Amicus Curiae Brief — Helsinn Healthcare S.A., Petitioner v. Teva Pharmaceuticals USA, Inc., et al.
Supreme Court briefAug 30, 2018
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No. 17-1229
In the Supreme Court of the United States
HELSINN HEALTHCARE S.A., PETITIONER
v.
TEVA PHARMACEUTICALS USA, INC., ET AL.
ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
BRIEF FOR THE UNITED STATES
AS AMICUS CURIAE SUPPORTING PETITIONER
NOEL J. FRANCISCO
Solicitor General
Counsel of Record
CHAD A. READLER
Acting Assistant Attorney
General
MALCOLM L. STEWART
Deputy Solicitor General
JENNY C. ELLICKSON
Assistant to the Solicitor
General
MARK R. FREEMAN
MEGAN BARBERO
JENNIFER L. UTRECHT
Attorneys
Department of Justice
Washington, D.C. 20530-0001
SupremeCtBriefs@usdoj.gov
(202) 514-2217
QUESTION PRESENTED
Whether an invention is “on sale” within the meaning
of 35 U.S.C. 102(a)(1) when the public cannot obtain
physical embodiments of the invention, but the invention is the subject of licensing and distribution agreements whose existence was disclosed to the public.
(I)
TABLE OF CONTENTS
Page
Interest of the United States....................................................... 1
Statement ...................................................................................... 2
Summary of argument ............................................................... 11
Argument..................................................................................... 14
I. An invention is “on sale” within the meaning of
Section 102(a)(1) only when a sale or offer for sale
makes the invention available to the public ................ 15
A. The text of Section 102(a)(1) provides that an
invention is “on sale” only when it is available
to the public ............................................................. 15
B. Treating the on-sale bar as limited to sales and
offers that make an invention “available to the
public” is consistent with the balance that the
patent laws have traditionally struck .................... 21
C. The AIA’s legislative history supports the
conclusion that a sale or offer for sale must
make an invention “available to the public” in
order to trigger Section 102(a)(1)’s on-sale bar....... 24
II. The agreements at issue in this case did not make
the invention “available to the public” within the
meaning of Section 102(a)(1) and therefore did not
trigger the on-sale bar .................................................. 26
A. An invention is “on sale” within the meaning of
Section 102(a)(1) only when a product
embodying the invention can be purchased by
its expected ultimate customers ............................ 26
B. Public disclosure of the existence of the April
2001 agreements did not trigger the Section
102(a)(1) bar ............................................................. 30
C. Petitioner’s agreements with MGI did not
make products embodying the 0.25 mg dose of
palonosetron available to the public ...................... 31
Conclusion ................................................................................... 33
(III)
IV
TABLE OF AUTHORITIES
Cases:
Page
Antor Media Corp., In re, 689 F.3d 1282 (Fed. Cir.
2012) ........................................................................... 3, 16, 17
Atlanta Attachment Co. v. Leggett & Platt, Inc.,
516 F.3d 1361 (Fed. Cir. 2008) ........................................... 23
Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 1331
(Fed. Cir. 2016) ......................................................... 2, 16, 17
Bonito Boats, Inc. v. Thunder Craf t Boats, Inc.,
489 U.S. 141 (1989).............................................. 2, 21, 22, 23
Consolidated Fruit-Jar Co. v. Wright, 94 U.S. 92
(1877) .................................................................................... 22
Egbert v. Lippmann, 104 U.S. 333 (1881) ........................... 17
Elizabeth v. Pavement Co., 97 U.S. 126 (1878) ................... 22
Gustafson v. Alloyd Co., 513 U.S. 561 (1995)...................... 18
Kellogg Co. v. National Biscuit Co., 305 U.S. 111
(1938) .................................................................................... 27
Life Techs. Corp. v. Promega Corp., 137 S. Ct. 734
(2017) .................................................................................... 17
Madstad Eng’g, Inc. v. United States Patent &
Trademark Office, 756 F.3d 1366 (Fed. Cir. 2014).......... 24
Markman v. Westview Instruments, Inc., 517 U.S.
370 (1996) ............................................................................. 16
Netscape Commc’ns Corp. v. Konrad, 295 F.3d 1315
(Fed. Cir. 2002) ................................................................... 23
Paroline v. United States, 572 U.S. 434 (2014) ............ 19, 20
Pennock v. Dialogue, 27 U.S. (2 Pet.) 1 (1829) ............. 21, 22
Pfaff v. Wells Elecs., Inc., 525 U.S. 55
(1998) ...............................................................3, 22, 24, 28, 29
STX, LLC v. Brine, Inc., 211 F.3d 588 (Fed. Cir.
2000) ..................................................................................... 23
V
Cases—Continued:
Page
Scott Paper Co. v. Marcalus Mfg. Co., 326 U.S. 249
(1945) .................................................................................... 27
United States v. Fausto, 484 U.S. 439 (1988) ..................... 18
United States v. Williams, 553 U.S. 285 (2008) ................. 17
Yates v. United States, 135 S. Ct. 1074 (2015) .................... 18
Statutes:
Leahy-Smith America Invents Act, Pub. L. No.
112-29, 125 Stat. 284 ............................................................. 2
Patent Act of 1790, ch. 7, 1 Stat. 109.................................... 21
Patent Act of 1836, ch. 357, 5 Stat. 117 .................................. 3
§ 6, 5 Stat. 119 .............................................................. 3, 22
Patent Act of 1952, ch. 950, 66 Stat. 792 (35 U.S.C. 1
et seq.)..................................................................................... 4
35 U.S.C. 2(a)(1)................................................................. 1
35 U.S.C. 102 .......................................................... 2, 14, 20
35 U.S.C. 102(a) (1952) .................................................... 23
35 U.S.C. 102(a)(1).................................................. passim
35 U.S.C. 102(b) (1952) ............................................... 4, 23
35 U.S.C. 102(b) (1994) ................................................... 29
35 U.S.C. 102(b) ................................................. 2, 4, 14, 15
35 U.S.C. 102(b)(1) ............................................................ 2
35 U.S.C. 112(a) ................................................................. 3
35 U.S.C. 112(b) ............................................................... 16
35 U.S.C. 131 ...................................................................... 1
18 U.S.C. 2259(b)(3) ............................................................... 19
Miscellaneous:
The American Heritage Dictionary of the English
Language (5th ed. 2016) ............................................... 15, 19
VI
Miscellaneous—Continued:
Page
Suryatapa Bhattacharya, Coca-Cola Serves Its First
Alcoholic Drink, Wall St. J., May 29, 2018 ...................... 15
Diane Cardwell, The Swamp-Gas Station: Fuel
From Landfill Methane Goes on Sale, N.Y. Times,
Oct. 3, 2013........................................................................... 16
157 Cong. Rec. (2011):
p. 3415 ............................................................................... 25
p. 3423 ............................................................................... 25
pp. 3423-3424.................................................................... 25
p. 3424 ............................................................................... 25
H.R. Rep. No. 98, 112th Cong., 1 Sess., Pt. 1 (2011) .......... 24
10 The Oxford English Dictionary (2d ed. 1989) ............... 19
S. Rep. No. 338, 24th Cong., 1st Sess. (1836)...................... 22
S. Rep. No. 259, 110th Cong., 2d Sess. (2008)..................... 25
Hayley Tsukayama, Apple’s iPad Pro goes on sale
Wednesday, Wash. Post, Nov. 9, 2015, https://www.
washingtonpost.com/news/the-switch/wp/2015/11/
09/apples-ipad-pro-goes-on-sale-wednesday/
?noredirect=on ................................................................... 15
Webster’s Third New International Dictionary of
the English Language (1986) ............................................ 19
In the Supreme Court of the United States
No. 17-1229
HELSINN HEALTHCARE S.A., PETITIONER
v.
