On June 25, 2018, the U.S. Supreme Court (“Supreme Court”) granted certiorari in Helsinn Healthcare S.A., v. Teva Pharmaceuticals USA, Inc. The question before the Supreme Court is whether, under the Leahy-Smith America Invents Act (“AIA”), an inventor”™s sale of an invention to a third party qualifies as prior art when the claimed invention was not publicly disclosed before one year of its application filing date.
Prior to the AIA, 35 U.S.C. § 102 (“§ 102”) barred any invention that was patented or described in a printed publication in the U.S. or a foreign country, or in public use or on sale in the United States from receiving a patent. Under the pre-AIA statue, courts consistently found that a sale of an invention, regardless of whether the invention was publicly disclosed more than one year before its effective application date, was considered prior art. However, under the AIA, § 102 now bars any invention that was in “public use, on sale, or otherwise available to the public” more than one year before the effective filing date of the claimed invention. The condition that the claimed invention was not on sale more than a year before its effective filing date is commonly referred to as the “on-sale bar.”
In 2001, Helsinn Healthcare S.A. (“Helsinn”) entered an agreement to license its 0.25 mg and 0.75 mg palonosetron product to MGI Pharma (“MGI”) when it received approval from the Federal Drug Administration (“FDA”). Under the agreement, MGI was obligated to keep knowledge related to the product and the proposed novel formulas confidential. Such an agreement is known as a “secret sale.” Accordingly, details of the formulas and related knowledge were redacted from any public disclosures regarding the agreement between Helsinn and MGI. In 2003, Helsinn filed a U.S. provisional patent application for the 0.25 mg palonosetron formula after receiveing FDA approval. In 2013 Helsinn received U.S. Patent No. 8,598,219 (“the ”²219 patent”) claiming priority on the 2003 application.
In 2011, Teva Pharmaceuticals USA, Inc. (“Teva”) filed an abbreviated new drug application (“ANDA”) to market a generic version of Helsinn”™s 0.25 mg palonosetron product. In response, Helsinn filed a patent-infringement action against Teva in district court. The District Court concluded that Helsinn”™s license agreement with MGI did not invalidate the ”²219 patent under the AIA”™s on-sale bar because the actual 0.25 mg formula was never publicly disclosed. Ultimately, the District Court found that Teva”™s generic version infringed on the ”²219 patent. Subsequently, Teva appealed to the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”).
In its opinion, the Federal Circuit analyzed the language of § 102 and the legislative history of the AIA and determined that Congress did not intend to change the meaning of “on sale.” Additionally, the Federal Circuit looked to Federal Circuit and Supreme Court precedent and concluded 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 sale.” Therefore, the Federal Circuit concluded that the sale of an invention, regardless of whether the invention was publicly disclosed more than one year before its effective application date, is considered prior art. Accordingly, the Federal Circuit held that Helsinn”™s license agreement for the ”²219 patent triggered the on-sale bar; and therefore, the ”²219 patent was invalid under §102.
Helsinn then filed a petition for certiorari to the Supreme Court on the issue of whether, under the AIA, an inventor”™s sale of an invention to a third party qualifies as prior art when the claimed invention was not publicly disclosed before one year of its application filing date. In its petition, Helsinn argued that the Supreme Court should grant the petition because the Federal Circuit decision is inconsistent with the statutory text of § 102, the legislative history of the AIA, and the functions of prior art and the on-sale time bar in the patent system. Specifically, Helsinn asserted that the addition of the phrase, “or otherwise available to the public,” to § 102 requires that only sales which make an invention available to the public qualifies as prior art.
By granting certiorari to this issue, the Supreme Court will decide whether the secret sale of an invention triggers the on-sale bar of § 102. Furthermore, the reasoning behind the Supreme Court”™s decision will shed light on U.S. patent law and the proper interpretation of § 102. Companies and inventors looking to license or sell patents should pay close attention to this case; if the Supreme Court finds in favor of Helsinn, both inventors and companies could benefit by secretly commercializing inventions before a patent is obtained.