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US Supreme Court Affirms in Helsinn v. Teva On-Sale Bar Case

05th February, 2019

On 22 January 2019, the Supreme Court of the United States issued its opinion, authored by Justice Thomas, in Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., et al., No. 17-1229, 586 U.S. __, slip op. (Jan. 22, 2019), affirming the decision by the Court of Appeals of the Federal Circuit, and holding that “[a] commercial sale to a third party who is required to keep the invention confidential may place the invention ‘on sale’ under § 102(a)”.  Id. Syllabus at 2.

Helsinn had appealed a decision by the Federal Circuit, Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., 855 F.3d 1356 (Fed. Cir. 2017), which was further explained in a denial of a request for rehearing en banc, Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., Nos. 2016-1284, 2016-1787, 2018 WL 1583031 (Fed. Cir. Jan. 16, 2018), holding that Helsinn’s license agreement, and supply and purchase agreement, in combination with their press release of the agreements, constituted an on-sale bar under 35 U.S.C. § 102(a)(1).  Helsinn argued that when the America Invents Act (AIA) modified 35 U.S.C. § 102(a) to prohibit the patenting of inventions that were “on sale…or otherwise available to the public”, the intent was to limit the on-sale bar to those inventions being sold with full disclosure to the public of all the details of the invention.  Helsinn had argued that because the public disclosure of the existence of the agreements did not include the precise details of the formulation, it did not constitute an on-sale bar under post-AIA 35 U.S.C. § 102(a)(1).  

Helsinn did not seek review of the pre-AIA interpretation of the on-sale bar as in Special Devices, Inc. v. OEA, Inc., 270 F. 3d 1353, 1357 (holding that “’secret sales’ can invalidate a patent”), Helsinn Healthcare S.A., 586 U.S. __, slip op. at 7, nor did Helsinn dispute the Federal Circuit’s finding that Helsinn’s claimed invention was subject to the on-sale bar of pre-AIA 35 U.S.C. § 102(a).  Rather, Helsinn only sought review of the interpretation of the post-AIA on-sale bar under 35 U.S.C. § 102(a)(1).

The Supreme Court held that “[t]he addition of ‘or otherwise available to the public’ is simply not enough of a change for us to conclude that Congress intended to alter the meaning of the reenacted term ‘on sale’”, Helsinn Healthcare S.A., 586 U.S. __, slip op. at 8, and declined to upset prior precedent such as Pfaff  v. Wells Electronics, Inc., 525 U.S. 55, 67 (1998), that held that “a sale or offer of sale need not make an invention available to the public to constitute invalidating prior art.”  Helsinn Healthcare S.A., 586 U.S. __, slip op. Syllabus at 2.

In considering the effect of the Supreme Court’s decision in Helsinn, one should not assume that all “secret sales” will constitute an on-sale bar.  Indeed, the Supreme Court in Helsinn limited its review to the issue of whether the AIA altered the scope of the on-sale bar, and did not consider the facts surrounding Helsinn’s sale.  Importantly, the Federal Circuit specifically stated that “[w]e do not find that distribution agreements will always be invalidating under § 102.  We simply find that this particular Supply and Purchase Agreement is.” Helsinn Healthcare S.A., 2018 WL 1583031, at *2.

Author: Sharon E. Crane, Ph.D

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