TEVA PHARMACEUTICALS USA, INC., ET AL.
ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
BRIEF FOR THE UNITED STATES
AS AMICUS CURIAE SUPPORTING PETITIONER
INTEREST OF THE UNITED STATES
This case presents the question whether petitioner’s
invention was “on sale” within the meaning of 35 U.S.C.
102(a)(1) at a time when the public could not obtain
physical embodiments of the invention, but the invention was the subject of licensing and distribution agreements whose existence had been disclosed to the public.
The United States Patent and Trademark Office
(USPTO) is responsible for examining all patent applications and for granting and issuing patents when the
applicants satisfy the statutory conditions for patentability. 35 U.S.C. 2(a)(1), 131. Several other agencies of
the federal government also have strong regulatory interests in the efficacy of the patent system. The United
States therefore has a substantial interest in the
Court’s resolution of the question presented here.
(1)
2
STATEMENT
1. Since 1790, the patent laws have prohibited the
issuance of patents for inventions to which the public
already has access. See Bonito Boats, Inc. v. Thunder
Craf t Boats, Inc., 489 U.S. 141, 146-149 (1989). Section
102(a)(1) of Title 35 of the United States Code is the
current codification of this longstanding principle. Section 102(a)(1) states that “[a] person shall be entitled to
a patent unless * * * the claimed invention 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.”
35 U.S.C. 102(a)(1). Section 102(b) provides that, under
specified circumstances involving disclosures by the inventor, “[a] disclosure made 1 year or less before the
effective filing date of a claimed invention shall not be
prior art to the claimed invention under subsection
(a)(1).” 35 U.S.C. 102(b)(1). In cases like this one, the
patentability of an invention therefore turns on whether
the invention was placed “on sale” more than one year
before the effective filing date of the patent application.
This version of Section 102 was enacted in 2011 as part
of the Leahy-Smith America Invents Act (AIA), Pub. L.
No. 112-29, 125 Stat. 284.
Section 102(a)(1) contemplates two conceptually distinct ways in which an unpatented invention may be
placed in the public domain so as to bar subsequent patenting. An invention is “described in a printed publication” within the meaning of Section 102(a)(1) if the inventive idea is disclosed in a sufficiently public way, and
in sufficient detail, to enable a person skilled in the art
to make or use it. See Blue Calypso, LLC v. Groupon,
Inc., 815 F.3d 1331, 1348 (Fed. Cir. 2016) (“To qualify
as a printed publication, a reference must have been
3
sufficiently accessible to the public interested in the
art.”) (citation and internal quotation marks omitted);
In re Antor Media Corp., 689 F.3d 1282, 1288-1290
(Fed. Cir. 2012) (explaining that a printed publication
must disclose enough information to enable a person of
ordinary skill in the art to make or use the invention).
That may occur even if no physical embodiment of the
invention has ever been produced, let alone made accessible to the public. The inventive idea likewise will have
been disclosed to the public if the invention has been
patented, since a compliant patent application must
“contain a written description of the invention, and of
the manner and process of making and using it,” that is
sufficient “to enable any person skilled in the art * * *
to make and use the” invention. 35 U.S.C. 112(a).
The on-sale bar, by contrast, is typically triggered by
the public sale, or offering for sale, of physical embodiments of the invention. Such sales or offerings can place
an invention in the public domain even if they do not enable a person skilled in the art to make or use it. That
may occur if the embodiments are not susceptible to the
sort of reverse engineering that would enable an expert
to discern how the invention works. For purposes of
Section 102(a)(1), a public sale or offering therefore can
place the invention in the public domain—i.e., make it
“available to the public,” 35 U.S.C. 102(a)(1)—even if
the inventive idea remains secret.
The first United States patent law to include an express on-sale bar was the Patent Act of 1836, ch. 357,
5 Stat. 117, which prohibited the patenting of any invention that was “in public use or on sale, with [the inventor’s] consent or allowance,” when the patent application was filed. Id. § 6, 5 Stat. 119; see Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 65 (1998). Congress preserved
4
the on-sale bar in the Patent Act of 1952, ch. 950,
66 Stat. 792 (35 U.S.C. 1 et seq.), prohibiting the patenting of any invention that “was patented or described in
a printed publication in this or a foreign country or in
public use or on sale in this country” more than one year
before the date of the patent application. 35 U.S.C.
102(b) (1952). The AIA moved this provision to Section
102(a)(1) and revised some of its text. See 35 U.S.C.
102(a)(1).
2. a. This case involves a dispute over the validity
of a patent covering a 0.25 mg dose of palonosetron in a
5 ml solution, an intravenous formulation directed to reducing the likelihood of chemotherapy-induced nausea
and vomiting. 1 Pet. App. 19a-20a, 25a, 60a. On January
30, 2003, petitioner filed a provisional patent application
covering the 0.25 mg dose, and the Food and Drug Administration (FDA) approved the 0.25 mg dose in July
2003. Id. at 25a. In 2013, petitioner applied for and obtained the patent at issue here, which also covers the
0.25 mg dose. Id. at 25a, 142a. The parties agree that
this patent is subject to the AIA for purposes of this
case. See id. at 61a. The parties further agree that the
application of Section 102(a)(1) to this case turns on
whether the 0.25 mg dose was “on sale” before January
30, 2002, i.e., one year before petitioner filed its provisional patent application. Id. at 20a & n.1; see 35 U.S.C.
102(b).
b. Petitioner is a family-owned and family-run company with headquarters in Switzerland. Pet. App. 77a.
During the period relevant here, petitioner’s business
Four patents covering the 0.25 mg dose of palonosetron were
initially at issue in this case, Pet. App. 19a-22a, but petitioner did
not seek this Court’s review of the court of appeals’ invalidity determination with respect to three of those patents, Pet. 10 n.2.
1
5
model was to acquire rights to drug products in the
early or middle stage of development, develop those
products, and then license the developed products out
for marketing and distribution. Id. at 78a-79a, 114a. In
1998, petitioner purchased the rights to palonosetron,
including the existing development research, and began
work to further develop palonosetron into a pharmaceutical product. Id. at 77a. By early 2000, petitioner was
developing two palonosetron formulations, the 0.25 mg
dose and a 0.75 mg dose. Id. at 22a.
In September 2000, petitioner issued a press release
announcing that it was moving forward with the next
phase of clinical trials involving the use of palonosetron
to prevent chemotherapy-induced nausea and vomiting.
