On April 6, 2001, before the critical date, Helsinn entered into two agreements with MGI Pharma, Inc., including a Supply and Purchase Agreement. The agreements were announced via press release, which included redacted copies (price and specific dosage formulations were omitted). The Supply and Purchase Agreement included a provision conditioning performance on favorable clinical trials and FDA approval. On January 7, 2002, Helsinn prepared a preliminary statistical analysis of the earliest Phase III Trial. On January 30, 2003, Helsinn filed a provisional application covering the formulation (making the critical date January 30, 2002).
Helsinn sued Teva for patent infringement based on the ANDA filing. The district court found that Teva’s generic product infringed Helsinn’s patents. Teva argued that the patents were invalid under the on-sale bar, because of the Supply and Purchase Agreement. The district court disagreed. For the pre-AIA patents, it applied the two-step inquiry in Pfaff v. Wells Electronics. First, was there a sale or offer for sale of the patented product? Second, was the claimed invention ready for patenting? The court concluded that the Supply and Purchase Agreement operated as a contract for future sale, and the invention was not reduced to practice and ready for patenting at the time of the Agreement. For the post-AIA patent, the court found that the AIA changed the on-sale bar, to require a “public” offer for sale.
The Federal Circuit addressed three issues: 1) whether the invention of the pre-AIA patents was subject to a sale or offer for sale prior to the critical date; 2) whether the AIA changed the meaning of the on-sale bar; and 3) whether the invention was ready for patenting as of the critical date.
The Court declined to address whether the AIA overturned case law relating to secret or confidential sales. Regarding the legislative history, statements made by Senator Kyl did not identify any cases that would be overruled. Exempting confidential sales from the on-sale bar would not matter in this case anyway, because the Agreement was publicly announced, including detailed information about palonosetron and its uses. The Court also rejected Helsinn’s arguments that the on-sale bar requires disclosure of the details of the claimed invention, including the dosage of palonosetron.
Finally, the Court found that the district court clearly erred in finding that reduction to practice had not occurred prior to the critical date because the product had not received final FDA approval. The completion of Phase III studies and final FDA approval are not pre-requisites for an invention to be ready for patenting. Whether an invention is reduced to practice and therefore ready for patenting depends on whether it works for its intended purpose, in this case, to reduce nausea from chemotherapy. There must be some “demonstration of the workability or utility of the claimed invention,” comprising evidence that goes “beyond a probability of failure” but not “beyond a possibility of failure.” FDA approval is a more rigorous and demanding standard. Earlier clinical results, before the critical date, “established that the patented invention would work for its intended purpose.”