On August 12, 2024, the Federal Circuit published its decision in Celanese International Corp. et al. v. International Trade Commission. The Federal Circuit concluded that, under the America Invents Act (AIA), patent claims can be invalidated based on the on-sale bar if products made using the patented process were sold more than one year before the effective filing date of the asserted patents. This Client Alert focuses on the decision in Celanese and its potential implications for IP rights holders. For a more comprehensive look at the case history, the parties’ arguments, and oral argument, please visit WilmerHale’s Insights & Events page to access our March 2024 Client Alert, A Secret On Sale: When Trade Secrecy And Invention Disclosure Collide.
ITC Invalidates Claims Based on Celanese’s “Secret Sales”
In 2020, Celanese discovered that Anhui Jinhe Industrial Co. (Jinhe), a Chinese food additives manufacturer, was allegedly infringing Celanese’s patents for manufacturing Ace-K (an artificial sweetener). Notably, Celanese kept its Ace-K manufacturing process a trade secret while selling the resulting sweetener product. More than a year after first commercializing Ace-K, Celanese applied for and was eventually granted multiple patents for its previously secret manufacturing process. After discovering Jinhe’s alleged infringement, Celanese petitioned the International Trade Commission (ITC) to institute an investigation into Jinhe’s activity. In January 2022, the presiding ITC Administrative Law Judge (ALJ) granted Jinhe’s motion for summary determination, finding that Celanese’s prior sales before the critical date triggered the on-sale bar provision of 35 U.S.C. § 102(a)(1) and the asserted claims were therefore invalid. The ITC declined to review the ALJ’s initial determination, and Celanese’s appeal to the Federal Circuit followed.
Federal Circuit Concludes That AIA Did Not Change On-Sale Bar Provision
The Federal Circuit concluded that “sales of products made using a secret process before the critical date would bar the patentability of that process”1 on the basis that its decision was “consistent with Supreme Court precedent going back to the 1800s.”2 In rejecting Celanese’s argument that the AIA overturned pre-AIA precedent, the Federal Circuit cited Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., 586 U.S. 123 (2019), in which the Supreme Court held that a sale or offer of sale “need not make an invention available to the public” to constitute invalidating prior art under the on-sale provision.3 The Helsinn Court relied on “settled pre-AIA precedent” that “‘secret sales’ could invalidate a patent in applying a presumption that when Congress reenacted the same ‘on sale’ language in the AIA, it adopted the earlier judicial construction of that phrase.”4 The Federal Circuit in Celanese relied on this logic, determining that in Helsinn, “the Supreme Court addressed whether Congress altered the on-sale bar when it enacted the AIA . . . [and] held that Congress did not.”5
In so ruling, the Federal Circuit rejected Celanese’s argument that the AIA’s use of the phrase “claimed invention” (replacing “invention” used in the pre-AIA version of the on-sale provision) indicated a congressional intent to alter the scope or meaning of the on-sale provision in the AIA. Specifically, the court determined that “[o]ur caselaw has, in addressing the on-sale bar, interchangeably referred to the invention at issue as the ‘claimed’ invention” and therefore, “[c]onsistent with existing judicial construction, that Congress elected to use the ‘claimed invention’ alternative reflects no more than a clerical refinement of terminology for the same meaning in substance.”6
The Federal Circuit also declined to credit Celanese’s other statutory interpretation arguments, including that (1) the phrase “or otherwise available to the public” from the AIA on-sale provision confirmed that provision excludes sales of a product not disclosing the invention process, (2) other sections of 35 U.S.C., including §102(b), §271(g), or §273(a) suggested an intention by Congress to affect the AIA on-sale provision, and (3) the AIA’s legislative history showed Congress’ intent to carve out sales similar to Celanese’s sales before the critical date from the scope of the AIA on-sale bar. As the Federal Circuit summarized: “[W]e hold that the enactment of the AIA did not constitute a foundational change in the theory of the statutory on-sale bar provision, §102(a)(1), in particular, to require that sales of products made using a secret process cannot trigger the on-sale bar.”7
Insights
The Federal Circuit’s decision in Celanese clarifies that the scope of the AIA’s on-sale bar provision remains unchanged from its pre-AIA analogue. Barring en banc or Supreme Court review of the decision, it remains the case that a sale of a product made using a secret process before the critical date triggers the on-sale bar and invalidates later-sought patent claims on that process. Consequently, the Celanese decision underscores the care that IP rights holders seeking patent protection must take to weigh the risks involved in placing their inventions on sale, even if the sales are made subject to confidentiality protections.
Footnotes
