No. 16-
`
`
`
`IN THE
`Supreme Court of the United States
`___________
`MERCK & CIE, BAYER PHARMA AG, AND BAYER
`HEALTHCARE PHARMACEUTICALS INC.,
`Petitioners,
`
`v.
`WATSON LABORATORIES, INC.,
`Respondent.
`
`___________
`On Petition for a Writ of Certiorari
`to the United States Court of Appeals
`for the Federal Circuit
`___________
`PETITION FOR A WRIT OF CERTIORARI
`___________
`
`CARTER G. PHILLIPS
`ADAM K. MORTARA
`JONATHAN F. COHN*
`BARTLIT BECK HERMAN
` PALENCHAR & SCOTT LLP RYAN C. MORRIS
`54 W. Hubbard Street
`JOSHUA J. FOUGERE
`Suite 300
`SIDLEY AUSTIN LLP
`Chicago, IL 60654
`1501 K Street, NW
`(312) 494-4400
`Washington, DC 20005
`
`(202) 736-8000
`
`jfcohn@sidley.com
`Counsel for Petitioners Merck & Cie, Bayer Pharma
`AG, and Bayer HealthCare Pharmaceuticals Inc.
`October 12, 2016
`
` * Counsel of Record
`
`
`
`
`
`
`
`
`
`IN THE
`Supreme Court of the United States
`___________
`MERCK & CIE, BAYER PHARMA AG, AND BAYER
`HEALTHCARE PHARMACEUTICALS INC.,
`Petitioners,
`
`v.
`WATSON LABORATORIES, INC.,
`Respondent.
`
`___________
`On Petition for a Writ of Certiorari
`to the United States Court of Appeals
`for the Federal Circuit
`___________
`PETITION FOR A WRIT OF CERTIORARI
`___________
`
`CARTER G. PHILLIPS
`ADAM K. MORTARA
`JONATHAN F. COHN*
`BARTLIT BECK HERMAN
` PALENCHAR & SCOTT LLP RYAN C. MORRIS
`54 W. Hubbard Street
`JOSHUA J. FOUGERE
`Suite 300
`SIDLEY AUSTIN LLP
`Chicago, IL 60654
`1501 K Street, NW
`(312) 494-4400
`Washington, DC 20005
`
`(202) 736-8000
`
`jfcohn@sidley.com
`Counsel for Petitioners Merck & Cie, Bayer Pharma
`AG, and Bayer HealthCare Pharmaceuticals Inc.
`October 12, 2016
`
` * Counsel of Record
`
`
`
`
`
`
`
`
`
`QUESTION PRESENTED
`The Patent Act provides that a “person shall be en-
`titled to a patent unless … the invention was … in
`public use or on sale in this country, more than one
`year prior to the date of the application” for the pa-
`tent. 35 U.S.C. § 102(b) (2006).
`The question presented is:
`Whether the “on sale” bar found in § 102(b) applies
`only to sales or offers of sale made available to the
`public, as Congress, this Court, and the United States
`have all made clear, or whether it also applies to non-
`public sales or offers of sale, as the Federal Circuit
`has held.
`
`(i)
`
`
`
`ii
`
`PARTIES TO THE PROCEEDINGS
`The parties to the proceedings are Merck & Cie,
`Bayer Pharma AG, Bayer HealthCare Pharmaceuti-
`cals Inc., and Watson Laboratories, Inc.
`RULE 29.6 STATEMENT
`Bayer Pharma AG and Bayer HealthCare Pharma-
`ceuticals Inc. are wholly owned subsidiaries of Bayer
`AG, a publicly held company.
`Merck KGaA is a publicly held company that owns
`more than 10% of Merck & Cie.
`
`
`
`
`
`
`
`TABLE OF CONTENTS
`
`Page
`QUESTION PRESENTED ...................................
`i
`PARTIES TO THE PROCEEDINGS ...................
`ii
`RULE 29.6 STATEMENT ....................................
`ii
`TABLE OF AUTHORITIES .................................
`v
`OPINIONS BELOW .............................................
`1
`JURISDICTION ...................................................
`1
`RELEVANT STATUTORY PROVISION.............
`1
`INTRODUCTION .................................................
`2
`STATEMENT OF THE CASE..............................
`4
`A. Factual Background ..................................
`4
`B. Procedural Background ............................
`6
`REASONS FOR GRANTING THE PETITION ...
`8
`I. THE FEDERAL CIRCUIT’S ON-SALE
`BAR CASE LAW IS INCONSISTENT
`WITH THE PATENT ACT, THIS
`COURT’S PRECEDENT, AND THE
`VIEWS OF THE UNITED STATES .............
