Supreme Court Holds that the AIA did not Change Long-Standing Precedent Governing the On-Sale Bar

January 22, 2019 – Article
As reported here previously, the U.S. Court of Appeals for the Federal Circuit (CACF) interpreted for the first time the new prior art provision (35 USC 102(a)(1)) of the American Invents Act (AIA). The CAFC held that an invention could be "on sale," and thus barred from patentability, even if the details of the claimed invention were not made available to the public via the sale or offer for sale. This holding came as a surprise to many commentators who believed that the new language in Article 102(a)(1) “or otherwise available to the public” modified the preceding phrase “on sale.” Thus, when companies offer for sale their technology (even under a confidential agreement) anywhere in the World, they should be aware that such offers could trigger a bar against the patentability of the technology even when the offers do not make the claimed invention available to the public.

On January 22, 2019, the U.S. Supreme Court affirmed the CAFC’s interpretation:

A commercial sale to a third party who is required to keep the invention confidential may place the invention “on sale” under §102(a). The patent statute in force immediately before the AIA in¬cluded an on-sale bar. This Court’s precedent interpreting that pro¬vision supports the view that a sale or offer of sale need not make an invention available to the public to constitute invalidating prior art. See, e.g., Pfaff v. Wells Electronics, Inc., 525 U. S. 55, 67. The Feder¬al Circuit had made explicit what was implicit in this Court’s pre-AIA precedent, holding that “secret sales” could invalidate a patent. Special Devices, Inc. v. OEA, Inc., 270 F. 3d 1353, 1357. Given this set¬tled pre-AIA precedent, the Court applies the presumption that when Congress reenacted the same “on sale” language in the AIA, it adopt¬ed the earlier judicial construction of that phrase. The addition of the catchall phrase “or otherwise available to the public” is not enough of a change for the Court to conclude that Congress intended to alter the meaning of “on sale.”

So much for harmonization of international patent law that the AIA was supposed to bring!