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PAT E N T S
Patentees: Caveat Emptor of the ‘On-Sale Bar’!
BY KRISHAN THAKKER, LEI ZHOU, ROBERT C.
MILLONIG AND GABY L. LONGSWORTH
T
he converse to the mantra of retailers holds true
for members of the scientific community involved
in transactions for patentable inventions: You buy
it, you break it. Such is the maxim of barring validity
under pre-AIA 35 U.S.C. § 102(b) based on a prior offer
for sale.
A similar scenario exists post-AIA under 35 U.S.C.
§ 102(a), for patent applications filed on or after March
16, 2013 (with claims entitled to a priority date), but
with two important caveats: (i) worldwide sales or com-
mercial offers for sale are now considered; and (ii) ar-
guably, the sale or offer needs to be ‘‘public.’’
After briefly summarizing the current state of the law
regarding the on-sale bar, we discuss the U.S. Court of
Appeals for the Federal Circuit’s pending en banc ap-
peal in Medicines Co. v. Hospira, Inc., a pre-AIA case
that relates to a challenge to overrule the ‘‘no supplier
exception’’ principle to the on-sale bar, and the impact
the decision may have on businesses engaged in con-
tracting with manufacturing entities.
We also evaluate whether the courts may apply a
‘‘public’’ requirement to post-AIA § 102(a)’s ‘‘on sale’’
bar. We end with practice-based tips for practitioners
regarding scenarios that may invoke the bar.
I. You Buy It, You Break It
Pre-AIA 35 U.S.C. § 102(b) prevented patents from
being granted for inventions which have been on-sale in
this country, more than one year prior to the date of the
application for patent (the ‘‘critical date’’) in the U.S.1
For such patents or applications, the on-sale bar is trig-
gered if the party challenging validity can prove that the
subject matter of the claim was, before the critical date,
both: (1) the subject of a commercial offer for sale or a
sale not for primarily experimental purposes; and (2)
ready for patenting.2
Further, a patentee faced with an on-sale challenge to
validity can raise the experimental use defense to the
1
35 U.S.C. § 102(b): ‘‘A person shall be entitled to a patent
unless - . . . (b) the invention was patented or described in a
printed publication in this or a foreign country or in public use
or on sale in this country, more than one year prior to the date
of the application for patent in the United States.’’
2
Pfaff v. Wells Electronics, Inc., 525 U.S. 55, 67, 48
U.S.P.Q.2d 1641 (1998) (rejecting the Federal Circuit’s ‘‘total-
ity of circumstances’’ test, holding constructive reduction to
practice can satisfy ready for patenting).
VOL. 92, NO. 2260 MAY 6, 2016
COPYRIGHT ஽ 2016 BY THE BUREAU OF NATIONAL AFFAIRS, INC. ISSN 0148-7965
BNA’s
Patent, Trademark
& Copyright Journal®

bar.3
This exception permits inventors to conduct test-
ing to refine their inventions without losing the right to
obtain a patent, even if it occurs in the public eye.4
But,
courts have held there can be no experimental use after
an invention has been reduced to practice or an inven-
tor realizes the invention as later claimed works for its
intended purpose.5
Also, the parties to a transaction
need not recognize that the product offered for sale
possesses the claimed characteristics, it is only neces-
sary that it inherently does so.6
II. Today, No ‘‘Supplier Exception’’ or
‘‘Public’’ Requirement Exists—But Will
There Be One Tomorrow?
