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.

File Wrapper Estoppel in Canada – How Far Are the Courts Willing to Go?

By: Stacey Dunn

Since the coming-into-force date of new section 53.1 of the Patent Act in December 2018, Canadian practitioners have been waiting to see how broad this “file wrapper estoppel” provision will be interpreted. Recently, the Federal Court released a decision that expands the scope of s. 53.1 to potentially include foreign prosecution file wrappers. However, this case is currently under appeal.

Section 53.1(1) states that written communications prepared in respect of the prosecution of a patent application between the applicant or patentee and an employee of the Canadian Patent Office may be admitted into evidence to rebut any representation made by the patentee in claim construction. However, the Court held in Canmar Foods Ltd. V TA Foods LTD (2019 FC 1233) that foreign prosecution could be admissible to the court under “extraordinary circumstances”.

During the prosecution of Canadian Patent No. 2,582,376, a Response to an Office Action stated “New claims 1 to 19 correspond substantially to those submitted during prosecution of a related United States application” and “the newly submitted claims are much narrower in scope than the previously examined claims”. Accordingly, the Court held that because the patentee specifically referenced the corresponding US Application’s prosecution history and acknowledged that the amendments were made to overcome novelty and obviousness concerns raised in the US Application’s prosecution history, the applicable US Application’s prosecution history was admissible. The Court stated that if they were to ignore the US prosecution history in this specific case, “patent applicants in Canada would be incentivized to intentionally refrain from being transparent with the Canadian Patent Office as to why amendments were made to limit claims during prosecution”. However, an unintended consequence of this case may be that patent practitioners may intentionally refrain from being transparent. Instead of providing Examiners with information regarding where the amendments are coming from, Applicants are now incentivized to not mention any reference to foreign prosecution. Under this interpretation, Applicants would be better served to merely state that the claim amendments are not disclosed, taught or fairly suggested by the prior art without reference to a foreign Patent Office’s work.

The Court held that “extraordinary circumstances” arise where “the patentee acknowledges that the claims have been amended to be substantially the same as claims submitted in another jurisdiction, and the patentee admits that the amendments have limited the scope of claims in order to make the claims novel and non-obvious”. When this occurs, the Court held that the foreign prosecution history is admissible for the limited purpose of purposively construing the Canadian claims. The Court specifically mentioned expedited examination via the Patent Prosecution Highway (PPH), where Applicants are required to identify allowable claims in another jurisdiction and amend the claims to substantially conform to those allowable claims. Accordingly, Canmar appears to suggest that the foreign prosecution history of the Office of Earlier Examination (i.e., the country with allowable claims to which a PPH request is being made) will be admissible in court as there is an implicit admission that the amendments limit the scope of the claims to be novel and non-obvious.

What does this mean for Canadian patent prosecution moving forward?

Canadian practitioners are well aware that anything put on the record in Canada may be admissible in US court proceedings. Accordingly, verbose Responses have always been avoided, and indeed directly referring to US prosecution was a way to avoid adding anything new to the worldwide file wrapper for that patent family. However, practitioners should avoid mentioning foreign prosecution history, even to show the Examiner that these amendments have been deemed allowable elsewhere. Furthermore, Applicants should be wary of entering PPH in Canada, as the prosecution history of the Office of Earlier Examination may be used to rebut a representation made by the patentee in claim construction.

Check out Natalie Raffoul’s Podcast on The Millionaires Lawyer: From Startup to Payout

The Millionaires Lawyer: From Startup to Payout Podcast launched their newest episode entitled “Natalie Raffoul – Patent and Trademark Queen”. If you have any questions regarding IP strategy, check out this podcast!

Natalie goes through some of the misconceptions surrounding patenting, especially in the high tech and software space. She also goes through how start-ups and small businesses can avoid some of the major pitfalls with protecting their IP. This is a can’t miss podcast for any start-ups and small businesses interested in protecting their IP.

Listen to The Millionaires Lawyer: From Startup to Payout Podcast online on all major platforms:

Brion Raffoul Welcomes Leber IP Law to Ottawa

Brion Raffoul and Leber IP Law enjoyed a great evening at Captive Escape Rooms last night! Escape rooms are a great team building exercise that Brion Raffoul has used in the past. Everyone has to work together in a time crunch situation to escape!

Brion Raffoul was happy to welcome US Patent Attorneys Celia Leber and Dave Robertson to Ottawa and we wish them safe travels home.

Dominique Lambert participera au FORPIQ le 1er mai, 2019 à Montréal

Le Forum International sur la Propriété Intellectuelle – Québec (FORPIQ) tiendra sa 10eme édition à Montréal le 1er mai 2019 sous le thème « Naviguer dans une ère où innovation ouverte et propriété intellectuelle s’entremêlent ». Brion Raffoul y sera représenté par l’une de ses agents de brevets, Dominique Lambert. Une programmation relevée et des discussions stimulantes en perspective!

https://www.forpiq.com/accueil#a-propos
https://www.linkedin.com/company/forpiq/

#forpiq10e