Helsinn Healthcare S. A. v. Teva Pharmaceuticals USA, Inc.
Headline: Court rules that selling an invention under a confidentiality agreement can block later patents by counting as an 'on sale' event, making it harder for companies to patent after commercial deals are made.
Holding: The Court held that selling an invention to a third party who is contractually required to keep it confidential can qualify as an "on sale" event under the AIA and therefore can bar later patenting.
- Makes secret sales before filing capable of defeating future patent claims.
- Press releases or required filings that disclose a deal can trigger the rule.
- Pushes companies to file patents before making commercial deals or announcements.
Summary
Background
Helsinn is a Swiss drug company that developed palonosetron, the active ingredient in Aloxi. Around 2000 Helsinn made public that it was beginning Phase III trials and sought marketing partners. Helsinn and a U.S. company, MGI, signed a license and a supply agreement that included dosage information and required MGI to keep proprietary details confidential. The deals were announced and parts were reported in an SEC filing with redactions. Helsinn filed a provisional patent application on January 30, 2003; the later-issued '219 patent claimed a 0.25 mg dose. Teva, a generic manufacturer, sought FDA approval in 2011 and was sued by Helsinn; Teva argued the 0.25 mg dose had been "on sale" more than a year before Helsinn’s provisional filing.
Reasoning
The central question was whether a commercial sale to a buyer who must keep the invention secret can count as prior art under the AIA. The Court relied on earlier decisions that define an "on sale" event by two factors: a commercial offer for sale and that the invention was ready for patenting. The Court concluded Congress, when it reenacted the phrase "on sale" in the AIA and added a broad catchall phrase, did not intend to change that long-standing meaning. Therefore a sale to a confidentiality-bound third party can qualify as an "on sale" event and bar a later patent.
Real world impact
The decision affirms the Federal Circuit and makes clear that companies risk losing patent rights if they make commercial deals before filing, even if the buyer promises secrecy. Public announcements or filings that reveal the existence of a sale can trigger the rule, so companies should file patent applications before entering or publicly disclosing commercial agreements.
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