by LeKeisha M. Suggs and Corey M. Beaubien | Michigan Bar Journal
The Michigan Bar Journal recently published the article below, which is co-authored by our team member, LeKeisha Suggs, Vice President of IP, and Corey M. Beaubien.
While the pace has slowed, the past decade of U.S. Supreme Court decisions has reshaped patent law in important ways. The matters taken up included review of U.S. Patent and Trademark Office Patent Trial and Appeal Board (PTAB) decisions, secret sales as prior art, damage awards for infringement of design patents, and venue in patent lawsuits. This article reviews the Court’s opinions in these areas and considers what the rulings mean for patent stakeholders.
REVIEW OF PTAB DECISIONS
After the enactment of the America Invents Act in 2011, patents issued by the U.S. Patent and Trademark Office (USPTO) can have their validity challenged at the PTAB, a tribunal within the USPTO. Whether a patented invention is new and nonobvious — requirements for patent issuance[1] — can be questioned at the PTAB. In effect, the PTAB offers a second look at patents issued by the USPTO.[2]
Many aspects of a PTAB proceeding resemble a civil lawsuit. Administrative patent judges (APJs) typically oversee PTAB proceedings and issue decisions.[3] While the secretary of commerce appoints APJs,[4] a director appointed by the president with the advice and consent of the Senate oversees the USPTO.[5] Before United States v. Arthrex, Inc.,[6] the PTAB was the last stop within the executive branch; a director’s review could not take place. Parties could only seek review via the Court of Appeals for the Federal Circuit.[7]
In Arthrex, the Court held that unreviewable decision-making exercised by APJs within the executive branch was inconsistent with their appointment by the secretary of commerce as inferior officers.[8] Rather, the authority wielded by APJs is more akin to that of principal officers, an appointment that is constitutional under the appointments clause only when made by the president and confirmed by the Senate.[9] The nature of their responsibilities, in essence, is inconsistent with their method of appointment.[10]
Arthrex obtained a patent on a surgical device and sued fellow medical manufacturer Smith & Nephew for infringement.[11] The dispute made its way to the PTAB in the form of an inter partes review proceeding.[12] An APJ panel concluded that the patent was invalid, freeing Smith & Nephew from infringement.[13] Arthrex appealed to the Federal Circuit, and argued that APJs were principal officers and their appointment by the secretary of commerce was unconstitutional.[14] The Federal Circuit largely agreed.
In its ruling, the Supreme Court found that the APJs’ power to render decisions without review by a superior officer was incompatible with their status as inferior officers.[15] The constitutional issue can be resolved, the Court explained, by subjecting APJ decisions to review by the USPTO director, a properly appointed principal officer.[16]
Indeed, the Arthrex decision ushered in a new process that provided directorial review of PTAB decisions. Dissatisfied parties can now request review of APJ decisions by the USPTO director.
SECRET SALES ARE STILL PRIOR ART
The America Invents Act (AIA) precludes patenting an invention “on sale, or otherwise available to the public” more than one year before the filing date.[17] This is known as the on-sale bar, and every patent statute since 1836 has included a version of the on-sale bar.[18] Prior to the AIA, it was established law that selling an invention to a third party could trigger the on-sale bar even if the on-sale activity was not made public.[19] These types of activities are referred to as secret sales.[20] The AIA’s addition of the phrase “or otherwise available to the public” raised doubts about whether secret sales still qualified as prior art.
In 2019, the Supreme Court probed this issue in Helsinn v. Teva.[21] Helsinn, which had developed a drug for treating chemotherapy-induced sickness,[22] signed agreements in 2001 with a third party to market and sell the drug.[23] The agreements were public, but details regarding the drug were confidential.[24] In 2003, Helsinn filed a provisional patent application covering its drug.[25] Over the next decade, Helsinn filed several patent applications that claimed priority to the 2003 date of the provisional application.[26] Helsinn later sued Teva for patent infringement.[27] In its defense, Teva argued Helsinn’s drug was on sale for more than a year before filing its provisional application.[28]
In its review, the Supreme Court presumed Congress adopted the pre-AIA judicial interpretation of on-sale when it retained the same language in the AIA,[29] emphasizing that the addition of “or otherwise available to the public” was not enough to alter the meaning of a reenacted term and “would be a fairly oblique way” for Congress to overturn an established body of law.[30] The Court held that “an inventor’s sale of an invention to a third party who is obligated to keep the invention confidential can qualify as prior art” under the AIA.[31]
The Helsinn decision is a reminder that the timing for filing patent applications is crucial. When developing a product, it is important to file patent applications early — and before any activity that may constitute a sale or offer for sale.
To read the full article with additional insights and review footnote references, visit the Michigan Bar Journal article here, The Supreme Court continues to reshape patent law.
ENDNOTES
[1] 35 U.S.C 102, 35 U.S.C. 103.
[2] 35 USC 6(b)(2)–(4).
[3] 35 USC 6(c)
[4] 35 USC 6(a).
[5] 35 USC 3(a)(1).
[6] United States v Arthrex, Inc, 594 US 1; 141 S Ct 1970; 210 L Ed 2d 268 (2021).
[7] 35 USC 319.
[8] Arthrex, supra n 5 at 23.
[9] Id. at 12.
[10] Id. at 13.
[11] Id. at 9-10.
[12] Id. at 10.
[13] Id.
[14] Id.
[15] Id. at 23.
[16] Id. at 24.
[17] 35 USC 102(a)(1) (emphasis added).
[18] Plaff v Wells Electronics, Inc, 525 US 55, 65; 119 S Ct 304; 142 L Ed 2d 261 (19.98).
[19] Special Devices, Inc v OEA, Inc, 270 F3d 1353, 1357 (CA Fed, 2001).
[20] Id.
[21] Helsinn Healthcare SA v Teva Pharms USA, Inc, 586 US 123; 139 S Ct 628; 202 L Ed 2d 551 (2019).
[22] Id. at 126-127.
[23] Id.
[24] Id.
[25] Id.
[26] Id.
[27] Id.
[28] Id.
[29] Id. at 131.
[30] Id.
[31] Id. at 132.