Federal courts have ruled that there is no ‘‘supplier’’
exception to the on-sale bar; thus, a patentee’s order to
its supplier may trigger the on-sale bar.7
What’s more,
any sales or commercial offers of a pre-AIA patented in-
vention in the U.S., even if kept confidential, may trig-
ger the bar.8
Whether a confidential offer for sale will trigger the
bar post-AIA is less clear:
A key change to the on-sale bar post-AIA is that there
is no distinction between activities conducted in the
U.S. or abroad. Thus, more patent rights can be lost
since a prior sale no longer needs to be in the U.S. On
the other hand, a secret or non-public sale may no lon-
ger constitute prior art under the AIA, if courts hold
that the phrase ‘‘or otherwise available to the public’’
modifies its antecedent, ‘‘on sale,’’ such that only ‘‘pub-
lic’’ sales or offers qualify as prior art (significantly nar-
rowing the scope of the bar and overturning decades of
case law).9
Such an interpretation, if adopted, would
not bar patentability after confidential sales or commer-
cial offers. Consequently, advocates of the ‘‘supplier ex-
ception’’ now seem to have a statutory basis for the pro-
posal.10
However, ‘‘plain meaning’’ arguments can be made
to support retaining the current understanding of the
bar. Nothing in Section 102(a)(1) expressly limits the
on-sale bar to publicly available sales/commercial of-
fers; the amended statute says ‘‘on sale,’’ not ‘‘publicly
on sale’’ or ‘‘on sale to the general public.’’ Since Con-
gress re-enacted the familiar ‘‘on sale’’ language with-
out change, it may have intended to retain the existing
judicial interpretations of the on-sale bar.11
Against this backdrop, in Hospira, the Federal Circuit
has agreed to consider en banc whether, for pre-AIA ap-
plications, there should in fact be a ‘‘supplier excep-
tion’’ or ‘‘public requirement’’ to the on-sale bar, ulti-
mately narrowing its scope. The core question is the
distinction between a ‘‘sale’’ and extended product de-
velopment.
In deciding this case, the Federal Circuit has the op-
portunity to reevaluate the underlying policy rationale
for the on-sale bar. The outcome has the potential to im-
pact industries outside of the pharmaceutical arena and
the life sciences.
3
See EZ Dock v. Schafer Sys, Inc., 276 F.3d 1347, 1358, 61
U.S.P.Q.2d 1289 (Fed. Cir. 2002).
4
Id.
5
In re Cygnus Telecomm. Tech., LLC Patent Litig., 536 F.3d
1343, 1356, 87 U.S.P.Q.2d 1801 (Fed. Cir. 2008).
6
Abbott Labs. v. Geneva Pharm., 182 F.3d 1315, 1319, 51
U.S.P.Q.2d 1307 (Fed. Cir. 1999).
7
Special Devices Inc v. OEA Inc., 270 F.3d 1353, 1354-57,
60 U.S.P.Q.2d 1537 (Fed. Cir. 2001) (‘‘neither the statutory
text, nor precedent nor the primary purpose of the on-sale
bar’’ allowed the Court to recognize a ‘‘supplier exception to
the on-sale bar’’ as otherwise inventors could ‘‘stockpile’’ com-
mercial embodiments of the patented invention before the
critical date).
8
In re Caveney, 761 F.2d 671, 675-76, 226 U.S.P.Q. 1 (Fed.
Cir. 1985).
9
Recently, the U.S. District Court for the District of New
Jersey held a licensing-supply agreement between a health-
care company and a customer did not trigger the bar because
the sale was not ‘‘public’’ per AIA § 102(a), rejecting a generic
maker’s argument that the AIA had not changed the adage that
‘‘private’’ sales of an invention are sufficient. Helsinn Health-
care S.A. v. Dr. Reddy’s Labs., Ltd., No. 11-03962 (D.N.J., Mar.
3, 2016) at 87, 100-101, 166 (acknowledging for claims with
priority on or before March 16, 2013, the deal qualified as a
‘‘sale’’ pre-AIA; but, ‘‘ready for patenting’’ prong was not es-
tablished pre- or post-AIA).
10
Former Senator Kyl expressed that ‘‘or otherwise avail-
able to the public’’ should in fact modify ‘‘on sale’’ in the re-
vised statute. Cong. Rec. S1370-71 (daily ed. Mar. 8, 2011). Be-
cause the modifier ‘‘or otherwise available to the public’’ is set
off from a preceding series of antecedents by a comma, courts
may conclude it applies to the on-sale bar.
