Legal Update: On-Sale Bar Applies to Secret Sales

Patent

On January 22, 2019, the Supreme Court held that amendments by the America Invents Act (AIA) to the U.S. Patent Act did not exclude secret sales from the on-bar sale doctrine, meaning such sales that occur before a patent’s filing can lead to its invalidation. The issue was whether the amendment that added the phrase “or otherwise available to the public” changed the meaning of “on sale”, such that the claimed invention of the sale itself had to be publicly disclosed in order for the sale to be an invalidating prior art event. (Read the original article on this topic.) Justice Thomas, writing for a unanimous Court, found it did not change the previous interpretation, which found secret sales to be included under the on-sale bar.

The Court examined the previous interpretations of the on-sale bar that predated the AIA. While the Court had never addressed the precise question presented in this case – a publicly announced sale which kept claimed subject matter confidential – its precedents suggested that a sale need not make an invention available to the public for the sale to be an invalidating event. Along the same lines, Justice Thomas pointed to explicit findings by the Court of Appeals for the Federal Circuit[1] where secret sales could invalidate a patent. Further, since the AIA amendment used the same on sale language, the Court presumed that Congress adopted the pre-AIA judicial construction of the phase “on sale”. Therefore, the Court found the secret sale invalidated the patent at issue.

With this in mind, we suggest to our clients to have a patent application on file before any activity occurs that is commercial in nature and may later be construed as an invalidating on-sale bar.

[1] As stated in the Opinion, the Federal Circuit has exclusive jurisdiction over patent appeals. See 28 U.S.C. § 1295(a)