. . . There, the Supreme Court held that "when Congress reenacted the same [on-sale] language in the AIA, it adopted the earlier judicial construction of that phrase. . . ."
Introduction
In Celanese International Corporation v. International Trade Commission, No. 2022-1827 (Fed. Cir. Aug. 12, 2024) ("Decision"), the United States Court of Appeals for the Federal Circuit affirmed the International Trade Commission's ("ITC") decision invalidating Celanese's patent claims under the on-sale bar of 35 U.S.C. § 102(a). The ITC found that Celanese's sales of products in the United States that were secretly made abroad using its proprietary process before the critical date triggered the on-sale bar, thereby invalidating the asserted patents. The Federal Circuit's ruling confirmed that the America Invents Act ("AIA") did not repeal long-standing judicial precedent that sales of products made by a secret process before the critical date can preclude patentability.
The Parties and the ITC's Ruling
Celanese International Corporation, along with Celanese (Malta) Company 2 Limited and Celanese Sales U.S. Ltd. (collectively, "Celanese"), filed a complaint at the ITC, alleging that Anhui Jinhe Industrial Co., Ltd. and Jinhe USA LLC (collectively, "Jinhe") violated 19 U.S.C. § 337 by importing infringing products into the United States. Specifically, Celanese alleged that Jinhe was importing acesulfame potassium ("Ace-K"), an artificial sweetener, manufactured abroad using a process that infringed three Celanese patents—U.S. Patent Nos. 10,023,546; 10,208,004; and 10,590,095—all of which had an effective filing date of September 21, 2016. In the Matter of Certain High-Potency Sweeteners, Processes for Making Same, & Products Containing Same, Inv. No. 337-TA-1264, Order No. 29, 2022 WL 142328, at *1 (Jan. 11, 2022) ("ITC Decision").
The key issue before the ITC was whether Celanese's patent claims were invalid under the on-sale bar of 35 U.S.C. § 102(a), which precludes patentability if the invention was "on sale" more than one year before the patent application was filed. It was undisputed that Celanese had sold Ace-K in the United States before the critical date of September 21, 2015—one year prior to the filing date of the asserted patents. However, the Ace-K was made using Celanese's proprietary process in Europe, where the process remained a trade secret. ITC Decision at *3.
Jinhe moved for a summary determination of no violation, asserting that Celanese's pre-critical date sales triggered the on-sale bar, thereby invalidating the patent claims. In response, Celanese contended that the AIA had changed the legal landscape, arguing that the AIA's revisions to § 102(a) meant that the on-sale bar no longer applies to sales of products made by a secret process. Rejecting Celanese's arguments, the Administrative Law Judge ("ALJ") presiding over the case concluded that the AIA did not repeal settled pre-AIA precedent. The ALJ held that Celanese's pre-2015 sales triggered the on-sale bar, invalidating the patent claims. The ALJ relied principally on the Supreme Court's decision in Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc., 586 U.S. 123 (2019), which expressly held that Congress did not change the pre-AIA on-sale bar rule when it enacted the AIA. ITC Decision at *3–5.
The ITC subsequently adopted the ALJ's ruling, finding that Celanese's sales of Ace-K before the critical date barred the patentability of the process used to manufacture it. The ITC denied Celanese's petition for review, and the ALJ's decision became the final determination of the Commission. Celanese then appealed the ITC's final determination to the United States Court of Appeals for the Federal Circuit.
Celanese's Arguments on Appeal and the Federal Circuit's Analysis
The Federal Circuit began its analysis by tracing the origins of the on-sale bar, which Congress first codified in the Patent Act of 1836. Decision at 6. "Since then, every patent statute has retained the on-sale bar as a condition of patentability." Id. The court thus emphasized that the on-sale bar has long been a statutory condition for patentability, precluding an inventor from obtaining a patent if the invention was commercially exploited more than one year before the patent application was filed. Id. Over time, courts interpreted this provision to apply not only to public sales of products embodying the invention but also to sales of products made using a secret process that is later patented. Id. (citing D.L. Auld Co. v. Chroma Graphics Corp., 714 F.2d 1144 (Fed. Cir. 1983) (secret process for making decorative emblems)).
This interpretation was rooted in a fundamental policy objective—the on-sale bar prevents inventors from extending the effective patent term by commercially exploiting their invention for more than one year before filing patent application. Decision at 6 (citing Metallizing Eng'g Co. v. Kenyon Bearing & Auto Parts Co., 153 F.2d 516 (2nd Cir. 1946)). The Federal Circuit explained that this principle "is consistent with Supreme Court precedent going back to the 1800s." Decision at 7 (citing Pennock v. Dialogue, 27 U.S. 1, 19–24 (1829) (failure to enforce the on-sale bar would "materially retard the progress of science and the useful arts[] and give a premium to those who should be least prompt to communicate their discoveries")); see alsoPfaff v. Wells Electronics, Inc., 525 U.S. 55 (1998) ("voluntary act" of exploiting an invention through commercial sale before the critical date constitutes "an abandonment of his right" to a patent).
When Congress enacted the AIA in 2011 and amended § 102(a), it preserved the language in that section denying a patent where "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 Federal Circuit noted that "[i]n Helsinn, both this court and the Supreme Court had the occasion to address the reenactment of the 'on sale' bar in the AIA." Decision at 8. Helsinn's invention in that case was directed to a proprietary dosing regimen for an anti-nausea drug that was sold prior to the one-year critical date under confidentiality agreements. Id. at 8-9. The Supreme Court affirmed the Federal Circuit's rejection of Helsinn's argument that the AIA repealed pre-AIA precedent interpreting the on-sale bar. See Helsinn, 586 U.S. at 130. There, the Supreme Court held that "when Congress reenacted the same [on-sale] language in the AIA, it adopted the earlier judicial construction of that phrase." Id. at 131.
