Abstract
The Leahy-Smith America Invents Act (AIA) substantially rewrote 35 U.S.C. §102, which defines the prior art that will preclude the grant of a patent on a claimed invention for lack of novelty or obviousness. The enactment of AIA §102 introduced a number of ambiguities to be sorted out by the U.S. Patent and Trademark Office (PTO), and ultimately the courts. In 2019 the Supreme Court addressed one of these ambiguities in Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., wherein the court held that in enacting the AIA, Congress had not changed the meaning of “on sale” as it appears in §102, at least with respect to the facts presented in that case. 1 I wrote an article shortly after Helsinn discussing the ramifications of the decision, and identifying a number of ambiguities that remained unresolved at that time. 2
Recently the U.S. Court of Appeals for the Federal Circuit issued two opinions that address some of those lingering ambiguities, Sanho Corp. v. Kaijet Tech. Int’l Ltd., Inc., 3 and Celanese Int’l Corp. v. Int’l Trade Comm’n. 4 This Holman Report discusses the changes to §102 wrought by the AIA, and where things currently stand with respect to some of the ambiguities created by these changes. This article begins by summarizing and providing some analysis of the changes that the AIA introduced into the language of 35 U.S.C. §102. It then turns to a discussion of three questions that have been answered by the Supreme Court and Federal Circuit: (1) the AIA did not harmonize the U.S. and European definitions of prior art; (2) a process claim can be invalidated under AIA §102 by the sale of a product made through a non-disclosing/secret use of the process; and (3) a “disclosure” of subject matter does not necessarily mean that it was “publicly disclosed” for purposes of the “grace period” for inventors created by AIA §102(b)(2)(B).
I. THE AIA CHANGES TO §102
The AIA substantially revised 35 U.S.C. §102, the statutory basis for the so-called “novelty” requirement. The pre-AIA version (pre-AIA §102) applies to patents and patent applications with filing dates earlier than March 16, 2013, while the AIA version (AIA §102) applies to patents and patent applications with filing dates on or after that date. Because the AIA is prospective in effect, and the duration of a patent is twenty years from the filing date (and often more than twenty years as a result of patent term adjustment or patent term extension), pre-AIA §102 will retain significant, albeit diminishing relevance for years to come.
Section 102 defines categories of “prior art” that can render a patent claim invalid under §102 or §103 for anticipation or obviousness, respectively. Significantly, although the pre-AIA and AIA versions of §102 differ in many respects, the AIA version retains many of the terms used to define the various categories of prior art, such as “described in a printed publication,” “in public use,” and “on sale.”
Pre-AIA §102 contains seven subsections (a)–(g), some of which are of substantially greater import than others. One way to think about the changes wrought by the AIA is that it eliminated five of the seven subsections while retaining modified versions of two of them, pre-AIA §§102(b) and (e). The elimination of pre-AIA §§102(a) and (g), both of which define patentability in terms of date of “invention,” was the natural consequence of the statutory shift from a first-to-invent regime to first-inventor-to-file, one of the primary objectives of the AIA that moved the United States into closer harmony with the rest of the world. Pre-AIA §§102(c) and (d) were anachronistic holdovers from an earlier time, rarely litigated and of little relevance, which explains their removal from AIA §102. The removal of pre-AIA §102(f), which prohibits the patenting of invention derived from another, is a bit puzzling, but in any event the prohibition against derivation remains intact under the AIA.
A major difference between pre-AIA and AIA §102 has to do with the so-called “critical date.” Prior art having an effective date prior to the critical date of a patent claim is generally available to invalidate the claim for lack of novelty or obviousness. In the pre-AIA version of §102, the critical was either the date of invention [with respect to subsections (a) and (e)] or one year before the filing date [with respect to subsection (b)], and in the AIA version the critical date is the effective filing date, with a potential grace period for inventors, as discussed in more detail below. By moving the critical date forward in time, the AIA serves to expand the universe of available prior art, generally making it more difficult for inventors to patent their inventions, and incentivizing the prompt filing of a patent application.
