Supreme Court To Review Whether Non-Public Sales Are Invalidating Under Post-AIA Section 102

The Supreme Court recently agreed to review Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., a case with broad implications for the pharmaceutical industry. In the opinion below, the Federal Circuit held that after the America Invents Act (“AIA”), “if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of sale” for the sale to be invalidating under Section 102. The Court granted Helsinn’s petition for certiorari to answer “[w]hether, under the Leahy-Smith America Invents Act, an inventor’s sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention.”

Before the AIA, § 102(b) barred the patentability of an 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 prior to the date of the application for patent.” By enacting the AIA, Congress amended § 102 to bar the 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.”

In its petition for certiorari, Helsinn argued that in amending § 102, Congress added the residual phrase “or otherwise available to the public,” which requires that sales make the claimed invention “available to the public” to qualify as prior art. In its opposition to certiorari, Teva argued that post-AIA § 102 retained the term “on sale” unmodified, which covers confidential sales, and the claimed invention need not have been made public.

Helsinn owns patents directed to reducing the likelihood of a serious side effect of chemotherapy treatment. Almost two years before applying for a patent, Helsinn and a third party entered into a License Agreement and a Supply and Purchase Agreement. These agreements were announced in a joint press release of the two corporations and in the third party’s Form 8-K filing with the Securities and Exchange Commission, which included partially redacted copies of both agreements. The agreements did not disclose the specific dosage formulations covered by the later-issued patents, and alleged to be infringed by Teva’s ANDA filing. The Federal Circuit held that the Supply and Purchase Agreement “constituted a sale of the claimed invention…before the critical date, and therefore both the pre-AIA and AIA on-sale bars appl[ied].”

During the cert petition stage, amici curiae representing biotechnology and pharmaceutical interests urged the Supreme Court to review the Federal Circuit’s decision. The Pharmaceutical Research and Manufacturers of America argued that “[c]ompanies have made significant investments, engaged in costly research, filed patent applications, and structured their business dealings, in reliance on their understanding” that non-public sales are excluded from the on-sale bar. The Biotechnology Innovation Organization argued that the Federal Circuit “decision will be particularly detrimental to biotechnological innovation, where a majority of the new product development pipeline is held by small companies that depend on development and investment partnerships.” And the Massachusetts Biotechnology Council argued that the Federal Circuit decision “has created a cloud of uncertainty over the risks associated with premarketing transactions and an overall chilling effect on innovation and collaboration in the biotechnology space.”

Helsinn’s brief on the merits is due on August 23, 2018. And Teva’s responsive brief is due on October 9, 2018. Under the Supreme Court rules, amicus briefs may “be submitted within 7 days after the brief for the party supported is filed.”

Gibbons will continue to monitor developments in this case, and provide updates as applicable.

Tryn T. Stimart, a Director in the Gibbons Intellectual Property Department, and Jean E. Dassie, an Associate in the Gibbons Intellectual Property Department, authored this post.
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