J.A. 50. The press release stated that, “[u]pon market
approval, Helsinn will be in a position to supply its marketing partners with a finished product ready for distribution.” Pet. App. 108a n.26 (citation omitted). Petitioner’s goal in licensing out a palonosetron product was
to minimize financial risk for the palonosetron project,
which had proved much costlier than petitioner had anticipated, and to plan for the future marketing and distribution of the product in the United States if the FDA
approved it. Id. at 114a. After “conduct[ing] a lengthy
and arduous search for a willing ‘commercial partner’
for the U.S. market,” id. at 115a (citation omitted), petitioner entered into a supply-and-purchase agreement
and a license agreement with MGI Pharma, Inc. (MGI),
an oncology-focused pharmaceutical company. Id. at
22a-23a, 115a.
The supply-and-purchase agreement “set the stage”
for MGI’s “future purchase” from petitioner of the two
palonosetron doses that petitioner was then testing.
Pet. App. 116a. The agreement provided that, if the
6
FDA approved either dose, petitioner would sell MGI
that palonosetron product. Id. at 29a. MGI agreed to
purchase exclusively from petitioner, and petitioner
agreed to supply, MGI’s requirements of “Products,”
which the supply-and-purchase agreement defined as
the pharmaceutical preparations of the palonosetron
formulation that “will be described in” an official regulatory approval to market the drugs. Id. at 119a (citation omitted); JA. 218; see Pet. App. 23a. The supplyand-purchase agreement also described the purchase
process that petitioner and MGI would implement if one
of the doses received FDA approval. Pet. App. 23a-24a,
118a. The agreement further provided that, if the FDA
did not approve either dose, the supply-and-purchase
agreement would terminate automatically. Id. at 24a.
The supply-and-purchase agreement was subject to
the license agreement. Pet. App. 115a-116a. That
agreement gave MGI a license to distribute, promote,
market, and sell “Products,” which the agreement again
defined as the pharmaceutical preparations of the
palonosetron formulation that “will be described in” an
official regulatory approval to market the drugs. 2 Id. at
119a (citation omitted); J.A. 59, 214. In return, MGI
agreed to make $11 million in upfront payments to petitioner and to pay additional future royalties on any distributions of the palonosetron products in the United
States. Pet. App. 23a.
According to one of petitioner’s negotiators, “it
was quite clear” to MGI that “this was a developmental
. . . . product,” which meant that MGI “w[as] not buying
a product.” Pet. App. 116a (citation omitted). Rather,
During the proceedings below, the parties agreed that the
“products” covered by the license agreement were 0.25 mg and 0.75
mg doses of palonosetron. Pet. App. 23a.
2
7
the negotiator testified, MGI was “buying the rights to
participate in the development effort to potentially have
a product in the future.” Ibid. (citation omitted).
Consistent with that testimony, the license agreement provided that, as of the date of the agreement, the
palonosetron products were “under development” by
petitioner in anticipation of a future application for
FDA approval. J.A. 69; see Pet. App. 24a. MGI acknowledged in the license agreement that petitioner might
interrupt or discontinue its development of the palonosetron products if that development became “commercially unreasonable” or if the results of the clinical trials
were unfavorable. Ibid. The license agreement also
stated that petitioner made “no warranty” that the
palonosetron products would obtain FDA approval or
“that a Product can be developed and registered.” J.A.
69. Petitioner pledged, however, to “use commercially
reasonable efforts to complete the development of the
Products” and to file a new drug application with the
FDA by the end of 2002, provided that the development
was satisfactory and that no unforeseen events or additional FDA requests occurred. J.A. 69-70. The license
agreement also allowed petitioner to terminate the
agreement if the clinical-trial results were unfavorable
and the FDA did not approve the sale of either dosage
of the product. Pet. App. 24a.
Several provisions of the license agreement contemplated that the parties would work together on the future development, regulation, and patenting of palonosetron products. See J.A. 62-63, 70-72, 74, 105. Petitioner and MGI agreed that, if clinical trials produced
unfavorable results, if the FDA denied approval, or if
the products’ development was interrupted or discontinued, the parties would “meet to discuss and seek an
8
agreement” on additional development efforts that the
parties deemed appropriate, “including the direct performance and funding by MGI of the further development activities deemed necessary for the registration of
the Products.” J.A. 70.
The parties further agreed that, if the FDA approved one of the palonosetron doses, MGI would serve
as petitioner’s agent with respect to the new drug application and would manage and carry out all FDA communications and relations on petitioner’s behalf, in close
coordination with petitioner. J.A. 71-72. MGI further
agreed to collaborate with and assist petitioner in obtaining regulatory approvals outside the United States,
with petitioner reimbursing MGI for the expenses it incurred in providing such support. J.A. 74. And the parties agreed that MGI would cooperate with petitioner
“for the purpose of filing for and obtaining patent extensions and supplementary or complementary protection certificates” of the existing palonosetron patents.
J.A. 105.
Both the license agreement and the supply-andpurchase agreement included appendices that described in detail the palonosetron formulations that petitioner had submitted to the FDA. Pet. App. 33a, 119a120a. Each agreement contained a confidentiality provision that required MGI to “treat as strictly confidential” any information, data, or documents it received under the agreements that were “not generally known to
the trade.” Id. at 120a.
Petitioner and MGI announced the agreements in a
joint press release, and MGI reported the agreements
in a Securities and Exchange Commission (SEC) filing
that included partially redacted copies of both agree-
9
ments. Pet. App. 23a. The specific formulations covered by the agreements—i.e., the 0.25 mg and 0.75 mg
doses—were not publicly disclosed. Id. at 24a, 121a.
Meanwhile, MGI’s initial payments to petitioner helped
fund the ongoing clinical trials of the palonosetron
doses. Id. at 116a.
3. Respondents sought FDA approval to market a
generic 0.25 mg palonosetron product, and petitioners
sued respondents for infringing the patent at issue
here. Pet. App. 26a. In their defense, respondents asserted that the patent was invalid under Section
102(a)(1) because petitioner’s agreements with MGI
had placed the 0.25 mg dose “on sale” in April 2001. Id.
at 55a, 151a; see id. at 115a. After a bench trial, the
district court held that respondents had not proved that
the patent was invalid under Section 102(a)(1). Id. at
230a.
The district court held that Section 102(a)(1) “requires a public sale or offer for sale of the claimed invention.” Pet. App. 164a. The court found that petitioner’s agreements with MGI did not meet that standard because “the sale or offer o[f ] sale did not make
[the] claimed invention available to the public.” Id. at
180a. The court rejected respondents’ contention that
the joint press release and SEC filing, which disclosed
to the public the existence of the agreements between
petitioner and MGI, had placed the invention “on sale”
in April 2001. Ibid.; see id. at 23a, 120a-121a. The court
explained that “the post-AIA on-sale bar inquiry is not
focused on the public disclosure of the sale or offer for
sale; rather, the ‘sale’ prong of the on-sale bar requires
that the sale make the claimed invention available to the
public.” Id. at 180a. Here, the court concluded, respondents had failed to show how the press release or
10
SEC filing made petitioner’s “claimed invention, i.e.,
its palonosetron formulation, available to the public.”
Ibid.
4. The court of appeals reversed, holding that the
patent was invalid under Section 102(a)(1). Pet. App.
17a-52a. The court found that “an agreement contracting for the sale of the claimed invention contingent on
regulatory approval is still a commercial sale as the
commercial community would understand that term.”