Pre-AIA §102(b) provides in relevant part that:
A person shall be entitled to a patent unless…
Note that pre-AIA §102(b) can preclude an inventor from patenting an invention even if the invention was “novel” at the time it was invented, and thus does not impose a requirement of actual “novelty.” For that reason pre-AIA §102(b) has long been referred to as a “statutory bar” (or “loss of right” provision).
Pre-AIA §102(b) lives on, in somewhat modified form, as AIA §102(a)(1), which provides that:
A person shall be entitled to a patent unless …
Note that AIA §102(a)(1) retains much of pre-AIA §102(b), particularly the categories of prior art: patented, described in a printed publication, in public use, or on sale. After the passage of the AIA, there was much speculation as to whether the meaning of these terms remains the same in the context of AIA §102(a)(1). As discussed below, the courts have provided some answers to this question, particularly with respect to the “on sale” category of prior art. As of yet the “public use” category of prior art does not appear to have been expressly addressed by the courts.
There are also a number of differences between pre-AIA 102(b) and AIA 102(a)(1). Two of these differences between pre-AIA 102(b) and AIA 102(a)(1) are addressed by the Federal Circuit in its recent Celanese decision and are discussed below, i.e., the substitution of the term “the claimed invention” for “the invention,” and the addition of the phrase “or otherwise available to the public,” apparently defining a fifth category of prior art.
There are a number of other significant differences that are not subject to further discussion this article, but are noted here. As mentioned earlier, the critical date has gone from one year prior to the (effective) filing to the effective filing date. Note that the effective filing date is the filing date of the application for purpose of priority, which could be earlier than the actual filing date, if, for example, the application claims priority to a provisional application, or if the application is a continuing application. In other words, the pre-AIA 102(b)’s one year grace period has been eliminated in AIA 102(a), but as, described below, it has been partially retained in AIA 102(b)(1). In addition, pre-AIA 102(b)’s geographic limitation of public use and on sale events to the United States has been eliminated.
AIA §102(b)(1) partially retains pre-AIA 102(b)’s one year grace period by providing that:
A
(A) the
(B) the subject matter disclosed had, before such disclosure, been
Essentially, §102(b)(1)(A) seeks to provide an inventor with a one year grace period to file a patent application with respect to a “disclosure” that would otherwise constitute prior art if the “disclosure” is attributable to the inventor or if the inventor “publicly disclosed” the subject matter prior to its “disclosure” by a third party. Importantly, prior art resulting from another’s invention of the subject matter does not qualify for the §102(b)(1) one your grace period. This is a major change from AIA §102(b), whose one year grace period applied with respect to prior art resulting from both the inventor as well as third parties. As discussed below, the proper interpretation of the term “publicly disclosed” was addressed by the Federal Circuit in its recent Sanho decision. 5
Pre-AIA §102(e) provides that:
A person shall be entitled to a patent unless…the invention was described in: (1) an application for patent, published under section 122(b), by another filed in the United States before the invention by the applicant for patent or (2) a patent granted on an application for patent by another filed in the United States
Thus, under this subsection, a patent claim is anticipated if an embodiment falling within the scope of the claim was described in a patent or published patent application of another, where that “other” filed her application in the United States before the applicant’s invention date. Note that pre-AIA §102(e) requires that the subject matter be “described” in the prior art patent or published patent application, not necessarily “claimed,” and that it is possible for a patent or patent application to describe subject matter without necessarily claiming it. Thus, the effective date of the written description portion of a U.S. patent (or patent application) being used as pre-AIA §102(e) prior art is its U.S. filing date.
Some find the ramifications of pre-AIA § 102(e) a bit counterintuitive, but it codifies the rule announced by the U.S. Supreme Court in Alexander Milburn Co. v. Davis-Bournonville Co., 6 which held that a prior art U.S. patent is treated as constructively published as of its filing date. Milburn is premised on a legal fiction that the contents of a patent’s written description instantaneously become available as a printed publication upon filing.
