Offering for sale could be a public disclosure of your invention: get patent pending before selling!

By: Dennis Haszko

Generating income is typically top of mind for any business. For technology companies, this often means that sales and marketing go hand-in-hand with product development. During product development, confidential clauses in agreements shield companies from public disclosure of the invention. However, the United States has an “on-sale” bar which prevents one from patenting an invention that has been offered for sale for more than one (1) year prior to the patent application filing date.

Recently, the U.S. Supreme Court held in Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc. (Helsinn) that a sale made under confidentiality obligations (a so-called “secret sale”) qualified as prior art under the “on-sale” bar in 35 U.S.C. 102(a)[1]. In that case, Helsinn Healthcare S.A. entered into a confidential agreement that granted a partner company the right to, inter alia, sell Helsinn’s chemotherapy product. Helsinn filed the first patent application on their product more than a year after executing the agreement. The U.S. Supreme Court held that even though the agreement between Helsinn and its partner company was confidential, the “secret sale” was a bar to patentability and thus Helsinn lost their patent rights. Accordingly, although confidentiality clauses may work in many circumstances, caution should be exercised when discussing new products with prospective customers prior to filing a patent application.

So how does a company prevent the self-inflicted wound of invalidating its patent before the application is even filed? Consider what actually makes the “secret sale” a problem in the first place.  The US Supreme Court cited Pfaff v. Wells Electronics, Inc., which provided the requirements for the conditions that create an on-sale bar:

  • the product must be the subject of a commercial offer for sale; and
  • the invention must be ready for patenting. [2]

A commercial offer for sale will typically require some manifestation of intent. However, determining when a product is ready for patenting can be confusing. The court held in Pfaff that drawings or other descriptions of the invention that enable a skilled artisan to practice the invention were sufficient to make a product “ready for patenting”. Notably, the Court in Pfaff held that even an offer for sale that did not disclose the details of the invention could cause an inventor to lose the right to patent.

Key Takeaway

Helsinn raises significant issues for early stage business activities.  During early product development, offering product solutions for sale can be easy and unintentional. For example, whiteboard presentations to prospective customers may in fact provide enough detail of the product to make the invention ready for patenting. Any suggestion of an offer for sale during such discussions could easily run afoul of the on-sale bar. An NDA is not enough, both parties should be clear as to whether or not there is an intention to sell the product.  The other option: file a patent application before your one-year grace period lapses.


[1] US Supreme Court, No. 17 – 1229, 2019.

[2] US Supreme Court, No. 97-1130, 1998.

IP in the Tiffany’s Acquisition—It’s the Box That Counts

Big news in the world of luxury goods:  earlier this week, French multinational LVMH (Moët Hennessy Louis Vuitton SA) acquired renowned jeweler Tiffany’s for $16.2bn. According to Reuters, one of the biggest draws for the luxury conglomerate was the breadth and value of Tiffany’s IP.  The famous Tiffany packaging, boxes of trademarked “Tiffany Blue” tied with white satin ribbon, might be more pricey than any jewels. “We’re [now] the owner of a colour”, said Bernard Arnault, CEO of LVMH.  “It’s a pretty rare thing.”

Natalie Raffoul spoke on IP and AI at Elevate Toronto Tech Festival

Natalie Raffoul joined a long list of exceptional speakers, including Michelle Obama and Chris Hadfield, at the Elevate Toronto Tech Festival today. The Elevate Tech Fest showcases the best of the Canadian innovation ecosystem. Natalie shared the stage with Carole Piovesan of INQ Data Law for the panel “Why Your AI Company Will Fail Without the Right IP Plan” moderated by Sean Silcoff of the Globe and Mail. Natalie spoke about IP trends and legal risks in artificial intelligence and machine learning, providing a IP lawyer and patent agent’s unique perspective on protecting AI assets.

Brion Raffoul Congratulates New Patent Agent Stacey Dunn

The firm would like to congratulate Stacey Dunn for passing the 2019 Canadian Patent Agent Qualification Examinations to become a Registered Canadian Patent Agent. Stacey has a background in molecular genetics and specializes in the life sciences. Stacey is also a lawyer in Ontario and actively supports our legal practice in the area of IP licensing and enforcement.

Brion Raffoul is a premier Canadian IP boutique providing clients with a full range of patent, design, and trademark procurement services, as well as legal advice in the field of IP.  We take time to know our clients and are committed to providing excellent quality service in a timely manner. If you have any questions about intellectual property, please feel free to reach out to any of our professionals.

2019 NBA Champions Toronto Raptors: Trademark Fight Ahead with Monster Energy

By: Edward Wu

Despite the Toronto Raptors’ historic win last night, they may have some trouble ahead with their, now iconic, logo. Monster Energy is suing the Toronto Raptors over the clawed basketball logo. Documents from the U.S. Patent and Trademark Office’s (USPTO) Trial and Appeal Board (TTAB) show that the two companies have been fighting over the “claw” style logos since 2015. Monster Energy claims that the Raptors’ logo of a clawed-up basketball is too similar to Monster Energy’s claw logo:

Monster Energy’s Logo

Monster’s “claw” logo is of three jagged vertical gashes. The company has used the three gashes since 2002. The Raptors’ old “claw and a basket ball” trademark was filed with the USPTO in 1994 and registered in 2003.

Raptors’ Old Logo

In 2014, the Raptors redesigned the team’s logos and filed US trademark applications for the following:

Raptors’ New Logos

In May 2015, Monster Energy opposed the Raptors’ new US trademark applications. Over the past 4 years, the two companies attempted to settle the case but failed to reach a settlement by 2018, when the case went into discovery.

