Industry Reaction to Helsinn Healthcare v. Teva Pharmaceuticals Oral Arguments

Industry Reaction to Helsinn Healthcare v. Teva PharmaceuticalsOn Tuesday, December 4th, oral arguments were held before the U.S. Supreme Court in Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA. The nation’s highest court will determine whether a secret sale of an invention, or a sale of a technology under terms that require the invention to remain confidential, triggers the on-sale bar under 35 U.S.C. § 102(a)(1), thereby preventing the invention from being patented. With this question squarely before the Supreme Court, several members of the legal industry who are watching this case offer their views on the major takeaways and the potential consequences of the Supreme Court’s decision, which will issue next year.

 

Sandip H. Patel
Marshall Gerstein & Borun LLP

“The Federal Circuit decided that the America Invents Act (AIA) version of the on-sale bar is practically no different than the pre-AIA version despite different wording, despite legislative history that arguably suggests the provision is different, and despite administrative guidance (i.e., Patent Office’s examination guidelines) that the AIA version is different. Each involved party unsurprisingly advocates for a decision that serves its self-interests. But the decision, like others the Court issues, will have more far-reaching consequences than those interests. And fortunately, the avalanche of amicus briefs—notably the ones from bar and industry trade associations and the Department of Justice—offers an objective assessment the Court ought to carefully consider. A decision affirming the Federal Circuit may well undermine the simplicity and predictability that the AIA sought to impart in our patent system.”

Sandip H. Patel is a partner with Marshall Gerstein & Borun LLP, where he represents clients relating to chemical and chemical engineering inventions. He has broad patent litigation experience in the district and Federal Circuit courts, and extensive experience in leading interferences, reexaminations, and inter partes reviews before the Patent Office.

 

Jake Holdreith
Robins Kaplan LLP

“The case involves a (relatively) small pharmaceutical development company in Switzerland that claims it needed funding to complete development of a valuable drug. The Swiss company agreed to sell the drug to a U.S. company prior to filing patent applications, to generate revenue needed to complete the development of the drug. The companies announced the agreement, but kept some details about the drug secret.

“The case thus pits the two rationales against each other. If the on-sale bar is meant to prevent sales prior to a patent application to avoid extending the inventor’s monopoly, the patent might be invalid based on the prior agreement to sell the drug. On the other hand, if the on-sale bar is meant to prevent a patent only if the public already knows about the invention, the patent might not be barred because the announcement of the agreement, without disclosing details about the drug, might not inform the public how to make the invention. In that case, the public might still be willing to grant a patent in exchange for teaching the public how to make the invention.

“The basic issue in the case involves a principle that is over 200 years old in U.S. law: that an inventor must apply for a patent before selling a product that includes the invention. Many companies have a standard practice of checking to ensure that patent applications are on file before allowing a product to be shown or offered for sale. The doctrine is known as the ‘on-sale bar’ because it often bars the grant of a patent when the patent application is filed after the invention is on sale.

“Conventional wisdom is that the Supreme Court frequently reverses the Court of Appeals for the Federal Circuit on patent matters, and that the Supreme Court may decide that the additional language in the patent statute has changed the law and that inventors may make confidential sales prior to filing a patent application, as long as they don’t make a public disclosure of the details of the invention.”

Jake Holdreith is a partner with Robins Kaplan LLP, and leads the firm’s Health and Life Sciences Industry Group and serves as a member of the firm’s Executive Board. Mr. Holdreith counsels clients and tries complex lawsuits including intellectual property, regulatory and constitutional litigation.

 

Irena Royzman
Patterson Belknap Webb & Tyler LLP

“In Helsinn, the issue before the Court is whether an invention is ‘on sale’ and prior art under the America Invents Act even when the invention is not available to the public. The Federal Circuit found that a license and distribution agreement to a medical invention whose existence was public could invalidate a patent even if the invention itself was not public and was not made public by the agreement. The decision is particularly problematic for the bio/pharma industry where many innovations are made by small companies that need to partner with established pharmaceutical companies in order to bring their inventions to patients. The decision impacts both the small bio/pharma companies that need funds to develop and patent their inventions as well as bio/pharma companies of all sizes that pour in billions of dollars to develop the medicines. The U.S. is urging the Supreme Court to reverse the Federal Circuit’s decision and to limit the ‘on sale’ bar to products that embody the invention and can be purchased by customers. As is, the Federal Circuit’s decision is inconsistent with congressional intent and chills needed innovation.”

