Supreme Court Holds that AIA "On Sale" Bar does not Require a Public Disclosure


            On January 22, 2019, in a unanimous ruling, the U.S. Supreme Court agreed with  the Federal Circuit that the America Invents Act (AIA) did not alter the substantial body of law, including the Court’s own precedent, that a “commercial sale to a third party who is required to keep the invention confidential may place the invention ‘on sale’ within the meaning of § 102(a).”

            It has been settled law under the pre-AIA novelty statute that a secret commercial sale by a patentee qualifies as prior art. The novelty statute under the AIA retained the on-sale bar and added the catchall phrase “or otherwise available to the public.”  35 U.S.C. § 102(a)(1) under the AIA recites: “A person shall be entitled to a patent unless . . . 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.”  The AIA novelty statute applies to patent applications and patents with at least one claim having an effective filing date on or after March 16, 2013, while the pre-AIA novelty statute still applies to older patent applications and patents.

            The key question before the Supreme Court was whether the addition of the catchall phrase "or otherwise available to the public" means that a sale by the patentee must be "available to the public" to be considered prior art.  In finding that patent claims at issue were invalid, the Federal Circuit below held that the patentee’s sale agreements with another company were publicly disclosed, regardless of whether the details of the invention were publicly disclosed in the terms of the sale agreements.  The Supreme Court agreed, finding that the mere "addition of 'or otherwise available to the public' is simply not enough of a change for us to conclude that Congress intended to alter the meaning of the reenacted term 'on sale.'"