The Supreme Court's recent forays into patent law cases have evinced a tendency towards statutory construction analysis, whether regarding substantive law (see, e.g., WesternGeco LLC v. ION Geophysical Corp. (2018); Sandoz Inc. v. Amgen Inc. (2017); Impression Products, Inc. v. Lexmark International, Inc. (2017); TC Heartland LLC v. Kraft Foods Group Brands LLC (2017); SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC (2017); Life Technologies Corp. v. Promega Corp. (2017); Halo Electronics, Inc. v. Pulse Electronics, Inc. and Stryker Corp. v. Zimmer, Inc. (2016); Kimble v. Marvel Entertainment, LLC (2015); and Commil USA, LLC v. Cisco Systems, Inc. (2015)) or the procedural niceties of Federal Circuit review and U.S. Patent and Trademark Office procedures (see Oil States Energy Services, LLC. v. Greene's Energy Group, LLC (2018); SAS Institute Inc. v. Iancu (2018); Cuozzo Speed Technologies LLC v. Lee (2016); Teva Pharmaceuticals USA, Inc. v. Sandoz Inc. (2015)).  This trend could be considered a marked improvement over the Court's penchant for imposing their views on patent eligibility displayed earlier in this decade (see "Supreme Court Issues Decision in Alice Corp. v. CLS Bank"; Association for Molecular Pathology v. Myriad Genetics, Inc. (2013); and Mayo Collaborative Services v. Prometheus Laboratories, Inc. (2012)).  Consistent with this latest inclination, the Court will decide the extent to which Congress changed what is novelty-destroying under U.S. patent law when it revised 35 U.S.C. § 102 under the Leahy-Smith America Invents Act (AIA) in 2012 in Helsinn Healthcare S.A. v. Teva Pharmaceuticals Inc.

The Court heard oral argument in this case on Tuesday, December 4, 2018.  It is impossible to know, and even more foolhardy to guess, what the members of the Court are thinking from their questions during oral argument, but that cannot stop an attempted analysis of the aspects of the issues before them that naturally arises when reviewing an oral argument transcript.

Kannon K. Shanmugam argued for Petitioner Helsinn; William M. Jay argued for Respondent Teva; and Malcolm L. Stewart, Deputy Solicitor General, argued for the Government.  The Chief Justice posed the first question to Mr. Shanmugam, noting that Helsinn's interpretation of the word "sale" in the statute (to mean sales to the general public) is not necessarily consistent with the plain meaning of the word (Mr. Shanmugam attempted to distinguish on the basis of their being a linguistic difference between "sale" and the statutory language "on sale").  New Justice Kavanaugh jumped on Mr. Shanmugam's hypothetical (regarding a purported private sale of Mr. Shanmugam's overcoat to Mr. Jay), disputing why that wouldn't be a sale ("it's pretty hard to say something that has been sold was not on sale").  Justice Breyer, referring to Helsinn's argument in the brief, questioned whether Helsinn's contentions that its position was supported by the Court's precedents ("we only have Justice Story, Learned Hand, and I guess various others, maybe John Marshall for all I know", which in vacuo seem pretty solid), and opined that "the purpose of this on-sale rule including private sales is to prevent people from benefiting from their invention prior to and beyond the 20 years that they're allowed."  Mr. Shanmugam countered that "the predominant purpose of the on-sale bar was preserving the public's access to inventions that have entered the public domain."  Justice Kavanaugh mentioned "commercial exploitation" as another aspect of the bar, and Justice Breyer interjected that such sales (like the one here) can be secret sales.  Mr. Shanmugam, attempting to provide clarification to Justice Ginsberg, said that Congress intended to "clarify" the scope of what would be considered to be "on sale" with, inter alia, the catchall phrase "or otherwise available to the public," which Justice Kavanaugh opined was "a terrible clarification," stating that there were many efforts during debate over the AIA to "actually change the 'on sale language, and all those failed."  Mr. Shanmugam countered by suggesting that the way Congress had revised the statute was appropriate to its purpose, which included "abrogating some of the outlying lower court decisions that had extended both the on-sale bar and the public use bar to cases where there was not public availability."  Mr. Shanmugam responded directly to Justice Kavanaugh's citation of an amicus brief by Mark Lemley (and other legal academics) that the on-sale bar always included secret sales, a statement challenged by Justice Breyer based on the Court's citation in its Bonito Boats case of Learned Hand's dichotomy that a patentee "has to go ahead and patent [her invention] or keep it a secret forever."  To Justice Breyer's accompanying hypothetical of an inventor selling her invention to multiple parties under confidentiality agreements, Mr. Shanmugam says his "submission is a much more modest one," to "correct the Federal Circuit's error, which is to say that public availability is not required."