Undaunted, Celanese argued that the substitution of the term "claimed invention" for the pre-AIA reference to "invention" meant that the AIA on-sale bar should only apply when the claimed invention itself—here, the process—was placed on sale. Decision at 11. According to Celanese, the "claimed invention" was the process only, not the resulting product sold in the United States. Id. The Federal Circuit rejected Celanese's textual argument, noting that the courts' pre-AIA precedent addressing the on-sale bar routinely used "invention" and "claimed invention" interchangeably. Id. (citing, among other examples, Pfaff v. Wells Electronics, Inc., 525 U.S. 55, 68 (1998) (discussing sales of products containing elements of "the invention claimed in the [patent at issue]" (emphasis added))). The Federal Circuit thus concluded that Congress's use of "claimed invention" "reflects no more than a clerical refinement of terminology for the same meaning in substance." Decision at 11.
Celanese further argued that the addition of the phrase "otherwise available to the public" in § 102(a) supported its interpretation. Id. at 12. Celanese claimed that this language means that only sales or uses that disclosed the details of the invention to the public would trigger the on-sale bar. Under this theory, Celanese's pre-2015 sales of Ace-K, which did not disclose the underlying process to the public, would not bar the patentability of the process. Id. In rejecting Celanese's argument, the Federal Circuit emphasized that Helsinn itself had made the same argument before the Supreme Court, which "explicitly rejected it." Id. (quoting Helsinn, 586 U.S. at 131). There, the Supreme Court explained that the catchall "or otherwise available to the public" phrase was intended merely to "capture[] material that does not fit neatly into the statute's enumerated categories." Helsinn, 586 U.S. at 132. The "on sale" category of the statute, therefore, stands on its own without qualification by the other categories of conduct listed in the statute. Decision at 12.
In further support of its position, Celanese pointed to other sections of the AIA, including § 102(b), which provides a one-year grace period for certain disclosures by the inventor, § 271(g), which addresses third-party liability for importing or selling products made using a patented process, and § 273(a), which provides a defense for prior commercial use. Id. at 13. Celanese argued that these provisions reflected Congress's intent to narrow the scope of the on-sale bar and protect inventors who commercialize their inventions before filing a patent application. Id.
The Federal Circuit rejected these textual arguments as well. The court explained that § 102(b) is designed to protect inventors from their own disclosures within one year of filing for a patent, but it does not alter the rule that pre-critical date commercialization of the invention can invalidate a patent. Id. at 14. The Federal Circuit additionally noted that since Celanese's sales occurred outside of § 102(b)'s one-year grace period, that provision could not apply in any event. Id. The court likewise rejected Celanese's reliance on § 271(g) and § 273(a), noting that these provisions concern different aspects of patent law—namely, infringement and defenses available to third parties—and do not govern the patentability of an inventor's own invention. Id. at 14-15. The Federal Circuit reasoned that "[t]he fact that Congress elected to write infringement-related sections in a certain way does not support a conclusion that Congress meant to rewrite sections on patentability or validity." Id. at 15 (emphasis in original).
Finally, Celanese relied on selective statements in the legislative history, specifically statements by Senator Patrick Leahy, to argue that Congress intended to exclude secret sales from triggering the on-sale bar. For example, Senator Leahy had remarked that § 102(a) was drafted to eliminate precedent under which "private offers for sale or private uses or secret processes" could be deemed patent-defeating prior art. 157 Cong. Rec. S1496–97 (daily ed. Mar. 9, 2011). In response, the Federal Circuit cautioned that "[i]ndividual legislators'views, isolated from the context of years of debate in the legislative process, do not meaningfully establish congressional intent." Decision at 16. Indeed, the Federal Circuit noted that Helsinn had also relied on the same statements by Senator Leahy to no effect in advancing the same arguments presented by Celanese in this case. Id. (citing Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc., 855 F.3d 1356, 1368-69 (Fed. Cir. 2017), aff'd, 586 U.S. 123 (2019)).
Ultimately, the Federal Circuit concluded that Celanese failed to demonstrate that the AIA altered the long-established on-sale bar doctrine. The court held that the ITC correctly applied the law in finding that Celanese's pre-2015 sales of Ace-K, made using a secret process, triggered the on-sale bar and invalidated the asserted patents. Id. at 17. The Federal Circuit emphasized that, despite the textual changes made by the AIA, Congress did not intend to alter the long-standing legal principle that secret sales can invalidate patents, as recognized by the Supreme Court in Helsinn, 586 U.S. at 123 (2019).
Conclusion
The Federal Circuit's decision in this case reaffirms the ongoing effect of the on-sale bar under 35 U.S.C. § 102(a) and clarifies, once again, that the AIA did not alter the long-standing case law interpreting and applying this doctrine. Despite the textual revisions in the AIA, the court held that secret commercial use of an invention before the critical date can invalidate a later-filed patent, thereby maintaining Congress's established balance between the grant of a patent monopoly and commercial exploitation in the patent system. The ruling further demonstrates that inventors must remain vigilant about their commercial activities prior to seeking patent protection, as pre-filing sales—whether public or secret—can preclude patentability.
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