Irena Royzman is a partner with Patterson Belknap Webb & Tyler LLP, where she concentrates on pharmaceutical and biotech patent litigation and is Co-Chair of the Firm’s Biotechnology Practice. She holds a Ph.D. in Biology from the Massachusetts Institute of Technology and the Whitehead Institute, where she was a National Science Foundation fellow. 

 

Ian DiBernardo
Stroock & Stroock & Lavan

“Patent invalidity for an on-sale bar is a common defense to a charge of infringement, and parties frequently expend significant time and money on the issue. For example, in our case Honeywell Intl Inc., et al v. Nikon Corporation, et al, 04-cv-01337-JJF, on behalf of co-defendant Fujifilm Corporation, we invalidated the asserted patent on these grounds.

“The on-sale bar under pre-AIA law was an important factor in invention monetization and patent filing strategies. If the AIA is found to have changed the law such that sales maintaining the invention as confidential are not prior art, greater attention will be placed on the structure of licenses and sales of the invention.

“Under the AIA, priority with respect to an invention goes to the first inventor to file a patent application. Thus, even if the AIA is found to have changed the law regarding on-sale bars, there is an incentive to file early.

“The Court’s decision may put significant patents at risk. Companies like Helsinn, who may have relied on the revised wording of the AIA and thus considered pre-filing, confidential sales to not be prior art, may be at risk of having patents invalidated.”

Ian G. DiBernardo is Co-Practice Group Leader of Stroock’s Intellectual Property and Technology Department and Co-Head of Stroock’s FinTech practice. He counsels both emerging and established companies, focusing on complex intellectual property and technology transactions and intellectual property litigation.

Share

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 as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com.

Join the Discussion

20 comments so far.

  • [Avatar for Anon]
    Anon
    December 18, 2018 09:02 am

    I will also add that the very notion of “interpretation” is one that should not — that can not — be taken at face value and without critical thinking.

    It simply is not “interpretation” when the end result is a policy change.

    When you hear the word “equity,” one must pause. Sure, “equity” is a Mom and Apple Pie Word; who would not want “equity?”

    When you hear the phrase “balance the equities” you have strayed from the Mom and Apple Pie into an arena of “balance,” which should call forth the notion of policy choices (policy BEING the choices of “balance between multiple parties”).

    The smokescreen of “words from the Constitution” are obfuscating the plain thrust that the Court is inserting a policy choice.

    Recall the two different timing aspects: actual duration and timing of decision point.

    Recall (and apply critical thinking to separate) the different actual durations that may (rightfully) occur under different Constitutional drivers.

    Keep that firmly in mind.

    Once that is clear, then we can address the timing of decision point policy decision; which is clearly NOT a “Constitutional” decision.

    Upon that point, it remains clear (even as we do not see eye to eye on the details) that the AIA was a direct decision to move to a Race mode.

    That Race mode is a policy decision that addresses the “timing of decision point” policy.

    Remember the Madison quote you used?

    That Madison quote — in view of the policy choice of Race mode — dictates that Congress (as a whole in the AIA) has defined “new” to be “new to you” and that the threat alone of someone else winning that race (with no ‘swear behind’), is enough to deal with any “delayed choice.”

    I do recognize that this view does rest on my different view of the Quid Pro Quo that you hold. I simply remove from your version the prior stated policy leanings of the Court, prefering to let a different branch of the government have the power of policy.

  • [Avatar for Anon]
    Anon
    December 18, 2018 08:15 am

    What I am saying, however, is that constitutional factors are part of the equitable Judicial interpretation — not “insertion”

    No.

    It IS insertion.

    Yes, I get that your parroting is a reflection of the Court’s parroting.

    I am trying to get you to realize that the Court’s parroting was wrong.

