Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc.

A commercial sale to a third party who is required to keep the invention confidential may place the invention “on sale” under § 102(a).

January 22, 2019

GENERICally Speaking: A Hatch Waxman Litigation Bulletin

Case Name: Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc., No. 17-1229, 139 S. Ct. 628 (Jan. 22, 2019) (Thomas, J. delivered the opinion for a unanimous Court), on cert. from the Federal Circuit, 855 F.3d 1356. 

Drug Product and Patent(s)-in-Suit: Aloxi® (palonosetron hydrochloride); U.S. Pat. No. 8,598,219 (“the ’219 patent”) 

Nature of the Case and Issue(s) Presented:  Helsinn acquired the right to develop palonosetron in 1998. In early 2000, it submitted protocols for Phase III clinical trials to the FDA, proposing to study a 0.25 mg and a 0.75 mg dose of palonosetron. In September 2000, Helsinn announced that it was beginning Phase III clinical trials and was seeking marketing partners for its palonosetron product. Helsinn found its marketing partner in MGI, and entered into two agreements: a license agreement and a supply-and-purchase agreement. The license agreement granted MGI the right to distribute, promote, market, and sell the 0.25 mg and 0.75 mg doses of palonosetron in the US. In return, MGI agreed to make upfront payments to Helsinn and to pay future royalties on distribution of those doses. Under the supply and purchase agreement, MGI agreed to purchase exclusively from Helsinn any palonosetron product approved by the FDA. Helsinn in turn agreed to supply MGI however much of the approved doses it required. Both agreements included dosage information and required MGI to keep confidential any proprietary information received under the agreements.

Helsinn and MGI announced the agreements in a joint press release, and MGI also reported the agreements in its Form 8-K filing with the Securities and Exchange Commission. Although the 8-K filing included redacted copies of the agreements, neither the 8-K filing nor the press releases disclosed the specific dosage formulations covered by the agreements. On January 30, 2003, Helsinn filed a provisional patent application covering the 0.25 mg and 0.75 mg doses of palonosetron. Over the next 10 years, Helsinn filed four patent applications that claimed priority to the January 30, 2003, date of the provisional application. Helsinn filed its fourth patent application—the one at issue—in May 2013, and it issued as the ’219 patent. The ’219 patent covered a fixed dose of 0.25 mg of palonosetron in a 5 ml solution and was governed by the AIA.

Teva filed an ANDA referencing Aloxi. Helsinn sued Teva. In defense, Teva asserted that the ’219 patent was invalid because the 0.25 mg dose was “on sale” more than one year before Helsinn filed the provisional patent application covering that dose in January 2003.

The trial court determined that the “on sale” provision did not apply. It concluded that an invention is not “on sale” unless the sale or offer in question made the claimed invention available to the public. Because the companies’ public disclosure of the agreements between Helsinn and MGI did not disclose the 0.25 mg dose, the court determined that the invention was not “on sale” before the critical date. The Federal Circuit reversed, concluding that “if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of sale” to fall within the AIA’s on-sale bar. Because the sale between Helsinn and MGI was publicly disclosed, it held that the on-sale bar applied. The Supreme Court affirmed.

Why Teva Prevailed:  In prior decisions, Supreme Court precedents suggested that a sale or offer of sale need not make an invention available to the public. Other cases focused on whether the invention had been sold, not whether the details of the invention had been made available to the public or whether the sale itself had been publicly disclosed. Moreover, the Federal Circuit had long held that “secret sales” can invalidate a patent.

The new § 102 retained the exact language used in its predecessor statute (“on sale”) and added only a new catchall clause (“or otherwise available to the public”). The addition of “or otherwise available to the public” was simply not enough of a change for the Court to conclude that Congress intended to alter the meaning of the reenacted term “on sale.” Helsinn disagreed, arguing that such a construction would read the word “otherwise” out of the statute. Helsinn argued that the associated-words canon requires the Supreme Court to read “otherwise available to the public” to limit the preceding terms in § 102 to disclosures that make the claimed invention available to the public. But neither of the cases cited by Helsinn addressed the reenactment of terms that had acquired a well-settled judicial interpretation. Moreover, according to the Supreme Court, Helsinn’s argument placed too much weight on § 102’s catchall phrase. Like other such phrases, “otherwise available to the public” captured material that did not fit neatly into the statute’s enumerated categories but was nevertheless meant to be covered. Given that the phrase “on sale” had acquired a well-settled meaning when the AIA was enacted, the Supreme Court declined to read the addition of a broad catchall phrase in a way that would upset that body of precedent.

Oren D. Langer


Managing Partner, New York Office
Member of Executive Board

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