Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc.

Court of Appeals for the Federal Circuit
855 F.3d 1356 (2017)

ELI5:

Rule of Law:

A commercial offer to sell a product embodying a claimed invention, made more than one year before the patent application filing date, triggers the on-sale bar of 35 U.S.C. § 102, even if the sale is contingent on future regulatory approval and the specific technical details of the invention are not publicly disclosed.

Facts:

Helsinn Healthcare S.A. developed intravenous formulations of palonosetron, including a 0.25 mg dose, to reduce chemotherapy-induced nausea and vomiting (CINV).
Prior to 2001, Phase II clinical trials had already shown that the 0.25 mg dose was effective in suppressing CINV.
On April 6, 2001, Helsinn entered into a License Agreement and a Supply and Purchase Agreement with MGI Pharma, Inc.
Under the agreements, Helsinn granted MGI the right to distribute and sell 0.25 mg and 0.75 mg palonosetron products in the United States, with the sale being contingent upon FDA approval.
Helsinn and MGI publicly announced the agreements in press releases and an SEC Form 8-K filing, which included redacted versions of the contracts.
The public disclosures did not reveal the specific dosage strengths (0.25 mg and 0.75 mg) or the price terms covered by the agreements.
These agreements were executed before January 30, 2002, the critical date which was one year prior to Helsinn filing its provisional patent application on January 30, 2003.

Procedural Posture:

Teva Pharmaceuticals USA, Inc. filed an Abbreviated New Drug Application (ANDA) with the FDA to market a generic version of Helsinn's palonosetron product.
Helsinn Healthcare S.A. sued Teva in the U.S. District Court for the District of New Jersey for patent infringement.
Teva raised the affirmative defense that Helsinn's patents were invalid under the 'on-sale bar' of 35 U.S.C. § 102.
Following a bench trial, the district court ruled in favor of Helsinn, finding that the patents were not invalid.
The district court held that the agreements with MGI did not trigger the on-sale bar because the invention was not 'ready for patenting,' and for the newer patent, the sale was not sufficiently 'public' under the AIA.
Teva, as the appellant, appealed the district court's final judgment to the U.S. Court of Appeals for the Federal Circuit.

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Issue:

Does a publicly announced, binding contract to sell a product embodying a claimed invention, contingent upon future regulatory approval, constitute a commercial sale that triggers the patent-invalidating on-sale bar under both pre-AIA and AIA versions of 35 U.S.C. § 102, even when the invention's specific dosage details are not publicly disclosed?

Opinions:

Majority - Judge Dyk

Yes, a publicly announced, binding contract to sell a product embodying a claimed invention, contingent upon future regulatory approval, constitutes a commercial sale that triggers the patent-invalidating on-sale bar. The Supply and Purchase Agreement was a commercial offer for sale under pre-AIA § 102(b) because it was a binding contract with all the necessary terms of a sale, such as price, payment, and delivery methods. The condition of FDA approval was merely a condition precedent, which does not negate the existence of a commercial sale under general contract law. Regarding the AIA version of § 102(a)(1), the addition of the phrase 'or otherwise available to the public' did not change the rule that a publicly announced sale triggers the bar, even if the specific details of the invention are not disclosed in the sale documents. Finally, the invention was ready for patenting before the critical date because extensive clinical trial data (Phase II and preliminary Phase III) had demonstrated it worked for its intended purpose of reducing CINV; the district court erred by incorrectly applying the much higher FDA approval standard to the 'reduction to practice' analysis.

Analysis:

This decision solidifies the Federal Circuit's interpretation of the on-sale bar, confirming its broad application even after the America Invents Act (AIA). It serves as a crucial precedent for companies in regulated industries, establishing that commercial agreements with marketing or distribution partners can be invalidating sales, even if contingent on regulatory approval. By holding that the AIA did not narrow the on-sale bar to require public disclosure of an invention's technical details, the court maintained a long-standing policy that prevents inventors from commercially exploiting their invention long before seeking a patent. This ruling reinforces the need for inventors to file for patent protection promptly after entering into any form of commercialization agreement.

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