11
Ariad Pharm. Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1344-
45, 2010 BL 62410, 94 U.S.P.Q.2d 1161 (Fed. Cir. 2010) (en
banc) (79 PTCJ 623, 3/26/10) (reenactment of identical Section
112 language found persuasive, since courts interpreted that
language to provide for a separate written description require-
ment; ‘‘If Congress had intended enablement to be the sole de-
scription requirement of § 112 [¶ 1], the statute would have
been written differently.’’); In re Nuijten, 500 F.3d 1346, 1356-
57, n.5, 2007 BL 105088, 84 U.S.P.Q.2d 1495 (Fed. Cir. 2007)
(74 PTCJ 631, 9/28/07) (by reenacting ‘‘manufacture’’ as a cat-
egory of patentable subject matter, despite other changes to
§ 101, Congress intended to adopt pre-1952 judicial definitions
of ‘‘manufacture.’’)
2
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III. TMC v. Hospira
TMC v. Hospira12
is an ANDA litigation over a ge-
neric drug application covering Bivalirudin (commer-
cialized as Angiomax௢), a blood-thinning drug. Back in
2005, owing to a ‘‘failing’’ batch of Bivalirudin (with
high impurity levels), The Medicines Co. (TMC) at-
tempted to create batches with levels of the Asp-
Bivalirudin impurity below FDA’s maximum require-
ment of 1.5 percent. During this testing period, TMC
hired a consultant to investigate and consult with
TMC’s batch contract manufacturer, Ben Venue Labo-
ratories.
The consultant (and patent-inventor) discovered new
methods to minimize the impurity level to less than 0.6
percent. This discovery led to the patented invention
and claims in two Orange-Book listed patents. TMC be-
came the assignee of the two patents-in-suit, both with
a critical date in July 2007. Both patents contain
‘‘product-by-process’’ claims13
to methods of making
the drug to reduce the impurity level to less than 0.6
percent.
A. District Court
In August 2010, TMC sued Hospira Inc. for patent in-
fringement, based on Hospira’s abbreviated new drug
application (ANDA) filing.14
At trial, Hospira contended
that TMC’s asserted claims were invalid under the on-
sale bar because, before the critical date, TMC engaged
in three separate transactions: (1) TMC paid Ben Venue
over $300,000 to prepare three validation batches using
the patented method; (2) TMC paid Ben Venue over
$1m to manufacture eight commercial batches using
the patented method; and (3) TMC contractually of-
fered to sell the resulting product to Ben Venue’s exclu-
sive U.S. distributor, Integrated Commercial Solu-
tions.15
The district court rejected Hospira’s argument.16
Though it found there was a prior reduction to practice
of the claimed invention, it reasoned TMC’s product
was neither commercially sold nor offered because of
the following factors: (i) Ben Venue sold only manufac-
turing services, not batches17
; (ii) title to the batches re-
mained with TMC18
; (iii) the batches were experimen-
tal19
; and (iv) the TMC-ICS distribution agreement was
not a ‘‘sales contract,’’ but a distributorship agreement
to enter into a future contract.20
B. Federal Circuit
Hospira appealed the finding that the asserted claims
are not invalid under the on-sale bar. Hospira main-
tained its argument that the claimed invention was
commercialized pre-critical date. TMC slightly changed
course and argued there was no reduction to practice as
the inventors did not appreciate the maximum impurity
limitations of the claimed invention until after the criti-
cal date, when subsequent batches were manufactured
according to TMC’s new process.
In a reversal for TMC, the Federal Circuit panel re-
versed the district court, holding both patents invalid
under Section 102(b)21
reasoning that the Delaware
court ‘‘clearly erred’’ in finding that the Ben Venue
batches were not ‘‘sold’’ to TMC, and that they were
prepared primarily for an ‘‘experimental purpose.’’22
A month later, Hospira (now Pfizer-owned) launched
its generic version of Angiomax௢. Later that fall, the
full Federal Circuit vacated the panel opinion and
granted TMC’s petition for full rehearing en banc on the
on-sale bar issue.23
Regardless of the outcome en banc,
whether the en banc court holds the patents to be valid
is probably not dispositive for Hospira given that the
district court independently held Hospira’s product
does not infringe TMC’s patents.