    They inserted “equity” into a statutory law situation and there is no real reach there — based at least in part on the fact that “Limited Times” was a conflation of two very different times of protection that derive from two very different areas of the Constitution.

    The use of “words” from the Constitution does not mean that use is properly moored there.

    As I noted, there is an immediate and direct reflection of the same tactic with the mess of the Court with 35 USC 101.

    Inserting “equity” is just an excuse for legislating from the bench. Doing so has no tether to ANY interpretation of the law written by Congress.

    Such is ultra vires.
    Such may serve at any time and under any condition as an excuse for the Court to insert themselves into anything.

    That’s just not reflective of the US system of limited powers and checks and balances that each (and every) branch of the US government must operate under as being under the Constitution.

    Beware (and be aware of) the mere mouthing of words of the Constitution as a pretext for inserting legislation (be the legislation dealing with “equity” or otherwise).

    And I would disagree as to any sense of futility – it is never futile to be able to apply critical thinking, even to statutory regimes of the past, in order to see how and when a past Court may have used power (whether or not the use of the power was proper under those different statutory regimes). This too has a direct parallel to what is the modern day 101 issue in that prior to 1952, Congress had acquiesced to the Court’s to use a Common Law law writing power to deal with “invention.” Recognizing that is part of the critical thinking in recognizing that the Act of 1952 took that power away. Visit the writings of Judge Rich to reflect on this.

  • [Avatar for Ron Katznelson]
    Ron Katznelson
    December 17, 2018 09:23 pm

    Anon,
    You should have read my quotes above. It is not me but the SCOTUS in Pennock and Kendall that “parroted” the Constitution. I agree that the statutory language per se is not a Constitutional command. What I am saying, however, is that constitutional factors are part of the equitable Judicial interpretation — not “insertion” — by the courts, which, as you know, must also exercise their equitable powers.

    Stated another way: is it your position that the courts were always wrong in arriving at the equitable personal forfeiture bars based on a pre-AIA statute that never expressly provided it?
    If your answer is NO — that Pennock, Kendall and Mettallizing were correctly decided given the pre-AIA statute they interpreted — than you must have recognized the legitimate role of equitable balancing in statutory interpretation; our only disagreement is then whether equitable balancing under the post-AIA statute calls for the same conclusion.
    On the other hand, if your answer is YES, they were always wrong — “they made mistakes” — then it appears futile to continue this discussion.
    But I will nonetheless have empathy for your sentiment because you and I agree that “they made mistakes” in other important patent cases.

  • [Avatar for Anon]
    Anon
    December 17, 2018 08:05 am

    Your quote from Madison actually supports my view, Ron.

    Think about it (while thinking about the statutory choice to engage in a Race mode).

    Stop parroting “Constitutional” when such is merely judicial insertion.

  • [Avatar for Anon]
    Anon
    December 16, 2018 09:16 pm

    We will have to agree to disagree as to your redefining “quo” as “The “quo” in the patent bargain is not merely “disclosure of the invention” — it is “timely and early disclosure of the invention” so that “progress of the useful arts” would be “promoted” and not retarded.

    That is the tainted insertion of the judicial branch’s desired policy, a policy that is simply not within their realm (much like the current 101 mess).

  • [Avatar for Ron Katznelson]
    Ron Katznelson
    December 16, 2018 07:53 pm

    Anon @14: “Is the Quid Pro Quo itself harmed in any way with a ‘later’ choice for one to turn a Trade Secret into quest for patent? The answer is – and must be admitted to be – no.”
    I commend you for the clarity in your argument and amplify your point here even further: if after a long delay the invention is still unknown to the public and there is no published prior art, the public should benefit from that late disclosure just the same and therefore a patent is warranted.

    But this is precisely where you are wrong — it cannot be admitted that the quid pro quo is not harmed in any way, because your apparent definition of “quo” is improperly narrow. The “quo” in the patent bargain is not merely “disclosure of the invention” — it is “timely and early disclosure of the invention” so that “progress of the useful arts” would be “promoted” and not retarded. This is not a matter of “might” or “might not”; it is definite and certain that an inventor delaying patenting his secret invention by 10 years delays the “progress of useful arts” in that field by 10 years. Does the public derive some benefit from that late disclosure anyway? Yes. Would an earlier disclosure be more beneficial to the public? Of course. Why should the public be deprived of the full benefit?

