Business as Usual: Federal Circuit Affirms that On-Sale Bar Remains Unchanged Under AIA

Occasionally, we still get questions about the status of the "one-year grace period" and the "on-sale" within the scope of the America Invents Act (AIA). ?Due to the lack of case law in this area, we advised exercising caution in any "creative" interpretations of the revisions to the on-sale bar or the one-year grace period, particularly in light of subtle language changes introduced by the AIA.? Unsurprisingly, our need for caution was affirmed by the Federal Circuit's recent decision in Celanese Int'l Corp. v. Int'l Trade Comm'n. 111 F. 4th 1338, 2024 U.S.P.Q.2D (BNA) 1428 (Fed. Cir. 2024).? Celanese has provided much-needed clarity on the application of the on-sale bar under the AIA. ?Id.? The Celanese ruling affirms that the AIA did not fundamentally alter the on-sale bar or the one-year grace period, maintaining consistency with pre-AIA precedent.? Id. at 1348.

On-Sale Bar Remains and One-Year Grace Period Unchanged

The Federal Circuit explicitly stated that "the enactment of the AIA did not constitute a foundational change in the theory of the statutory on-sale bar provision, 35 U.S.C. § 102(a)(1)" Id. at 1348.? The Celanese decision reinforces a long-standing principle that sales of products made using a secret process can trigger the on-sale bar and preclude patentability of that process.? Celanese argued (unsuccessfully) that the process itself was the claimed invention that would need to be sold to be barred from patenting under the on-sale bar.? Id. at 1341-1342.? However, the Federal Circuit dismissed such arguments affirming that the term "claimed invention" and "invention" (the term used in the pre-AIA patent statute) was no more than "clerical refinement of terminational for the same meaning in substance".? Id. at 1346.? The Federal Circuit's ruling also confirms that the one-year grace period under AIA § 102(b)(1) remains consistent with pre-AIA law. ?Id. at 1347.?

Resolving Uncertainty After AIA Enactment

Celanese addresses a significant delay between the passing of the AIA and Federal Circuit rulings that definitively clarify this area of law. ?The Federal Circuit emphasized the importance of maintaining settled precedent, stating, "[w]e presume that when Congress reenacted the 'on sale' language, Congress was aware of pre-AIA precedent and adopted the settled judicial interpretation of the term."

Implications for Inventors and Patent Applicants

Certainty in Pre-Filing Sales

The Celanese holding offers inventors and companies greater certainty regarding the implications of selling an invention before filing a patent application. Key considerations include:

1. Secret Process Sales: Sales of products made using a secret process triggers the on-sale bar, even if the process itself is not disclosed.
2. Critical Date Importance: The one-year period before the effective filing date remains crucial for determining patentability.
3. Commercial Exploitation: Inventors cannot exploit their invention commercially for more than one year before seeking patent protection without risking invalidation.

The Celanese decision provides much-needed clarity in patent law, affirming that the AIA did not fundamentally alter the on-sale bar or the one-year grace period. ?Inventors and companies can now proceed with greater confidence when making decisions about commercializing inventions prior to filing patent applications. ?This ruling underscores the importance of timely patent filings and reinforces the balance between promoting innovation and preventing undue extensions of patent rights.