Law School Case Brief
Meds. Co. v. Hospira, Inc. - 827 F.3d 1363 (Fed. Cir. 2016)
The Supreme Court's Pfaff decision clarified that the on-sale bar under 35 U.S.C.S. § 102(b) applies when, before the critical date, the claimed invention (1) was the subject of a commercial offer for sale; and (2) was ready for patenting. Pfaff itself focused on the second prong of its newly articulated test—ready for patenting. It held that the "ready for patenting" requirement can be met in at least two ways: (1) proof of a reduction to practice; or (2) drawings or other descriptions sufficiently specific to enable a person of ordinary skill to practice the invention. Pfaff itself said little about the first prong of the two-prong test—what constitutes a patent-defeating "commercial offer for sale"—however. The Court did emphasize that an inventor can both understand and control the timing of the first commercial marketing of his invention, and that a transaction that is experimental in character is distinct from one that is for purposes of such commercial marketing.
This suit arises from the submission of two Abbreviated New Drug Applications (ANDAs), ANDA Nos. 90-811 and 90-816, by Defendant Hospira, Inc. In these ANDAs, Hospira sought Food and Drug Administration (FDA) approval to sell generic bivalirudin drug products before the expiration of the patents-in-suit: the '727 patent and the '343 patent. Plaintiff MedCo sued Hospira in the District Court for the District of Delaware, alleging that Hospira's two ANDA filings infringed claims 1-3, 7-10, and 17 of the '727 patent and claims 1-3 and 7-11 of the '343 patent. Defendant Hospira alleged several grounds of invalidity. First, Hospira argued that the invention was sold or offered for sale before the critical date under § 102(b) based on two sets of transactions. Hospira contended that the on-sale bar was triggered when MedCo paid another company to manufacture Angiomax before the critical date. Hospira also contended that the on-sale bar was triggered because MedCo offered to sell the Angiomax produced according to the patents to its distributor before the critical date.
Were circumstances present under 35 U.S.C.S § 102(b) for the product to be considered as to be "on sale"?
The Federal Circuit Court of Appeals affirmed the district court's decision, on modified grounds, regarding inapplicability of on-sale bar. To be "on sale" under § 102(b), a product must be the subject of a commercial sale or offer for sale, and a commercial sale is one that bears the general hallmarks of a sale pursuant to Uniform Commercial Code § 2-106. No such invalidating commercial sale occurred in this case because the mere sale of manufacturing services, and not the patented drug invention, did not constitute a "commercial sale" of the invention, particularly where title was not transferred. Commercial benefit, even to both parties in a transaction, was not enough to trigger the on-sale bar of § 102(b). Stockpiling by the purchaser of manufacturing services was not improper commercialization under § 102(b).
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