`A. The Patent Act, This Court’s Precedent,
`And The United States All Demonstrate
`That The On-Sale Bar Does Not Apply
`To Non-Public Sales Or Offers Of Sale ....
`B. The Federal Circuit’s Decision Conflicts
`With These Authorities ............................ 13
`II. THE QUESTION PRESENTED IS EX-
`CEPTIONALLY IMPORTANT ..................... 15
`CONCLUSION ..................................................... 20
`
`
`9
`
`9
`
`(iii)
`
`
`
`iv
`TABLE OF CONTENTS—continued
`
`Page
`
`APPENDICES
`APPENDIX A: Merck & Cie v. Watson Labs.,
`Inc., 822 F.3d 1347 (Fed. Cir. 2016).................. 1a
`APPENDIX B: Merck & Cie v. Watson Labs.,
`Inc., No. 13-978 (D. Del. Sept. 14, 2015) ........... 16a
`APPENDIX C: Merck & Cie v. Watson Labs.,
`Inc., No. 13-1272 (D. Del. Sept. 14, 2015) ......... 19a
`APPENDIX D: Merck & Cie v. Watson Labs.,
`Inc., 125 F. Supp. 3d 503 (D. Del. 2015) ........... 22a
`APPENDIX E: Merck & Cie v. Watson Labs.,
`Inc., Nos. 2015-2063, -2064 (Fed. Cir. July 15,
`2016) ................................................................... 41a
`
`
`
`
`
`
`
`v
`TABLE OF AUTHORITIES
`
`Page
`
`CASES
`Bonito Boats, Inc. v. Thunder Craft Boats,
`Inc., 489 U.S. 141 (1989) ....................... 2, 10, 12
`Cannon v. Univ. of Chi., 441 U.S. 677
`(1979) .......................................................... 10
`Consol. Fruit-Jar Co. v. Wright, 94 U.S. 92
`(1877) .......................................................... 12
`Egbert v. Lippmann, 104 U.S. 333 (1881) .... 12
`Elizabeth v. Pavement Co., 97 U.S. 126
`(1878) ......................................................... 11, 12
`Limelight Networks, Inc. v. Akamai Techs.,
`Inc., 134 S. Ct. 2111 (2014) ........................
`Medimmune, Inc. v. Genentech, Inc., 549
`U.S. 118 (2007) ...........................................
`Medicines Co. v. Hospira, Inc., 827 F.3d
`1363 (Fed. Cir. 2016) .......................... 3, 7, 8, 15
`Muncie Gear Works v. Outboard, Marine &
`Mfg. Co., 315 U.S. 759 (1942) .................... 12
`Octane Fitness, LLC v. ICON Health &
`Fitness, Inc., 134 S. Ct. 1749 (2014) ..........
`Pennock v. Dialogue, 27 U.S. (2 Pet.) 1
`(1829) .......................................................... 10
`Pfaff v. Wells Elecs., Inc., 525 U.S. 55
`(1998) .............................................. 4, 15, 16, 18
`Planing-Mach. Co. v. Keith, 101 U.S. 479
`(1880) .......................................................... 12
`Special Devices, Inc. v. OEA, Inc., 270 F.3d
`1353 (Fed. Cir. 2001) .................................. 14
`
`
`CONSTITUTION AND STATUTES
`U.S. Const. art. I, § 8, cl. 8 ............................ 17
`Act of April 10, 1790, ch. 7, 1 Stat. 109 ........ 10
`Act of Feb. 21, 1793, ch. 11, 1 Stat. 318 ....... 10
`Act of July 4, 1836, ch. 357, 5 Stat. 117 ....... 10
`Act of July 8, 1870, ch. 230, 16 Stat. 198 ..... 11
`
`2
`
`7
`
`2
`
`
`
`
`
`vi
`TABLE OF AUTHORITIES—continued
`
`Page
`Act of July 19, 1952, ch. 950, 66 Stat. 792 ... 11
`Leahy-Smith America Invents Act, Pub. L.