    You appear to proclaim the absolute notion that the residual benefit to the public after the 10-year delay is the equitably sufficient “quo” for a “quid” of full exclusive statutory term that runs from the late filing date at the discretion of the inventor. Would that be also true if the secret were kept for 30 years before a patent term begins? You proclaim this valuation of the quid pro quo as an absolute that “must be admitted” regardless of the interpretation of the statute. How do you come to that absolute determination?

    That at least one of the framers disagreed with your notion of the bargain is clear from his writings directly on this equitable balancing issue, when referring to the “limitation” imposed on the public for a set exclusive term in exchange for the benefit of early disclosure: “The limitation is particularly proper in the case of inventions, because they grow so much out of preceding ones … and because … the discovery might be expected in a short time from other hands.” James Madison, “Aspects of Monopoly One Hundred Years Ago,” reproduced in 128 Harper’s Mag., 489, 490 (March 1914) (my emphasis). So even Madison recognized that tethering the disclosure and the subsequent end of the patent term close to the invention date must be presumed equitable because it helps others make follow-up inventions earlier, and because extending the end of the exclusive term too long after the invention date may constitute no real consideration for a full patent term because, by then, “the discovery might be expected … from other hands” anyway. This would more frequently make it a one-sided hollow “bargain” at the expense of the public.

    It is beyond dispute that the patent bargain is itself an equitable balance of inventor’s and the public’s equities. Pennock, Kendall, and Metallizing all clarified how the balance of the equities must be struck to interpret the statute in view of the Constitution. By definition, the constitutional direction to “promote the progress,” requires that the delay period before a patent application is filed not be ignored in a proper balancing of the equities; if anything, it may only permit assignment of a weight (which you argue should be zero) to such period. But Congress did not write the pre-AIA statute with such zero weight.

    So when you argue (@13) “they made mistakes,” you simply disagree with all these SCOTUS decisions to balance the equities with substantial weight allocated to the equitable constitutional factor of “promoting the progress” in interpreting the statute. But the need for employing equitable factors for avoiding the evils of archaic rigidity of statutes that cannot be exhaustive in covering every circumstance, is not unique to interpretation of the statutory patenting bars. Indeed, analysis of the SCOTUS jurisprudence over the last several decades illustrates the Court’s general equity-protective presumption in interpreting federal statutes. See Leigh T. Anenson, “Statutory Interpretation, Judicial Discretion, and Equitable Defenses,” 79 U. Pitt. L. Rev. 1, 21-24 (2017). This is dimply another legitimate element in statutory construction.

    As you correctly point out, however, it is not the Court’s job or power to make law. But here, both with respect to pre-AIA law and post-AIA law, the courts interpret the statute under their judicial discretion for equitable balancing under constitutional factors. The language of the statute simply does NOT contain sufficient indication that Congress as a whole intended to allocate diminished weight to the pre-filing period in such equitable balancing. Again, “In order to abrogate a common-law principle [SCOTUS’ previous equity-preserving interpretation], the statute must ‘speak directly’ to the question addressed by the common law.” United States v. Texas, 507 U.S. 529, 534 (1993) (citation omitted). The SCOTUS in Helsinn will tell us whether it believes Congress did that in the AIA.

  • [Avatar for Anon]
    Anon
    December 16, 2018 09:58 am

    Let me point out that a parallel exists between “Limited Times” and the current nonsense of the Supreme Court vis a vis the Court’s fingers being thrust into the wax nose of 101.

    People are not thinking critically enough about just what the protection afforded by the patent clause is, when that protection is actually in play, and what it means to have power FROM particular sections of law to be cabined, what it means to have protection afforded by Trade Secrets, where in the Constitution this Trade Secret legal authority flows from, nor the policy choice of Congress to go to a “Race” system and remove the “danger” of being able to “swear behind” (and just what “race” means as to eliminating the NON-Constitutional “danger” the the Court has masqueraded as some Constitutional imperative).

