Whether the America Invents Act (AIA) reset the on-sale bar for patents and upset 200 years of precedent depends on how a few simple words are interpreted.

In a case for the grammarians, the U.S. Supreme Court heard arguments Tuesday for two different interpretations of that bar in Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA Inc. One interpretation holds that in aligning U.S. patent law with the rest of the world's first-to-file approach, the AIA intentionally changed the on-sale bar to allow for nonpublic sales. The other claims that sales, even confidential ones, preceding a patent filing by more than a year are still considered prior art.

What the court is facing is "not a wonky patent issue," Robins Kaplan LLP partner Jake Holdreith told BioWorld. "It's an English issue." And there are sound arguments for either interpretation, he added.

It all comes down to whether the catchall phrase "otherwise available to the public" is a quantifier or a totally new category in the AIA section that bars the patentability of an "invention [that] was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention."

Those five words weren't part of the on-sale bar prior to the AIA, which took effect five years ago. In their briefs, Helsinn, the U.S. government and groups such as the Pharmaceutical Research and Manufacturers of America argued that the addition of the phrase signifies that the on-sale bar no longer applies to confidential sales. To trigger the on-sale bar, a sale must make the invention available to the public, they said.

In concluding Helsinn's argument before the Supreme Court, Kannon Shanmugam said, "Our fundamental submission today is a simple one. It is that the phrase 'on sale' should not be read in a vacuum but, rather, in the context of the surrounding language."

Arguing the case

Teva, the U.S. Court of Appeals for the Federal Circuit and groups such as the Association for Accessible Medicines (AAM) begged to differ, saying "otherwise available to the public" doesn't change a thing. A sale is still a sale, even if the invention isn't publicly disclosed.

When the Federal Circuit last year invalidated four Helsinn patents protecting Aloxi, an intravenous formulation of palonosetron used to reduce chemotherapy-induced nausea and vomiting, it ruled that under the AIA, if the existence of a sale is public, the details of the invention need not be publicly disclosed in the terms of the sale to trigger the on-sale bar.

Tuesday, rather than reading the "otherwise" phrase as a modifier, Teva's attorney, William Jay, characterized it as an additional category that creates new invalidating prior art disclosures that weren't invalidated before the AIA. "It would be strange for Congress, by creating a new invalidating category – in other words, narrowing the scope of things that could be patentable – to indirectly, and by the strangest implication, narrow a category of prior art and widen the scope of things that could be patented," he told the justices.

Jay also argued against disrupting historic precedent with a few little words. But the AIA itself disrupted centuries-old precedent when it changed the U.S. patent system from the first inventor to the first-to-file approach used in other countries. Holdreith noted that the rest of the world doesn't invalidate a patent because of a confidential sale.

When Justice Sonia Sotomayor raised that issue in questioning Tuesday, Jay pointed out that other countries have no ban on pre-filing sales, be they confidential or public.

In its amicus brief, AAM claimed that allowing confidential sales would create a new way for brand companies to game the system and extend their monopolies by delaying generic competition.

But the race to be the first to file could shut down those kinds of games. Shanmugan argued, "Any inventor who engages in commercial activity without applying [for a patent] in a first-to-file system runs the risk that another inventor will beat them to the Patent Office. And that is a concern . . . that is particularly acute in a context like this."

Both sides also have raised legislative intent to bolster their arguments, citing lawmaker comments and rejected legislative wording. But given that lawmakers are not in agreement on their intent and that they have contradicted themselves in amicus briefs, "I don't think you can discern legislative intent" in this case, Holdreith said.

Looking for clarity

Whichever way the court diagrams the sentence at the heart of the debate, the result needs to provide clarity, Holdreith said. Businesses have to know what the rules are, he added.

Sandip Patel, a partner with Marshall Gerstein & Borun LLP, agreed. "What companies want is certainty on how that part of the law is construed," he said. They also need to know what is considered a public sale.

Patel described the issue before the Supreme Court justices as a narrow question. "Frankly, if they don't answer it, everyone's going to be disappointed," he said.

If he were advising the court, Holdreith said he'd tell the justices, "Whatever you do, make it a real simple test." Otherwise, there will be more litigation before the issue is sorted. For instance, if the court goes along with the government's recommendation and allows confidential sales, it will need to clearly define those sales.

Besides getting the court to answer a sticky AIA question, Helsinn v. Teva could provide some insight into the current court's overall thinking on patents, Holdreith said. In the recent past, the Supreme Court has been considered a little hostile toward patents. But with two new justices, that could change, he noted.