Pre-AIA §102(e) lives on in modified form as AIA §102(a)(2), which provides that:
A person shall be entitled to a patent unless … the claimed invention was described in a patent [or published patent application that] names another inventor and was effectively filed
The primary difference is that the critical date has been changed from the date of invention to the effective filing date, entirely consistent with the move from first-to-invent to first-inventor-to-file and pre-AIA §102(b) to AIA §102(a)(1). AIA §102(b)(2) established a grace period with respect to AIA §102(a)(2) that is analogous to and closely parallels the grace period AIA §102(a)(1) provides with respect to AIA §102(a)(1). AIA §102(b)(2) provides that:
A
(A) the subject matter disclosed was
(B) the subject matter disclosed had, before such subject matter was effectively filed under subsection (a)(2), been
Note that AIA §102(b)(2), like AIA §102(b)(1), includes the term “publicly disclosed,” which was addressed by the Federal Circuit in its recent Sanho decision and which is the subject of further discussion below. One significant difference between AIA §§102(b)(1) and (b)(2) is that (b)(2) is not limited to disclosures made one year or less before the effective filing date. This difference reflects the fact that (b)(1) is intended to partially restore the grace period of pre-AIA §102(b), whose critical date was one year prior to the filing date, while (b)(2) is intended to partially compensate inventors for the change in the critical date from date of invention [pre-AIA § 102(e)] to effective filing date [AIA §102(a)(2)].
Ambiguities in AIA §102 that have been addressed by the courts.
This article now turns to a discussion of three ambiguities in the interpretation of AIA §102 that have been addressed by the Supreme Court or Federal Circuit.
The AIA did not harmonize the U.S. and European definitions of prior art.
When the AIA was enacted, it was touted as a major step toward harmonization of U.S. patent law with the patent laws of other jurisdictions, and in particular European law. The Senate Report recommending passage of the AIA identifies “harmonizing our system for granting patents with the best parts of other major patent systems throughout the industrialized world for the benefit of U.S. patent holders” as a key concern of Congress in enacting the AIA. 7
Section 3 of the AIA states that, with respect to the implementation of a first-to-file rule:
It is the sense of the Congress that converting the U.S. patent system from ‘first to invent’ to a system of ‘first inventor to file’ will improve the U.S. patent system and promote harmonization of the U.S. patent system with the patent systems commonly used in nearly all other countries throughout the world with whom the United States conducts trade and thereby promote greater international uniformity and certainty in the procedures used for securing the exclusive rights of inventors to their discoveries. 8
Some of the most important differences between pre-AIA U.S. patent law and the laws of other jurisdictions relate to the definition of prior art. The European counterpart to 35 U.S.C. § 102 is Article 54 of the European Patent Convention (EPC), which reads as follows (emphasis added):
An invention shall be considered to be new if it does not form part of the state of the art. The state of the art shall be held to comprise everything made
Note that Article 54 employs the phrase “available to the public” to define “state of the art” (which equates to “prior art”), the exact same term that the AIA introduced into §102’s definition of prior art. Proponents of the view that the AIA harmonized U.S. and European patent laws were based on an assertion that the “or otherwise” element of “or otherwise available to the public” should be interpreted as implicitly requiring that all of the preceding categories of prior art, including on sale and public use, must be “available to the public” to qualify as prior art. They also have assumed that the language “available to the public” would be interpreted in the same manner as it has been in Europe, which requires that the subject matter literally be available to the public, and excludes the various forms of “secret” prior art that existed in the U.S. pre-AIA.