    It is an error of historical proportions, and yes, and error propounded by some (otherwise) top legal minds.

    It is error, nonetheless.

    The bottom line is — and remains — that ANY protection afforded under the patent clause only inures once the patent system is engaged. Since the patent system is not a mandatory system, and it is entirely a choice of an inventor to partake, the “logic” of confusing and conflating different times of protection available under VERY different sections of law (provided even through different sections of the Constitution) can — and should — be seen as the officious insertion of policy choices NOT tethered to the Constitution itself.

    Look at the parallel of the “danger” being invoked by the Court in its choice to legislate: the subjective, projective and conjectural “MIGHT,” as in, “if we allow this, progress MIGHT be hampered.”

    As noted, “MIGHT” necessarily includes “might NOT.”
    As noted, this is not a matter of present case or controversy.
    As noted, it is not the judicial branch that has been appointed power to make the policy call.

    Take a closer look at the “might hamper” with the conflation here. Is the Quid Pro Quo itself harmed in any way with a “later” choice for one to turn a Trade Secret into quest for patent?

    The answer is – and must be admitted to be – no.

    That’s because there is no actual harm to the larger scope of things.

    It is a more than a little bit of a misnomer to force an inventor to choose one or the other, and it could be seen that THAT forced choice is what impairs the progress of innovation by forcing a one-time constraint into secrecy of that which MAY be (later) chosen to be shared.

    The same “rules of the game” affect all who may choose to enter the patent game.

    Now that Swearing Back is gone, and now that the evaluative time of comparison is the CHOICE of partaking (by way strictly of the filing date), one who later chooses to partake in the patent game already only “punishes” himself with the risk that some other inventor may grab the patent ring.

    The rest of the world does not know (kind of important, and due to the nature of “Secret”) what anyone may be doing in secret.

    That truly matters not at all to the patent bargain. For the patent bargain, what IS important is that an inventor is choosing to partake and share.

    Let’s also distinguish here that the timing mechanism has two different components:
    a) time OF protection and
    b) time to decide to share

    What the (NON-)Constitutional drive has been was to conflate the time of protection (which is clear error) with the notion of (the policy choice of) pushing a “punishment” for not choosing a voluntary choice AT a specific point of time.

    It’s a bit like cutting off your nose to spite your face, and keeping people OUT of sharing, if they later want to share.

    I know the “rationale” has historically been some “sense” of unfairness that was attributed to the “conniving” inventor who would choose to share only (later) when that inventor judged the market about to come upon his invention. But that (policy) reasoning really has no tether to the Constitution itself.

    “New” has the meaning that the branch of the government designated by the Constitution give to it (this is one reason why Pennock needs to be read much more carefully than it typically is, as that case does not stand for the Constitutional “authority” being granted to the Judicial Branch that many glom onto).

    Instead, taking an objective and neutral viewpoint (not a punish a “conniving inventor” viewpoint), the Quid Pro Quo is fully intact at whatever point in time the decision to share is made — in part because the rest of the law serves to still policy that “new” for the attributes desired.

    With an expressly stated simplified version of “policing” new (the entirety of switching to a “Race” system), there simply is NO imperative (Constitutional or otherwise) to “punish” a choice to share that happens to come later, or to come about for any particular reason. The policy is to reward sharing, not to punish those who may have chosen to share at a later date (and whose choice brings risk only to that person already).

    And much like critically thinking about Pennock, we should not woodenly hold on to the policy thinking of past Courts, just because the Courts wanted things to “work out” in a particular fashion (or decision point timing).

    If — for the public — “new” is “new to you,” then the policy choice of such is a proper choice of the particular branch of Congress, and that choice — upon critical review of the differences between time OF protection, and timing of choice to partake in one different set of laws affording protection arising out of one section of the Constitution or to partake in another different set of laws affording protection arising out of another different section of the Constitution must be made clear so as to still (and only) afford a truly Limited Time of protection under patent law.

    Congress may well have chosen differently in the past (as is their right). Be that how they had chosen in the time that Pennock was decided, or be that how Congress chose its statutory approach in the Patent Act of 1952.
    Critically, any such past choices do not disempower Congress from choosing as they have now done so.