Id. at 30a. The court stated that, under the Federal Circuit’s precedents, “an invention is made available to the
public when there is a commercial offer or contract to
sell a product embodying the invention and that sale is
made public,” even if “the details of the invention” are
not “disclosed in the terms of sale.” Id. at 40a.
The court of appeals stated that “[a] primary rationale of the on-sale bar is that publicly offering a product for sale that embodies the claimed invention places
it in the public domain, regardless of when or whether
actual delivery occurs.” Pet. App. 40a-41a. The court
explained that prior Federal Circuit decisions had “applied the on-sale bar even when there is no delivery,
when delivery is set after the critical date, or, even
when, upon delivery, members of the public could not
ascertain the claimed invention.” Id. at 42a. The court
considered the AIA’s legislative history and found “no
indication in the floor statements” by individual members of Congress that those members intended to overrule those earlier Federal Circuit rulings. Ibid.; see id.
at 36a-38a. The court therefore concluded that, “after
the AIA, if the existence of the sale is public, the details
of the invention need not be publicly disclosed in the
terms of sale” in order for Section 102(a)(1) to apply. Id.
at 43a. The court of appeals found the on-sale bar to be
11
applicable here because the supply-and-purchase agreement between petitioner and MGI, which was consummated and publicly announced more than one year before petitioner submitted its provisional patent application, “constituted a sale of the claimed invention—the
0.25 mg dose.” Ibid.; see id. at 20a, 24a.
5. a. The court of appeals denied rehearing and rehearing en banc. Pet. App. 1a-2a. Judge O’Malley concurred in the denial of panel rehearing and wrote separately to respond to points raised in petitioner’s rehearing petition and in various amicus briefs. Id. at 3a-16a.
Judge O’Malley described the panel decision as holding
only “that the particular agreement at issue triggered
the on-sale bar, in part—but not exclusively—because
it was made public.” Id. at 5a. She stated that “an offer
for sale between a supplier and distributor can trigger
the on-sale bar even though the transaction is several
steps removed from the consuming public actually acquiring the invention.” Id. at 15a-16a.
b. Petitioner filed a motion to stay the mandate,
which the court of appeals denied in a per curiam order
by the panel. Br. in Opp. App. 1-2. The order stated
that, “[f ]or the reasons set forth in the majority opinion,
and in Judge O’Malley’s concurrence to the denial of rehearing, the decision is a narrow one.” Id. at 2.
SUMMARY OF ARGUMENT
I. Under 35 U.S.C. 102(a)(1), a sale or offer to sell
must make an invention “available to the public” in order to trigger the on-sale bar.
A. The term “on sale” typically refers to a product
that is sold or offered for sale to the public. Within Section 102(a)(1), the three terms that precede “on sale”—
“patented,” “described in a printed publication,” and “in
public use”—reinforce that understanding. All three
12
terms refer to situations in which either the inventive
idea or physical embodiments of an invention are placed
in the public domain. The phrase “otherwise available
to the public,” which was added in 2011 as part of the
AIA, confirms that an invention is placed “on sale” only
when it is made available for purchase by the public.
35 U.S.C. 102(a)(1).
B. Treating the on-sale bar as limited to sales and
offers that make an invention “available to the public”
is consistent with the balance that the patent laws have
traditionally struck. The Court has repeatedly described the on-sale bar as applying to inventions that
have been placed on “public sale” or in “public commerce.” So understood, the bar has served to prevent
use of the patent system to withdraw from public access
inventions that had previously entered the public domain. Before the AIA was enacted, the on-sale bar also
was sometimes viewed as an incentive to the prompt filing of patent applications. The AIA provided an alternative means to the same end, however, by amending
United States patent law so that priority disputes are
now resolved in favor of the first inventor to file a patent
application.
C. The AIA’s legislative history supports the conclusion that a sale or offer for sale triggers Section
102(a)(1)’s on-sale bar only if it makes the invention
“available to the public.” Both committee reports and
floor statements made that point explicitly.
II. The agreements between petitioner and MGI did
not make petitioner’s invention “available to the public”
and therefore did not trigger Section 102(a)(1)’s on-sale
bar.
A. The Court should reject respondents’ suggestion
that, because petitioner sold its invention to MGI and
13
MGI is a member of the public, the on-sale bar applies.
Treating every sale to a third-party distributor as making an invention “available to the public” is inconsistent
with Section 102(a)(1)’s text and purposes and would
produce untoward results. Among other things, it would
produce unwarranted disparities between large, vertically integrated companies that can perform in-house
the various steps needed to prepare an invention for
public sale, and smaller companies that rely on thirdparty distributors to disseminate their inventions to the
public.
B. The disclosures by petitioner and MGI concerning the existence and general contours of the agreements between them did not trigger the on-sale bar.
For purposes of Section 102(a)(1), an invention can enter the public domain either when the inventive idea is
disclosed with sufficient specificity to enable a person
skilled in the art to make and use it, or when physical
embodiments of the invention are made available for
purchase by their ultimate customers. Public disclosure
of a redacted version of the supply-and-purchase agreement between petitioner and MGI did not have either of
those effects.
C. Petitioner’s agreements with MGI did not place
the invention “on sale” within the meaning of Section
102(a)(1). The agreements initiated a collaborative arrangement that the contracting parties hoped would
culminate in sales of the invention to the public. But the
contracting parties recognized that various intermediate steps were necessary before any such sales would
occur, and that petitioner might ultimately deliver no
palonosetron products even to MGI itself if, for example, the FDA did not approve the relevant palonosetron
14
doses or the ongoing clinical trials produced unfavorable results. Like similar arrangements between corporate subsidiaries in a large organization, the agreements were intended to facilitate future marketing efforts, but they did not make petitioner’s invention available to its ultimate purchasers.
ARGUMENT
Under 35 U.S.C. 102, a patent shall not issue for a
claimed invention that was “patented, described in a
printed publication, or in public use, on sale, or otherwise available to the public before” a date specified in the
statute—here, the date one year before petitioner filed its
provisional patent application. 35 U.S.C. 102(a)(1); see
35 U.S.C. 102(b). That statutory text establishes that a
claimed invention is “on sale” only when a sale or offer
for sale makes the invention “available to the public.”
The agreements between petitioner and MGI for future
distribution of palonosetron products, following further
development and regulatory approval, did not satisfy
that standard because they did not give the public the
opportunity to buy any palonosetron drugs.
The public announcements that the agreements had
been consummated did not trigger Section 102(a)(1)’s
ban on patent issuance. Because the agreements were
disclosed to the public only in redacted form, the disclosure did not enable persons skilled in the art to make or
use the invention. And while the announcements alerted the public to the existence of the sale, they did not
make the invention itself “available to the public.” The
judgment of the court of appeals should be reversed.
15
I. AN INVENTION IS “ON SALE” WITHIN THE MEANING
OF SECTION 102(A)(1) ONLY WHEN A SALE OR OFFER
FOR SALE MAKES THE INVENTION AVAILABLE TO
THE PUBLIC
A. The Text Of Section 102(a)(1) Provides That An Invention
Is “On Sale” Only When It Is Available To The Public
Section 102(a)(1) prohibits the issuance of a patent
when “the claimed invention was patented, described in
a printed publication, or in public use, on sale, or otherwise available to the public before” a date specified in
the statute. 35 U.S.C. 102(a)(1); see 35 U.S.C. 102(b).
