In May of 2017, the U.S. Court of Appeals of the Federal Circuit in Helsinn Healthcare, S.A. v. Teva Pharmaceuticals USA, Inc., 855 F.3d 1356, clarified, to some extent, the scope of the on sale bar under the America Invents Act (AIA). The on sale bar invalidates a patent and is triggered if the invention is sold or otherwise offered for sale more than one year prior to the date of the filing of a patent application.
Helsinn owned four related patents (three pre-AIA and one post-AIA) covering a formulation of palonosetron, a drug for cancer patients that treats nausea. Approximately two years before filing a patent application at the USPTO, Helsinn entered into two different agreements for the purchase of the drug with MGI Pharma, Inc. The agreements did not specify whether the drug's dosage would be 25 mg or 75 mg. Further, the agreements were contingent upon obtaining FDA approval for the drug.
Subsequently, Teva filed an Abbreviated New Drug Application (ANDA) for a generic equivalent of palonosetron. Helsinn sued Teva for patent infringement under the Hatch-Waxman Act. The trial court found that under the AIA, a secret sale does not invalidate patent, and that the disclosure of the patent needs to be made public to trigger the on sale bar.
On appeal, the Federal Circuit found that all four patents were invalid both under the pre-AIA and post-AIA versions of the one sale bar. The Federal Circuit held that a sale of the patented goods had occurred and that the fact the agreements were contingent upon obtaining FDA approval did not alter this result. Under Pfaff v. Wells Electronics, Inc., 525 US 55 (1988), the on sale bar is triggered if an invention is the subject of a “commercial sale” and is also “ready for patenting.” Traditionally, courts have looked to the UCC to determine if there has been a commercial sale. With regard to the second prong of Pfaff, an invention is ready for patenting when there is actual reduction to practice or when there are appropriate disclosure for an ordinary person skilled in the art to practice the invention.
Following the Pfaff analysis, the Federal Circuit held that post-AIA, the details of an invention need not be revealed to the public to trigger the on sale bar. It is sufficient that there be a public sale. Here, the Federal Circuit also found that the present invention was ready for patenting notwithstanding the fact that further testing was being conducted. The Federal Circuit did not, however, address whether a private sale implicates the on sale bar under the AIA. This decision has significant repercussions because public transactions for the commercialization of an invention can trigger the on sale bar, even if the transaction itself does not disclose the details of the product or invention.