  • [Avatar for Anon]
    Anon
    December 14, 2018 06:27 pm

    As noted Ron, they made mistakes

    Time to stop making those mistakes.

  • [Avatar for Ron Katznelson]
    Ron Katznelson
    December 14, 2018 05:04 pm

    Anon,
    If I am conflating “different times under different sets of protection,” so did Justice Story in the SCOTUS Pennock decision and Judge Learned Hand in Metallizing Engineering, as I explained above. Do you proclaim to know better than they did how to interpret the balance of equities found in the Constitution?

    How about the relation of the Constitution to what you call “different times” prior to filing, as expressly articulated by SCOTUS: “the inventor who designedly, and with the view of applying it indefinitely and exclusively for his own profit, withholds his invention from the public comes not within the policy or objects of the Constitution or acts of Congress. He does not promote, and, if aided in his design, would impede, the progress of science and the useful arts.” Kendall v. Winsor, 62 U.S. 322, 328 (1858) (emphasis added, citing U.S. Const. art. I, § 8, cl. 8).

    The “on sale” and “public use” bars are equitable forfeiture bars distinct from statutory prior art bars. These terms were given specific meaning through nearly two centuries of equitable common-law rules that continue to operate alongside the statutory terms. It takes more than a colloquy of 3 out of 535 members of Congress and renaming the statute to repeal this common law. “In order to abrogate a common-law principle, the statute must ‘speak directly’ to the question addressed by the common law.” United States v. Texas, 507 U.S. 529, 534 (1993) (citation omitted); Beck v. Prupos, 529 U.S. 494, 500 (2000) (“[W]hen Congress uses language with a settled meaning at common law, Congress presumably knows and adopts the cluster of ideas that were attached to each borrowed word in the body of learning from which it was taken and the meaning its use will convey to the judicial mind unless otherwise instructed. In such case, absence of contrary direction may be taken as satisfaction with widely accepted definitions, not as a departure from them.”) (quoting Morissette v. United States, 342 U.S. 246, 263 (1952), quotation marks omitted).

    This was Congress’ statutory approach in Section 102(b) of the Patent Act of 1952, incorporating the equitable doctrines surrounding the forfeiture bars and experimental use exceptions thereto long after they were well-developed judicially. There is no evidence that in the AIA Congress as a whole (not only 3 members) intended to change the common law terms “on sale” and “public use.”

  • [Avatar for Anon]
    Anon
    December 14, 2018 03:37 pm

    We also should make note that Trade Secret law is largely (still) a STATE law item, and that there is no “Federal” pre-emption of legislation (per se, outside of the new Federal Cause of Action) that guides and controls ANY notion of overlap of “patent” style protection. Heck, as we all know, trade secrets do not have any type of novelty or other patent-like requirements.

    The fact that mistakes in the past were made conflating these things has zero relevance once those mistakes are understood for what they are (no matter how great the jurists may have been that made those mistakes!).

  • [Avatar for Anon]
    Anon
    December 14, 2018 02:32 pm

    Ron @ 8,

    No. No it does not. You are still conflating different times under different sets of protection.

    Prior to the application for patent, there is NO time afforded protection under the patent laws.

    Not infinite, but zero time.

    It is only by erroneously equating pre-patent application “secret” time WITH time of protection afforded by the patent laws is any such “unlimited” even attempted to be reached.

    And I say attempted, because by its very nature, starting into the patent system may well end the separate and different time at that! In fact, if one DOES obtain time of protection under the patent regime, the time is necessarily limited by the publication (and term) of the patent.

    Only by maintaining the mistake made long ago can this “unlimited” boogeyman of a threat be countenanced.

    It is time to stop countenancing that error.

  • [Avatar for Anon]
    Anon
    December 14, 2018 01:38 pm

    EG,

    Part of my current effort with Ron is reflected in your observation of “Note that patent term now (unlike before 1995) is based upon 20 years from filing date which is what Congress has defined as the “for a limited time.”

    Dating back several years now, I have tried to have people understand that a fundamental error occurred in the original thinking of the matter.