C. Issues for the En Banc Court
The Federal Circuit requested that both TMC and
Hospira address three core issues en banc: (1) Was
there a ‘‘commercial sale’’ despite lack of title-transfer?;
(2) Was the ‘‘sale’’ commercial or experimental?; and
(3) Should the Federal Circuit overrule or modify the
‘‘no supplier exception’’ to the on-sale bar under Spe-
cial Devices?24
With regard to the lack of title transfer, Hospira’s
brief argued that title transfer should not be required
for the analysis because otherwise such a bright-line
rule would encourage gamesmanship in contracts and
remove flexibility in deciding a commercial offer for
12
TMC v. Hospira, Inc., 791 F.3d 1368, 115 U.S.P.Q.2d 1587
(Fed. Cir. 2015) (90 PTCJ 2541, 7/10/15).
13
Claim 1 of U.S. Patent No. 7,598,343 recites, in relevant
part: . . . ‘‘said batches prepared by a compounding process
comprising: . . .(ii) efficiently mixing a pH-adjusting solution
with the first solution to form a second solution, wherein the
pH adjusting solution comprises a pH-adjusting solution sol-
vent; and (iii) removing the solvent . . . and wherein the
batches have a maximum impurity level of Asp 9-bivalirudin
that does not exceed about 0.6% as measured by HPLC.’’
14
TMC v. Hospira, Inc., No. 09-750-RGA, at *1 (D. Del.,
March 31, 2014).
15
Id. Hospira relied on invoices for services that identified
a ‘‘charge to manufacture Bivalirudin lot(s)’’ numbers and
commercial product codes. Further, Hospira alleged that TMC
entered into an exclusive distribution agreement with ICS con-
taining a title-transfer clause.
16
Id.
17
Id. at *9
18
Id. at *9-10.
19
Id. at *11.
20
Id. at *12.
21
791 F.3d at 1369.
22
Id. The panel could not distinguish between the commer-
cial sale of services resulting in the patented product-by-
process here, and a commercial sale of products prepared by a
patented method at issue in D.L. Auld Co. (barring product-by-
process claims covering secret, unpatented method to sell
goods unrevealing of method). It held the bar applies where
the inventor commercially exploited the embodiment pre-
critical date, even if there was no title-transfer. Here, the sale
of manufacturing services to TMC resulted in batches valued
greater than $10m each, enabling FDA approval. Id. at 1371.
Regarding ready for patenting, the panel upheld the dis-
trict court’s finding, but reasoned its rationale was flawed
since the experimental use doctrine could preclude application
of the bar, not just because it was raised sua sponte, but also
because it failed to attribute experimental use to both prongs
of the bar (only commercial offer). Regardless, experimental
use could not occur after reduction to practice, i.e. when req-
uisite batches were made for TMC. Id., at 1372. It was irrel-
evant whether TMC knew the process limitations consistently
produced bivalirudin below 0.6 percent, since the batches sat-
isfied limitations. Id.
23
TMC v. Hospira, Inc., No. 2014-1469 (Fed. Cir. Nov. 13,
2015) (en banc order) (91 PTCJ 160, 11/20/15).
24
TMC v. Hospira, Inc., Id. at *1.
3
PATENT, TRADEMARK & COPYRIGHT JOURNAL ISSN 0148-7965 BNA 5-6-16

sale, especially considering that Pfaff v. Wells, supra
held that a completed sale is not required to trigger the
bar. Hospira focused on TMC’s ‘‘commercial exploita-
tion’’ of the invention before the critical date, such as
how the batches ‘‘were released for commercial and
clinical packaging, and [] restocked [TMC’s] long-
depleted commercial pipeline of Angiomax௢.’’ It also
argued that there should not be a ‘‘supplier exception’’
as the statute does not differentiate between sellers
when an invention is placed on-sale.
