Presented by Kyle Coleman
In a unanimous opinion by Justice Thomas, the Supreme Court held that a commercial sale of an invention to a third party who is required to keep the invention confidential can still place the invention 'on sale' and trigger the on-sale bar to patentability under the America Invents Act. Before the AIA, the Court's precedents had established that even a secret or confidential commercial sale could qualify as prior art under the on-sale bar. When Congress reenacted the phrase 'on sale' in the AIA, it is presumed to have adopted that settled judicial construction, and the added catch-all 'or otherwise available to the public' was not a sufficiently clear signal that Congress intended to narrow the term. Helsinn's confidential sale of its patented treatment therefore invalidated the patent.
Helsinn Healthcare v. Teva Pharmaceuticals, decided January 22nd, 2019. A unanimous Supreme Court, in an opinion by Justice Thomas, affirmed the Federal Circuit and held that a commercial sale of an invention to a third party who is required to keep it confidential can still place the invention on sale — and so bar a patent — under the America Invents Act.
A secret sale is still a sale. Here's the brief.
Helsinn makes Aloxi, a treatment for chemotherapy-induced nausea and vomiting. Its active ingredient is palonosetron. In 2001, while still developing the drug, Helsinn entered two agreements with a Minnesota company, MGI Pharma — a license agreement and a supply-and-purchase agreement. Together they gave MGI the right to distribute, promote, and sell a quarter-milligram dose of palonosetron in the United States. The agreements were announced publicly, and MGI reported them in a securities filing — but the specific dose was kept confidential.
Nearly two years later, in January 2003, Helsinn filed a provisional patent application. Over the next decade it filed four applications claiming that priority date. The fourth, filed in 2013 and covering the fixed quarter-milligram dose, issued as the patent at issue here. Because of its filing date, that patent is governed by the America Invents Act.
When Teva sought approval to market a generic version, Helsinn sued for infringement. Teva's defense was that the patent was invalid because the quarter-milligram dose had been on sale — through the MGI agreements — more than a year before Helsinn filed. The District Court held the on-sale bar did not apply, reasoning that a sale counts only if it makes the invention available to the public. The Federal Circuit reversed: because the sale itself was public, it held, the details of the invention need not be.
The question: does a sale to a party bound to secrecy place an invention on sale under the AIA?
The Act provides that a person is entitled to a patent unless the claimed invention was, among other things, on sale, or otherwise available to the public, before the effective filing date. That last phrase — "or otherwise available to the public" — was new. The earlier statute had barred a patent when the invention was on sale, full stop. And more than twenty years before, in Pfaff v. Wells Electronics, the Court had held that an invention is on sale once it is the subject of a commercial offer for sale and is ready for patenting — with no requirement that the sale reveal the invention to the public. So the dispute was whether the new catchall phrase changed that settled meaning.
It did not, the Court held, unanimously.
Congress legislated against a substantial body of law construing the on-sale bar. The Federal Circuit had long held that even secret sales could invalidate a patent, making explicit what the Court's own precedents had implied. So when Congress reenacted the identical phrase "on sale," the Court presumed it adopted that established construction.
That left the new words. Helsinn argued that "or otherwise available to the public" narrowed everything before it — so that only sales disclosing the invention to the public would count.
The Court disagreed. A broad catchall phrase, it reasoned, captures material that does not fit the enumerated categories but is nonetheless meant to be covered; it was not enough to upset a settled body of precedent. Had Congress meant so significant a change — to require public disclosure for the first time in over a century of on-sale law — it would have done more than add a catchall.
Helsinn resolved a question the AIA's new language had opened: whether the on-sale bar now reaches only public sales. It does not. The decision confirms continuity — the AIA carried forward the pre-AIA meaning of "on sale," including the settled rule that a confidential sale can be invalidating prior art. The case stands for a narrow but consequential proposition: adding "or otherwise available to the public" did not add a public-disclosure requirement to the on-sale bar.
Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, 586 U.S. 123, decided January 22nd, 2019. I'm Kyle Coleman. Thanks for watching.
These videos are educational case briefs, not legal advice, and watching them does not create an attorney-client relationship with the presenter or the firm. Case law and its interpretation evolves, always check a decision's subsequent history. Do not rely on these case briefs, but read the case yourself or have your attorney read them. Videos are presented via an AI avatar and voice clone of Kyle Coleman, created with his participation and consent.