    That fundamental error was the confusion and conflation of exactly what “time of protection” meant.

    There are those who WANT the time of protection afforded by the different law of Trade Secrets (arising from a different portion of the Constitution) to be inextricable with/from the time of protection afforded by the different law of patents (arising from a different portion of the Constitution).

    When people realize that those wanting this conflation were speaking from a pure-WANT (policy) motivation, AND when one recognizes the fundamentally different Constitutional originations (and thus, different effects and different scopes), THEN one can realize that the Limited Times of patent protection can only start when one chooses to submit what they have into the process of obtaining that protection.

    Separate the (earlier) pure “want” from the actual law makes it quite clear why want Congress wanted with the new “new” is perfectly legitimate from the Constitutional angle.

    Put it this way: the infection would not be limited in one direction, and Trade Secrets running forever would then be tainted with a Limited Times aspect.

    Further, the essential Quid Pro Quo mechanism is still fully in play with ANY delay from a Trade Secret holder-turned Patent holder wannabe. The only danger in our new “race” situation is the danger that the straggler invites for themselves (as this is one of the reasons given for changing to a race mechanism, like the Rest Of the World). No more “surprise” swear behinds.

    The plain facts of the matter is that Congress wanted the new “new” to be merely “new to you.”

    It’s all part of the new sausage, as it were.

    🙂

  • [Avatar for Ron Katznelson]
    Ron Katznelson
    December 14, 2018 01:13 pm

    EG,
    The U.S. Constitution cabins Congress’ power, restricting it to “securing for limited times to authors and inventors the exclusive right.” As you correctly observed, Pennock and Metallizing stand for the proposition that this restriction on Congressional power is not confined merely to securing exclusive rights in issued patents – it also encompasses any de-facto pre-issuance exclusivity that Congress may indirectly “secure” by incentives created by its statutory scheme that controls inventors’ rights and obligations prior to filing. Helsinn’s construction of post-AIA § 102(a)(1), however, would do just that. It would hold that Congress authorized inventors to receive a patent after an indefinite period of secret exclusive exploitation of their invention, and therefore necessarily secured the exclusive period for an indefinite duration at the inventors’ discretion. Metallizing, 153 F.2d at 520 (Learned Hand, J.) (by “making use of his secret to gain a competitive advantage over others,” the inventor would “thereby extend the period of his monopoly”). That such secret use is exclusive is inherently built into the patentability requirement at filing — that the invention was not known by, or disclosed to, any person other than the inventor or a privy of the inventor.

    As to your point on the Bono Act, and Anon’s “multiple times of protection,” the Helsinn construction of de facto indefinite extension of exclusive use of the invention in a temporal cascade that ends with a full patent term is distinguishable from extending it by a set and definite duration. Cf. McClurg v. Kingsland, 42 U.S. 202, 206 (1843) (sustaining a limited extension of existing patent terms); Eldred v. Ashcroft, 537 U.S. 186, 209-10 (2003) (existing copyright terms extended 20 years by Congress remained “limited,” not “perpetual”). Helsinn’s construction of an indefinite and “perpetual” secret (exclusive) use thus raises a substantial constitutional question.

    Is this a constitutional question that my theory answers with certainty? — no, I do not claim so — reasonable persons may properly disagree. However, the mere genuine uncertainty and judicial attempt to avoid it may be dispositive. Crowell v. Benson, 285 U.S. 22, 62 (1932) (“When the validity of an act of the Congress is drawn in question, and even if a serious doubt of constitutionality is raised, it is a cardinal principle that this Court will first ascertain whether a construction of the statute is fairly possible by which the question may be avoided.”). The premise of constitutional avoidance is that “Congress did not intend” any meaning of a statute “which raises serious constitutional doubts.” Clark v. Martinez, 543 U.S. 371, 381 (2005).

