Supreme Court Affirms Interpretation of “On-Sale Bar” in Helsinn Healthcare S. A. v. Teva Pharmaceuticals US, Inc.

Supreme Court Affirms Interpretation of “On-Sale Bar” in Helsinn Healthcare S. A. v. Teva Pharmaceuticals US, Inc.

by Shamim Mohandessi

On January 22, the US Supreme Court, on Writ Certiorari to the US Court of Appeals for the Federal District held that under the Leahy-Smith American Invents Act (“AIA”), “a commercial sale to a third party who is required to keep the invention confidential may place the invention ‘on sale’ under §102(a).” This decision affirmed the lower court and asserted that the patent statute in force prior to the enactment of the AIA included an on-sale bar.

A Brief Synopsis

In January 2003, Helsinn Healthcare S.A. (“Helsinn”) filed a provisional patent application covering a 0.25mg dose of a chemical called palonosetron, the active ingredient in Helsinn’s drug Aloxi, which treats chemotherapy-induced nausea and vomiting. During the next decade, Helsinn filed four additional patent applications claiming priority to the first patent – the last of which was filed in 2013, after the AIA was signed into law on September 16, 2011.

Two years prior to the initial 2003 filing, Helsinn entered into a series of agreements with a marketing partner to sell the 0.25 mg and 0.75 mg doses of palonosetron in the United States. The partnership was announced in a press release and in the marketing partner’s Form 8-K filing with the SEC.

In 2011, Teva Pharmaceuticals Industries, Ltd. and Teva Pharmaceuticals US, Inc. (collectively, “Teva”) sought approval of a generic 0.25mg dose of palonosetron. Helsinn sued Teva for infringement of its patents covering a 0.25mg dose of palonosetron. Teva argued that the fourth patent filed by Helsinn on the 0.25mg dose of palonosetron was invalid because the 0.25mg dose of palonosetron was “on sale” more than one year before Helsinn filed the 2003 provisional patent to which their 2013 patent claimed priority.

Under the AIA, “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).

The statute predating the AIA, including a similar limitation, often referred to by patent counsel as the “on-sale bar,” which provided, “a person shall be entitled to a patent unless … the invention was patented or described in a printed publication in [the US] or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States.” 35 U.S.C. § 102(b) (pre-AIA).

The District Court determined that the “on sale” provision of the AIA did not apply to the 2001 transaction between Helsinn and its marketing partner because “public disclosure of the agreements between Helsinn and [the marketing partner] did not disclose the 0.25 mg dose.” Thus, the court determined that the invention was not “on sale.”

The Federal Circuit declined to accept the trial court’s interpretation and determined that “if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of sale to fall within the AIA’s on-sale bar.”

The Supreme Court, in an opinion delivered by Justice Thomas, held 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),” affirming the Federal Circuit’s view that the pre-AIA precedent would be extended to its interpretation of the AIA and holding that “secret sales” could invalidate a patent.

What This Means

In short, firms generating and harvesting patentable subject matter need not change course if their current processes protect against pre-filing disclosure. However, firms should be mindful that the AIA does not offer applicants refuge from the pre-AIA “on-sale bar.” Firms seeking patent protection of their patentable inventions must remain ever vigilant of inadvertent disclosures barring patent protection.

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