In particular, European Patent Office Boards of Appeal case law has construed the prior art as being anything made available to the public as a technical teaching, e.g., “a collection of technical features.” 9 A 2013 article co-authored by U.S. and European patent attorneys shortly after enactment of the AIA explains that:
This interpretation derives from a policy or concept of rewarding new technical teachings to the world so as to thereby enhance and further technology. The purpose of EPC Article 54(1) is thus to prevent that which is already a part of the state of the art from being patented. 10
Comments made in the AIA’s legislative history indicate that the “or otherwise available to the public” served to align the U.S. definition of prior art with European practice, eliminating the pre-AIA’s secret prior art. For example, at one point in the Congressional record the import of the phrase “otherwise available to the public” was characterized as follows:
The words “otherwise available to the public” were added to section 102(a)(1) during that Congress’s Judiciary Committee mark up of the bill. The word “otherwise” makes clear that the preceding clauses describe things that are of the same quality or nature as the final clause–that is, although different categories of prior art are listed, all of them are limited to that which makes the invention “available to the public.” As the committee report notes at page 9, “the phrase ‘available to the public’ is added to clarify the broad scope of relevant prior art, as well as to emphasize the fact that it [i.e., the relevant prior art] must be publicly available.” In other words, as the report notes, “[p]rior art will be measured from the filing date of the application and will include all art that publicly exists prior to the filing date, other than disclosures by the inventor within one year of filing.” 11
Robert A. Armitage, who at that time serving as General Counsel for Eli Lily & Co., was heavily involved in legislative efforts leading up to the passage of AIA. Testifying before Congress, Mr. Armitage expressed the view that “[a] major component of any harmonization treaty should be the maintenance of the right to obtain patent protection so long as the acts of the inventor are not publicly accessible to persons of ordinary skill in the art.” 12
Prior to the Supreme Court’s decision in Helsinn, the PTO interpreted “otherwise available to the public” as changing the definition of public use and on sale in AIA §102 to incorporate a public accessibility requirement. In particular, the edition of the PTO’s Manual of Patent Examining Procedure (MPEP) in effect prior to Helsinn stated (emphasis in the original):
The pre-AIA 35 U.S.C. 102(b) “on sale” provision has been interpreted as including commercial activity even if the activity is secret. AIA 35 U.S.C. 102(a)(1) uses the same “on sale” term as pre-AIA 35 U.S.C. 102(b). The “or otherwise available to the public” residual clause of AIA 35 U.S.C. 102(a)(1), however, indicates that AIA 35 U.S.C. 102(a)(1) does not cover secret sales or offers for sale. For example, an activity (such as a sale, offer for sale, or other commercial activity) is secret (non-public) if it is among individuals having an obligation of confidentiality to the inventor. 13
In what was reportedly the first judicial decision to interpret AIA §102, the district court judge in Helsinn held that the “otherwise” language modifies and limits the “on sale” provision, and thus an offer for sale only count as prior art if they are also “available to the public.” 14 The district court judge explained that:
[H]aving considered the parties’ arguments on the plain language meaning of § 102(a)(1), the USPTO’s guidelines, the undisputed AIA Committee Report, and the public policy considerations underlying the passage of the AIA, [this court] concludes that § 102(a)(1) requires a public sale or offer for sale of the claimed invention. The new requirement that the on-sale bar apply to public sales comports with the plain language meaning of the amended section, the USPTO’s interpretation of the amendment, the AIA Committee Report, and Congress’s overarching goal to modernize and streamline the U.S. patent system. 15
Although many of those who were most deeply involved in the drafting and enactment of the AIA were adamant in their position that, particularly in view of the “or otherwise available to the public” language, prior art under AIA §102 does not encompass secret on-sale events uses of the subject matter, others took the opposite and ultimately correct position that AIA §102 continues to encompass secret prior art (“correct” in the sense that the Supreme Court so decided in Helsinn). For example, in 2015 Professor Mark Lemley published an essay that arrived at two conclusions:
First, as a matter of statutory interpretation it is unlikely that Congress intended to make such a change, not only because they readopted existing statutory language but because other parts of the statute make no sense under such an interpretation. Second, reading the AIA as making such a change would be unwise as a policy matter, not only because it would encourage secrecy but because it would undermine confidence that other terms reenacted in the AIA have the same meaning they have accrued in decades of common law. 16
An article co-authored by U.S. and European patent attorneys shortly after enactment of the AIA predicted that:
While the words are very similar, practitioners both in the United States and elsewhere in the world should not be misled to believe that this similar language will lead to harmonized treatment of the definition of prior art. This article will explain what we believe to be the core philosophies that will result in a very different interpretation of the definition of available prior art. 17
Paul Morgan published an article in 2011 that identifies the ambiguity created by the addition of the “or otherwise available to the public” language, and reviewed arguments in favor of the two competing interpretations,” but ultimately left the resolution of the ambiguity to “the reader, the PTO and the Courts.” 18
As mention above and discussed in detail in my 2019 Holman Report, in Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc. the Supreme Court definitively resolved the issue by holding that the addition of the phrase “or otherwise available to the public” to §102 did not alter the meaning of the “on sale” bar, and as a consequence an inventor’s sale of an invention to a third party who is obligated to keep the invention confidential can qualify as prior art under AIA §102(a). 19
Under the AIA the sale of a product can create an on-sale bar with respect to a claimed process.