  • [Avatar for EG]
    EG
    December 14, 2018 10:06 am

    Hey Ron,

    Very interesting point you made. I downloaded and read your article, especially the quote from Pennock which I agree is fairly clear that “for a limited time” constitutionally affects how long such “secret sales” can occur before they become invalidating. But I could also argue that it’s not necessarily the 1 year grace period either. Note that patent term now (unlike before 1995) is based upon 20 years from filing date which is what Congress has defined as the “for a limited time.” Couldn’t the argument be made that, after the 1 year grace period ends, any such “secret sales” or “secret use” would now consume that 20 year period from filing date, thus avoiding the potential constitutional issue you note? (I harken to the “never-ending” Sony Bono Act for which the term for a copyright never seems to have a limit.) I’m thinking out loud here, so please feel free to respond to the contrary, but I do agree that the language in 102(a), like far too much of the AIA (Abominable Inane Act), is drafted terribly.

  • [Avatar for Anon]
    Anon
    December 14, 2018 08:34 am

    Ron,

    Please reevaluate your limited times notion with correctly identifying the multiple (and different) times of protection that accord under the multiple (and different) types of legal protection.

    It’s about time that the conflation of times of protection is corrected.

  • [Avatar for EG]
    EG
    December 14, 2018 06:47 am

    Hey Steve and Gene,

    The advocates for the patentee need to watch Seth Waxman, as well as read the oral argument transcripts for the cases he’s argued before SCOTUS. In my opinion, the advocate for the patentee in Helsinn led off with his worst argument, namely that the “on sale” bar prior to the AIA meant “public.” Justice Kavanaugh correctly tore into him for that faux pas, as Metallizing Engineering is quite clear that the “on sale” bar includes “secret sales.”

    The better argument that he should have been led with relates to how the phrase “or otherwise available to the public” in 102(a) of the AIA impacts the word “on sale” before it and especially what this new phrase means. If you read what Joe Matel said in his Guide to the AIA, 102(b) has essentially dispensed with the pre-AIA concept of bar as to acts by the inventor and replaced it with the concept of “prior art” which applies to both acts by the inventor (under 102(a)) and the non-inventor (under 102(b)). And “prior art” under the AIA means that the act must make the claimed invention “available to the public,” be it an act of the inventor or others. In that regard, what Helsinn did with its agreement doesn’t qualify as “prior art” under the AIA because it didn’t make the claimed invention “available to the public,” and therefore doesn’t invalidate its patent under new 102(a).

  • [Avatar for Ron Katznelson]
    Ron Katznelson
    December 14, 2018 05:09 am

    The SCOTUS decision does matter here.
    Reversing the Federal Circuit’s ruling — accepting Helsinn’s construction of Post-AIA § 102(a)(1) — opens this part of the AIA statute to a constitutional challenge. This is because such construction repeals the forfeiture bars to patenting, which may exceed the Constitutional “limited times” notion and the “progress” limits on Congress’ authority. See my paper, “The America Invents Act May Be Constitutionally Infirm if It Repeals the Bar Against Patenting After Secret Commercial Use,” 13 Engage: J. Federal Society Practice Groups, 73 (October 2012). At http://bitly.com/Absolute-Novelty .

  • [Avatar for Josh Malone]
    Josh Malone
    December 13, 2018 10:36 pm

    I don’t see a good answer here either way. We now have a patent system completely untethered to its purpose – promoting progress in the useful arts. Now it is a public franchise system in which all sorts of crazy rules, conditions, payments, and favors might result in a legal claim to get a rent payment from someone else. Congress gets to create a definition of “prior art” out of whole cloth. I just wish they would quit calling them patents. Patents, in America, should always mean a. Inventor DISCLOSING an invention in exchange for a EXCLUSIONARY RIGHT. The grand bargain. But that is not at issue here. Doesn’t matter at all in the decision. But it should. You shouldn’t get to keep your invention secret (not longer than a year) and still get a “patent” on it. But if it is a public franchise, then there are no boundaries and anything goes.

  • [Avatar for George]
    George
    December 13, 2018 02:33 pm

    Other people’s ‘opinions’ don’t really matter, do they? Haven’t so far!

  • [Avatar for Bemused]
    Bemused
    December 13, 2018 09:59 am

    Here’s my “expert” prediction: SCOTUS will screw this up and do further damage to the US patent system and to our country’s already beaten down biotech industry.

    Not really going out on much of a limb here with SCOTUS’s “patents=bad” mindset.