The On-Sale Bar Under the America Invents Act Does Not Require a Public Disclosure of the Invention
| May 9, 2017
Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc.
May 1, 2017
Before Dyk, Mayer and O’Malley. Opinion by Dyk
Summary:
Helsinn Healthcare S.A.’s (“Helsinn”) patents were invalidated based on the on-sale bar of § 102. One of the patents invalidated is an AIA patent, so the CAFC addressed whether the law for the on-sale bar has changed under the AIA. The CAFC declined to adopt the change proposed by Helsinn to require that the invention be publicly disclosed in the terms of a sale agreement for the on-sale bar to apply. The CAFC essentially stated that if the law has changed under AIA it is only that the fact of the sale be public, not that the terms of the sale include a description of the invention that is made available to the public. In this case, the fact of the sale was made public without publicly disclosing details of the invention. The CAFC held that this is enough in this case for the on-sale bar to apply for both pre-AIA § 102 and AIA § 102.
Japanese Summary
本件は、米国改正法（ＡＩＡ）102(a)(1)条における新規性欠如要件の1つである「販売行為（on sale）」の解釈について争われたケースである。改正前では、発明を秘密にした状態の販売行為（secret sale）も場合により「販売行為」に該当し得るとされていた（判例法）。たとえば、出願可能な程度に発明が完成しており、第三者と販売のライセンス契約等が成立すると「販売あるいは販売の申し出」をしたことになる。しかし、改正により発明新規性の条文が大幅に変わり、102(a)(1)条においては「販売された」等に加えて「その他公に利用に可能とった（or otherwise available to the public）」発明には特許を付与しないと規定された。この「公に利用可能となった」のフレーズが挿入されたため、販売に際しても、いわゆる秘密販売を除外したと説明されているが（特許庁ガイドライン）、曖昧な点が多く、改正法下での判例法の蓄積が待たれている。
本件では、出願人と第三者との間で、出願前に発明薬剤の販売についてライセンス契約が行われ、そのライセンス契約の内容が公開された。しかし、クレームに記載されていた特定の投与量の情報は開示されなかった（ただし当事者間ではその投与量の使用に合意はあった）。
地裁は、ライセンス契約で特定の投与量の情報が開示されなかったため、クレームの発明が開示されたことにはならないとして、「販売された」の要件を満たさず、特許は有効と判断した。控訴審（ＣＡＦＣ）はその地裁の判断を覆した。ＣＡＦＣは、「販売された」というためには、発明の詳細（すべてのクレーム要素）が開示されている必要はないと判示し、上記ライセンス契約により特許は無効であると判決した。すなわち、改正法下でも「販売された」の意味は実質的に変わらず、「販売」の成立に際して、必ずしも発明が「公に利用可能となる」ことが要件ではないと示唆された。なお、本件では、契約内容が秘密である場合の秘密販売（secret sale）やいわゆる公用（public use）のケースについてＣＡＦＣは判断を避けており、これらのケースについては別の判例を待つ必要があるであろう。
Details:
Helsinn Healthcare S.A. (“Helsinn) sued Teva Pharmaceuticals USA, Inc. (“Teva”) for infringing four patents: U.S. Patent Nos. 7,947,724 (‘724 patent); 7,947,725 (‘725 patent); 7,960,424 (‘424 patent); and 8,598,219 (‘219 patent). The patents are directed to intravenous formulations of palonosetron for reducing chemotherapy-induced nausea and vomiting (“CINV”). Teva had filed an ANDA for FDA approval of a generic version of palonosetron indicating that the claims of the noted patents are invalid and/or not infringed. Teva’s invalidity argument was based on the on-sale bar.
The following is a list of some of the key events for discussing the on-sale bar:
April 6, 2001: Helsinn and MGI Pharma, Inc. (“MGI”) enter into a license agreement and a supply and purchase agreement. The license agreement included that MGI agreed to pay $11 million in initial payments to Helsinn, plus additional royalties on distribution of products in the US. The parties agreed that the products covered the 0.25 mg and 0.75 mg doses of palonosetron within the scope of the claims. The supply and purchase agreement specified that MGI would purchase exclusively from Helsinn and Helsinn agreed to supply MGI’s requirements of whichever of the two doses were approved by the FDA. The agreement also specified price, method of payment and method of delivery. If neither dosage was approved by the FDA, Helsinn could terminate the agreement.
The agreements were announced in a joint press release and in MGI’s filings with the SEC which included partially redacted copies of both agreements. The publicly disclosed information did not include the price terms and the specific dosage formulations covered by the agreements.
January 7, 2002: Helsinn prepared a preliminary statistical analysis of the earliest Phase III trial. The data showed that 81% of patients who received the 0.25 mg dose of palonosetron experienced relief from CINV for 24 hours.
January 30, 2002: The Critical Date – one year prior to filing a patent application.
February 2002: Helsinn submitted preliminary Phase III data to the FDA.
September 2002: Helsinn filed its New Drug Application for the 0.25 mg dose.
January 30, 2003: Helsinn filed a provisional patent application covering the 0.25 mg dose and the 0.75 mg dose.
In July 2003, the FDA approved the 0.25 dose. In 2005 to 2006, Helsinn filed three patent applications issuing as the ‘724, ‘725 and ‘424 patents. These are pre-AIA patents. In May 2013, Helsinn filed a fourth patent application which issued as the ‘219 patent. This patent is an AIA patent. All of Helsinn’s noted patents claim priority to the provisional application filed January 30, 2003.
