Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA Inc.

THE PROPER CONSTRUCTION OF SECTION 102(A)(1)

Helsinn argues that the plain text of § 102(a)(1) of AIA requires that a “sale” be “available to the public” in order to prevent an inventor from patenting the invention in question. According to Helsinn, the catch-all provision (“or otherwise available to the public”) that completes the list provided in § 102(a)(1), and covers exceptions to an invention’s patentability, requires that each of the list’s items “must be read in light of the final, comprehensive category.” In other words, Helsinn maintains, the phrase “otherwise available to the public” applies to each exception to patentability—like the “sale” exception—instead of being a new, discrete category. Helsinn cites several Supreme Court cases that support their argument that catch-all provisions using “otherwise” inform the language preceding the provision, which in turn supports their argument that “on sale” must be read in light of the public-availability modification. Rejecting this “familiar canon of statutory construction,” Helsinn posits, would render the provision’s term “otherwise” superfluous and thus would violate this Court’s rule against creating superfluity. Further, Helsinn asserts that the noscitur a sociis canon of interpretation confirms this reading, as the canon would resist any interpretation that does not apply the consistent characteristic (public availability) to all items on the list because such an interpretation would give “on sale” unintended breadth and make “on sale” inconsistent with the remaining items. Because the on-sale provision does not cover agreements that do not make the invention publicly available, and because Helsinn’s development agreement does not remove any knowledge already in the public domain, Helsinn argues that the agreement does not undermine the patentability of the product.

Teva counters that Helsinn’s catch-all interpretation leads to irreconcilable redundancies and conflicts with two centuries’ worth of judicial decisions on the meaning of the term “on sale.” Moreover, Teva also contends that its interpretation would not render the term “otherwise” superfluous; rather, it acknowledges the overlap between the three categories listed in § 102(a)(1) in order to prevent confusion. Indeed, the noscitur a sociis canon also does not support Helsinn’s interpretation, according to Teva, because this doctrine only applies where there are two potential meanings of an ambiguous term to choose between. Because the canon cannot be invoked to change a clear term’s meaning, Teva maintains, it therefore cannot modify the on-sale provision. Additionally, the canon does not support Helsinn’s view because Congress enacted the provisions of §102(a)(1) at various times, according to Teva, and for the same reason Helsinn’s reliance on Supreme Court precedent is misplaced; the cases that Helsinn cites involve lists created entirely at once, and Teva argues that the AIA’s staggered implementation therefore precludes noscitur a sociis.

THE INFLUENCE OF LEGISLATIVE HISTORY

Helsinn argues that the legislative history surrounding the 2011 amendment to § 102(a)(1) requires the same result as the plain language interpretation of the section itself: the “on sale” bar does not apply to sales that do not make the invention publicly available. Helsinn points to proposed patent reform bills from 2005 onward which demonstrate Congress’ concern that the prior art patentability restriction be limited by the public-availability requirement. The AIA’s two eponymous sponsors also confirm the catch-all provision’s limitation to the “on sale” bar, according to Helsinn, as both Senator Leahy and Representative Smith explain that they intended the amendment to prevent private offers or sales of inventions from triggering the prior art provision. In fact, Helsinn claims that Senator Kyl noted that the AIA amendment specifically meant to clarify the sales category of prior art, explaining that the first-to-file patent scheme provided sufficient incentive to file and that the bill no longer needed an expansive definition of prior art; Helsinn asserts that this confirms the company’s plain text interpretation. The lower court’s reasoning, according to Helsinn, merely attempts to minimize the sources Helsinn cites without asserting any history that actually supports its holding. Helsinn posits that Judge O’Malley’s concurring opinion, noting that Congress rejected bills eliminating sales from prior art, does not address the real question at issue: what triggers the on-sale provision. That Congress decided to retain and clarify the on-sale provision, rather than eliminate it, Helsinn contends, does not support Teva’s contention that the on-sale provision covers the confidential transaction at issue.

Teva replies that Helsinn’s legislative-history argument improperly relies on Senator Kyl’s post hoc analysis which came after his failure to repeal the on-sale provision. The provision’s drafting history, according to Teva, illustrates that the on-sale provision was initially contemplated without any public-availability provision or that it was used to replace that provision. Teva notes that contemporaneous statements from Congress indicate the general agreement that the on-sale provision would maintain its pre-amendment meaning if it were to remain in the statute, and Teva argues that Senator Kyl’s pre-amendment statements reinforce this agreement. That Senator Kyl so drastically changed his approach after the amendment passed maintaining the on-sale language emphasizes why such post-passage floor statements are so unreliable, according to Teva, and should not overcome the opinion within pre-passage legislative history that Teva puts forth.

WHICH INTERPRETATION BETTER SERVES AIA’S PURPOSES?

Helsinn claims that, beyond the plain text interpretation and legislative history, AIA’s stated purposes also support its interpretation of § 102(a)(1). Congress aimed to harmonize U.S. patent law with the patent systems of other countries, Helsinn maintains, including those of China, Korea, Japan and many European countries, by shifting from a first-to-invent to a first-to-file system. This new system incentivizes prompt filing and worked to resolve the issue of secret commercialization that plagued the earlier system, and Helsinn argues that Congress’ decision to narrow the on-sale provision aligns with the adjusted incentives. Helsinn also notes that the lower court’s interpretation would render AIA’s post-grant-review procedure completely unmanageable, citing Senator Kyl for support, as the alternative tribunals were not designed to handle the intense discovery required in secret-sale claims. Helsinn alleges that Teva’s interpretation would create significant uncertainty in the U.S. patent system and therefore stifle innovation, particularly in small companies requiring outside capital; therefore, Helsinn posits that Teva’s view should not displace the plain-text interpretation that Helsinn puts forth.

Teva, in response, argues that Helsinn’s interpretation would undermine the AIA’s purposes because it would allow inventors to extend their monopoly over an invention by entering into pre-patenting commercialization agreements subject to confidentiality. Teva notes that, though Helsinn’s agreement only involved one other party, Helsinn’s interpretation would not prevent a company from engaging in such secret sales with multiple companies or even from forcing consumers to sign such confidentiality agreements to further extend the life of the monopoly surrounding the invention. Teva also asserts that Helsinn’s international arguments are unconvincing: just because the U.S. sought to become more aligned with international patent law does not mean that the U.S. sought alignment in every aspect. Teva further claims that nothing in the provision’s text limit “public” to exclude distributors such as MGI, that the $11 million deal with MGI constitutes the buyer-seller relationship of a typical commercial sale, and that Helsinn could have avoided undermining the product’s patentability by seeking an investor rather than a buyer to develop the drug.