`No. 112–29, 125 Stat. 284 (2011) .............. 1, 18
`26 U.S.C. § 6802(1) ........................................ 10
`35 U.S.C. § 102 (2006) ................................... 1, 9
`
`
`§ 102 (2012) ................................... 11
`
`LEGISLATIVE HISTORY
`H.R. Rep. No. 112-98 (2011) ......................... 11
`157 Cong. Rec. S1368 (daily ed. Mar. 8,
`2011) ........................................................... 11
`
`
`SCHOLARLY AUTHORITIES
`Christopher A. Cotropia, The Folly of Early
`Filing in Patent Law, 61 Hastings L.J. 65
`(2009) ......................................................... 16, 17
`Leah C. Fletcher, Equal Treatment Under
`Patent Law: A Proposed Exception to the
`On-Sale Bar, 13 Tex. Intell. Prop. L.J.
`209 (2005) ................................................... 18
`Dmitry Karshtedt, Did Learned Hand Get
`It Wrong?: The Questionable Patent
`Forfeiture Rule of Metallizing Engineer-
`ing, 57 Vill. L. Rev. 261 (2012) ................. 16, 17
`Toshiko Takenaka, Rethinking the United
`States First-to-Invent Principle from a
`Comparative Law Perspective: A Proposal
`to Restructure § 102 Novelty and Priority
`Provisions, 39 Hous. L. Rev. 621 (2002) .... 17
`
`
`
`
`
`
`
`vii
`TABLE OF AUTHORITIES—continued
`OTHER AUTHORITIES
`American Heritage Dictionary (rev. 5th ed.
`2016), https://ahdictionary.com/word/
`search.html?q=on+sale ..............................
`U.S. Patent & Trademark Office, U.S.
`Patent Statistics Chart: Calendar Years
`1963-2015, http://www.uspto.gov/web/
`offices/ac/ido/oeip/taf/us_stat.htm (last
`modified June 15, 2016) ............................. 15
`
`Page
`
`9
`
`
`
`
`
`
`
`
`
`
`
`PETITION FOR A WRIT OF CERTIORARI
`Merck & Cie, Bayer Pharma AG, and Bayer
`HealthCare Pharmaceuticals
`Inc.
`(collectively,
`Merck) respectfully petition for a writ of certiorari to
`review the decision of the United States Court of Ap-
`peals for the Federal Circuit in this case.
`OPINIONS BELOW
`The Federal Circuit’s opinion is reported at 822
`F.3d 1347 and is reproduced at Pet. App. 1a–15a. The
`Federal Circuit’s order denying rehearing en banc is
`reproduced at Pet. App. 41a–42a. The district court’s
`decision is reported at 125 F. Supp. 3d 503 and is re-
`produced at Pet. App. 22a–40a. The district court’s
`final judgment is reproduced at Pet App. 16a–21a.
`JURISDICTION
`The court of appeals filed its decision on May 13,
`2016, and denied the petition for rehearing and re-
`hearing en banc on July 15, 2016. This Court has ju-
`risdiction under 28 U.S.C. § 1254.
`RELEVANT STATUTORY PROVISION
`35 U.S.C. § 102 (2006) provides:1
`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
`
`1 Section 102(b) was amended by the Leahy-Smith America
`Invents Act (“AIA”). Pub. L. No. 112–29, § 3(b)(1), 125 Stat. 284,
`285–87 (2011); see infra at 11. Because Merck applied for its pa-
`tent in 2000, the pre-AIA law governs this case. Citations are to
`the pre-AIA statute unless otherwise noted.
`
`
`
`
`2
`than one year prior to the date of the application
`for patent in the United States, ….
`INTRODUCTION
`This case presents an all-too-familiar basis for cer-
`tiorari: Once again, the Federal Circuit has reached a
`conclusion that contradicts the Patent Act, this
`Court’s precedents, and the considered views of the
`United States. See also, e.g., Limelight Networks, Inc.
`v. Akamai Techs., Inc., 134 S. Ct. 2111 (2014) (in-
`duced infringement); Octane Fitness, LLC v. ICON
`Health & Fitness, Inc., 134 S. Ct. 1749 (2014) (attor-
`ney’s fees). This time, the subject is the Patent Act’s
`“on sale” bar, which precludes anyone from seeking to
`patent an invention that has been “on sale” for more
`than one year prior to the patent application. 35
`U.S.C. § 102(b). Because only this Court can correct
`the Federal Circuit’s erroneous standard—which
`casts doubt on the validity of countless patents—the
`Court should grant certiorari and reverse.
`Outside of the Federal Circuit, the reach of § 102(b)
`has long been clear. Both Congress and this Court
`have consistently confirmed that the on-sale bar ap-
`plies only to sales or offers for sale made available to
`the public. Non-public transactions or discussions,
`typically conducted in preparation for launching a
`product, do not place an invention “on sale” within
`the meaning of the statute. In short, as this Court re-
`cently stated, “[f]rom the Patent Act of 1790 to the
`present day, the public sale of an unpatented article
`has acted as a complete bar to federal protection of
`the idea embodied in the article thus placed in public
`commerce.” Bonito Boats, Inc. v. Thunder Craft
`Boats, Inc., 489 U.S. 141, 148–49 (1989) (emphases
`added).
