OC Patent Lawyer » on sale bar

Public availability under the America Invents Act

James Yang — Wed, 26 Oct 2011 05:32:58 +0000

The first-inventor-to-file (“FITF”) system under the America Invents Act (“AIA”) retains much of the verbiage used in the current Patent Act. For example, the FITF system retains terms such as “patented,” “printed publication,” “public use” and “on sale.” Under the FITF system, if the claimed invention was patented, disclosed in a printed publication, in public use or on sale anywhere in the world before the filing of the inventor’s patent application, then no patent shall be granted to the inventor. Each of these terms has already been litigated and defined through case law under the current Patent Act. For example, the on-sale bar under the current act includes offers for sale regardless of whether the offer was made in private. The expectation is that the current legal definition for “on-sale” and the other similar terms will flow through to the AIA. At least one other person has implied that the “on sale” language under the AIA excludes secret offers for sale as prior art based on statutory construction and legislative history of the AIA. Expect to see litigation as to whether secret offers for sale are deemed prior art under the AIA.

The FITF system also adds new language in the form of a catch all phrase which bars the grant of a patent if the claimed invention was “otherwise available to the public” before the filing of the patent application. In other words, even if the claimed invention is not in the form of a patent, printed publication, public use or on-sale (i.e., offer for sale) but was “otherwise made available to the public” before the filing of a patent application by the inventor, then such public availability shall bar the grant of a patent to the inventor. Expect to see litigation as to what is meant by “otherwise made available to the public” standard.

I invite you to contact me with your patent questions at (949) 433-0900 or James@OCPatentLawyer.com. Please feel free to forward this article to your friends. As an Orange County Patent Attorney, I serve Orange County, Irvine, Los Angeles, San Diego and surrounding cities.

Offers for sale: foreign sales for US use infringes patent

James Yang — Tue, 24 May 2011 15:41:44 +0000

Under current U.S. patent laws, an entity that makes, uses, offers for sale or imports into the United States any patented invention during the term of the patent therefor, infringes the patent. (35 USC 271(a)). The following case relates to places where the offers for sale are made which might lead to patent infringement. More particular, it discusses when foreign transactions become an offer for sale within the United States so as to constitute patent infringement. Transocean v. Maersk Contractors, 2009-1556 (Fed. Cir. August 18, 2010).

Transocean holds patents for various offshore drilling rigs. Maersk utilizes various drilling rigs within its business. During the 2005 time frame, Maersk entered into a contract with Statoil for use of one of Maersk’s rigs that infringed Transocean’s patents. The contract was entered into in Norway (i.e., outside of the United States) but had an “Operating Area” of the U.S. Gulf of Mexico (i.e., within the United States). Typically, when a product that would infringe a U.S. patent is manufactured, sold and use outside of the United States, a United States patent is not infringed because patents are territorial and does not reach beyond the borders of the United States.

In the present case, the Court held that contracts made outside of the United States for products to be delivered and used within the United States is an offer for sale constituting patent infringement. To hold otherwise would exalt form over substance. Maersk would be able to generate interest in its product in the U.S. to the detriment of the U.S. patent owner, the type of harm that the “offer to sell” language in 35 U.S.C. 271(a) was meant to remedy.

Infringement may still be maintained even though the offending actions are outside of the United States. Accordingly, even though the infringer appears to be out of reach and well within his/her right to sell a particular product, you may still have recourse against alleged infringer. This case broadens the reach of US patentees through interpretation of the offers for sale phrase in 35 USC 271(a).

Bidding on a Proposal Triggers On Sale Bar

James Yang — Thu, 01 Apr 2010 14:24:53 +0000

A patent application must be filed within one year after an offer for sale of the invention, public use of the invention or distribution of a printed publication regarding the invention, whichever event occurs first. Otherwise, the inventor is barred from receiving patent protection for the invention. During this one year grace period, the inventors can conduct market studies, pitch the invention to investors and pursue other public endeavors to determine feasibility of the invention without waiving the right to seek patent protection in the United States. Nonetheless, there are still significant benefits to filing a patent application prior to disclosing your invention to the public. By way of example and not limitation, to preserve foreign patent rights, many foreign countries require that the patent application be filed first before any public disclosure.

The following case illustrates the meaning of an offer for sale or the “on sale” bar and illustrates one example in which an earlier filing date would have been beneficial. In RCA v. General Data, RCA (the patentee) submitted bid documents on a government project for a display system for computer generating alphanumeric characters on a standard raster scan television monitor. The defendant argued that the bid documents constituted an offer for sale triggering the start of the one year time period to file a patent application. Since the patent application was filed more than one year after submission of the bid documents, if the bid documents constitute an offer for sale, RCA’s patent would be rendered invalid. RCA contended that the bid documents could not be an offer for sale since the bid documents did not disclose all of the aspects of the invention. The Court disagreed. Although the bid documents did not disclose all aspects of the invention, the court held that such fact does not prove that the bid document is not an offer for sale of the invention. The issue of whether the invention was on sale may be established by any relevant evidence outside of the bid documents (e.g., memoranda, drawings, correspondence memoranda, drawings, correspondence, and testimony of witnesses). In this case, an RCA witness testified that RCA intended to incorporate the invention into the device if their bid was accepted by the government. Hence, the bid documents constituted an offer for sale. RCA v. General Data, 12 USPQ2d 1449 (Fed. Cir. 1989).

One exception to the “on sale” bar is that the offer for sale does not trigger the start of the one year time period if the inventor was still experimenting with the invention. Unfortunately for RCA, an RCA witness testified that an actual working prototype of the invention was made before the bid documents were submitted. Thus, the experimental use exception did not apply.

Businesses may generate a quote for their product, software, or service. The quote may trigger the one year time period in which the inventor or business must file an application for patent under the on sale bar discussed above. This is a hard date. There are no extensions or petitions. As such, based on the foregoing discussion, it is advantageous to file patent applications as early as possible to mitigate inadvertent loss of patent rights.