In Helsinn, the Federal Circuit did not directly address the question of whether post-AIA the sale of a product produced using a process can create an on-sale bar with respect to a claim directed toward that process. The Supreme Court also did not directly address the issue.
There is pre-AIA case law to the effect that such a sale can constitute a patent-invalidating on-sale event even if the sale was non-disclosing, at least when it is the inventor or an assignee that used the process for this purpose. The leading Federal Circuit decision standing for this proposition is D.L. Auld Co. v. Chroma Graphics Corp., decided in 1983. 20 In Auld, the claimed invention is a process for “forming foil-backed inserts in the form of cast decorative emblems.” Prior to the critical date, the assignee of the patent (Auld) use the claimed process to produce samples which were offered for sale to a number of potential buyers. The Federal Circuit held that these offers triggered the on-sale bar with respect to the process, regardless of whether any actual sale was made, and even if the process was maintained as a secret and remained secret after the sale of the products. Significantly, Auld states that “where a method is kept secret, and remained secret after a sale of the product of the method, that sale will not, of course, bar another inventor from the grant of a patent on that method. The situation is different where, as here, that sale is made by the applicant for patent or his assignee.”
In W.L. Gore & Assocs., Inc. v. Garlock, Inc. the Federal Circuit explicitly held that a non-informing commercial use of a process by a
The outcome in Gore might have hinged upon the degree to which the third party maintained the secrecy of the process. The process itself was performed by a machine, and the Federal Circuit noted that the third party had told its employees that the machine “was confidential and required them to sign a confidentiality agreement.” The court further observed that there was “no evidence that a viewer of the machine could thereby learn anything of which process, among all possible processes, the machine is being used to practice,” nor any evidence that the third parties’ secret use of the machine “made knowledge of the claimed process accessible to the public.”
In In re Caveney the Federal Circuit endorsed the holdings in Auld and Gore, calling Gore an exception to the general rule that third-party sales or offers for sale can create an on-sale bar in cases “where a patented method is kept secret and remains secret after a sale of the unpatented product of the method. Such a sale prior to the critical date is a bar if engaged in by the patentee or patent applicant, but not if engaged in by another.” 22 Caveney held that a third-party sale of the patented invention created an on-sale bar even though the invention was kept secret from the purchasing public in general, because the claimed invention was disclosed to the purchaser and thus was not sufficiently secret. The court found the case distinguishable over Gore and Auld based on this disclosure of the invention to the purchaser. Another important distinction between the facts of Caveney and Gore is that in Caveney the claimed invention is a product, which was literally offered for sale, while in Gore the claimed invention, a process, is not itself the subject of an offer of sale, nor was the process disclosed by the sale of the product manufactured by means of the process.
