In a unanimous decision, the United States Supreme Court has held that inventors are barred from obtaining patents on inventions that were \u201con sale\u201d more than one year prior to a patent application even if the sale is subject to confidentiality obligations that would prevent the nature of the invention from becoming public.<\/p>\n
This holding arose in the Court\u2019s most recent consideration of the 2011 revision to the United States patent system, the America Invents Act (\u201cAIA\u201d).\u00a0 In its decision, Helsinn Healthcare S.A. v. Teva Pharm. USA, Inc.<\/em>, the Court found that the AIA did not change the meaning of the \u201con sale\u201d bar to patents for inventions that have been available for commercial purchase by third parties more than one year prior to filing a patent application.\u00a0 The Helsinn Healthcare <\/em>decision, the first patent case of this Supreme Court term, issued on January 22, 2019.<\/p>\n Under the pre-AIA statutory framework, 35 U.S.C. \u00a7 102 had barred patents for inventions that had been \u201con sale\u201d more than one year prior to filing a patent application.\u00a0 See<\/em>, e.g.<\/em>, Pfaff v. Wells Electr., Inc.<\/em>, 525 U.S. 55, 57 (1998).\u00a0 The Supreme Court had construed the term \u201con sale\u201d to mean that the invention was \u201cthe subject of a commercial offer for sale\u201d and \u201cready for patenting.\u201d\u00a0 Id.<\/em> at 67.\u00a0 When Congress enacted the AIA, it retained a provision prohibiting patents on inventions that had been \u201con sale\u201d more than a year prior to the effective filing date of the claimed invention.\u00a0 35 U.S.C. \u00a7 102(a)(1).[1]<\/a>\u00a0 The issue in this year\u2019s Helsinn Healthcare <\/em>case was whether the AIA\u2019s \u201con sale\u201d bar extended to commercial sales where the purchaser was required to \u201ckeep confidential any proprietary information received under the agreements.\u00a0 Slip op. at 2.<\/p>\n The Court noted that it had not addressed this precise question in the context of the pre-AIA version of the statute.\u00a0 Id. <\/em>at 6.\u00a0 It observed that although one apparent rationale for the on-sale bar is to prevent inventors \u201c\u2018remov[ing] existing knowledge from public use\u2019 by obtaining a patent covering that knowledge,\u201d its earlier decisions had made it clear that the bar could apply even where a pre-application sale had not revealed made the entirety of the invention public.\u00a0 Id.<\/em> at 5-6, quoting Pfaff<\/em>, 525 U.S. at 64.<\/p>\n The Court recognized, however, that the Court of Appeals for the Federal Circuit, which is responsible for patent appeals, had long held that \u201c\u2018secret sales\u2019 can invalidate a patent.\u201d\u00a0 Id.<\/em> at 7, citing Special Devices, Inc. v. OEA, Inc.<\/em>, 270 F.3d 1353, 1357 (Fed. Cir. 2001) and Woodland Trust v. Flowertree Nursery, Inc.<\/em>, 148 F.3d 1368, 1370 (Fed. Cir. 1998).\u00a0 The Supreme Court labeled this earlier precedent \u201csettled\u201d on the meaning of the term \u201con sale,\u201d and concluded on that basis that \u201cwhen Congress reenacted the same language in the AIA, it adopted the earlier judicial construction of that phrase.\u201d\u00a0 Id.<\/em><\/p>\n In reaching this conclusion, the Supreme Court rejected the petitioner\u2019s proffered interpretation of the statute.\u00a0 The petitioner, Helsinn, had advanced a rule of construction called that \u201cassociated-words canon\u201d to argue that the statute’s use of the phrase \u201cotherwise available to the public\u201d limited the other parts of the statute, including the phrase \u201con sale,\u201d to disclosures that would make the invention available to the public. \u00a0The Supreme Court disagreed, in part because it did not believe the associated-words canon was applicable, and in part because it believed that the broad catchall phrase should not be used to upset a body of precedent.<\/p>\n