Brief of the R Street Institute and Engine Advocacy as Amici Curiae: Helsinn Healthcare v. Teva Pharmaceuticals

Abstract

In Helsinn Healthcare v. Teva Pharmaceuticals, the Supreme Court considers whether the term "on sale" in 35 U.S.C. § 102, which lays out the rules for prior art that prevents patenting of inventions, contemplates only sales or offers for sale that render the relevant invention available to the public. Helsinn, the patent owner, contends that the text of the statute is limited in this manner such that secret sales do not constitute prior art under § 102. Teva disagrees, arguing that any sale or offer for sale, whether or not secret, is prior art under that statute.

This brief makes two main arguments. First, it explains that the on-sale bar of § 102 should be interpreted broadly to encompass all sales. If secret sales are exempted from § 102, then inventors can as a matter of course avoid application of the on-sale bar by attaching nondisclosure agreements to any sales of their inventions. This creates two problems of public policy. First, it subverts the basic aims of the patent system, which include a limited duration of patent term and early public disclosure of inventive discoveries. Second, prevalence of nondisclosure agreements impairs critical research into product security, safety, and improvement.

The second argument of the brief is that treating the phrase "on sale" as limited to public sales conflicts with traditional property rights. A classic tenet of the common law is that property, once sold, can be resold freely; the original seller may not place conditions on the sold property that prevent further resale. As such, when an invention is "on sale," the inventor has expressed willingness to cede control over the invention and to allow the invention to enter the public stream of commerce. To interpret § 102 to differentiate between "public sales" and "secret sales," then, ignores this traditional notion of alienability of property and demands a patent-exceptional rewriting of ordinary property law that is inconsistent with precedent.

Keywords: Patent, On-Sale Bar, Helsinn, Teva, Anticipation

JEL Classification: K22, O34, I18