`
`
`
`
`
`3
`The United States agrees. In an en banc case decid-
`ed contemporaneously with this one, the Department
`of Justice urged the Federal Circuit to “overrule its
`decisions interpreting the on-sale bar to reach non-
`public sales” and to “clarify that, consistent with
`longstanding Supreme Court precedent and congres-
`sional intent, the on-sale bar is trigged only by sales
`or offers for sale that make the invention available to
`the public.” En Banc Brief for the United States as
`Amicus Curiae, at 17, 19, Medicines Co. v. Hospira,
`Inc., Nos. 2014-1469, -1504 (Fed. Cir. filed Mar. 2,
`2016) (en banc) (ECF No. 132) (U.S. Amicus Br.).
`The Federal Circuit, however, rejected the United
`States’ request to correct course, and adhered to its
`incorrect view that non-public communications can
`trigger the on-sale bar and invalidate a patent. The
`Federal Circuit reaffirmed its belief that “confidential
`transactions [can] be patent invalidating sales under
`§ 102(b)” and that confidentiality is merely a “factor”
`to be considered. Medicines Co. v. Hospira, Inc., 827
`F.3d 1363, 1376 (Fed. Cir. 2016) (en banc) (citing cas-
`es). In line with that view, the court held in this case
`that confidential, non-public discussions between
`Merck and a third party during preparations to
`launch a product triggered the on-sale bar and wiped
`out Merck’s patent entirely. Pet. App. 14a–15a.
`This case warrants this Court’s review to correct
`the Federal Circuit’s errant view of § 102(b)’s on-sale
`bar. The Federal Circuit’s incorrect approach to the
`on-sale bar is inconsistent with the Patent Act, this
`Court’s precedent, and the position of the United
`States. This is the only Court that can correct those
`wrongs. And because the Federal Circuit held that
`the on-sale bar was not triggered in Medicines Co.,
`this is the proper case to address the issue.
`
`
`
`
`
`4
`The issue is also extremely important. Many inven-
`tors, out of necessity or efficiency, rely on non-public
`dealings with manufacturers, wholesalers, and others
`to launch and bring inventions to the public market
`in anticipation of receiving patents on their inven-
`tions. The Federal Circuit’s willingness to invalidate
`patents for inventors who engage in such a collabora-
`tive process, and to reduce the non-public nature of
`pre-launch transactions to a mere “factor” to be con-
`sidered, unsettles the fate of many patents, creates
`perverse incentives for inventors to file prematurely,
`and favors certain inventors over others.
`Nearly 20 years ago, this Court discarded the Fed-
`eral Circuit’s “unnecessarily vague” “totality of the
`circumstances” approach to the on-sale bar, empha-
`sizing the need for “certainty” and the “interest in
`providing inventors with a definite standard for de-
`termining when a patent application must be filed.”
`Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 65–68 & n.11
`(1998). That message has been lost through the Fed-
`eral Circuit’s insistence on a “factor”-based analysis
`of non-public transactions. The Court should grant
`the petition or, at a minimum, call for the views of
`the Solicitor General.
`STATEMENT OF THE CASE
`A. Factual Background
`This case concerns Merck’s invention of and patent
`on a chemical compound used in certain popular con-
`traceptives. In 1997, Merck scientists invented a
`unique crystalline calcium salt of 5-methyl-(6S)-
`tetrahydrofolic acid (MTHF). Pet. App. 2a. MTHF is
`marketed under the trade-name Metafolin® and is
`used to manufacture oral contraceptives sold as
`Safyral® and Beyaz®. Id. at 22a–23a. Shortly after
`inventing Metafolin®, Merck realized it needed a lo-
`
`
`
`
`5
`cal partner to help prepare Metafolin® for launch and
`delivery to the U.S. market. As a result, Merck began
`“exploring a strategic partnership” with Weider Nu-
`trition International, Inc., to develop and launch
`commercial uses for Metafolin® in the United States.
`Id. at 2a.
`Initial discussions were promising, and the parties
`signed a confidential disclosure agreement (CDA) in
`February 1998 to govern their exploration of a part-
`nership. Pet. App. 2a. Protected by the CDA, Merck
`and Weider continued to discuss the possibility of an
`exclusive supply arrangement or a joint venture to
`market and distribute Metafolin®-based products in
`the United States. Id.
