An Inventor’s Sale of an Invention to a Third Party who is Obligated to Keep the Invention Confidential can Qualify as Prior Art

The United States Supreme Court held in Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc. et al. (No. 17-1229, 2019) that inventor’s sale of an invention to a third party who is obligated to keep the invention confidential can qualify as prior art under section 102(a) of title 35 of the United States Code.  The Court reasoned that Congress did not alter the meaning of the phrase “on sale” when it enacted the America Invents Act, 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.”  The patent statute in force immediately before the America Invents Act included an on-sale bar provision, as well.  The Supreme Court’s precedent interpreting that provision supports the view that a sale or offer for sale need not make an invention available to the public to constitute invalidating prior art.  The Court has implicitly held in precedents decided prior to the enactment of the America Invents Act that “secret sales” could invalidate a patent.

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