Full Federal Circuit Curbs On Sale Bar's Threat to Patents

Morrison Foerster Client Alert, July 12, 2016 Biotech and pharmaceutical companies received critical guidance from the Federal Circuit yesterday, when the en banc court exempted a broad category of common manufacturing and supply arrangements from the reach of the patent law’s “on sale” bar. In The Medicines Company v. Hospira, Inc., App. No. 14-1469 (Fed. Cir. 2016) (en banc), the Federal Circuit ruled unanimously that “the mere sale of manufacturing services by a contract manufacturer to an inventor to create embodiments of a patented product for the inventor does not constitute a ‘commercial sale’ of the invention” and does not create a potential bar to patentability under 35 U.S.C. § 102(b). The decision reduces the IP risk that smaller pharmaceutical companies faced when contracting out for manufacturing services during commercial development, and provides in-house counsel with signposts to craft agreements that will stay clear of the on sale bar