Drumroll…..the Supreme Court said an emphatic No! The American Invents Act (AIA) did not change the Patent On-Sale Bar

By Matthew J. Booth

A couple of weeks ago I wrote about whether the America Invents Act (AIA) changed the Patent On-Sale bar. The US Supreme Court answered this question in a short, unanimous opinion by Justice Thomas, with the answer being, no, the AIA did not change the Patent On-Sale bar.

In its review of the case, the Court said that since the term “on sale” was both in the earlier version of the statute and the current version of the statute, Congress intended for the term to have the same construction used by the Supreme Court. The Court further found that the addition of the term “or otherwise available to the public” was not enough of a change to the meaning of “on sale” for the Court to conclude that Congress wanted to alter its meaning.

Seeing such a strong judicial takedown by the Supreme Court on anything is always a bit of a jaw dropper. Clearly, the Court was not impressed with the appeal.

I think an interesting tidbit in this opinion is that the Court looked favorably on the Federal Court’s (the lower court for patent appeals) case law on “secret sales” invalidating patents. While not an express holding, this language seems to indicate that all “secret sales” occurring more than one year prior to the date of the application will invalidate a patent.

The practical tip coming from this case is to always file patent applications before selling or licensing technology.

The case is Helsinn Healthcare SA v. Teva Pharmaceuticals USA Inc., US, No. 17-1229 (01/22/2019).

Link to case.

USPTO issues new Examiner Guidance for Subject-Matter eligibility for software patents

By Matthew J. Booth

The US Patent & Trademark Office (USPTO) recently published an updated Examiner Guidance that applies to the examination of software patent applications (See 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50).  The hope is that these new Guidelines will speed up the application review process and provide more predictability for the patenting of existing and new software inventions.

First a little background, in 2014 the US Supreme Court decided the Alice case.  Alice redefined how software patents were analyzed by asking whether software patents were eligible for patent protection under 35 U.S.C 101. (See Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 217-18 (2014) (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012)). The aftermath of Alice has been, in my opinion, chaos because courts invalidated scores of issued software patents.  Additionally, the USPTO started refusing to grant scores of patents on software related inventions. Since Congress never fixed “the Alice problem,” the courts began determining on a case-by-case basis (really a patent-by-patent basis) whether claims were eligible for patent protection. The USPTO tried to keep current with these cases by issuing guidance to the Examiners for how to examine software patent applications in light of the fallout from Alice but that offered little relief.  I have seen articles over the past couple of years showing the statistics for the rejection rate of software patent applications post-Alice to be over 90% in some USPTO examination groups. This type of technological shutdown in the USPTO was completely unprecedented.

As I have worked on patent applications over the years, the challenge is to write claims for a software invention that will be patentable and enforceable.  I have often relied on the technique of reviewing case law to look for cases with claims that met that criteria and then mimicking them in writing a new application. This was the first and foremost step in drafting the application and then the question of whether the invention was novel or nonobvious over prior patents actually came later.  This often felt like putting the cart before the horse but it is where we found ourselves in the aftermath of Alice.

This is one of the reasons that Patent Owners and Applicants have been calling on the USPTO to address these examination problems and to come up with a process that will get software patent applications granted while maintaining enforceability. The new Director of the USPTO recognized the problem and promised a fix. That fix has finally come to pass with the issuance of new examination Guidelines.

Breaking the new Guidelines down, they are like a check list for Examiners to go through as they are analyzing software claims. For example, if the claims are written in a certain fashion, then they are subject-matter eligible and the analysis proceeds on to whether the claims are novel and nonobvious. The Examiner continues down the checklist looking at the next set of requirements. If the Examiner reaches the conclusion that the claims are not patent eligible, then a second review and approval by the Director of that particular Technology Group is required prior to issuing a rejection.

I have high hopes that this is at last the light at the end  of the long dark post-Alice tunnel.

Did the America Invents Act (AIA) change the Patent On-sale bar?

By Matthew J. Booth

The U.S Supreme Court heard oral arguments last month regarding whether the America Invents Act changed the definition of the on-sale bar for patents. Before the AIA, the on-sale bar meant that an applicant for a patent could not have sold or attempted to sell the claimed invention before the filing of a patent application. In most situations, however, there was 1-year grace period from the sale or attempted sale date for an applicant to file the patent application so that sale would not be considered prior art. Any patent application covering that invention that was filed after that 1-year grace period would be considered invalid.

The pre-AIA section read:

35 USC 102 35 U.S.C. 102 (PRE‑AIA) CONDITIONS FOR PATENTABILITY; NOVELTY AND LOSS OF RIGHT TO PATENT.
A person shall be entitled to a patent unless —
• (a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent, or
• (b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States, or …

The AIA changed the statutory language around “on sale” and this section now reads:

35 USC 102
(a) NOVELTY; PRIOR ART.— A person shall be entitled to a patent unless—
(1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention; …

Ever since the AIA came into effect, there has been some questions in the Patent community about whether the new language changed the prior interpretation of the on-sale bar and that now “private” sales to third parties were no longer considered prior art (or did not start the count on the 1-year grace period). A case has made it to the Supreme Court that will hopefully give us some clarity regarding this issue.

The case is Helsinn Healthcare SA v. Teva Pharmaceuticals USA Inc., No. 17-1229. This case is worth keeping an eye on as it may change the filing strategies for patent applications that come out of research agreements, joint development agreements, or manufacturing agreements.

Link to case