On-sale Bar: Patentability and Selling Your Invention
Mar 16, 2021
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Dr. Ashley Sloat and a panel of experts discuss the on-sale bar and its implications for patentability. They cover topics such as remote business communication, challenges of patentability in Europe, method as trade secrets, filing provisional patents, and managing patent filing budgets.
Performing a service or providing reports can trigger the on sale bar for method patents.
Selling a product that is created using a trade secret manufacturing process can trigger the on sale bar, creating a dilemma for companies.
Being the original user of a trade secret method does not guarantee protection from a valid patent obtained by another party, leading to potential legal battles.
Deep dives
The Impact of On Sale Bar on Method Patents
The podcast episode discusses the on sale bar and its implications for method patents. Pre-AIA, the on sale provision of 102 stated that the invention should not be in public use or on sale in the country more than one year prior to patent application. Post-AIA, the provision expanded to cover claims that were on sale or otherwise available to the public. Case law examples were cited to illustrate how the on sale bar can be triggered even without the sale of physical products. For example, performing a service and providing reports triggered the on sale bar for a method patent. In the software industry, providing output or data to clients can also trigger the on sale bar for method patents that cover the unique way of displaying or collecting the data.
The Impact of On Sale Bar on Manufacturing Processes
The podcast episode explores the challenges of patenting manufacturing processes when the product itself is not visible or reverse-engineerable. The concern arises when the manufacturing process is being used to create a product that is sold in the market. While the process remains a trade secret, the act of selling the product can still trigger the on sale bar. This creates a dilemma for companies that want to protect their manufacturing processes but also want to commercialize their products. Disclosing such manufacturing processes during patent applications would violate trade secret protection. In practice, companies are advised to carefully evaluate the risk and potential consequences before deciding on patenting or maintaining secrecy.
Trade Secrets and Using Patented Methods
The podcast episode raises the question of what happens when a trade secret method is independently discovered and patented by another party. While the party using the method may be protected from infringement since they were the original users, the party that came up with the same method may still obtain a valid patent. However, the party using the method can still challenge the validity of the patent based on prior use and potentially prevent others from infringing. The situation may lead to lengthy legal battles and is a reminder for companies to carefully protect their trade secrets and evaluate the risks of known methods being patented by others.
The Importance of Constructively Reducing Technology to Practice
In this podcast episode, the speaker discusses how the concept of constructive reduction to practice plays a crucial role in triggering the on-sale bar. The case of PAPA and Texas Instruments is examined, where PAPA provided detailed engineering drawings, specifications, and measurements for a semiconductor chip carrier device to Texas Instruments. Although PAPA did not fully reduce the technology to practice, the court determined that the invention was ready for patenting, and the commercial offer for sale triggered the on-sale bar. The significance of being ready for patenting and making a commercial offer for sale is highlighted as the basis of the on-sale bar.
The Impact of Rejected Offers and Experimental Use on the On-Sale Bar
Another important topic discussed in the podcast episode is the effect of rejected offers and experimental use on the on-sale bar. The case of Group One and Hallmark Cards is examined, where Group One offered to license or enter into a royalty agreement with Hallmark for their curling and shredding ribbon machine. Although Hallmark rejected the offer and developed their own machine, the court found that the offer for sale still triggered the on-sale bar. The distinction is made that even offers for licensing or lease can trigger the on-sale bar. Additionally, the podcast explores the criteria for experimental use as an exception to the on-sale bar, highlighting the importance of maintaining control, not selling the invention, and not allowing others to use it.
In this inaugural episode, Dr. Ashley Sloat, President & Director of Patent Strategy at Aurora Consulting leads a deep dive into the on-sale bar and the trapdoor-esque implications of selling your innovation before filing. Spoiler alert: there are some very sneaky triggers – many types of activities that you might not traditionally think of as sales transactions that can trigger the bar and really jeopardize patentability.
Ashley is joined in this episode by an expert panel with over 56 years combined patenting experience:
David Jackrel, President of Jackrel Consulting
David Cohen, Principal at Cohen Sciences
Katrin Kareht, Sr. Director of Intellectual Property at Perfect Day
Daniel Wright, Partnership Manager and Patent Strategist at Aurora Consulting
