Earlier today the United States Court of Appeals for the Federal Circuit issued a major decision interpreting provisions of the America Invents Act (AIA), specifically the AIA on-sale bar provisions. In Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., the Federal Circuit panel of Judges Dyk, Mayer and O’Malley determined: “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” for the sale to be invalidating. In so reaching this ruling the Federal Circuit has largely done away with the belief that the AIA created some kind of safe harbor for sales that did not disclose the details of the claimed invention.
After first determining that a sale had occurred, the Federal Circuit turned to the language of the statute and the legislative history of the AIA. “We next address whether the AIA changed the meaning of the on-sale bar under 35 U.S.C. § 102 so that there was no qualifying sale as to the ‘219 patent,” Judge Dyke wrote.
Teva and various amici argued that the AIA did not change the law with respect to the meaning of the term “on sale,” while Helsinn and the government argued that the AIA did change the law, which no longer encompasses secret sales and requires that a sale make the invention available to the public in order to trigger application of the AIA on-sale bar. The argument of Helsinn and the government was primarily based on the legislative history, and more specifically floor statements made during debate of the AIA. Before proceeding to the merits of what was contained in the floor statements, the Federal Circuit pointed out the obvious – that floor statements are not typically reliable indicators of Congressional intent, citing the U.S. Supreme Court for support.
The Federal Circuit quoted excerpts from statements by Senator Patrick Leahy (D-VT), who explained in his opinion “Section 102(a) was drafted in part to do away with precedent under current law that private offers for sale… may be deemed patent-defeating prior art.” The Court also pointed to an excerpt from then Senator Jon Kyl (R-AZ), who explained in his opinion the AIA precluded the extreme results that occur from “commercialization that merely consists of a secret sale or offer for sale.”
Judge Dyk explained the Court declined the invitation to decide this matter more broadly than necessary, and would limit its ruling to the issue of sales, saying nothing about public use which is not before the panel at this time with these facts.
“The floor statements do not identify any sale cases that would be overturned by the amendments,” Dyke wrote. “Even if the floor statements were intended to overrule those secret or confidential sale cases… that would have no effect here since those cases were concerned entirely with whether the existence of a sale or offer was public. Here, the existence of the sale… was publicly announced in MGI’s 8-K filing with the SEC.”
Helsinn also argued that the “otherwise available to the public” language of the AIA required the details of the claimed invention be publicly disclosed before the AIA on-sale bar is triggered. Dyk wrote that such a rule would require “a foundational change in the theory of the statutory on-sale bar.” Not only would such a ruling require overruling Federal Circuit precedent, but such a ruling would require the panel to overrule Supreme Court precedent, which the Court was not about to do.
Dyk pointed out that there are no floor statements or anything else in the legislative history that suggest that a sale or offer for sale must itself publicly disclose the details of the claimed invention to become invalidating. To the contrary, then Senator Kyl acknowledged in the legislative history “once a product is sold on the market, any invention that is inherent to the product becomes publicly available prior art and cannot be patented.”
Had Congress wanted to so fundamentally change the law surrounding the on-sale bar they would have, and should have done so in clear language, Dyk explained.
Given the limited nature of the ruling, and the fact that it does not apply at all to public use, we can expect a series of additional rulings to continue to build out our understanding of the exact scope of the AIA on-sale bar. Having said that, for those who were anticipating relying on the legislative history as evidence that the AIA changed the law relative to secret sale and secret uses, Helsinn Healthcare has to raise significant doubts.