Argument Recap

Earlier this month, the Federal Circuit heard oral argument in Celanese International Corporation v. International Trade Commission. This is a patent case that attracted an amicus brief in support of reversal. In the appeal, the Federal Circuit is reviewing a determination by the International Trade Commission that, under the post-America Invents Act on-sale bar provision, the sale of products made by a secret process invalidates a subsequently filed patent application on that process. Judges Reyna, Mayer, and Cunningham heard the argument. This is our argument recap.

Deanne E. Maynard argued for the appellants, Celanese International Corporation, Celanese (Malta) Company 2 Limited, and Celanese Sales U.S. Ltd. Maynard began by asserting that the administrative law judge’s finding–that “the sale of a product made by a secret process places the process on sale such that it can invalidate a later filed patent on the process under the on-sale bar”–is not compatible with the text of the AIA.

One judge interjected, asking why the Supreme Court’s decision in Helsinn was not dispositive to this case. In response, Maynard argued prior case law has only discussed the sale of the “claimed invention” and not the sale of a product made by the “claimed inventive process.” She argued that, in this case, only the product and not the claimed invention, the process, was ever on sale. 

One judge asked how someone could infringe a secret process claim. Maynard responded by highlighting that normally “[y]ou couldn’t infringe it by selling the product of the process.” But, she noted, Congress passed a specific provision to capture this conduct, and in certain circumstances “a process patent is infringed under [35 U.S.C. §] 271(g) if the product which is made by a patented process is sold.”

Another judge asked how the court should reconcile the answer to the question presented in this case with the “long line of cases that talk about when a process would be on sale.” Maynard responded by arguing “those cases are not applicable to the meaning of the American Invents Act.” She further argued that, in the first case to apply the on-sale bar in the manner adopted by the administrative law judge, the court never said “the text requires that holding”; instead, she argued, the justification was “the policies that the court perceived to be animating the text under the old on-sale bar.”

Maynard maintained the reenactment cannon should not apply because the text of the AIA is clear, and there is no well-settled interpretation of the on-sale bar. 

Another judge asked why the public sale of products made using a secretive process wouldn’t be a disclosure under 35 U.S.C. § 102(b). Maynard argued it is not a disclosure because it “doesn’t disclose the patented invention to anyone.” Another judge asked whether this argument begins to “move away from the foundation of exclusivity” and “dedication to the public in exchange for that exclusivity.” Maynard responded that the appellants’ reading encourages filing patents that may have otherwise remained trade secrets. 

Benjamin S. Richards, representing the International Trade Commission, began by arguing “the sole question” presented in this case “is: did Congress change what it means for a process to be on sale when it enacted the AIA.” He argued the answer to that question was “no” given the decision of hte Supreme Court in Helsinn. One judge followed up by asking how Helsinn applies here and whether it is dispositive. Richards, in response, argued Helsinn is dispositive. He maintained that, even if the process was secretive, selling a product made using this secret process put the claimed invention on sale by offering to practice the method in exchange for compensation. 

One judge asked about the AIA’s change of the relevant language from “invention” to “claimed invention.” In response, Richards highlighted that, not only had the Federal Circuit already been applying the “claimed invention” language for some time, but the legislative history mentions that the changes were “added to bring clarity and meaning and application of the terms in the context of a first-to-file system.” He noted the legislative history, in this regard, does not mention a change in the on-sale bar. He argued that additional legislative history indicates that “on sale” was adopted because it had a settled meaning. 

Finally, Richards argued that, contrary to the appellants’ arguments that their interpretation promotes disclosure of patented processes, the amici who filed in their support expressed a goal to “overturn the long-held rule that you have to choose between secrecy or exclusivity under a patent.” 

Nicole A. Saharsky argued for the intervenors, Anhui Jinhe Industrial Co. and Jinhe USA LLC. She first asserted “there is no dispute between the parties about the meaning of claimed invention.” She argued the only relevant question is, “What does it mean for the process to be on sale?” And, Saharsky argued, while Congress changed the statute’s language from “invention” to “claimed invention,” the Federal Circuit’s precedent makes it clear that “the word ‘invention’ in the old statute and ‘claimed invention’ always meant the same thing.” 

Saharsky asserted courts have routinely held that a “process is on sale either when you perform the process for money or sell a product made using the process.” Saharsky contended this interpretation is rational because, if a patented invention is a process, the sale of the product it produces confers the benefit of the invention to the inventor by allowing the inventor to commercialize it. 

One judge asked how the AIA impacted the interpretation of the on-sale bar. Saharsky responded that the interpretation of the on-sale bar has not changed under the AIA. She argued, moreover, adopting the appellants’ interpretation would render the on-sale bar “almost meaningless” and allow parties like Celanese “to do exactly what the on-sale bar was designed to prevent.” One judge interjected, asking whether Helsinn is distinguishable. Saharsky responded that it is not. She said that, while the facts of Helsinn are different, the question addressed was whether Congress changed the meaning of the on-sale bar, and the Supreme Court held Congress did not. 

In her rebuttal, Maynard argued “Congress knows how to capture this conduct in precise terms if it wants to.” And, she maintained, “it did not add language like that to the on-sale bar provision.” Additionally, she argued, that appellants are not asking for the court to overturn a long history of precedent. While there is a lot of dicta on this topic, she argued, “dicta cannot make well-established law.”

We will continue monitoring this case and report on developments.