The term “on sale” inherently suggests a sale or offer
to sell to the public. Within Section 102(a)(1), that inference is confirmed by the other enumerated bars to
patent issuance, and by the residual phrase “otherwise
available to the public.”
1. The term “on sale” typically refers to a product
that is sold or offered for sale to the public. A product
is commonly understood to go “on sale” when consumers first have an opportunity to buy it. See, e.g., The
American Heritage Dictionary of the English Language 1547 (5th ed. 2016) (defining “on sale” to mean
“[a]vailable to customers”). 3 That natural understanding of “on sale” suggests that an invention goes “on
See also, e.g., Suryatapa Bhattacharya, Coca-Cola Serves Its
First Alcoholic Drink, Wall St. J., May 29, 2018, at B3 (“A fizzy
lemon-flavored alcoholic drink that went on sale in Japan on Monday marked Coca-Cola Co.’s first fling at selling alcohol in its 132year history.”); Hayley Tsukayama, Apple’s iPad Pro goes on sale
Wednesday, Wash. Post, Nov. 9, 2015, https://www.washingtonpost.
com/news/the-switch/wp/2015/11/09/apples-ipad-pro-goes-on-salewednesday/?noredirect=on (“Apple on Monday announced that it
will begin accepting online orders for the iPad Pro on Wednesday
and that the tablet should show up in stores by the end of the
3
16
sale” for purposes of Section 102(a)(1) when it first becomes available for sale to the public.
2. The three terms that precede “on sale” in Section
102(a)(1) reinforce that understanding. 35 U.S.C. 102(a)(1).
The terms “patented,” “described in a printed publication,”
and “in public use” all identify circumstances that place an
invention in the public domain. Ibid. Section 102(a)(1)
contemplates two distinct senses in which an invention
may be placed in the public domain.
First, when a claimed invention is “patented” or “described in a printed publication,” the inventive idea becomes publicly available. See Markman v. Westview
Instruments, Inc., 517 U.S. 370, 373 (1996) (“[A] patent
must describe the exact scope of an invention and its
manufacture * * * to apprise the public of what is still
open to them.”) (citation omitted); 35 U.S.C. 112(b);
Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 1331,
1348 (Fed. Cir. 2016) (“To qualify as a printed publication, a reference must have been sufficiently accessible
to the public interested in the art.”) (citation and internal quotation marks omitted); In re Antor Media Corp.,
689 F.3d 1282, 1288-1290 (Fed. Cir. 2012) (explaining
that a printed publication must disclose enough information to enable a person of ordinary skill in the art to
make or use the invention). Those circumstances make
the inventive idea publicly available by giving persons
skilled in the art the knowledge required to make and
use the invention.
week.”); Diane Cardwell, The Swamp-Gas Station: Fuel From
Landfill Methane Goes on Sale, N.Y. Times, Oct. 3, 2013, at B9
(“Clean Energy Fuels will announce on Thursday that it has started
selling a fuel made of methane from landfills and other waste
sources at its more than 40 filling stations in California.”).
17
Respondents have not contended, and the court of
appeals did not suggest, that the invention at issue here
had been “described in a printed publication” before
January 30, 2002. The unredacted licensing and supplyand-purchase agreements between petitioner and MGI
would have enabled persons skilled in the art to make
the invention. The unredacted agreements were not
“printed publication[s],” however, because they were
shared only between the two contracting parties subject
to a duty of confidentiality. See Blue Calypso, 815 F.3d
at 1348. Redacted versions of the agreement were made
available to the public in petitioner’s SEC filings, and
those redacted agreements were “printed publications.”
As a result of the redactions, however, those filings did
not describe the invention in sufficient detail to enable
a person skilled in the art to make it. See Antor Media,
689 F.3d at 1288-1290.
Second, when a claimed invention is “in public use,”
the public has access to a physical embodiment of the
invention. See Egbert v. Lippmann, 104 U.S. 333, 336
(1881) (“If an inventor, having made his device, gives or
sells it to another, to be used by the donee or vendee,
without limitation or restriction, or injunction of secrecy, and it is so used, such use is public.”). Placing
that physical embodiment “in public use” therefore can
preclude the patenting of that invention, even if the inventive idea remains hidden from the public.
This Court has often recognized that “[a] word is
given more precise content by the neighboring words
with which it is associated.” Life Techs. Corp. v.
Promega Corp., 137 S. Ct. 734, 740 (2017) (quoting
United States v. Williams, 553 U.S. 285, 294 (2008)).
The Court relies on this interpretive principle, known
as noscitur a sociis, “to ‘avoid ascribing to one word a
18
meaning so broad that it is inconsistent with its accompanying words, thus giving unintended breadth to the
Acts of Congress.’ ” Yates v. United States, 135 S. Ct.
1074, 1085 (2015) (quoting Gustafson v. Alloyd Co., 513
U.S. 561, 575 (1995)). As explained above, the three specific terms that precede “on sale” all describe occurrences that make an invention available to the public,
either in inventive concept or in physical form. Cf. Pet.
App. 9a n.2 (O’Malley, J., concurring in denial of panel
rehearing) (“[E]ach phrase—i.e., ‘patented,’ ‘printed
publication,’ and ‘public use’—recites a disclosure that
is necessarily public.”). The noscitur a sociis canon
therefore suggests that the term “on sale” should be
construed in the same manner. Cf. Gustafson, 513 U.S.
at 573-575 (concluding that a statute’s reference to
“communication” meant “a public communication” because of its inclusion in a list of terms that “refer[red]
to documents of wide dissemination”).
3. Although United States patent laws have long
barred the patenting of inventions that were “on sale”
before a specified date, the phrase “or otherwise available to the public” was added to Section 102(a)(1) by the
AIA. 35 U.S.C. 102(a)(1). The most obvious purpose of
that language was to serve as a catchall, rendering an
invention unpatentable if it was “available to the public”
before the specified date, even if it was not covered by
any of the four enumerated grounds of unpatentability.
Ibid. In addition to serving that function, however, the
new language sheds light on the proper understanding
of the preexisting term “on sale.” Cf. United States v.
Fausto, 484 U.S. 439, 453 (1988) (“Th[e] classic judicial
task of reconciling many laws enacted over time, and
getting them to ‘make sense’ in combination, necessarily assumes that the implications of a statute may be
19
altered by the implications of a later statute.”). In particular, the word “otherwise” indicates that the terms
preceding the catchall, including the term “on sale,” describe ways in which a claimed invention is “available to
the public.” 35 U.S.C. 102(a)(1); see 10 The Oxford English Dictionary 984 (2d ed. 1989) (defining the adverb
“otherwise” as “[i]n another way, or in other ways; in a
different manner, or by other means; differently”);
American Heritage Dictionary 1249 (“[i]n another way;
differently,” “[u]nder other circumstances,” “[i]n other
respects”); Webster’s Third New International Dictionary of the English Language 1598 (1986) (“in a different way or manner,” “in different circumstances: under other conditions,” “in other respects”).
