Tuesday, January 22, 2019

Highway To Helsinn

Today (January 22, 2019), the United States Supreme Court published its decision in the patent law case Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., et al. ("Helsinn v. Teva"). At issue was whether, under the Leahy-Smith America Invents Act of 2011, a commercial sale of an invention to a third party legally bound to keep the invention confidential triggers the on sale bar of 35 U.S.C. §102(a).  The Supremes unanimously held it could in an opinion written by Justice Clarence Thomas.
Justice Thomas summarized the case as follows:
Petitioner Helsinn Healthcare S. A. makes a treatment for chemotherapy-induced nausea and vomiting using the chemical palonosetron.  While Helsinn was developing its palonosetron product, it entered into two agreements with another company granting that company the right to distribute, promote, market, and sell a 0.25 mg dose of palonosetron in the United States.  The agreements required that the company keep confidential any proprietary information received under the agreements.  Nearly two years later, in January 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 January 2003 date.  Relevant here, Helsinn filed its fourth patent application in 2013.  That patent (the ’219 patent) covers a fixed dose of 0.25 mg of palonosetron in a 5 ml solution and is covered by the Leahy-Smith America Invents Act (AIA). 
In 2011, respondents Teva Pharmaceutical Industries, Ltd., and Teva Pharmaceuticals USA, Inc. (collectively Teva), sought approval to market a generic 0.25 mg palonosetron product. Helsinn sued Teva for infringing its patents, including the ’219 patent.  Teva countered that the ’219 patent was invalid under the “on sale” provision of the AIA—which precludes a person from obtaining a patent on an invention that was “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)—because the 0.25 mg dose was “on sale” more than one year before Helsinn filed the provisional patent application in 2003.  The District Court held that the AIA’s “on sale” provision did not apply because the public disclosure of the agreements did not disclose the 0.25 mg dose.  The Federal Circuit reversed, holding that the sale was publicly disclosed, regardless of whether the details of the invention were publicly disclosed in the terms of the sale agreements.
Here is Justice Thomas' summary of the Supremes' decision:
Held: A commercial sale to a third party who is required to keep the invention confidential may place the invention “on sale” under §102(a).  The patent statute in force immediately before the AIA included an on-sale bar.  This Court’s precedent interpreting that provision supports the view that a sale or offer of sale need not make an invention available to the public to constitute invalidating prior art.  See, e.g., Pfaff v. Wells Electronics, Inc., 525 U. S. 55, 67.  The Federal Circuit had made explicit what was implicit in this Court’s pre-AIA precedent, holding that “secret sales” could invalidate a patent. Special Devices, Inc. v. OEA, Inc., 270 F. 3d 1353, 1357.  Given this settled pre-AIA precedent, the Court applies the presumption that when Congress reenacted the same “on sale” language in the AIA, it adopted the earlier judicial construction of that phrase.  The addition of the catchall phrase “or otherwise available to the public” is not enough of a change for the Court to conclude that Congress intended to alter the meaning of “on sale.” Paroline v. United States, 572 U. S. 434, and Federal Maritime Comm’n v. Seatrain Lines, Inc., 411 U. S. 726, distinguished. Pp. 5–9. 855 F. 3d 1356, affirmed.
A lingering question is how the Court of Appeals for the Federal Circuit's Special Devices, Inc. v. OEA, Inc. (Federal Circuit 2001) ("Special Devices v. OEA") decision is now to be interpreted in light of both The Medicines Co. v. Hospira Inc. (Federal Circuit en banc 2016), which addressed stockpiling by a manufacturer, on behalf of a patent owner, of the claimed invention, and Helsinn v. Teva, which appears to have cited Special Devices v. OEA with approval.  Since the Supremes are unlikely to dive this deeply into the details of §102(a), it will be interesting to see how the Federal Circuit unravels this doctrinal knot.