`By August 1998, Weider was no longer interested in
`a joint venture, but the parties continued to discuss
`alternative arrangements—still confidentially, under
`the cloak of the CDA. Pet. App. 2a–3a. In that con-
`text, Weider floated the idea of possibly purchasing 2
`kilograms of Metafolin®. Id. at 3a. Merck then sent
`Weider a fax with product details, including a poten-
`tial price and payment and delivery terms. Id. Weider
`responded that it needed more information and would
`send a purchase order after receiving that infor-
`mation. Id. at 3a–4a.
`The likelihood of Weider’s possible purchase of
`Metafolin® faded over the ensuing months. At first,
`the parties tried to sort out details of the possible
`transaction, like insurance coverage and safety re-
`quirements. Pet. App. 4a. But Weider lost interest,
`and, by January 1999, both sides had come to the
`conclusion that any potential undertaking would not
`be fruitful. Id. at 4a–5a. They parted ways, without
`Weider ever purchasing Metafolin®. Id. at 5a.
`
`
`
`
`
`6
`More than a year later, in April 2000, Merck filed
`an application for a patent on Metafolin®. Pet. App.
`2a. The patent, No. 6,441,168, issued in August 2002.
`Id.
`
`B. Procedural Background
`1. Almost a decade after Merck secured its patent,
`in December 2011, Watson Laboratories, Inc., took
`the position that the patent was never valid. Watson
`filed
`two Abbreviated New Drug Applications
`(ANDAs) seeking to manufacture generic versions of
`Safyral® and Beyaz®. Pet. App. 5a, 22a–23a. Once
`Merck sued Watson for patent infringement, id. at
`5a, 22a, Watson conceded infringement but argued
`that Merck’s patent was invalid, contending among
`other things that the on-sale bar nullified Merck’s pa-
`tent from the get-go. Id. at 24a. In particular, Watson
`claimed that Merck’s confidential discussions with
`Weider in late 1998 triggered the bar and, because
`Merck’s patent application was filed more than one
`year later, wiped out the ’168 patent. Id. at 26a–29a.
`The district court held that Watson failed to prove
`invalidity and agreed with Merck that the invention
`had not been “on sale” in 1998. First of all, it was
`“undisputed” that the CDA remained
`in effect
`throughout the fall 1998 discussions and, accordingly,
`those discussions were non-public. Pet. App. 29a.
`Against that backdrop, the district court held that the
`parties’ indefinite discussions did not constitute a
`sale or an offer to sell within the meaning of 35
`U.S.C. § 102(b). Id. at 29a–30a.
`2. The Federal Circuit reversed. Pet. App. 1a–15a.
`Watson did not challenge the district court’s finding
`that the CDA covered the parties’ fall 1998 discus-
`sions, and so the Federal Circuit assumed that it did.
`Id. at 13a. Nevertheless, and notwithstanding the
`
`
`
`
`
`7
`fact that the discussions were not public, the Federal
`Circuit erased Merck’s 14-year-old patent based on
`the confidential communications made in preparation
`for launching a potential commercial product. Id. at
`13a–15a. According to the Federal Circuit, Merck’s
`discussions with Weider constituted a “premature
`commercial exploitation of its invention” sufficient to
`invalidate the patent under the on-sale bar. Id. at
`15a.
`3. While this case was pending, the Federal Circuit
`granted en banc review in Medicines Co. v. Hospira,
`Inc., 827 F.3d 1363 (Fed. Cir. 2016), to reconsider the
`scope of the “on sale” bar. And in that en banc pro-
`ceeding, the United States submitted an amicus brief
`explaining why, under this Court’s precedent, the on-
`sale bar does not apply when an “invention was never
`made available for sale to the public.” U.S. Amicus
`Br. at 2. The United States urged the Federal Circuit
`to hold that the on-sale bar does not apply when
`transactions are “confidential and exclusive, such
`that no member of the public could have purchased
`the product,” and to “overrule its decisions interpret-
`ing the on-sale bar to reach non-public sales.” Id. at 2,
`17.
