Federal Circuit Holds That Using A Contract Manufacturer Does Not Trigger An On-Sale Bar

In The Medicines Co. v. Hospira, Inc., Appeal Nos. 2014-1469, -1504, the Federal Circuit, en banc, held that the patentee’s deal for pharmaceutical manufacturing services did not trigger an on-sale bar under 35 U.S.C. § 102(b).

The Medicines Co. (“MedCo”) contracted with Ben Venue to manufacture commercial quantities of Angiomax, a product that practiced the claims of MedCo’s asserted patents. The district court found that this arrangement did not trigger the on-sale bar under § 102(b). Hospira appealed. On appeal, a Federal Circuit panel reversed, finding that the on-sale bar was triggered. MedCo requested en banc review, which was granted.

The Federal Circuit, en banc, considered the on-sale bar issue in view of the Supreme Court’s guidance in Pfaff v. Wells Electronics, Inc. There, the Supreme Court held that an on-sale bar 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. Under the first prong of Pfaff, the en banc panel determined that there was no invalidating sale. Ben Venue, as a contract manufacturer, acted as a pair of “laboratory hands.” That both MedCo and Ben Venue received commercial benefit by their arrangement was not enough to trigger the on-sale bar. The absence of title transfer and the confidential nature of the transactions weighed against the conclusion that the transactions were commercial.