law recognizes here is for the purpose of experimentation. You might ask someone to pinkie swear not to tell anyone before you tell them your invention too, and that also would be legally ineffective on the question of validity.
The only people who aren’t the public is the inventive entity and the agents of the inventive entity for the purpose of experimentation. Everyone else is the public regardless of the contractual relationship. The only time “secrecy” matters is as a factor in determining if the nature of the act is experimental, it has no meaning qua itself.
If the contention is that MGI is “the public,” such that the sale from Helsinn to MGI put “the public” in possession of the invention, we would need to know a good deal more about the nature of the deal between Helsinn and MGI.
No, we wouldn’t because we have the independent fact that the drug was applied for, which means experimenting was done.
Were the confidentiality provisions in the contract?
Irrelevant. The purpose of the contract was to make the inventors money, not to experiment.
No, I disagree… The only people who aren’t the public is the inventive entity and the agents of the inventive entity for the purpose of experimentation. Everyone else is the public regardless of the contractual relationship.
Er, you are free to disagree, but you are simply wrong about that. In re Bayer, 568 F.2d 1357, 1360 (C.C.P.A. 1978).
N.B., the BPAI took up your contention, viz. that disclosure to even a single person who is not part of the inventive entity or an agent of the inventive entity for purposes of experimentation constitutes a patent defeating disclosure. The CCPA rejected that understanding of public disclosure. Where a disclosure is made to a third party under a duty of confidentiality, the “public” is not put in possession of the information by that disclosure.
See also, Northern Telecom v. Datapoint Corp., 908 F.2d 931, 937 (Fed. Cir. 1990) (documents distributed to defense industry entities under a confidentiality seal were not “printed publications” under §102(b).