Maier & Maier

Supreme Court Not Buying Helsinn On-Sale Argument

On Tuesday, December 4, the Supreme Court heard oral arguments in Helsinn Healthcare v. Teva Pharmaceuticals centered around the meaning of the phrase “On-Sale” under the AIA and whether the term was changed from the previous meaning.

Helsinn originally sued Teva for infringement of four patents relating to palonosetron dosages in chemotherapy treatments in the District of New Jersey. While the drug use was in testing and development, Helsinn entered into a License Agreement and a Supply and Purchase Agreement with MGI Pharma, Inc, which was binding as of April 6, 2001. It wasn’t until January 30, 2003 that Helsinn filed a provisional application on the dosage. All four of the patents claim priority to that application, raising the question of whether the Supply & Purchase Agreement constituted the dosages being “On Sale” as Prior Art under §102.

Three of the patents were filed between 2003 and 2006 and are governed under the pre-AIA “On Sale” interpretations, while one of the patents was filed in May of 2013 and is subject to the AIA language. Pre-AIA, patents were invalid if “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 application for patent in the United States” under 35 U.S.C. 102. Under the AIA, patents are invalid if “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 District Court found the three pre-AIA patents valid because by interpreting the MGI Agreement as a contract for a future sale once the idea was reduced to practice, rather than a sale at the time of enactment. They also found the AIA patent valid by interpreting the new language to require a public sale or offer for sale, while this Agreement was confidential between MGI and Helsinn. On appeal by Teva, the Federal Circuit reversed on all four patents, finding them all invalid due to a prior sale and also that the claims were ready for patenting prior to the critical date. Helsinn appealed.

Helsinn’s first argument was that “on sale” has always required public availability and the Agreement would not be prior art under either pre-AIA or AIA language. This argument centered on the idea that there is ambiguity about the meaning of the phrase “on sale” as to whether it means someone is actively seeking purchasers or merely requires an offer to at least one person. The idea here being that Helsinn’s private sale to MGI might not constitute being “on sale” whereas an open offer to prospective buyers at large would have.

In oral arguments, the justices seemed unconvinced of any such ambiguity. Justice Sotomayor objected to his alternative meaning of the phrase. “This [public] definition of ‘on sale,’ to be frank with you, I’ve looked at the history cited in the briefs, I looked at the cases, I don’t find it anywhere.” Meanwhile, Justice Kavanaugh commented that “it’s pretty hard to say something that has been sold was not on sale”.

Helsinn also argued that the AIA language’s inclusion of “or otherwise available to the public” meant that the preceding list of prior art forms must be ‘available to the public’ as well. This would indicate a new additional requirement from the previous iteration of §102 where the invention must be on sale to the public, eliminating the confidential Agreement as invalidating prior art.

Currently, the only change to the on sale requirement from pre-AIA to AIA was the new eligibility of sales abroad as prior art. Helsinn’s interpretation would change that, but so far the Court does not seem to be buying it.

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