United States: IP Monitor - The Devil Is In The Details: Will Your Pre-Filing Transaction Invalidate Your US Patent?

Nothing is what it seems, and according to a recent Federal Circuit opinion, details matter.

In Helsinn Healthcare SA v Teva Pharmaceuticals USA Inc. (the 2018 Opinion), the Federal Circuit provided some clarity on a question that may interest many: When will a pre-patent filing transaction invalidate a US patent? According to the Federal Circuit, the answer lies in the details of the transaction.

The 2018 Opinion denied a petition brought by Helsinn Healthcare SA to rehear a Federal Circuit panel's earlier opinion from May 2017. Helsinn's petition involved the proper interpretation of what is known as the "on-sale bar," as amended by the Leahy–Smith America Invents Act (AIA)1.


The AIA on-sale bar is a limitation on patentability codified in 35 USC § 102 and applies to US patents filed on or after March 16, 2013. The AIA on-sale bar precludes an invention from being patented if the claimed invention was "[...] on sale, or otherwise available to the public before the effective filing date of the claimed invention."2

In May 2017, the Federal Circuit invalidated four patents owned by Helsinn relating to certain drug formulations to reduce chemotherapy-induced nausea and vomiting (the 2017 Opinion). One of the invalidated patents was Helsinn's US 8,598,219 patent (the 219 Patent) – to which the AIA on-sale bar applied.

In dealing with the 219 Patent, the Federal Circuit held that a supply and purchase agreement Helsinn had entered into in 2001 (the Agreement) triggered the on-sale bar to invalidate the 219 Patent. First, the Federal Circuit found that the Agreement bore various hallmarks of a commercial sale. Then, the Federal Circuit found that certain public disclosures in SEC filings had made the transaction a public sale, despite the fact the disclosures had redacted the details of the claimed invention.

The 2017 Opinion held that the AIA on-sale bar will invalidate patents so long as the claimed invention was put "on sale" before the effective filing date, and that the relevant transaction did not need to publicly disclose the details of the invention.

Helsinn petitioned for a rehearing, arguing that the AIA changed settled law. Helsinn argued that the AIA on-sale bar would only apply if a sale made the invention available to the public, and that in order to do so, the sale must also publicly disclose the details of the claimed invention.

Federal Circuit decision

The Federal Circuit denied Helsinn's petition for a rehearing. In a concurring opinion, Judge O'Malley clarified what she described as Helsinn's mischaracterizations of the 2017 Opinion. Judge O'Malley's opinion makes the following clear:

  • The AIA on-sale bar continues to apply to both consummated sales and mere offers for sale.
  • The AIA on-sale bar will invalidate a patent if, before the effective filing date, (1) the invention was the subject of a transaction that rises to the level of a commercial sale or an offer for sale and (2) the invention was ready for patenting.
  • Whether or not a transaction will trigger the AIA on-sale bar depends on a multi-factor analysis. As such, some transactions that are made public may not trigger the on-sale bar, and some secret transactions may trigger the on-sale bar.
  • Factors that suggest the AIA on-sale bar might apply to a transaction (the Warning Factors) include the following:
    • the presence of a passage of title;
    • the non-confidential nature of a transaction; and
    • the presence of any commercial marketing of the invention.
  • Supply-side or distribution agreements can avoid the AIA on-sale bar if structured appropriately. However, these agreements will trigger the AIA on-sale bar if they bear the hallmarks of a commercial sale or offer for sale.


The AIA on-sale bar is different than its predecessor. Under the AIA on-sale bar, pre-patent filing transactions outside of the US can now also invalidate US patents. Formerly, only transactions within the US could invalidate a US patent. Further, the AIA on-sale bar can now also invalidate a US patent if a pre-patent filing transaction made the invention "otherwise available to the public." The former provision did not have this catch-all phrase.

It is important to note that the opinions in Helsinn did not specifically deal with how the AIA on-sale bar applies to secret sales. However, the opinions did provide some clarity and some general takeaways that companies should keep in mind when they enter pre-patent filing commercial transactions.

At a high level, whether or not a transaction will trigger the AIA on-sale bar will depend on an analysis, under contract law, as to whether the commercial community would understand a transaction to be a commercial sale or offer for sale. Among other things, this analysis takes into consideration the Warning Factors (as identified above).

Companies should keep an eye out for the Warning Factors when entering into a pre-patent filing transaction, whether or not the transaction deals with a supply-side arrangement. It's prudent to obtain proper legal advice prior to entering any pre-patent filing transaction.

The authors wish to thank articling student Blanchart Arun for his assistance in preparing this legal update.


1. Pub. L. No. 112-20. 125 Stat. 284 (2011) (codified at 35 USC) ("AIA").

2. See 35 USC § 102(a)(1).

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