TMC’s response brief advocated the same positions
as before—namely, that: (i) Ben Venue’s performance
of manufacturing services to convert the API into a fin-
ished product does not trigger the bar, especially where
it did not have any title to the products and where the
patents-at-issue were product and product-by-process
(not process or method) patents, relying on Trading
Techs. Int’l, Inc. v. eSpeed, Inc.25
; (ii) neither Ben Venue
nor TMC could sell the patented products pre-critical
date as they were placed in quarantine pending quality
control testing; and (iii) there was no commercial ex-
ploitation or ‘‘stockpiling’’ of the patented invention
pre-critical date, particularly where the only evidence
Hospira relied on was: (a) the potential sales price of
each unapproved validation batch; and (b) FDA-
mandated product codes, even if rejected.26
TMC likely will face an uphill battle in attempting to
limit or eliminate the ‘‘no supplier exception’’ rule,
since the court can point to the language of Special De-
vices, its progeny and their express invocation of Con-
gress as the sole source of modification.27
In Special
Devices, OEA Inc. negotiated with its supplier, Coors
Ceramics Co., to mass-produce a patented ‘‘all-glass
header’’ relating to automobile air bags.28
The court de-
clined recognition of a ‘‘supplier’’ exception to the on-
sale bar, and stated (in dicta) that even if an invention
is stolen by a thief and sold to an innocent buyer, the
bar would still be triggered.29
The court further rea-
soned that its precedent precludes a ‘‘supplier’’ excep-
tion,30
and that there is a policy of encouraging inven-
tors to enter the patent system promptly.31
.
Additionally, it is worth noting that under judicial
precedent, process steps are limiting and must be met
in determining infringement of product-by-process
claims.32
Thus, as Hospira implies, it may not be as sig-
nificant that the claims-at-issue are not process or
method claims, or that there is no title transfer, since
there has allegedly been a sale of manufacturing ser-
vices creating products that meet claim limitations.33
And even if the claims were solely process claims, the
case law dealing with product-by-process claims in this
area focuses on commercial exploitation of the ‘‘inven-
tion,’’ not an actual sale of a product that requires pas-
sage of title.34
TMC, however, is being supported by several amici.
For instance, the Patent and Trademark Office is urging
the Federal Circuit to recognize a ‘‘supplier exception’’
to the on-sale bar, arguing that the drug was not ‘‘avail-
able to the public’’ and that applying the bar to confi-
dential supplier arrangements might prejudice small
companies and inventors who lack ability to manufac-
ture drugs in-house. The Houston IP Association sepa-
rately contended that ‘‘[i]f a company can’t safely out-
source its manufacturing needs, the experimental use
exception is worthless where [the Federal Circuit] actu-
ally held that submitting data to the FDA was a com-
mercial benefit.’’
In contrast, the American Intellectual Property Law
Association and the Intellectual Property Owners Asso-
ciation are requesting that the court partially overrule
Special Devices to recognize that certain supplier trans-
actions do not trigger the bar. Both argue that the court
should trim the blanket rule since although there are no
‘‘personal’’ sales, ‘‘Inventors can request another enti-
ty’s services in developing products embodying the in-
vention without triggering the on-sale bar.’’35
Also, both
claim that unless a product containing or derived from
the invention is ‘‘sold’’ to the public, the inventor is un-
likely to benefit financially from the invention. Thus,
under this rationale, a patent owner or its employees
may stockpile patented products or products made us-
ing a patented product-by-process without implicating
the bar.
Hospira argued that TMC’s reliance on ‘‘experimen-
tal use’’ contradicts the district court record, such as the
Ben Venue clinical batches encompassing thousands of
vials ‘‘for commercial use.’’ Hospira also claims that
TMC and its amici are seeking to exempt categories of
transactions based on the parties, the type of claims, or
the transactions’ legal form—all of which contravene
both Section 102(b) as well as the Federal Circuit’s
25
595 F.3d 1340, 93 U.S.P.Q.2d 1805 (Fed. Cir. 2010) (on-
sale bar not triggered where inventor paid software company,
by the hour, to develop specialized software based on inven-
tor’s specifications).