In this respect, Section 102(a)(1) is similar to the
statute that this Court construed in Paroline v. United
States, 572 U.S. 434 (2014). For purposes of certain restitution awards, that law defined the term “full amount
of the victim’s losses” to include all costs incurred by
the victim that fell into any of six categories. 18 U.S.C.
2259(b)(3). The first five categories enumerated specific types of costs, such as “physical and occupational
therapy or rehabilitation” and “lost income,” while the
sixth category covered “any other losses suffered by the
victim as a proximate result of the offense.” Ibid. The
Court recognized that the “broad, final category * * *
is most naturally understood as a summary of the type
of losses covered—i.e., losses suffered as a proximate
result of the offense.” Paroline, 572 U.S. at 447. The
phrase “otherwise available to the public” in Section
102(a)(1) performs a similar function.
Respondents have suggested that, if the phrase “otherwise available to the public” is read to imply that the
preceding terms in Section 102(a)(1) require public
20
availability, the provision as a whole will be redundant.
Br. in Opp. 21-23. That is incorrect. Most obviously,
that catchall language makes clear that the enumerated
categories of prior art are not exclusive. And, to the
extent that the phrase “otherwise available to the public” clarifies the proper understanding of the preexisting term “on sale,” it performs an additional useful function. Congress could not have reliably achieved the
same result by deleting the enumerated categories of
prior art and drafting Section 102(a)(1) to refer solely
to an “invention” that was “available to the public” at a
particular point in time. Such a dramatic textual
change, including the elimination of an express “on
sale” bar that had been part of United States patent law
since 1836, might well have been construed as substantially altering prior patentability rules. Cf. Paroline,
572 U.S. at 447-448 (explaining that the catchall category of costs did not render the five enumerated categories superfluous because “[t]he first five categories
provide guidance to district courts as to the specific
types of losses Congress thought would often be the proximate result of a Chapter 110 offense and could as a general matter be included in an award of restitution”). 4
As respondents point out (Br. in Opp. 28), the phrase “otherwise
available to the public” (and close variants of that phrase) first appeared in predecessor bills that did not contain the term “on sale.”
That sequence of events demonstrates that the phrase was not initially drafted for the purpose of clarifying that an invention is “on
sale” only if it is publicly available. The phrase nevertheless serves
that purpose as it appears in the version of Section 102 that Congress ultimately enacted.
4
21
B. Treating The On-Sale Bar As Limited To Sales And Offers That Make An Invention “Available To The Public”
Is Consistent With The Balance That The Patent Laws
Have Traditionally Struck
“From their inception, the federal patent laws have
embodied a careful balance between the need to promote innovation and the recognition that imitation and
refinement through imitation are both necessary to invention itself and the very lifeblood of a competitive
economy.” Bonito Boats, Inc. v. Thunder Craft Boats,
Inc., 489 U.S. 141, 146 (1989). In seeking to achieve this
“careful balance,” ibid., patent law has long restricted
inventors’ ability to commercially exploit their inventions in the public sphere before making the disclosures
necessary to receive patent protection for their ideas.
See Pennock v. Dialogue, 27 U.S. (2 Pet.) 1, 19-24
(1829).
“From the Patent Act of 1790[, ch.7, 1 Stat. 109,] to
the present day, the public sale of an unpatented article
has acted as a complete bar to federal protection of the
idea embodied in the article thus placed in public commerce.” Bonito Boats, 489 U.S. at 148-149. This Court
first recognized the patent laws’ focus on “public
sale[s],” id. at 149, in Pennock. There, the Court held
that an inventor loses his right to a patent “if he suffers
the thing invented to go into public use, or to be publicly
sold for use, before he makes application for a patent,”
because “[h]is voluntary act or acquiescence in the public sale and use is an abandonment of his right.” 27 U.S.
(2 Pet.) at 23-24. The Court described this doctrine as
a carryover from English common law, under which
“letters patent were unavailable for the protection of articles in public commerce at the time of the application.”
22
Bonito Boats, 489 U.S. at 149 (citing Pennock, 27 U.S.
(2 Pet.) at 20).
Congress codified that principle in the Patent Act of
1836 by prohibiting the patenting of any invention that,
at the time the application was filed, was “in public use
or on sale, with [the inventor’s] consent or allowance.”
§ 6, 5 Stat. 119; see Pfaff v. Wells Elecs., Inc., 525 U.S.
55, 65 (1998). The legislative history of that statute reflects Congress’s concern that then-existing patent laws
accorded “no power to the Secretary to refuse a patent
for want of either novelty or usefulness.” S. Rep. No.
338, 24th Cong., 1st Sess. 2 (1836). That statutory gap
had enabled the “reprehensible” practice “of taking out
patents for what has been long in public use, and what
every one has therefore a right to use.” Id. at 3-4. That
history suggests that, in barring the issuance of patents
for inventions that were already “on sale,” Congress
sought to address sales or offers of sale that had made
an invention publicly available.
Congress retained the “on sale” language in subsequent amendments to the patent laws, initially adding a
two-year grace period in which the inventor could file
an application and later reducing that grace period to
one year. Pfaff, 525 U.S. at 65. Meanwhile, this Court
recognized that the “on sale” bar did not preclude an
inventor from patenting an invention when the inventor
“does not voluntarily allow others to make it and use it,
and so long as it is not on sale for general use.” Elizabeth v. Pavement Co., 97 U.S. 126, 135 (1878). In contrast, a sale that placed items embodying the invention
in the public domain precluded a patent. See Consolidated Fruit-Jar Co. v. Wright, 94 U.S. 92, 93-94 (1877)
(holding that patent for fruit jars was invalid where the
inventor sold a dozen or more jars “to get the money
23
which they yielded, and to test their salability in the
market”).
The Patent Act of 1952 preserved the bar on patenting inventions that had been “on sale,” prohibiting the
issuance of patents for any invention that “was patented
or described in a printed publication in this or a foreign
country or in public use or on sale in this country” more
than one year before the date of the patent application.
35 U.S.C. 102(b) (1952). That provision and Section
102(a) of the same statute “operate[d] in tandem to exclude from consideration for patent protection knowledge that is already available to the public,” thereby
expressing a congressional judgment that patenting
such inventions would “injure the public by removing
existing knowledge from public use.” Bonito Boats,
489 U.S. at 148. The Patent Act of 1952 therefore prohibited the patenting of an invention that had been “placed in
public commerce” by a “public sale.” Id. at 149.
Before the AIA was enacted, the Federal Circuit repeatedly held that “[t]he overriding concern of the onsale bar is an inventor’s attempt to commercialize his
invention beyond the statutory term.” Atlanta Attachment Co. v. Leggett & Platt, Inc., 516 F.3d 1361, 1365
(2008); see Netscape Commc’ns Corp. v. Konrad,
295 F.3d 1315, 1323 (2002) (same); STX, LLC v. Brine,
Inc., 211 F.3d 588, 590 (2000) (same). Standing alone,
that characterization of the on-sale bar’s purpose might
suggest that the bar is triggered by any transaction
from which the inventor makes money on his invention.
