Supreme Court to hear Helsinn v. Teva, decide AIA Secret Sales

By Gene Quinn
June 26, 2018

On Monday, June 25, 2018, the United States Supreme Court granted cert. in Helsinn Healthcare S.A., v. Teva Pharmaceuticals USA, Inc.  The single question presented by Helsinn in the petition accepted by the Supreme Court read:

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.

Federal Circuit Decision

On May 1, 2017, the United States Court of Appeals for the Federal Circuit issued 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., 855 F.3d 1356 (Fed. Cir. 2017), 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 largely did 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.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 15 Comments comments.

  1. EG June 26, 2018 11:26 am

    Hey Gene,

    I watch with bated breath as to how the Royal Nine will rule.

  2. Gene Quinn June 26, 2018 11:33 am

    EG-

    I thought the Federal Circuit got it right. The Supreme Court taking the case suggests they think the Federal Circuit got it wrong. What mischief will ensue if secret sales are not prior art?

    I suppose it will be good for the lawyers. Whatever the Supreme Court rules I can’t imagine the Federal Circuit will allow any ruling to be interpreted to mean that things like long held trade secrets are now patentable. But who knows in this brave new era where the Federal Circuit seems to have capitulated on so many things.

    I suppose there is a chance they took the case to say something about the role of legislative history post Scalia.

  3. Anon June 26, 2018 12:40 pm

    Gene,

    Sorry, but you are completely wrong on this one.

    Congress did exactly the opposite of your “I can’t imagine the Federal Circuit will allow any ruling to be interpreted to mean that things like long held trade secrets are now patentable.

    Let’s be perfectly clear about this: all prior judicial “reasoning” on this subject is moot (besides being wrong in the first instance***).

    Such is moot because here the very widely announced and extremely radical aim of the AIA (one of its several primary aspects) was to redo the notion of prior art, remove the personal bars, and make the determination more “objective” and universal (hence, the removal of personal bars).

    They even renamed the sections of the law.

    On top of that, you have the Soliloquy (the timing of which, it should be noted was prior to the House picking up and passing the Senate version, before that version returning back to the Senate).

    Congress was deliberate in changing the “new” to be “new to you.”

    See also the amicus brief for one of the Congressman authors of the AIA (penned by Armitage).

    ***Now, back to being wrong in the first instance. The prior judicial wranglings conflated and confused two different times of protection afforded by two very different modes of protection and for each mode, come from two very different portions of the Constitution.

    One, being trade secrets, germinates from the commerce clause, is largely driven by state to state choices (with only recently a Federal action being introduced, with that very same Federal Action disclaiming the notion that the Federal nature removes the state by state choices); and finally, the time of protection under this aspect is essentially UNlimited – forever (if you can maintain the secret).

    The other, being patent protection, germinates explicitly from Article I Section 8, is a Federal system removing any state choice, and – once committed to via publication prior to express abandonment – most definitely has an outer most fixed time period.

    As I have stated in the past, I will do so here: one cannot (legitimately) conflate the two different time periods of protection afforded by the two different sets of laws (which germinate from two different sections of the Constitution).

    Was such conflation done previously (and by some excellent legal minds)? Sure. But that makes the conflation no less wrong.

  4. Gene Quinn June 26, 2018 3:33 pm

    Anon-

    I appreciate your comment, but you are wrong.

    The legislative history is rather clear. That which remains secret is not prior art. The problem is the statute does not say that. Of course, there is always the possibility that the Supreme Court gets this wrong, but the Federal Circuit was correct in Helsinn. Any argument to the contrary is either advocacy or wrong.

  5. Anon June 26, 2018 4:50 pm

    The legislative history is rather clear.

    I will say that as well – but it is clear in my favor. Feel free to talk to Armitage, Mattel, or the two senators holding the Colloquy.

  6. Lawrence Pope June 26, 2018 8:27 pm

    In 1983 in D.L. Auld v Chroma Graphics Judge Markey adopted a judicial forfeiture doctrine as Federal Circuit precedent. He made it explicitly clear that although he was adopting some of the rationale of Metallizing, he was not interpreting the statute. The AIA did not address such judicial doctrines, which also include inequitable conduct and obviousness double patenting, that have no statutory basis. The AIA amended 102 but such an amendment can only reach interpretations of 102. Certainly Congress can obviate judicial doctrines as , but to do so the legislation needs to explicitly address the doctrine.

  7. Mr. V June 27, 2018 11:07 am

    I wonder how the justices will reconcile this with Cuozzo where the USPTO was afforded Chevron deference? Prior to Cuozzo, the USPTO had officially interpreted the “or otherwise available to public” clause to mean that secret-sales were no longer prior art under the AIA; implicitly overruling the holding of Metallizing from 1946.