The criteria for determining whether the sale of a product creates an on-sale bar with respect to a process claim appears to be whether the product that was the subject of the sale “embodies the essential features” of the claimed process. In J.A. LaPorte, Inc. v. Norfolk Dredging Co. the Federal Circuit states:
[O]ur precedent holds that the question is not whether the sale, even a third party sale, “discloses” the invention at the time of the sale, but whether the sale relates to a device that
The Federal Circuit discussed the “embodies the essential features” test in it 2020 decision in BASF Corp. v. SNF Holding Co. 24 The BASF court reviewed the case law, noting that in Minton v. Nat’l Ass’n of Sec. Dealers, Inc. 25 the patentee’s lease of his computerized trading system to a local brokerage firm raised an on-sale bar against his method claims because the system substantially “embod[ied] the claimed method.” The court also pointed to the Supreme Court’s decision in Quanta Comput., Inc. v. LG Elecs., Inc., 26 stating:
As the Supreme Court observed [in Quanta], in the context of the patent exhaustion doctrine, a product and methods of using that product may approach each other so nearly that it will be difficult to distinguish the process from the function of the apparatus. In that circumstance, where a product embodies essential features of the patented invention, a sale of the product is tantamount to a sale of the process performed by that product and thus creates an on-sale bar to the process claims as well. 27
In BASF, the Federal Circuit rejected an assertion that one company’s acquisition of another created an on-sale bar with respect to patent claims directed toward a process because the acquisition involved the purchase of a manufacturing plant wherein the claimed process was commercially employed. The court noted that neither the plant itself nor the plant’s equipment used to perform the claimed process “embodied the essential features” of the claimed process, particularly given that equipment was capable of numerous uses apart from its use in the claimed process. 28
The MPEP’s interpretation of the law on the subject is as follows:
A claimed process, which is a series of acts or steps, is not sold in the same sense as is a claimed product, device, or apparatus, which is a tangible item. …. However, sale of a product made by the claimed process by the patentee or a licensee would constitute a sale of the process within the meaning of pre-AIA 35 U.S.C. 102(b). [See In re Kollar, 286 F.3d 1326, 1333 (Fed. Cir. 2002); D.L. Auld Co. v. Chroma Graphics Corp., 714 F.2d 1144, 1147-48 (Fed. Cir. 1983); W.L. Gore & Assocs., Inc. v. Garlock, Inc., 721 F.2d 1540, 1550 (Fed. Cir. 1983).] The application of pre-AIA 35 U.S.C. 102(b) would also be triggered by actually performing the claimed process itself for consideration. See Scaltech, Inc. v. Retec/Tetra, L.L.C., 269 F.3d 1321, 1328 (Fed. Cir. 2001) [Patent was held invalid under pre-AIA 35 U.S.C. 102(b) based on patentee’s offer to perform the claimed process for treating oil refinery waste more than one year before filing the patent application]. Moreover, the sale of a device embodying a claimed process may trigger the on-sale bar. Minton v. National Ass’n. of Securities Dealers, Inc., 336 F.3d 1373, 1378 (Fed. Cir. 2003) (finding a fully operational computer program implementing and thus embodying the claimed method to trigger the on-sale bar). …. 29
Notably, the MPEP does not appear to express an opinion as to what would constitute a sale of a process within the meaning of AIA 35 U.S.C. 102(a)(1).
In Celanese Int’l Corp. v. Int’l Trade Comm’n., the patent claims at issue were directed to a process for producing a sweetening agent, and the product being sold, “Ace-K,” was a sweetening agent manufactured using the claimed process. During prosecution of the relevant patents, Celanese disclosed to the PTO that the claimed process for making Ace-K had been in secret use in Europe and that Ace-K made using that process had been exported and sold in the United States for more than one year before the patents’ effective filing date, i.e., before the critical date. The patents had an effective filing date of September 21, 2016, and were thus governed by the AIA.
The question before the Federal Circuit in Celanese was “whether the AIA changed Section 102’s on-sale bar such that [the sale of a product] made using a secret process would not invalidate its later-sought claims on that process.” 30 The court held that the AIA had resulted in no such change.
The court began by stating:
Under long-settled pre-AIA precedent, pre-critical date sales of products made using a secret process would trigger the on-sale bar to patentability and render invalid later-sought patent claims on that process. Under that precedent, Celanese’s prior sales of Ace-K made using its secret process, well before the critical date, would have triggered the on-sale bar and invalidated its later-sought patent claims on that process. 31
The court then proceeded to review its decision in Helsinn, and the Supreme Court’s affirmation of that decision, after which the court concludes that “[t]he same reasoning guides our inquiry here.” The court found that under long-settled pre-AIA precedent, the on-sale bar applies when a patentee sells, before the critical date, products made using a secret process. The court went on to state that there is a presumption that when Congress reenacted the “on sale” language, it was aware of pre-AIA precedent and adopted the settled judicial interpretation of the term. As was the case in Helsinn, the court found this presumption to be appropriate where, as here, Congress had reenacted statutory language that had attained settled judicial interpretation at the time of reenactment.
