Sanho owns U.S. Patent No. 10,572,429 directed to a USB-C peripheral connection extender.  The patent covers the Sanho "HyperDrive" product.  Kaijet initiated an Inter Partes Review (IPR) that successfully invalidated the Sanho's patent claims as obvious.  The obviousness finding relied on U.S. Patent Publication No. 2018/0165053 that predated the filing date of Sanho's patent – i.e. 102(a)(2) prior art.

Sanho appealed, asserting that before the filing date of the prior art, the inventor of Sanho's patent had sold HyperDrives to Sanho, constituting a predating public disclosure.  Specifically, Sanho asserted that the reference should be disqualified under 35 U.S.C. 102(b)(2)(B), which reads: “the subject matter disclosed had, before such subject matter was effectively filed under subsection (a)(2), been publicly disclosed by the inventor…”

Sanho argued that the sale of the HyperDrives was necessarily a public disclosure in view of jurisprudence related to the on sale bar.  Sanho also highlighted that the sale was not subject to a confidentiality agreement.

The Federal Circuit affirmed the PTAB’s holding that Sanho’s patent was invalid as obvious.  They focused on the word "publicly disclosed" in (b)(2)(B), and reasoned that the private sale between the inventor and Sanho was not a public disclosure.  They also discussed the policy reasons for 102(b) – i.e. encouraging inventors to share inventions with the public.  The private sale did not further these objectives.  In other words, the private sale did not make the subject matter of the invention available to the public.