    Since Cuozzo however, the CAFC has stuck to the old guns by maintaining that secret-sales are prior art . Another wonderful patent-mess for SCOTUS to exacerbate.

  8. Anon June 27, 2018 11:54 am

    Mr. Pope, your statement of “Certainly Congress can obviate judicial doctrines as , but to do so the legislation needs to explicitly address the doctrine.” is not correct.

    There is no such need when Congress announces – as it did with the AIA – that the entire section is receiving a drastic overhaul.

    In such cases, there need not be a litany of prior cases to which the legislation obviates.

  9. Lawrence Pope June 27, 2018 12:22 pm

    D.L. Auld v. Chroma Graphics was, if we take Judge Markey at his word, not in any way an interpretation of 102. It was a stand alone forfeiture doctrine. It did borrow the one year period from 102, but the AIA made no change to this one year grace period. And it was not the Metallizing case referred to in some of the AIA legislative history. This is important because Judge Hand was a bit ambiguous in Metallizing as to whether he was announcing a stand alone judicial doctrine or interpreting the patent statute as it then stood. Judge Markey’s opinion contains no such ambiguity. As the Federal Circuit made clear in South Corporation v. US, it was not adopting the decisions of the Regional Courts of Appeal as binding precedent. So while Judge Markey admittedly borrowed some of the rationale in Metallizing, he was not following it as precedent and was free not to adopt its ambiguity on forfeiture.

  10. Anon June 28, 2018 8:26 am

    Mr. Pope,

    I am not sure why you are resisting the fact that Congress was explicit in changing ALL of the prior sections of 102 and 103 with the AIA.

    Your ruminations on what past judges did or did not do (in relation to any of the different moving pieces under 102/103) are moot.

    Please see post 3 above.

  11. Lawrence Pope June 28, 2018 1:04 pm

    Dear Anon, I’m not consciously resisting anything. But surely we can all agree that there are some judicial patent doctrines that do not derive their authority from the patent statute. The clearest one to me is inequitable conduct. Congress could, of course, abrogate it but I don’t believe that it could do so by amending or indeed repealing any part of the current 35 USC. Another is obviousness double patenting, though it does have some connection to 35 USC 101. A third is the forfeiture doctrine announced by Judge Markey. I suppose that an argument could be constructed that a dramatic enough change to 102 undercuts Judge Markey’s rationale for the doctrine. But I think that the mere fact that 102 was amended does not establish that the amendment should obviate this forfeiture doctrine. I’d be pleased to deal with an argument that the changes to 102 did so undermine this doctrine, but I’ve yet to see such arguments. In this regard, the AIA amendments were not necessary to establish that a secret sale by a third party does not create prior art. That was done by W.L Gore v. Garlock in 1983.

  12. Anon June 28, 2018 4:39 pm

    You have yet to see that personal forfeitures were removed by the AIA?

    I am sorry sir, but this can only come about by your intentional clenching right your eyes, as arguments aplenty have been provided numerous times.

    That you may “feel” that some extra-statutory basis may exist in addition to the identified statutory basis (which has been deliberately changed) provides no relief as you imagine.

  13. Anon June 28, 2018 4:51 pm

    “Clenching right” => “clenching tight”

    Apologies for the auto-correct

  14. Lawrence Pope June 28, 2018 5:47 pm

    Dear Anon, I don’t believe I used the word “feel” in any of my posts. And the plain language of D. L. Auld is that there was no statutory basis for the forfeiture doctrine announced there.Is there some reason why we should not take Judge Markey at his word and should read that Decision is some other way which ignores his explicit language? One can argue, and I presume that you do intend to argue, that the AIA intended to reach this decision because a portion of the legislative history made mention of Metallizing. However, Metallizing was not the controlling precedent at the time the AIA was passed and it, as opposed to D.L Auld, is ambiguous as to whether it is an interpretation of the patent statute that existed at the time. Can we really read this snippet of the AIA legislative history as reaching D.L. Auld because this legislative history and D.L. Auld both cite Metallizing?

  15. Eric Berend June 29, 2018 6:14 am

    @ 2. – 14., ‘Gene’, ‘Anon’, ‘Lawrence Pope’, ‘Mr. V’:

    So it works back to Gene’s assertion at #2 above: could Coca-Cola’s recipe be patented, under the current regime?

    This has massive potential economic ramifications for those inventions that can be commercialized and protected as a trade secret, particularly if there should be some sort of swing back towards greater patent property protections.

    The above discussion implies there is no consensus on this point; few observers seem to have confidence that the CAFC won’t be reversed on any one or many of these grounds; such as those in Cuozzo, as ‘Mr. V’ pointed out in comment #7.

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