Celanese argued that, in enacting the AIA, Congress intended to alter the on-sale bar such that its pre-2015 sales of Ace-K would not invalidate its later-sought patent claims. To support its contention, Celanese pointed to certain textual changes in Section 102, other AIA sections, and “selected excerpts from the legislative history.”
In particular, Celanese argued that the AIA’s replacement of the word “invention” with “claimed invention” in AIA §102(a) and the introduction of the phrase “or otherwise available to the public” supported the purported change in the meaning of “on sale.” Based on these textual changes, Celanese argued that under AIA §102 sales of a product made using a claimed process invention, without publicly disclosing the process, would no longer trigger the on-sale bar. But the court was not persuaded.
Given that in Helsinn the Federal Circuit and Supreme Court rejected the argument regarding the import of the “or otherwise available to the public” language in a very similar context, Celanese’s argument regarding the addition of the word “claimed” to §102 probably had the best chance for persuading the court, given that at least it was a novel argument. Celanese argued that by virtue of the addition of the word “claimed” the on-sale bar had been modified such that the “claimed invention” itself must be on sale in order to create an on-sale bar.
The Federal Circuit rejected this argument, finding that adoption of this interpretation of AIA §102 would amount to a “foundational change to the on-sale bar as a patentability condition for process inventions.” The court rejected Celanese’s proposed “foundational change” in the law, and essentially found that when used in this context the terms “invention” and “claimed invention” are synonymous, pointing to Federal Circuit case law in which the court, in addressing the on-sale bar, interchangeably referred to the invention at issue as the “invention” or the “claimed invention.” The court concluded that the fact that Congress had elected to use the term “claimed invention” rather than its “alternative reflect[ed] no more than a clerical refinement of terminology for the same meaning in substance, which is consistent with existing judicial construction.”
As for the “or otherwise available to the public” language, the court basically found that the same argument had been raised and explicitly rejected by the Supreme Court in Helsinn. The court found that the phrase did not alter the established definition of “on sale” in the manner argued for by Celanese, but was instead merely a “catchall phrase” intended to “captures material that does not fit neatly into the statute’s enumerated categories but is nevertheless meant to be covered.”
Celanese also argued that the AIA’s legislative history indicates that Congress intended to remove sales like Celanese’s prior sales here from the scope of the on-sale bar. In particular, one of the AIA’s primary sponsors, Senator Leahy, stated his view that “subsection 102(a) was drafted in part to do away with precedent under current law that private offers for sale or private uses or secret processes practiced in the United States … may be deemed patent-defeating prior art.” 32 The court was not persuaded, pointing out that Sen. Leahy’s statement was also cited by Helsinn in support of the same proposition, and the argument was rejected both by the Federal Circuit and the Supreme Court. The court observed that:
Individual legislators’ views, isolated from the context of years of debate in the legislative process, do not meaningfully establish congressional intent. The Supreme Court has repeatedly cautioned against relying on legislative materials like committee reports, or individual legislators’ views, to interpret statutory text.
The Celsanese decision appears to have dashed the hopes of those who have taken the position that under the AIA secret/non-disclosing commercial use of a process would not constitute prior art. For example, the National Association of Manufacturers filed an amicus curiae brief on behalf of Celanese arguing that:
Harmonizing U.S. and global patent law depends on the consistent treatment of processes across regimes, including consistency in determining whether certain actions by an inventor result in a loss of right to patent. The ITC’s decision disrupts and undermines the Congressional goal of harmonizing American and global patent law by creating an inconsistency between the treatment of trade secret processes in the United States and abroad. In the European patent system, for example, the governing principle is that of a public teaching. As a result, the concept of forfeiture as barring patentability is not recognized by the EPC. Thus, under the European regime, a secret/non-disclosing use of an invention does not make the invention “available to the public” and does not undermine patentability. Maintaining consistency between American and international patent systems necessarily requires the maintenance of the right to obtain patent protection so long as the acts of the inventor are not publicly accessible and the elimination of forfeiture based on the public sale of an end product created through a secret, undisclosed process. Because the ITC’s decision would create inconsistencies between U.S. and international patent law–directly contradicting the AIA’s goal of harmonization–it should be reversed. 33
A “disclosure” of subject matter does not necessarily mean that the subject matter was “publicly disclosed” for purposes of the AIA’s grace period.
