Practitioners of U.S. securities laws should take note of a major Federal Circuit Appeals court opinion entered in May 2017 (Helsinn v. Teva) that stresses the importance of carefully timing the submission of patent applications with the U.S. PTO and complying with SEC rules on disclosing material transactions. 

          The securities laws require that material transactions of an issuer be publicly disclosed in periodic reports or in interim Form 8-K filings. 

          The Helsinn case puts an interesting twist to such disclosures by holding that merely publicly disclosing the sale of products (in a SEC filing) covered by claims under a patent application which has NOT been filed yet with the U.S. PTO will bar the grant of a patent under the prior art doctrine even though the details of the invention-claims have not been disclosed in such SEC filing. (The Helsinn court refused to rule whether a secret (undisclosed ) sale would trigger such bar.)

          Issuers should strategically plan the timing of a major sale of products covered by a prospective un-filed U.S. patent application to ensure that such application would not be later barred under section 102 of the AIA for lack of novelty grounds. 

          This is a rare situation where compliance with the rules of one legal practice discipline (SEC material transactions rules) may undercut compliance with another (PTO rules on granting patents). Counsel should adopt a multi-disciplinary mentality when representing clients hoping to commercialize their IP prior to the filing of a corresponding patent application. 

          In June 2017, Helsinn petitioned for en banc review and asked the following question:

Does mere public disclosure of the “existence” of a sale trigger the on-sale bar under 35 U.S.C. § 102(a)(1) of the America Invents Act (“AIA § 102(a)(1)”), even though the invention was not made “available to the public” before the critical date?

          Will keep you updated on the progress of this appeal. 

#IPO #Patents #Securities