As explained above, however, this Court’s decisions
have emphasized the distinct purpose of preserving
the public’s access to inventions that have already
entered the public domain. Congress’s addition of
the phrase “otherwise available to the public” in the
24
AIA confirms the primacy of that legislative purpose.
35 U.S.C. 102(a)(1).
That choice was particularly explicable given another feature of the AIA. Before the AIA was enacted,
disputes as to priority among competing patent applicants were resolved in favor of the applicant who had
first invented the invention for which a patent was
sought. See Pfaff, 525 U.S. at 61 (“[I]t is normally the
first inventor to conceive * * * who establishes the
right to the patent.”). Under that regime, the on-sale
bar served in part to prod inventors to seek patents expeditiously, thereby hastening the time at which a patent would expire and the invention would reenter the
public domain. Under the AIA, however, priority disputes are resolved in favor of the first inventor to file a
patent application. See Madstad Eng’g, Inc. v. United
States Patent & Trademark Office, 756 F.3d 1366, 1368
(Fed. Cir. 2014). Congress’s addition of language (“otherwise available to the public”) confirming that the onsale bar should be confined to inventions that had previously entered the public domain thus coincided with
its enactment of an alternative disincentive to artificial
delay in applying for patents.
C. The AIA’s Legislative History Supports The Conclusion
That A Sale Or Offer For Sale Must Make An Invention
“Available To The Public” In Order To Trigger Section
102(a)(1)’s On-Sale Bar
In its favorable report on the AIA, the House Judiciary Committee noted that inclusion of the phrase “available to the public” in proposed Section 102(a)(1) was intended in part “to emphasize the fact that [prior art]
must be publicly accessible.” H.R. Rep. No. 98, 112th
Cong., 1st Sess., Pt. 1, at 43 (2011). An earlier Senate
Committee Report on a predecessor bill that contained
25
the same language had likewise stated that “the phrase
‘available to the public’ is added to clarify the broad
scope of relevant prior art, as well as to emphasize the
fact that it must be publicly available.” S. Rep. No. 259,
110th Cong., 2d Sess. 9 (2008).
In a floor statement on the AIA, Senator Kyl described Section 102(a)(1)’s residual clause as clarifying
that the preceding terms, including “on sale,” were limited to acts that had made an invention “available to the
public.” 157 Cong. Rec. 3423 (2011). One of the bill’s
sponsors, Senator Leahy, expressed similar views, stating that Section 102(a)(1) “imposes an overarching requirement for availability to the public, that is a public
disclosure,” thereby limiting Section 102(a)(1) “to subject matter meeting the public accessibility standard.” Id. at 3415. Senator Kyl also emphasized the connection between new Section 102(a)(1)’s express publicavailability standard and the AIA’s shift from a first-toinvent to a first-inventor-to-file rule of patent priority.
See id. at 3423-3424. He explained that, “[b]y adopting
the first-to-file system, * * * the present bill already
provides ample incentive for an inventor to enter the
patent system promptly. There is no need to also require forfeiture of patents simply because the inventor
has made some use of the invention that has not made
the invention available to the public.” Id. at 3424; see
Pet. Br. 27-28. 5
With respect to the scope of the Section 102(a)(1) on-sale bar,
the legislative history focused significantly on the inadvisability of
treating certain “secret” sales or offers to sell as barriers to patent
issuance. See Pet. Br. 7, 26, 28. The court of appeals found that this
concern was not implicated here because the agreements between
petitioner and MGI were disclosed to the public. See Pet. App. 37a38a. The primary thrust of this aspect of the legislative history,
5
26
II. THE AGREEMENTS AT ISSUE IN THIS CASE DID NOT
MAKE THE INVENTION “AVAILABLE TO THE PUBLIC” WITHIN THE MEANING OF SECTION 102(A)(1)
AND THEREFORE DID NOT TRIGGER THE ON-SALE
BAR
A. An Invention Is “On Sale” Within The Meaning Of Section 102(a)(1) Only When A Product Embodying The Invention Can Be Purchased By Its Expected Ultimate
Customers
Respondents have suggested that, even if an invention must be “available to the public” in order for the
on-sale bar to be triggered, that requirement is satisfied here in part because “MGI is a member of the public.” Br. in Opp. 17 (quoting Pet. App. 151a). That is
incorrect.
1. A sale or offer for sale makes an invention available to the public when a product embodying the invention could be purchased by its expected ultimate customers. A new model of the iPhone, for example, will be
“on sale” when consumers have an opportunity to buy
it, not when Apple ships the new iPhones to Walmart so
that Walmart can sell them to the public. This paradigmatic understanding of what it means to make an invention “available to the public” comports with this Court’s
recognition that “[t]he aim of the patent laws is not only
that members of the public shall be free to manufacture
the product or employ the process disclosed by the expired patent, but also that the consuming public at large
however was that such secret sales or offers to sell should not preclude patenting of an invention because those arrangements do not
make an invention publicly available. That concern is directly implicated here, whether or not the relevant sale is properly characterized as “secret.” See pp. 30-31, infra.
27
shall receive the benefits of the unrestricted exploitation, by others, of its disclosures.” Scott Paper Co. v.
Marcalus Mfg. Co., 326 U.S. 249, 255 (1945); cf. Kellogg
Co. v. National Biscuit Co., 305 U.S. 111, 122 (1938)
(“Sharing in the goodwill of an article unprotected by
patent or trade-mark is the exercise of a right possessed
by all—and in the free exercise of which the consuming
public is deeply interested.”).
Although many inventions are intended for ultimate
purchase by ordinary individual consumers, the nature
and contours of the expected customer base will vary
from product to product. Some products (e.g., cash registers or bulldozers) may as a practical matter be purchased only by businesses or by particular types of business; others may be legally available only to persons
with a particular license. An inventor who makes his
invention available to a purchaser of that character may
thereby place his invention “on sale,” even if ordinary
consumers have no opportunity to buy it.
The fact that the relevant “public” may vary from invention to invention, however, does not mean that the
on-sale bar is triggered by every commercial sale to a
person other than the inventor. Such a rule would have
obvious untoward results. It would mean that the onsale bar is triggered by a secret sale or offer to sell (see
pp. 25-26 n.5, supra), or by a sale to the inventor’s corporate affiliate. If Congress had intended to make the
on-sale bar so broadly applicable, it presumably would
have used language tailored to that purpose, e.g., by
barring the issuance of a patent for an invention that
“was sold or offered for sale to any person” before a
specified date. And the fact that physical embodiments
have been sold or offered for sale to a single entity other
than the inventor does not, standing alone, necessarily
28
implicate Section 102(a)(1)’s core purpose of preventing
the withdrawal from public accessibility of inventions
that have already entered the public domain.
2. To be sure, third-party distributors like MGI often play an essential role in the overall process by which
an invention is made available to its ultimate expected
customers and thus is placed “on sale.” But treating
such a distributor as “the public” would place smaller
companies (like petitioner) that require such assistance
at an unwarranted disadvantage. Contracts like the
supply-and-purchase agreement between petitioner
and MGI mirror the arrangements that might occur
within a large, vertically integrated company that has
the in-house capacity to develop, manufacture, and distribute its own products. Preparatory steps within such
a company would not trigger the on-sale bar until the
product’s expected ultimate purchasers were actually
able to buy it. The fact that petitioner enlisted the help
of a third-party distributor, rather than performing the
same distribution functions in-house, did not cause its
invention to become “available to the public” at an earlier date.
