Helsinn – The Government Sides with Reality
On September 24, 2018, the Solicitor General filed a motion to participate in oral argument as amicus curiae in Helsinn Healthcare v. Teva Pharmaceuticals. The U.S. government’s interest in this case is obvious, as the decision would have a direct impact on how the USPTO examines and determines patentability of invention.
The term “on sale” in 102(a)(1) means a product is sold or offered for sale to the public.
The amicus brief provides the government’s interpretation of the term “on sale” in 102(a)(1). Typically we say that a product goes on sale “when consumers first have an opportunity to buy it.” Citing to a dictionary, the government argues the “natural understanding” of the term is that it becomes available for sale to the public.
The government’s focus is on whether the invention is placed in the public domain. Looking at the text of 102(a)(1), it argues the 102(a)(1) bar is triggered when one places the invention in the public domain by either i) disclosing the inventive idea or ii) allowing public access to a physical embodiment of the invention.
The inventive idea is disclosed when it is “patented” or “described in a printed publication.” This is the classical 102(a)(1) event where the invention is previously disclosed with sufficient details to enable one to make/use the invention.
The other events listed in 102(a)(1) – “in public use, on sale, or otherwise available to the public” – are triggered, the government argues, when the public gains access to a physical embodiment of the invention. Once the product reaches the public, the patenting is precluded “even if the inventive idea remains hidden from the public.” The public access to the physical product embodying the invention itself, even without learning the inventive idea from the product, triggers the bar under 102(a)(1). Thus, if you make and sell a hose to hose companies and later try to patent the method of making the hose, the sales of the product to the user prevents you from obtaining the patent, as in Pennock v. Dialogue, 27 U.S. 1 (1829). It is a forfeiture of your patent right, regardless of whether the hose companies can figure out how to make the hose by looking at the product or through reverse engineering.
Here, did Helsinn allow public access to the drug formulation in question by entering into a supply-and-purchase agreement with MGI? Should we treat MGI as the public? The government answers No to both questions, arguing that the public is “the product’s expected ultimate purchasers.” It cautions that if we treat the distributer like MGI as the public and entering into this agreement as triggering the on sale bar, it would cause “an unwarranted disadvantage” to smaller companies like Helsinn. On the other hand, a larger vertically integrated company that could do everything in-house including distribution would not run into this problem and would be able to file an application at a later date.
As to the catchall phrase “otherwise available to the public” added by the AIA, the government views it as clarifying language. It clarifies that the preceding list is not exclusive, and the term “otherwise” indicates that the preceding terms “describe ways in which a claimed invention is ‘available to the public.’” The text of 102(a)(1) reads “in public use, on sale, or otherwise available to the public.” Under the governments view the preceding “public use” and “on sale” are exemplary ways that the invention can enter into the public domain, and the last phrase is there to catch all other ways.
No heavy reliance on legislative history, unlike Helsinn
The government briefly addressed the legislative history and stated it supported the interpretation discussed above. The AIA’s legislative history on the addition of the catch-all phrase did not appear to be much. But Helsinn argued, “[t]he Senate Judiciary Committee added the ‘otherwise available to the public’ language to the definition of prior art in 2007 for the specific purpose of making clear that so-called ‘secret sales’ do not qualify as prior art.” Helsinn’s sale was such a secret sale that was eliminated by the AIA, and thus it did not trigger the on-sale bar according to Helsinn.
This position is consistent with the USPTO’s examination guidelines published in 2013. See 78 Fed. Reg. 11,059 (Feb. 14, 2013). The guidelines explain the Office’s view that the catch-all phrase “indicat[es] that secret sale or use activity does not qualify as prior art,” and that “an activity (such as a sale, offer for sale, or other commercial activity) is secret (non-public) if, for example, it is among individuals having an obligation of confidentiality to the inventor.” Id. at 11,060. It would be interesting to see how the USPTO examination guidelines would be updated after the Supreme Court decides the case.