A recent Federal Circuit decision, Junker v. Med. Components, Inc., No. 2021-1649 (Feb. 10, 2022), serves as a warning to prospective filers that making pre-filing offers for sale, or engaging in discussions for future sales, can be detrimental to one’s ability to obtain both design and utility patents.
In Junker, the Federal Circuit reversed a decision by the Eastern District of Pennsylvania U.S. district court granting summary judgement of no invalidity under the “on-sale bar” of 35 U.S.C. § 102(b) (Pre-AIA), invalidating Mr. Larry Junker’s U.S. Design Patent No. D450,839 (the D‘839 Patent) for a catheter introducer sheath. Junker, at *2, 14.
Under the on-sale bar, both design and utility patents will be invalid where “the invention was . . . on sale in this country, more than one year prior to the date of the application for patent in the United States.” 35 U.S.C. §102(b) (Pre-AIA); accord 35 U.S.C. § 102(a)(1) (AIA) (“A person shall be entitled to a patent unless—(1) the claimed invention was . . . on sale . . . before the effective filing date of the claimed invention”); 35 U.S.C. § 102(b)(1) (AIA) (providing a 1-year grace period). The on-sale bar is triggered if, before the critical date, i.e., one year prior to the filing date of the application, “the claimed invention was both (1) the subject of a commercial offer for sale and (2) ready for patenting.” Junker, at *8 (citing Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 67–68 (1998)).
On January 8, 1999, 30 days prior to the D‘839 Patent’s critical date of February 7, 1999, one of Mr. Junker’s business associates, Mr. James Eddings, sent a letter to Boston Scientific Corp. in response to “a request for quotation” for introducer sheaths, which had been the subject of previous discussions between Mr. Eddings and Boston Scientific. Junker, at *5–6. The letter included a table “detailing bulk pricing information for variously sized peelable introducer sheath products,” while also thanking Boston Scientific for the opportunity to provide the quotation and inviting further discussion on any specific requirements that Boston Scientific may have. Junker, at *5–6.
Letter from Mr. Eddings to Boston Scientific in response to request for quotation, mailed January 8, 1999
Since the parties to the suit agreed that the claimed design of the D‘839 Patent was ready for patenting when the letter was sent, the decision turned on whether the letter was “a commercial offer for sale of the claimed design,” thus triggering the on-sale bar, “or merely a quotation signaling the parties were engaged in preliminary negotiations.”; Junker, at *9 (citing Merck & Cie v. Watson Lab’ys, Inc., 822 F.3d 1347, 1351 (Fed. Cir. 2016)) (“Only an offer which rises to the level of a commercial offer for sale, one which the other party could make into a binding contract by simple acceptance (assuming consideration), constitutes an offer for sale under § 102(b)”) (emphasis added).
Applying traditional principles of contract law, the Federal Circuit found that “[t]he completeness of the relevant commercial sale terms in the letter itself” (e.g., pricing, quantity discounts, payment terms, and delivery conditions), combined with the fact that the letter was sent only to Boston Scientific and in direct response to a request for quotation, “signal[ed] that [the] letter was not merely an invitation to further negotiate, but rather multiple offers for sale, any one or more of which Boston Scientific could have simply accepted to bind the parties in a contract.” Junker, *9-14 (emphasis added). In doing so, the Federal Circuit also reiterated earlier precedent, stating that “expressing a desire to do business in the future does not negate the commercial character of the transaction then under discussion.” Junker, *11 (quoting Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1370 (Fed. Cir. 2007)).
Under the holding of Junker, it is clear that “simple acceptance” is broader than what the words themselves imply, i.e., the courts will look not only to the express terms of an alleged offer for sale, but also the surrounding circumstances leading up to the offer to determine whether it “rises to the level of a commercial offer.” Accordingly, Junker serves as a stark reminder to applicants of the importance of filing all patent applications—utility and design alike—prior to making express offers for sale and prior to entering into any discussions relating to potential future sales, since these discussions may often lead to the appearance of an offer having been made.