The district court found that for the pre-AIA patents (‘724, ‘725 and ‘424 patents), the Supply and Purchase agreement was a contract for the sale of a commercial product embodying the 0.25 mg dose and constituted a sale under § 102(b). But the district court held that the claimed invention was not reduced to practice before the critical date of January 30, 2002, and was not ready for patenting.
For the AIA patent (‘219 patent), the district court held that under the AIA, the on-sale bar under § 102(a)(1) now “requires a public sale or offer for sale of the claimed invention,” and that this requires that a sale must publicly disclose the details of the invention. The district court found that the Supply and Purchase agreement was not a public sale or offer for sale since the agreement did not publicly disclose the 0.25 mg dose. The ‘219 patent was also held to be not ready for patenting prior to the critical date. Thus, the district court held that all four of the asserted patents were not invalid.
On-Sale Bar Rules:
Pre-AIA § 102(b): the invention 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 in the United States.
AIA § 102(a)(1): 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
Application of the on-sale bar requires, under Pfaff v. Wells Electronics, Inc., 525 U.S. 55 (1998), that (1) “the product must be the subject of a commercial offer for sale” and (2) “the invention must be ready for patenting.
Discussion
Regarding the pre-AIA patents, the CAFC agreed with the district court that there was an offer for sale with the Supply and Purchase agreement. Helsinn argued that the agreement is not an offer for sale because at the critical date they did not have FDA approval. But the CAFC said that an agreement contracting for the sale of the claimed invention contingent on regulatory approval is still a commercial sale.
Regarding the AIA patent, the CAFC discussed whether the AIA changed the meaning of the on-sale bar under 35 U.S.C. § 102. Under the pre-AIA § 102, although confidentiality is factor that weighs against application of the on-sale bar, that fact by itself is not determinative. Helsinn argued that the AIA changed the law and that the on-sale bar now does not include secret sales and requires that a sale make the invention available to the public. The argument cites to floor statements made by individual members of Congress.
The floor statements seemed to be directly on point with the on-sale bar. Specifically, the cited floor statements discuss doing away with precedent under pre-AIA law that a secret sale or offer for sale triggers the on-sale bar. However, the CAFC stated that floor statements are typically not reliable indicators of congressional intent. At most, the floor statements show intent to do away with precedent under pre-AIA law, and the cases cited in the floor statements only address public use cases and do not address “sale” cases. Furthermore, the CAFC stated that even if the floor statements were intended to overrule secret or confidential cases, it would not have an effect on this case since the Supply and Purchase agreement which disclosed all pertinent details of the transaction other than the price and dosage amounts was publicly announced.
Helsinn further argued that based on the floor statements and the “or otherwise available to the public” language of the statute, the on-sale bar does not apply unless the sale discloses the invention to the public. The CAFC disagreed stating that “our cases explicitly rejected a requirement that the details of the invention be disclosed in the terms of the sale,” and that there is no indication in the floor statements that these cases should be overruled.
The CAFC provided a narrow holding applicable to the facts of this case 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 the sale.” In this case, the Supply and Purchase agreement which covered the 0.25 mg dose, was publicly disclosed. Thus, a sale is considered to have been triggered for purposes of step (1) of the on-sale bar analysis.
The remaining issue is whether the invention was ready for patenting prior to the critical date under step (2) of the Pfaff test. The CAFC held that the invention was reduced to practice prior to the critical date, and thus, was ready for patenting. Reduction to practice requires that the inventor (1) constructed an embodiment that met all of the limitations and (2) determined that the invention would work for its intended purpose. The parties agreed that the formulation had been made and was stable prior to the critical date. The issue is whether Helsinn had determined that the invention would work for its intended purpose, i.e., reducing the likelihood of CINV.
The CAFC stated that demonstrating that an invention works for its intended purpose requires a demonstration that the invention works for its intended purpose beyond a probability of failure but not beyond a possibility of failure. Later refinements or further testing do not preclude reduction to practice.
The district court improperly relied on the FDA standards for determining that the invention was not reduced to practice. The CAFC said that the FDA’s rigorous standard for approving a new drug is a much more demanding standard than what is required to demonstrate a reduction to practice. The completion of Phase III studies at the FDA and final FDA approval are not pre-requisites for the invention to be ready for patenting. The CAFC cited several reports that demonstrated that the invention would work for its intended purpose of reducing the likelihood of emesis including the analysis of January 7, 2002 showing that 81% of patients who received the 0.25 mg dose of palonosetron experienced relief from CINV for 24 hours.
Thus, the CAFC concluded that the invention was ready for patenting prior to the critical date and that the patents are invalidated under the on-sale bar.
Comments
This case provides some guidance regarding the on-sale bar under § 102 of the AIA. It states that the on-sale bar under AIA does not require a public disclosure of the invention in the terms of the sale. In this case, details of the invention were not publicly disclosed in the terms of the sale. However, since the fact of the sale was made public, the CAFC did not need to decide whether a secret sale or offer for sale can satisfy the on-sale bar under § 102 of the AIA.
At least for now, an inventor should still assume that the law regarding the on-sale bar has not changed under the AIA. An inventor should treat a sale or offer for sale of an invention, whether the sale is secret or disclosed to the public, as triggering the on-sale bar.