`Prior to this en banc proceeding, it obviously would
`have been futile for Merck to argue that the non-
`public nature of its discussions with Weider preclud-
`ed application of the on-sale bar, because a three-
`judge panel “had no authority to overrule” the Feder-
`al Circuit’s long line of cases rejecting precisely that
`argument. See Medimmune, Inc. v. Genentech, Inc.,
`549 U.S. 118, 125 (2007). But, because en banc pro-
`ceedings are not so limited, Merck asked the panel in
`this case to defer a decision until after the en banc
`court decided Medicines Co. See Fed. R. App. P. 28(j)
`Letter, Merck & Cie v. Watson Labs., Inc., Nos. 2015-
`
`
`
`
`
`8
`2063, -2064 (Fed. Cir. filed Mar. 7, 2016) (ECF No.
`50). Nonetheless, the panel rejected Merck’s request
`and forged ahead, alluding to the Medicines case only
`in a footnote that said “there is no dispute that the
`[on-sale] bar arises when a product is marketed to the
`public prior to the critical date,” even though the
`panel had earlier “assum[ed]” that the Merck-Weider
`discussions were not public. Pet. App. 13a, 15a n.4.
`4. Merck filed its own petition for rehearing en
`banc. ECF No. 53. Merck explained that the panel
`decision holding that the confidential, non-public dis-
`cussions triggered the on-sale bar conflicted with the
`Patent Act, with this Court’s precedent, and with the
`views of the United States. Id. at 9–11.
`Shortly thereafter, the Federal Circuit issued its
`decision in Medicines Co., 827 F.3d 1363, and later
`that same week denied Merck’s rehearing petition,
`Pet. App. 41a–42a. In Medicines, the en banc court
`rejected the United States’ plea to realign the on-sale
`bar with the statute and with centuries of this
`Court’s precedent. Instead, the Federal Circuit reaf-
`firmed its earlier decisions holding that “confidential
`transactions [can] be patent invalidating sales under
`§ 102(b)” and concluded that the non-public nature of
`a transaction is merely a “factor” to be considered.
`Medicines, 827 F.3d at 1376 (citing cases).
`REASONS FOR GRANTING THE PETITION
`The Court should grant certiorari for at least two
`reasons. First, the Federal Circuit’s decision is incon-
`sistent with the text of the Patent Act, this Court’s
`precedent, and the considered views of the United
`States. The Federal Circuit has refused several op-
`portunities to reconcile its precedent with these au-
`thorities, making plain that this Court’s review is the
`only way to correct course.
`
`
`
`
`9
`Second, the ramifications of the Federal Circuit’s
`refusal to adhere to the Patent Act and this Court’s
`precedents are severe. This refusal affects millions of
`patents, presents confusing and uncertain standards
`for inventors, and is harmful to innovation. The
`Court’s intervention is sorely needed.
`I. THE FEDERAL CIRCUIT’S ON-SALE BAR
`CASE LAW IS INCONSISTENT WITH THE
`PATENT ACT, THIS COURT’S PRECE-
`DENT, AND THE VIEWS OF THE UNITED
`STATES.
`The Federal Circuit invalidated Merck’s 14-year-old
`patent based on misguided precedent that erroneous-
`ly applies the on-sale bar to confidential, non-public
`discussions. This position conflicts with the Patent
`Act’s text, with this Court’s precedent, and with the
`views of the United States. Certiorari is warranted.
`A. The Patent Act, This Court’s Precedent,
`And The United States All Demonstrate
`That The On-Sale Bar Does Not Apply To
`Non-Public Sales Or Offers Of Sale.
`1. The Patent Act provides that “[a] person shall be
`entitled to a patent unless,” among other things, “the
`invention was … in public use or on sale in this coun-
`try, more than one year prior to the date of the appli-
`cation” for the patent. 35 U.S.C. § 102(b). The text
`and history of that provision make clear that an in-
`vention must be available for sale to the public in or-
`der to be considered “on sale” and subject to § 102’s
`bar.
`The operative phrase “on sale” has an established
`ordinary meaning—namely, that a member of the in-
`terested public can buy whatever it is that is “on
`sale.” See, e.g., American Heritage Dictionary (rev.
`5th ed. 2016) (defining “on sale” to mean “[a]vailable
`
`
`
`
`10
`to customers”). An object can of course be sold pri-
`vately or secretly, but saying that something is “on
`sale” naturally conveys that the item is available
`more widely and to more than one potential counter-
`party. See also 26 U.S.C. § 6802(1) (using “on sale” in
`a way that clearly means accessible to the public).
`The Patent Act’s long history confirms this com-
`monsense understanding. The earliest iterations did
`not include the term “on sale”; instead, they barred a
`patent on any invention that was already “known or
`used.” Act of April 10, 1790, ch. 7, § 1, 1 Stat. 109,
`110; Act of Feb. 21, 1793, ch. 11, § 1, 1 Stat. 318, 319.
