Posts Tagged: "Helsinn Healthcare S.A. v. Teva Pharmaceuticals"

It seemed like a trade secret trifecta when Congress in 2011 passed the America Invents Act (AIA). Although the statute was aimed at patent reform, it made three helpful changes in how trade secrets are treated. First, companies could hold onto secret information about an invention without risking invalidation of their patents for failing to disclose the “best mode” of implementing it. Second, the “prior user right” that guarantees continuing use of a secret invention, even if someone else later patents it, was extended to cover all technologies. And third, the law would no longer deny a patent simply because the inventor had already commercialized the invention in a way that didn’t reveal it to the public. Or so we thought. That last change depended on how you read the legislation. The long-standing requirement that an invention could not be “on sale” or “in public use” more than a year before filing a patent application was still there. But Congress added a qualifier to 35 U.S.C. §102: there would be no patent if the invention had been “in public use, on sale, or otherwise available to the public . . . .”

Yesterday a unanimous Supreme Court ruled that the America Invents Act’s (AIA’s) language barring patent protection for inventions that were “in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention” under 35 U.S.C. § 102(a)(1) extends to private sales to third parties. The decision upholds pre-AIA Federal Circuit precedent establishing that a “secret sale” could invalidate a patent. The question patent owners have been asking since 2011 was whether the AIA’s addition of the phrase “or otherwise available to the public” overruled the Federal Circuit’s judicial construction of the on-sale bar. “No,” said the High Court. As always, IPWatchdog reached out to experts across industries for their views on the decision. From “well-reasoned and correct” to “a disappointment” and “dismissive,” they had wide-ranging perspectives on the ruling’s broader implications.

n a relatively short, unanimous decision authored by Justice Thomas, the Court begins by explaining that twenty-years ago in Pfaff v. Wells Electronics, Inc., 525 U.S. 55, 67 (1998) the Court determined that an invention was on sale within the meaning of pre-AIA § 102 if it was subject to a commercial offer for sale and it was ready for patenting. Moreover, Thomas recognized that prior to passage of the AIA the Federal Circuit had clearly established that a secret sale could invalidate a patent. Therefore, given the settled precedent, Justice Thomas explained that there was a presumption “that when Congress reenacted the same language in the AIA, it adopted the earlier judicial construction of that phrase.” The Court also found the catch all phrase “or otherwise available to the public” was “simply not enough of a change… to conclude that Congress intended to alter the meaning of the reenacted term ‘on sale.’”

On 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.

On the morning of Tuesday, December 4th, the U.S. Supreme Court held oral arguments in the case of Helsinn Healthcare S.A. v. Teva Pharmaceutical USA (transcript of oral arguments here). This case asks the nation’s highest court to determine whether the sale of a patented invention which required the purchaser to keep the invention confidential (i.e.: a “secret sale”) qualifies as invalidating prior art under the on-sale bar found in 35 U.S.C. § 102(a)(1)… Justice Samuel Alito said that the most serious argument for Jay to deal with was the plain meaning of the new statutory language under the AIA; if “on sale” meant on sale publicly and privately, then the “or otherwise available to the public” language wouldn’t make much sense in the context of the statute.

On June 25th, the the U.S. Supreme Court agreed to hear Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA Inc., on appeal from the Federal Circuit. The case will ask the Supreme Court to decide whether 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 under the terms of the Leahy-Smith America Invents Act (AIA). In other words, is a secret sale prior art? To assess some of the reasons why the Supreme Court likely decided to take up Helsinn’s appeal, and some of the arguments we are sure to see again at the merits stage, we explore some of the amicus briefs filed with the Supreme Court encouraging them to take up the case on appeal.

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.