26
TMC argued that Hospira improperly relied on evidence
of the 8 subsequently manufactured commercial batches, as
these were never raised in district court, and asserted that even
if the Court considers them, all batches fall within the experi-
mental use exception as made for regulatory purposes to verify
the invention worked for its intended purpose. Interestingly,
TMC contended that experimental use is an exception, not a
negation, to the bar which can exist even after an invention is
reduced to practice. But this would mean that the burden of
proof/persuasion over validity arguably shifts to TMC—a posi-
tion it likely did not intend to advocate for. TP Labs., Inc. v.
Prof’l Positioners, Inc., 724 F.2d 965, 971, 220 U.S.P.Q. 577
(Fed. Cir. 1984) (patentee need not prove that a public use was
experimental to assert an experimental use defense, since ex-
perimental use is a negation, not an exception, to the bar; the
burden of proving invalidity rests with the challenger, but the
burden of production on experimental use shifts to the paten-
tee).
27
See Special Devices, 270 F.3d at 1357.
28
Id., 270 F.3d at 1354
29
Id. at 1354-55 (‘‘By phrasing the statutory bar in the pas-
sive voice, Congress indicated that it does not matter who
places the invention ‘‘on sale’’; it only matters that someone—
inventor, supplier or other third party—placed it on sale.’’).
30
Id., reviewing Brassler, U.S.A. I, L.P. v. Stryker Sales
Corp., 182 F.3d 888, 51 U.S.P.Q.2d 1470 (Fed. Cir. 1999).
31
Id. at 1357
32
Abbott v. Sandoz, 566 F.3d 1282, 90 U.S.P.Q.2d 1769
(Fed. Cir. 2009) (if product in a product-by-process claim is the
same as or obvious from a product of the prior art, the claim is
unpatentable even though prior product was made by a differ-
ent process).
33
See In re Thorpe, 777 F.2d 695, 227 U.S.P.Q. 964 (Fed.
Cir. 1985) (prior art pertinent only to a product is a proper
ground for rejecting product-by-process claims).
34
Plumtree Software, Inc. v. Datamize, LLC, 473 F.3d 1152
(Fed. Cir. 2006); D.L. Auld Co. v. Chroma Graphics Corp., 714
F.2d 1144, 219 U.S.P.Q. 13 (Fed. Cir. 1983).
35
Trading Tech., supra, 595 F.3d at 1361-62.
4

prior rulings that commercial exploitation takes many
forms. Further, importing a confidentiality or ‘‘supplier
exception’’ would risk conflating ‘‘sales’’ under the bar
with public use of inventions, except for commercial of-
fers. And, that application of the bar will neither chill
innovation nor prohibit a way of doing business, since
upholding the prior panel decision would encourage in-
ventors to apply for patents within one year of commer-
cial exploitation of their inventions.
Any other ‘‘public’’ sale requirement or ‘‘confidenti-
ality’’ exception, Hospira argued, would encourage in-
ventors to game the system as they would only engage
in secret sales of the invention, consequently delaying
public disclosure, and ultimately extending patent
terms while reaping commercial benefit. Further, ex-
perimental use is still a safeguard to many small drug
companies worried about a manufacturer-agreement
putting it under the risk of an invalidating ‘‘sale,’’ suffi-
cient to dissuade the need for blanket immunity for all
supplier-customer transactions.
Hospira will thus be an opportunity for the full Fed-
eral Circuit to address the applicability of the bar to
product-by-process patent claims in the context of a
sale of services, especially where the ‘‘sold’’ invention is
not the product itself but instead a product derived from
a disclosed and subsequently patented method of mak-
ing the product. Oral arguments are scheduled for May
5, 2016.
IV. Some Takeaways for Practitioners in
View of Hospira
The pre-AIA law surrounding the on-sale bar is com-
plex, and most of this complexity carries over to the
post-AIA world. Even though there is no bright-line rule
in determining whether certain business activities prior
to the critical date constitute a sale or an offer for sale,
below are some takeaways—applicable regardless of
Hospira’s decision to uphold or overrule the no ‘‘sup-
plier exception’’:
A. For Patentees
s IP: Regularly update IP counsel and conduct fre-
quent audits over research and development and
commercial activities to draw attention to IP is-
sues.
o Develop early claim strategies and provisional
patent applications to match critical develop-
ment dates, even if incomplete.