`But even then, the Act had a public-facing design: it
`sought to prohibit patenting any idea “already dis-
`closed to the public” because doing so would “ob-
`struct[] others in the use of what they possessed be-
`fore.” Bonito Boats, 489 U.S. at 147 (quoting 13 Writ-
`ings of Thomas Jefferson 326–27 (memorial ed.
`1904)). This Court subsequently concluded as much
`when the provision came before it in Pennock v. Dia-
`logue, 27 U.S. (2 Pet.) 1 (1829). “[T]he true construc-
`tion of the act,” the Court held, is that an inventor
`cannot obtain a patent “if he suffers the thing invent-
`ed to go into public use, or to be publicly sold for use,
`before he makes application for a patent,” because his
`“voluntary act or acquiescence in the public sale and
`use is an abandonment of his right.” Id. at 23–24
`(emphases added).
`Congress made that explicit when it amended the
`statute a few years later to codify Pennock’s pro-
`nouncement and to prohibit the patenting of any in-
`vention that was, at the time of filing, “in public use
`or on sale.” Act of July 4, 1836, ch. 357, § 6, 5 Stat.
`117, 119; see Cannon v. Univ. of Chi., 441 U.S. 677,
`698–99 (1979) (“evaluation of congressional action …
`must take into account its contemporary legal con-
`
`
`
`
`
`11
`text”). That language largely stuck for nearly two
`centuries. See, e.g., Act of July 8, 1870, ch. 230, § 24,
`16 Stat. 198, 201; Act of July 19, 1952, ch. 950,
`§ 102(b), 66 Stat. 792, 797 (codified at 35 U.S.C.
`§ 102(b) (2006)). The “on sale” phrase thus arose out
`of this Court’s statements about public sales and
`never wavered from that origin.
`Just a few years ago, Congress amended § 102 and
`in the process confirmed the long-established under-
`standing that an invention is not “on sale” when it is
`not available to the public. The amended provision
`states that an inventor cannot acquire a patent if the
`invention was “in public use, on sale, or otherwise
`available to the public” before filing. 35 U.S.C.
`§ 102(a)(1) (2012) (emphasis added). The broad resid-
`ual clause clarifies that “the preceding clauses de-
`scribe things that are of the same quality or nature
`as the final clause—that is, although different cate-
`gories of prior art are listed, all of them are limited to
`that which makes the invention ‘available to the pub-
`lic.’” 157 Cong. Rec. S1368, S1370 (daily ed. Mar. 8,
`2011) (statement of Sen. Kyl), cited in final Commit-
`tee Report, H.R. Rep. No. 112-98, at 43 n.20 (2011).
`And, by continuing to use the phrase “on sale” with-
`out any direct modifier (like “publicly” or “to the pub-
`lic”), Congress confirmed that it has always covered
`only sales or offers of sale that are available to the
`public.
`2. Like Congress, this Court has consistently main-
`tained the view, set out in Pennock, that non-public
`transactions do not make an invention “on sale.” In
`Elizabeth v. Pavement Co., 97 U.S. 126 (1878), for ex-
`ample, the Court spelled out the distinction between
`what does and does not trigger the statutory bar. On
`the one hand, experimental use does not come within
`the statute’s reach so long as the inventor controls
`
`
`
`
`
`12
`the invention and “does not voluntarily allow others
`to make [the invention] and use it, and so long as it is
`not on sale for general use.” Id. at 135 (emphasis add-
`ed). On the other hand, once the inventor allows the
`invention “to be used by other persons generally [or]
`put on sale for such use,” then the invention would
`“be in public use and on public sale, within the mean-
`ing of the law.” Id. (emphasis added).
`Numerous other decisions similarly reflect the need
`for public accessibility and the fact that the on-sale
`bar does not cover non-public transactions or confi-
`dential, pre-launch dealings needed to bring a prod-
`uct to market. See, e.g., Bonito, 489 U.S. at 148–49
`(“[f]rom the Patent Act of 1790 to the present day, the
`public sale of an unpatented article has acted as a
`complete bar” to patenting) (emphasis added); Consol.
`Fruit-Jar Co. v. Wright, 94 U.S. 92, 93–95 (1877)
`(sale of more than a dozen fruit jars to members of
`the public triggered the on-sale bar); Planing-Mach.
`Co. v. Keith, 101 U.S. 479, 485 (1880) (invention must
`not be in public use or on sale or else it could trample
`the “intervening rights of the public”); Egbert v.
