Helsinn Healthcare v. TEVA Pharmaceuticals, Inc.

A sale to a third party, even with a confidentiality obligation, may still qualify as a “sale” under The Leahy-Smith America Invents Act. 35 U.S.C. §102(a)(1).

According to the Leahy-Smith America Invents Act (“Act”), a person cannot receive a patent for a product that is “on sale.”35 U.S.C. §102(a)(1). Petitioner manufactures a drug that contains an active ingredient called palonosetron. Petitioner entered into an agreement with a third party to market the use of palonosetron. Some time later, after Petitioner received a patent for palonosetron, Respondent sought to market a generic version of it. Petitioner sued for patent infringement.Respondent averred that since palonosetron was “on sale” a year before the patent was granted, the patent should be invalid.  Petitioner argued that the third-party marketing sale is not included in the “on sale” provision because the parties entered into a confidentiality agreement. The District Court sided with Petitioner and the Federal Circuit Court of Appeals reversed.The United States Supreme Court held that the relevant provision of the Act applied.  Although there is no direct precedent on point, the Court concluded that the spirit of the precedent did not require a sale to the public in order for the “on sale” provision to apply.  Adopting Federal Circuit reasoning—that “secret sales can invalidate a patent”—the Court presumed that Congress did not intend to change the meaning of “on sale” when it enacted the Act.  AFFIRMED.