AIA On-Sale Bar May Be Triggered By Contract Keeping Certain Invention Details Confidential
Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., 2017 U.S. App. LEXIS 7650 (Fed. Cir. May 1, 2017) (DYK, Mayer, O’Malley) (D.N.J.: Cooper) (4 of 5 stars)
Fed Cir reverses bench trial determination that Helsinn’s patents were not invalid per the on-sale bar provision of § 102. The case involved four Helsinn patents relating to reducing chemotherapy-induced nausea and vomiting (“CINV”). Pre-AIA § 102 applies to three of the patents. Modern § 102 applies to the fourth.
As to the three pre-AIA patents, the district court correctly determined that a 2001 supply agreement between Helsinn and MGI Pharma was a contract for future sale of a commercial product embodying the three patents. The opinion rejects Helsinn’s argument that, because the contract was contingent on FDA approval for Helsinn’s product, the arrangement would not be commercially understood as a contract for sale. Citing the UCC and BG Group, 134 S. Ct. 1198 (2014), the opinion reasons that a contract with a condition precedent remains a valid, enforceable contract. That the agreement contemplated two products—one practicing the claims, one not—also does not change the outcome. The opinion also rejects Helsinn’s argument under Medicines Co., 827 F.3d 1363 (Fed. Cir. 2016) (en banc), that the law will not find commercial activities invalidating if those same activities (here, MGI’s selection of Helsinn as a sole supplier) could have been performed in house. Helsinn’s relationship with MGI was too different from the contract manufacturing arrangement in Medicines to invoke that case’s rule.
As to the fourth patent, the district court erred in concluding that the same agreement failed to invoke the modern on-sale bar because the agreement kept the actual dosing details—which were part of the claims—confidential. The opinion analyzes modern § 102’s rule barring patentability of an “invention [that] was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” (Emphasis added.) It rejects Helsinn’s argument that the revision to § 102 means that the on-sale bar does not apply to sales that do not disclose the invention itself to the public—i.e., sales that keep no details of the invention confidential. Citing a variety of Supreme Court and Federal Circuit authority, the opinion reasons that the history of the on-sale bar has not required full disclosure of all claim elements, so long as there is a sale of an embodiment of the invention. Reviewing the legislative history of AIA, the opinion finds no basis to support overturning such history. It therefore concludes that the 2001 supply agreement was a contract for future sale of the invention of the fourth patent.
Finally, the opinion concludes that the inventions of all four patents were ready for patenting as of the critical date, as required by Pfaff, 525 U.S. 55 (1998), due to actual reduction to practice. It was uncontested that Helsinn had made the formulation in a stable form by that date. The district court erred in concluding that Helsinn had not yet determined that the invention would work for its intended purpose. To satisfy that standard, it is not necessary to meet FDA standards for approval, only to show that the invention works “beyond a probability of failure” but not “a possibility of failure.” Scott, 34 F.3d 1058 (Fed. Cir. 1994). The opinion concludes that, on the record available, it was clear as of the critical date that the invention would work for its intended purpose.
KEYWORDS: ON-SALE BAR; AMERICA INVENTS ACT; READY FOR PATENTING