Don’t Take the Wind Out of Your Sales | McDonnell Boehnen Hulbert & Berghoff LLP
You can be denied a U.S. patent if the application you submit to the U.S. Patent and Trademark Office (USPTO) is not “new” and “non-obvious.”[1] In determining whether something is “new” and “non-obvious,” U.S. patent examiners commonly look at boatloads of prior patents and printed publications.[2] Perhaps lesser known, though, is that an applicant can also be denied patent protection if the claimed invention was previously “in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” [3]
These three categories of patent-negating prior art are just as important to keep in mind as are patents / printed publications. This is especially true because an inventor can inadvertently submarine their own patent protection (e.g., prevent themselves from being able to obtain a patent) by taking certain actions prior to filing a patent application. For example, if an inventor is going full-steam ahead with the development of their technology, they could inadvertently run afoul of the proscription against selling the invention before filing a patent application. In this three-part series, I will give a stem-to-stern primer on the “on sale” bar, including providing some notable exceptions. Let’s get underway.
What is the “On Sale” Bar?
35 U.S.C. § 102(a)(1) states that an applicant cannot get a patent if the invention was “on sale” prior to filing a corresponding patent application.[4] What does this mean, exactly? Judicial decisions (including pre-AIA decisions) can provide us with some guidance.[5] The primary case cited with respect to the “on sale” bar is Pfaff v. Wells Elecs., Inc. (1998). In that case, the Supreme Court established the doctrine that, unless an exception applies (covered in more detail in part 3 of this series), patentability shall be negated if: (1) the claimed invention was the subject of a commercial sale or offer for sale that was not primarily for experimental purposes; and (2) the claimed invention was ready for patenting.[6] The first element (covered here) and the second element (covered in part 2 of this series) both individually raise some interesting points.
The first of the two Pfaff requirements is that the claimed invention be the subject of a commercial sale or an offer for sale. In other words, if the invention was sold (or even merely offered for sale) and the subject matter of the sale (or offer to sell) fully anticipated the claimed invention or would have rendered the claimed invention obvious, the invention is no longer patentable.[7] In deciding whether a commercial sale / offer for sale has taken place, courts look to common law contract principles.[8] The following factors weigh in favor of a determination that a commercial sale or offer for sale has occurred:
(A) Preparation of commercial documents (e.g., orders, invoices, receipts, delivery schedules, etc.)[9]
(B) Preparation of price lists and distribution of price quotations[10]
(C) Display of samples to prospective customers [11]
(D) Demonstration of models or prototypes, especially at trade conventions, even if no orders are actually obtained[12]
(E) Use of an invention where an admission fee is charged [13]
(F) Advertising in publicity releases, brochures, and various periodicals [14]
(G) Incorporation of material terms (e.g., price, quantity, shipping timelines, etc.) into communications [15]
Undertaking any of the activities above will, therefore, call patentability into question. Hence, to the extent possible, it is best to avoid such activities prior to filing a patent application. It is also worth noting that even “sales” that do not result in profit or rejected offers for sale can trigger the “on sale” bar. [16] [17]
In part 2 of this series, I’ll cover the second Pfaff requirement, that the invention must be “ready for patenting” to trigger the “on sale” bar.
[1] 35 U.S.C. §§ 102 and 103
[2] See, e.g., M.P.E.P. § 901
[3] 35 U.S.C. § 102(a)(1)
[4] 35 U.S.C. § 102(a)(1)
[5] See, e.g., M.P.E.P. § 2152.02(d) (citing Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., 139 S.Ct. 628 (2019))
[6] Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 67 (1998)
[7] Ferag AG v. Quipp, Inc., 45 F.3d 1562, 1565 (Fed. Cir. 1995); see also M.P.E.P. § 2133.03(b).
[8] Medicines Co. v. Hospira, Inc., 827 F.3d 1363, 1373 (Fed. Cir. 2016) (en banc); see also M.P.E.P. §§ 2133.03(b), 2152.02(d); Linear Tech. Copr. v. Micrel, Inc., 275 F.3d 1040, 1048 (Fed. Cir. 2001); Group One, Ltd. v. Hallmark Cards, Inc., 254 F.3d 1041, 1047 (Fed. Cir. 2001); In re Caveney, 761 F.2d 671, 676 (Fed. Cir. 1985); Medicines Co. v. Hospira, Inc., 827 F.3d 1363, 1364 (Fed. Cir. 2016) (en banc) (citing U.C.C. § 2-106(1)) (“Section § 2-106(1) of the Uniform Commercial Code describes a ‘sale’ as ‘the passing of title from the seller to the buyer for a price.’”)
[9] See, e.g., M.P.E.P. § 2133.03(e)(1)
[10] Akron BrassCo.v. Elkhart Brass Mfg. Co., 353 F.2d 704, 709 (7th Cir. 1965); Amphenol Corp.v. Gen’l Time Corp., 397 F.2d 431, 436 (7th Cir. 1968); see also M.P.E.P. § 2133.03(e)(1)
[11] Cataphote Corp. v. DeSoto Chemical Coatings, Inc., 356 F.2d 24, 27 (9th Cir. 1966); see also M.P.E.P. § 2133.03(e)(1)
[12] General Elec. Co. v. United States, 206 USPQ 260 (Ct. Cl. 1979); Red Cross Mfg. v. Toro Sales Co., 525 F.2d 1135, 1140 (7th Cir. 1975); Philco Corp.v. Admiral Corp., 199 F. Supp. 797, 815-16 (D. Del. 1961); Interroyal Corp.v. Simmons Co., 204 USPQ 562, 563-65 (S.D. N.Y. 1979); Monogram Mfg. v. F. & H. Mfg., 144 F.2d 412 (9th Cir. 1944); see also M.P.E.P. § 2133.03(e)(1)
[13] In re Josserand, 188 F.2d 486, 491 (CCPA 1951); Greenewalt v. Stanley, 54 F.2d 195 (3d Cir. 1931); see also M.P.E.P. § 2133.03(e)(1)
[14] In re Theis, 610 F.2d 786, 792 n.6 (CCPA 1979); Interroyal Corp. v. Simmons Co., 204 USPQ 562, 564-66 (S.D.N.Y.1979); Akron Brass, Co. v. Elkhart Brass Mfg.,Inc., 353 F.2d 704, 709 (7th Cir.1965); Tucker Aluminum Prods. v. Grossman, 312 F.2d 393, 394 (9th Cir. 1963); see also M.P.E.P. § 2133.03(e)(1)
[15] Elan Corp., PLC v. Andrx Pharms. Inc., 366 F.3d 1336, 1341 (Fed. Cir. 2004); see also MPEP § 2133.03(b)(II)(D).
[16] In re Dybel, 524 F.2d 1393, 1401 (CCPA 1975); see also M.P.E.P. § 2133.03(b)(I)(B)
[17] Group One, Ltd. v. Hallmark Cards, Inc., 254 F.3d 1041, 1048 (Fed. Cir. 2001); see also M.P.E.P. § 2133.03(b)(II); UMC Elecs. v. United States, 816 F.2d 647, 653 (Fed. Cir. 1987)
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