In its recent decision in Sanho Corp. v. Kaijet Tech. Int’l Ltd., Inc., the Federal Circuit addresses the meaning of the term “publicly disclosed” in the context of AIA §102, and particularly whether a non-confidential but otherwise private sale results in an invention’s subject matter being “publicly disclosed” for purposes of section 102(b)(2)(B). 34
Sanho argued that the phrase “publicly disclosed” in section 102(b)(2)(B) should be construed to include all the “disclosure[s]” described in §102(a)(1), i.e., the categories of prior art set forth in §102(a)(1), including activities that would constitute an on-sale bar. It argued that under the Supreme Court’s decision in Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., 35 a private commercial sale constitutes on on-sale event, and thus a disclosure under section 102(a)(1). It further argued that the inventor’s sale of a device purportedly embodying the claimed invention constituted a public disclosure by the inventor, even though Sanho made no showing that the sale was publicized in any way (the court characterized it as “a private sale between two individuals arranged via private messages”). As discussed earlier in this article, this private sale by the inventor would be treated as an on-sale bar under pre-AIA 102(b), and might very well be treated as an on-sale bar under AIA 102(a)(1). But the question for the court was whether the subject matter of the sale was “publicly disclosed” for purposes of section 102(b)(2)(B).
The Federal Circuit held that it was not. The court rejected Sanho’s argument that the plain meaning of “publicly disclosed” in section 102(b)(2)(B) is the same as the terms “disclosed” and “disclosure” used elsewhere in section 102. Sanho contended that “identical words used in different parts of the same statute are presumed to have the same meaning,” so the term “publicly disclosed” should also include “disclosures” (e.g., private sales).
The Federal Circuit was not persuaded, pointing out that the words “publicly disclosed” are not the same as the word “disclosed,” and concluding that the fact that Congress chose to use the two different phrases—”disclosed” and “publicly disclosed”—suggested that Congress intended the phrases to have different meanings. The court found that that the added word, “publicly,” both negated Sanho’s consistent usage argument and suggested that the sorts of disclosures that qualify for the exception in section 102(b)(2)(B) are a narrower subset of “disclosures” (i.e., the disclosures that are “public”). That is, the exception applies only to “disclosures” that result in the subject matter of the invention being “publicly disclosed.”
The court went on to find Sanho’s reading of the statute to also be contrary to the apparent purpose of the exception, i.e., protection of an inventor who discloses his invention to the public before filing a patent application because the inventor has made his invention available to the public.
In light of this purpose, “publicly disclosed by the inventor” must mean that it is reasonable to conclude that the invention was made available to the public. If the subject matter of the invention were kept private, the inventor would not have disclosed the invention to the public. Section 102(b)(2)(B) thus works to protect inventors who share their inventions with the public from later disclosures made by others. Animating this exception appears to be the idea that priority should be given to the patentees who make their invention available to the public before a patent application filing by another. See 157 CONG. REC. S1360, S1369 (daily ed. Mar. 8, 2011) (statement of Sen. Jon Kyl). It would also be unfair to deny a patent to the original inventor if the inventor published the subject matter of the invention, but another filed a patent application appropriating the same subject matter after the inventor’s public disclosure.
The court concluded by noting that, “to the extent that legislative history is relevant,” the legislative history states that “public disclosure” requires that the invention be made available to the public. The floor debate explains that “[w]hether an invention has been made available to the public is the same inquiry that is undertaken under existing law to determine whether a document has become publicly accessible.”