Selling the output of a secret process for more than a year forfeits the patent on the process under the America Invents Act

2024-08-12Trade Secrets

Celanese International Corporation v. International Trade Commission, 111 F.4th 1338 (Fed. Cir. Aug. 12, 2024) (precedential) (Reyna, J., joined by Mayer and Cunningham, JJ.), No. 2022-1827, affirming the Commission's determination in Investigation No. 337-TA-1264, Certain High-Potency Sweeteners, Processes for Making Same, and Products Containing Same

Celanese asserted claims of United States Patent Nos. 10,023,546, 10,208,004 and 10,590,095, effective filing date September 21, 2016, against imports of the sweetener Ace-K by Anhui Jinhe and others. Celanese had undisputedly practiced the process in secret in Europe and sold Ace-K made by it in the United States before the critical date of September 21, 2015. The administrative law judge found the claims invalid under the on-sale bar of Section 102(a)(1) of Title 35 of the United States Code, the Commission declined review, and the Federal Circuit affirmed. The court reviewed its decisions from D.L. Auld Co. v. Chroma Graphics Corp. onward holding that selling products made by a secret process before the critical date bars a patent on the process, and Judge Learned Hand's statement in Metallizing that an inventor "must content himself with either secrecy, or legal monopoly." Applying Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., it presumed that Congress adopted the settled construction when it reenacted "on sale" in the America Invents Act and rejected Celanese's arguments: substituting "claimed invention" for "invention" is "a clerical refinement of terminology"; "otherwise available to the public" does not require that a sale disclose the invention; Sections 271(g) and 273(a) govern infringement, not patentability; and Helsinn had already rejected the Leahy colloquy. The Act "did not constitute a foundational change" in the on-sale bar.

What it changesThe patent-or-trade-secret decision for a training method, a data pipeline or an inference optimization has to be made before the first paid output, because the first sale of what the process produces starts the one-year clock on the process claims, and after that year the choice is made for the company. A model trained by a proprietary method and sold as an application programming interface, a dataset built by a secret curation process and licensed, or a fine-tuned model delivered to a customer are all sales of the product of the process, and nothing in the America Invents Act changes the result. The compliance step is procedural: the invention disclosure form should ask when the first commercial use of the output occurred or will occur, and the docket should carry that date as a bar date for any process claim. The decision concerns the inventor's own sales; the Section 273 prior-user defense, which protects a company that kept a process secret against another party's patent, was kept separate.

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Burbage Law is the practice of Jon Burbage, a registered patent attorney. 342 United States patents have issued from applications he wrote; the full list is on the Patents page. More about Jon Burbage.

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