3. This Court’s decision in Pfaff does not support a
categorical rule of the sort described above. In Pfaff,
representatives of Texas Instruments approached an
inventor and asked him to develop a new device for
mounting and removing semiconductor chip carriers.
525 U.S. at 58. The inventor prepared detailed drawings describing his design, and he showed a sketch of
his concept to Texas Instruments. Ibid. Texas Instruments made an oral purchase order for 30,100 of the inventor’s new sockets and gave the inventor written confirmation of that order in April 1981. Ibid. Because of
29
manufacturing delays, however, the inventor did not fill
the order until July 1981. Ibid.
The Pfaff Court held that the on-sale bar set forth in
the Patent Act of 1952, see 35 U.S.C. 102(b) (1994), was
triggered when the relevant invention was (a) the subject of a commercial offer for sale, and (b) ready for patenting. 525 U.S. at 67. The Court’s focus was on the
latter requirement, see id. at 60-67, but the Court also
concluded that the oral purchase order in that case had
placed the invention “on sale” within the meaning of the
statute, id. at 67.
Because Pfaff was decided under the pre-AIA version of the on-sale bar, the Court had no occasion to analyze whether the sale to Texas Instruments made the
invention “available to the public” within the meaning
of current Section 102(a)(1). In any event, the transaction at issue in Pfaff differed substantially from the
April 2001 agreements between petitioner and MGI.
The invention in Pfaff was a socket to mount and remove semiconductor chip carriers, which Texas Instruments presumably intended to use to manufacture its
own products. See 525 U.S. at 58. Texas Instruments
was thus the ultimate purchaser of the sockets as discrete units of commerce. The contract between the parties, moreover, committed the inventor to provide a
specified commercial quantity of sockets, which were
delivered approximately three months after the written
confirmation of the oral purchase order.
In this case, by contrast, MGI “w[as] not buying a
product,” but rather was “buying the rights to participate in the development effort to potentially have a
product in the future.” Pet. App. 116a. The agreements
between petitioner and MGI reflected the parties’ understanding that it was uncertain whether, when, and in
30
what quantities petitioner would ultimately deliver palonosetron. See id. at 23a-24a. Although the Federal
Circuit recognized those uncertainties, the court found
it sufficient that the supply-and-purchase agreement
would nevertheless qualify as a “contract to sell” under
the Uniform Commercial Code. See id. at 30a-31a. But
given the preliminary and contingent nature of the parties’ agreement, that contract did not make petitioner’s
invention “available to the public,” and therefore did not
place it “on sale” within the meaning of Section
102(a)(1).
B. Public Disclosure Of The Existence Of The April 2001
Agreements Did Not Trigger The Section 102(a)(1) Bar
The court of appeals stated that “an invention is
made available to the public when there is a commercial
offer or contract to sell a product embodying the invention and that sale is made public.” Pet. App. 40a; see id.
at 43a (“conclud[ing] that, after the AIA, if the existence
of the sale is public, the details of the invention need not
be publicly disclosed in the terms of sale”). The court’s
conclusion that the sale at issue here had been “made
public” was based on the fact that the supply-andpurchase agreement between petitioner and MGI “was
publicly announced in MGI’s 8-K filing with the SEC.”
Id. at 38a. The court thus correctly (though implicitly)
recognized that MGI’s own status as a member of the
“public” was insufficient to trigger the on-sale bar, and
that some form of broader public accessibility was required. The court was wrong, however, in concluding
that public disclosure of the sale’s existence made the
invention “available to the public.”
As explained above (see pp. 2-3, 16-17, supra), Section 102(a)(1) contemplates two distinct senses in which
an invention may be placed in the public domain so as to
31
preclude subsequent patenting. That may occur if the
inventive idea is made public, with sufficient specificity
to allow persons skilled in the art to make and use it,
even if no physical embodiment of the invention yet exists. Or it may occur if physical embodiments of the
invention become available to their expected ultimate
purchasers, even if the idea itself remains secret.
In this case, the joint press release and MGI’s SEC
filing did not have either of those effects. The redacted
version of the supply-and-purchase agreement that was
publicly disclosed with the SEC filing did not reveal the
inventive idea. And the fact that the sale’s existence
was publicized has no logical bearing on whether physical embodiments of the invention were made available
to potential ultimate purchasers.
C. Petitioner’s Agreements With MGI Did Not Make Products Embodying The 0.25 Mg Dose Of Palonosetron
Available To The Public
The April 2001 agreements between petitioner and
MGI did not place petitioner’s invention “on sale” because those agreements did not make the 0.25 mg dose
of palonosetron available to the public in its embodied
form. Although those agreements “set the stage” for
MGI’s “future purchase” of palonosetron products,
MGI “w[as] not buying a product,” but rather was “buying the rights to participate in the development effort
to potentially have a product in the future.” Pet. App.
116a. The agreements also recognized that the FDA
had not yet approved the marketing of the palonosetron
drugs described in the agreements, and that such approval would be a prerequisite to any distribution of the
drugs to the public. Id. at 23a-24a, 29a, 119a. The
agreements further acknowledged that petitioner
might not sell any palonosetron products to MGI at all
32
if, for example, the FDA did not approve the relevant
palonosetron doses or the results of the ongoing clinical
trials were unfavorable. Id. at 24a; J.A. 69-70.
The relationship between petitioner and MGI was
not a traditional buyer-seller relationship. Rather, the
license and supply-and-purchase agreements anticipated that petitioner and MGI would work together on
future efforts to develop, regulate, and patent palonosetron products. See J.A. 62-63, 70-72, 74, 105. MGI
gave petitioner initial infusions of capital, totaling $11
million, despite the contracting parties’ recognition that
there might never be a palonosetron product for MGI to
purchase. Pet. App. 23a; J.A. 69-71. Petitioner in turn
shared the innovative details of the palonosetron formula with MGI, subject to a confidentiality agreement
between the parties. Pet. App. 119a-120a.
The April 2001 agreements thus reflected the contracting parties’ shared objective that, through the
combined efforts of petitioner and MGI, the palonosetron drugs would become available to their expected
ultimate purchasers at some indefinite time in the future. The agreements allowed petitioner and MGI to
collaborate on development and distribution projects
that a larger organization might have handled in-house.
But neither the arrangement between petitioner and
MGI, nor similar in-house transactions between corporate subsidiaries in a larger, vertically integrated organization, make pre-market products “available to the
public.” Thus, while a new invention may be subject to
intermediate transactions before its commercial marketing to the public, those preparatory transactions by
themselves do not place the invention “on sale” within
the meaning of Section 102(a)(1).
33
CONCLUSION
The judgment of the court of appeals should be
reversed.
Respectfully submitted.
NOEL J. FRANCISCO
Solicitor General
CHAD A. READLER
Acting Assistant Attorney
General
MALCOLM L. STEWART
Deputy Solicitor General
JENNY C. ELLICKSON
Assistant to the Solicitor
General
MARK R. FREEMAN
MEGAN BARBERO
JENNIFER L. UTRECHT
Attorneys
AUGUST 2018
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.