`Lippmann, 104 U.S. 333, 337 (1881) (lack of an “obli-
`gation of secrecy” during invention’s distribution and
`later widespread use and sale precluded patent);
`Muncie Gear Works, Inc. v. Outboard, Marine & Mfg.
`Co., 315 U.S. 759, 766–68 (1942) (invention that was
`widely “popularized” before the patent application
`barred). Unless an invention is “placed in public
`commerce,” Bonito Boats, 489 U.S. at 149 (emphasis
`added), and available for sale to the public, it is not
`“on sale” under § 102. The confidential transactions
`that patentees typically have with manufacturers,
`marketers, and other members of the supply chain in
`order to bring a product to market do not trigger the
`“on sale” bar.
`
`
`
`
`
`13
`3. The United States shares this Court’s view
`about the correct scope of the on-sale bar. Citing
`many of the same authorities noted above, the United
`States told the en banc Federal Circuit that, “[o]ver
`the nearly two centuries during which Congress has
`reenacted the on-sale bar without changing the ‘on
`sale’ language, th[is] Court has repeatedly described
`the statute as addressed to public sales.” U.S. Amicus
`Br. at 8–15. When it was “undisputed that the trans-
`actions [in that case] were confidential and exclu-
`sive,” therefore, the government maintained that
`“section 102(b) would not apply because the invention
`was never made available for sale to the public.” Id.
`at 2. And, the United States explained, such an ap-
`proach dovetails with Congress’s more general “de-
`termination to ‘exclude from consideration for patent
`protection knowledge that is already available to the
`public’ because ‘the creation of a monopoly in such
`information would not only serve no socially useful
`purpose, but would in fact injure the public by remov-
`ing existing knowledge from public use.’” Id. at 9
`(quoting Bonito Boats, 489 U.S. at 148).
`Accordingly, the United States urged the Federal
`Circuit to “overrule its decisions interpreting the on-
`sale bar to reach non-public sales, including confiden-
`tial supplier agreements.” Id. at 17–19. The path for-
`ward, the United States said, was to “hold that the
`on-sale bar is triggered only by sales or offers for sale
`that make the invention available to the public.” Id.
`at 18.
`B. The Federal Circuit’s Decision Conflicts
`With These Authorities.
`The Federal Circuit’s decision in this case is incon-
`sistent with this body of authority. The discussions
`between Merck and Weider in preparation for a po-
`tential product launch were not public. The district
`
`
`
`
`14
`court found that the parties’ confidentiality agree-
`ment covered these discussions, Pet. App. 27a–30a,
`and Watson did not challenge that finding in the
`Federal Circuit. The record is thus clear, as the Fed-
`eral Circuit “assum[ed],” id. at 13a, that the public
`did not know about Metafolin® and that the ’168 pa-
`tent’s invention was not available for sale to the pub-
`lic. These undisputed facts mean that the parties’
`pre-launch discussions about Metafolin® fall squarely
`outside the scope of § 102(b)’s on-sale bar.
`Contrary to the statute and this Court’s case law,
`however, the Federal Circuit held that the parties’
`non-public discussions in preparation for a potential
`launch triggered the statutory bar and invalidated
`Merck’s patent. The Federal Circuit’s only attempt to
`reconcile that judgment with this Court’s precedent
`comes in a footnote at the end of the opinion. There,
`the Federal Circuit alluded to the pending en banc
`case in Medicines but stated that “there is no dispute
`that the [on-sale] bar arises when a product is mar-
`keted to the public prior to the critical date.” Pet.
`App. 15a n.4. That is true, but it is entirely irrelevant
`to this case, particularly after the Federal Circuit ac-
`cepted the undisputed fact that Merck’s discussions
`with Weider about the invention were confidential
`and not public. Merck did not market Metafolin® or
`otherwise make it available for public consumption.
`It merely explored a possible partnership to facilitate
`launch of the drug after it became patented and
`ready for mass sale.
`Moreover, there is no doubt about where the Feder-
`al Circuit stands on the scope of § 102. For years, it
`has held that secret and non-public transactions can
`place an invention “on sale” and preclude patentabil-
`ity. See, e.g., Special Devices, Inc. v. OEA, Inc., 270
`F.3d 1353, 1357 (Fed. Cir. 2001) (the on-sale bar
`
`
`
`
`
`15
`would apply “even if a patentee’s commercial activi-
`ties took place in secret”). And when the Federal Cir-
`cuit’s wayward doctrine was presented for reconsid-
`eration en banc, with the U
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