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Supreme Court Rules That Confidential Sales Are Still Sales

US Supreme Court
Says sale of secret treatment
Counts as prior sale

The US Supreme Court has affirmed a decision by the Federal Circuit that the sale of an invention to a customer obligated to keep the invention confidential is still considered a sale that can invalidate a patent.

Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc. involved a treatment for chemotherapy-induced nausea and vomiting using the chemical palonosetron, sold by Helsinn.

Helsinn entered into agreements with another company giving the other company the right to distribute, promote, market, and sell a 0.25 mg dose of palonosetron. The agreements required that the marketing company keep confidential any proprietary information received under the agreements.

Nearly two years later, in 2003, Helsinn filed a provisional patent application covering a 0.25 mg dose of palonosetron. Over the next 10 years, Helsinn filed four patent applications that claimed priority to the 2003 date.

In 2011, Teva sought approval to market a generic 0.25 mg palonosetron product. Helsinn sued Teva for patent infringement. Teva contended that the relevant patent was invalid under the “on sale” provision of the America Invents Act (AIA).

The on-sale provision states that:

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) (emphasis added).

The District Court held that the AIA’s “on sale” provision didn’t apply because the public disclosure of the agreements didn’t disclose the 0.25 mg dose. The Federal Circuit reversed, finding that the agreement was publicly disclosed, regardless of whether the details of the invention were publicly disclosed.

The Supreme Court held that a commercial sale to a third party required to keep the invention confidential may still place the invention “on sale” under §102(a).

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