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FEDERAL CIRCUIT RAISES THE ON-SALE BAR

by | Aug 22, 2011 | Patent | 0 comments

Today, the U.S. Court of Appeals for the Federal Circuit issued a precedential opinion addressing the “on-sale bar” under 35 U.S.C. §102(b). Section 102(b) provides that:

A person shall be entitled to a patent unless —

(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States . . .

In August Technology Corp. v. Camtek, Ltd., Camtek argued that August Technology’s NSX-80 wafer inspection device was on “sale” under section 102(b) prior to the critical date of August Technology’s U.S. Patent No. 6,826,298, and thus, was valid prior art which August Technology failed to disclose to the Patent Office during prosecution, thereby constituting inequitable conduct. The District Court jury concluded that the NSX-80 device was not on “sale” prior to the critical date of the ‘298 patent, based on instruction 23 which stated that “[i]n order to be on ‘sale’ the NSX-80 must have also been ready for patenting at the time the alleged offer for sale is made.”[1]

The Federal Circuit agreed with Camtek that the jury instruction contained an erroneous statement of the law. The Court relied upon the U.S. Supreme Court’s decision in Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 67 (1998) which held that that the “on-sale” bar applies when two conditions are met before the critical date: (1) the product is the subject of a commercial offer for sale, and (2) the invention is ready for patenting. The issue presented on appeal was whether the invention must be ready for patenting at the time an alleged offer is made. The Court held that it did not, stating that to require that an invention be ready for patenting at the time of the offer would render the second prong of Pfaff superfluous. Rather, the Federal Circuit held that, in accordance with Pfaff, the invention must be ready for patenting prior to the critical date.

For the full Federal Circuit Court opinion, click here.

[1]The Federal Circuit noted that jury instruction 23 was patterned after the AIPLA model jury instructions