A recent document shows that Monster Energy filed a motion for partial summary judgement stating that the equitable defense of prior registration that the Raptors asserted is only available when the marks and goods/services in the subject application are essentially the same as the mark and goods/services in a prior registration. Monster Energy argues that the Raptors’ Trademarks are not substantially identical to the prior registration. Namely, the Raptors’ design was changed from independent claws and a basketball to claws within a basketball. Furthermore, one of the new marks added the words “TORONTO RAPTORS”, which is not found in the old mark. Monster also states that the Raptors described the new marks in very different ways, and they intended to create new marks for evolving the aging Raptors brand. The TTAB has yet to decide the outcome of the motion.

The trademark fight extends to the Raptors’ home court, Canada. Monster Energy opposed the Raptors’ Canadian trademark application for the “TORONTO RAPTORS” logo in December 2016. Interestingly, the Raptors successfully registered their new logo without the “TORONTO RAPTORS” on March 10, 2017 with the Canadian Intellectual Property office (CIPO).

Monster Energy may try to bring down the Raptors’ trademarks, but nothing can take away from last night’s win!

#WeTheNorth!

Ms. Dominique Lambert to attend BIO International Convention from June 3-6

Ms. Dominique Lambert will be representing the patent team at the BIO International Convention (BIO) being held in Philadelphia from June 3 to June 6, 2019.

https://convention.bio.org/

BIO attracts 16,000+ biotechnology and pharma leaders who come together to discover new opportunities and promising partnerships, bringing together a wide spectrum of life science and application areas including drug discovery, biomanufacturing, genomics, biofuels, nanotechnology and cell therapy.

CIPO OPENS PUBLIC CONSULTATION ON DRAFT ADMINISTRATIVE TOPICS FOR THE UPCOMING NEW PATENT RULES

By Dominique Lambert

Following the amendments to the Patent Act to comply with the requirements of the Patent Law Treaty (PLT), and proposed amendments to the accompanying Patent Rules, the Canadian Intellectual Property Office (CIPO) has drafted revised administrative procedures for the Manual of Patent Office Practice (MOPOP).

The new Patent Act and Patent Rules are expected to come into force in the Fall of 2019. Many sections of the MOPOP will need to be revised.

This Public Consultation is an opportunity for IP practitioners, IP owners, or any person interested in the Canadian Patent regime to provide feedback on the revised procedures that will be applied by the Office.

The Consultation will be open from March 26, 2019 until May 27, 2019.

Meaningful Progress or Mere Signal Transient?

By Dennis Haszko

“A transient event is a short-lived burst of energy in a system caused by a sudden change of state.” –Wikipedia

Recently, the U.S. Patent & Trademark Office (USPTO) published the 2019 Revised Patent Subject Matter Eligibility Guidance (2019 PEG) which has predictably caused a stir in the field of business method patents.

After the U.S. Supreme Court’s key decisions over the last decade in Bilski v. Kappos, 130 S. Ct. 3218 (2010); Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012), and Alice Corp. Pty. Ltd. V. CLS Bank International, 134 S. Ct. 2347 (2014), the courts in the US have increasingly found certain computerized methods of doing business to be unpatentable.  Moreover, patent examiners at the USPTO have been brought to near deadlock in many instances where patent applications become mired in the threshold question of whether the invention constitutes patent eligible subject matter under 35 U.S.C. 101.

To date, the USPTO has applied the key decisions inconsistently and oftentimes seemingly arbitrarily.  This has made negotiating with patent examiners less a science and more of an art.  Typical rejections under 35 U.S.C. 101 include a blanket assertion that the subject matter “forms an abstract idea” and “fails to constitute something significantly more.” 

The 2019 PEG is an effort by the USPTO to provide clarity and consistency during the patenting process. Patent examiners are now directed to review and analyze patent applications in a more stringent manner.  The updated analysis can be distilled to the following steps:

  1. Does the claimed subject matter recite a judicial exception related to:
  1. Mathematical concepts— mathematical relationships, mathematical formulas or equations, mathematical calculations;
  • Certain methods of organizing human activity—fundamental economic principles or practices (including hedging, insurance, mitigating risk); commercial or legal interactions (including agreements in the form of contracts; legal obligations; advertising, marketing or sales activities or behaviors; business relations); managing personal behavior or relationships or interactions between people (including social activities, teaching, and following rules or instructions); or
  • Mental processes – concepts performed in the human mind (including an observation, evaluation, judgment, opinion)?
  • If a judicial exception is identified, then is it integrated into a practical application? If so, then the invention is at least subject matter eligible, though it must still be analyzed for novelty and non-obviousness.
  • If a judicial exception is identified, but not integrated into a practical application, then the claimed subject matter may only be considered subject matter eligible if it provides an inventive concept where the claimed subject matter forms “significantly more” than the recited judicial exception.

While this updated analysis under the 2019 PEG still reflects a lot of gray area, it does clearly lay out the types of claimed subject matter in a more distinct list.  Moreover, the analysis provides patent practitioners with a more “scientific” or logical approach to arguing that a practical application exists.  This is better than the previous, more ambiguous approach of arguing that the invention provides “significantly more.”  As experienced patent practitioners can attest, previous USPTO attempts at dealing with business method inventions had led to arguments that can, at best, be characterized as mere throws of the dice.  The 2019 PEG, at the very least, should provide a seemingly logical blueprint for crafting suitable arguments.

Only time will tell whether the 2019 PEG is a mere signal transient or something more meaningful in terms of obtaining business method patents from the USPTO.