The Government argued next.  Justice Sotomayor responded negatively to Mr. Stewart's hypothetical, regarding sales of iPhones to distributors wherein being "on sale" should be considered to arise upon sales to consumers, saying that this might be true if you asked a consumer, but if you asked the industry they would say the phones were on sale when they were purchased by the distributor.  The Justice further said she has found no support for the Government's argument ("I've looked at the history cited in the briefs, I looked at the cases, I don't find it anywhere") and further said that the Government's assertion of the meaning of the statute was not the words Congress used.  Indeed, the words Congress did use, "on sale," were fraught with their historical meaning that did not support the Government's position.  Justice Kagan followed by asking whether the changes to the statute under the AIA were "capable of flipping [] settled law."  After further colloquy, Mr. Stewart conceded that the change in language would not be so capable, but only if he accepted Justice Kagan's assumption (and it's "a big assumption," the Justice herself conceded) that the law was indeed settled on the question of what activities fell under the on sale bar under prior law.  Justice Kavanaugh returned to the questioning, asking whether this wasn't "a classic example of trying to snatch victory from defeat in some of the legislative statements?" in view of Congress's failure to affirmatively revise the statute to exclude secret sales.  Mr. Stewart aptly (but not necessarily persuasively) responded, referring to how those failed proposals would have otherwise modified the statute to require that the invention be disclosed, even under circumstances where it would not upon sale.

Mr. Jay argued last, leading with the simple proposition that "[a] product that is sold or offered for commercial sale is on sale."  Justice Alito questioned whether Respondent's position, if stated in statutory language not used by Congress ("on sale publicly or on sale privately"), "would be nonsense," because this phrase would be followed by "or otherwise available to the public" and "otherwise" should indicate that "all of the things that went before are public."  Mr. Jay responded by saying:

So we think that the function of "otherwise" in the statute as amended [] is to acknowledge that there is overlap between the previous four categories and the new category of invalidating prior art that's being added, so as to make sure that the new category doesn't swallow or change the meaning of a prior one.

This "new category" would include "An oral presentation at a conference without slides" and "a collaboration among many people on an app."  In Respondent's view, by including the phrase "or otherwise available to the public," Congress intended "to create new invalidating prior art disclosures that weren't invalidating before the AIA."  Mr. Jay clarified for Justice Sotomayor that the U.S. is the only country where "secret" prior art could be novelty destroying, and that "otherwise" is intended to "make clear that that new category was a residual category intended to catch things not already caught."  Various members of the Court (as is their wont) engaged counsel with an extended exercise in analogy-making, involving collections of sports ("football, baseball, swimming," Justices Alito and Breyer), coupled with a hypothetical catch-all of "amended to add 'or any other activity that involves the use of a ball,'" and a proscription against "peanut butter cookies, pecan pie[, and] brownies" (Justice Kagan), coupled with the question of whether the proscription would be violated by "nutless brownies."  Despite yeoman effort to address these analogies, Mr. Jay was able to forthrightly respond to Justice Kagan's question asking whether it was Respondent's position that "it's not even like a little bit doubtful what 'on sale' means?" by saying "[c]ertainly not by the time the AIA was enacted."  After additional colloquy with Justice Kavanaugh regarding whether the term "on sale" is ambiguous, Justice Gorsuch asked whether the Court should consider how the Patent Office has interpreted the statute regarding the on-sale bar.  Mr. Jay reminded the Justice that "[t]his Court has never given deference to the Patent Office on substantive questions of patentability, on what it takes to overcome the bars put in the statute by Congress where Congress has said you may not have a patent if X, Y, or Z" and that "this Court has any number of decisions in which it has held that a patent issued by the Patent Office in conformance with the -- with the office's then examination guidelines were invalid."  Justice Kagan completed the Court's questioning of Mr. Jay by asking "would the prior secret sale of an invention by somebody other than the patentholder invalidate the patentholder's patent?", to which Mr. Jay answered "yes" (while acknowledging that "I've not seen cases like that because I think it would be exceptionally difficult to").

Petitioner's rebuttal drew questioning only from Justice Breyer, regarding the meaning of the term "otherwise."  Argument concluded with rather jocular reference to the excellence of the briefs (Justice Breyer having earlier noted "I thought the bar really earned its pay on both sides") with the Chief Justice saying "I am sure we'll come up with an excellent opinion."