s Control/access: Retain control over experiments,
and ensure only authorized testers have access
and use over inventions.
o Experimental use: Make observations about the
invention and whether it is fit for its intended
purpose, not whether customer finds it suitable
or it will be commercially successful.
o Confidentiality: Have all employees and suppli-
ers execute confidentiality agreements; educate
staff about when they can disclose company ac-
tivities; and restrict access to information tech-
nology systems, especially those that contain
R&D files.
o Service contracts: Structure supplier agreements
as ‘‘service manufacturing agreements’’ rather
than product purchase/requirement contracts,
where patentees supply or purchase all raw ma-
terials and pay suppliers for assembly and manu-
facturing services (retaining rights with title-
retention clauses).
s Sales: Avoid making any ‘‘sales’’ within claim limi-
tations; ‘‘use’’ is more likely to be experimental if
no sale is involved.
s Focus on trade secrecy and confidentiality36
: Ex-
ecute confidentiality and non-disclosure agree-
ments over sales or offers for sale, to potentially
avoid triggering the on-sale bar.
o Parameters around ‘‘public availability’’ of inven-
tion: Depending on the Federal Circuit’s holding
and when an invention becomes publicly avail-
able, if an invention is sold with accompanying
non-disclosure agreements yet such sales still
become widely prevalent, be prepared to execute
restrictive measures over distribution and supply
channels to prevent sales from reaching a critical
mass.
B. For Patent-Defendants
s Take early first- and third-party discovery over
pre-critical date development/supply contracts, in-
ventors, supply chain personnel, etc., and develop
an on-sale bar theory at the outset of litigation.
o Investigate: 1) financial/batch records to ascer-
tain monetary consideration; 2) whether the al-
leged infringing product, even for testing pur-
poses, expressly or inherently meets every claim
limitation; and 3) substantiate invalidity analysis
with expert testimony and claim charts.
s Section 282 notice: be prepared to meet obliga-
tions, 30 days pre-trial, and attempt to rely on pat-
entee’s documents.
s ‘‘Public use’’: consider whether early marketing
activities (including preliminary negotiations) over
an invention involve an inventor’s non-secret use
of a process, intended for a commercial purpose
without reaching the level of a commercial offer.37
Krishan Thakker is an Associate in the Litigation Group of
Sterne, Kessler, Goldstein & Fox PLLC and focuses his prac-
tice on general intellectual property enforcement and patent
infringement, with a special emphasis on pharmaceutical pat-
ent litigation under the Hatch-Waxman Act.
Lei Zhou is a Director in the Biotechnology/Chemical Group
of Sterne, Kessler, Goldstein & Fox PLLC where her practice
36
If the Federal Circuit rules in Hospira that secret sales or
commercial offers no longer qualify as prior art, the role of
trade secrets may expand under the AIA.
37
Though Pfaff narrowed the scope of the on-sale bar, the
‘‘totality of the circumstances’’ test is still applicable for ‘‘pub-
lic use.’’ In light of obstacles Pfaff may create for litigants as-
serting the on-sale bar, ‘‘public use’’ is more flexible in sup-
porting a pre- or post-AIA defense.
5
PATENT, TRADEMARK & COPYRIGHT JOURNAL ISSN 0148-7965 BNA 5-6-16

focus is in the chemical and pharmaceutical areas. She coun-
sels in all areas of patent procurement, exploitation and en-
forcement, including domestic and foreign patent preparation
and procurement.
Robert C. Millonig, Jr., Ph.D., is a Director in the
Biotechnology/Chemical Group of Sterne, Kessler, Goldstein &
Fox PLLC. He has signiﬁcant experience developing and ana-
lyzing complex multi-patent portfolios for marketed innovator
and generic pharmaceutical products.
Gaby L. Longsworth, Ph.D., is a Director in the
Biotechnology/Chemical Group of Sterne, Kessler, Goldstein &
Fox PLLC. Dr. Longsworth is sought out by both innovator
and generic pharmaceutical companies for her insights and
knowledge of intellectual property and brand product lifecycle
management strategies.
6

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