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“SECRET SALES” CAN INVALIDATE A PATENT

After a U.S. patent application is filed, it will be evaluated by an administrator for classification of the invention claimed in the application.  From there the application is forwarded to an appropriate examination group for assignment to an examiner who is selected based on the examiner’s technical specialty and existing workload. If no special status is applied to the application, such as by an applicant’s petition for expedited handling, or for some other reason, the application will be taken up in the order in which it is filed.  Meanwhile, the application will be automatically published 18 months from the U.S. filing date, or the filing date of the earlier filed non-U.S. application assuming one exists.

The examiner or an administrator at the USPTO will make an initial review of the application to confirm that formal requirements have been met. The examiner will next carry out a search of prior art based on the claims of the application.  The examiner ordinarily will issue an “office action,” often with an initial rejection based on prior art, or based on claim indefiniteness, disclosure shortcomings or failure to comply with the formal requirements.  The universe of prior art is defined under 35 U.S.C. 102(a)(1) as set forth in America Invent Act (AIA).  

The AIA precludes a person from obtaining a patent on an invention that was “on sale” before the effective filing date of the patent application:

“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.” 35 U. S. C. §102(a)(1) (emphasis added). See also §102(b)(1) (exception for certain disclosures made within a year before the effective filing date)


The on-sale bar includes sale or offer for sale of the claimed invention.  For a long time, the USPTO procedural guidelines indicated that the on-sale bar only acts as a prior art if the sale or offer for sale was public.  That is, in view of the USPTO, the private or confidential sale of the claimed invention did not trigger this bar previously.  However, on January 22, 2019, in a unanimous decision in Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA Inc., the Supreme Court of the United States held that a sale of the claimed invention to the public even if done privately or subject to confidentiality agreement will place the invention “on sale” under §102(a)(1).  

Practice Note:   Inventors/patent owners be aware, file your patent application first and then offer it for sale.

About the Author

Babak Akhlaghi is a registered patent attorney and the Managing Director at NovoTech Patent Firm, where he assists inventors in protecting and monetizing their inventions. He is also a co-author of the "Patent Applications Handbook," which has been updated and published annually by West Publications (Clark Boardman Division) since 1992. Additionally, Babak is a former adjunct faculty member at the University of Maryland, where he taught legal aspects of entrepreneurship. One of his notable achievements includes successfully prosecuting a patent application for a startup, resulting in licensing fees totalling over a hundred million dollars.

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