Your company has a new product. You think you may pursue a patent eventually, but there are other concerns right now. Other concerns include further development and marketing of the product. In fact, other concerns may include the immediate survival of the company.

Can you delay filing a patent application? To answer this question, you should seek legal counsel now. Legal counsel can help you determine whether there is a deadline for filing a patent application, as discussed in more detail below.

For a patent application to succeed, the invention must be new within the meaning of the patent law. In other words, the invention must not be Prior Art. Prior Art is a term encompassing prior technology.

An item becomes Prior Art against a later filed patent application if the item is "on-sale" more than one year before filing a patent application. "A person shall be entitled to a patent unless. . . the invention was. . . on-sale in this country, more than one year prior to the date of the application for patent." 35 U.S.C. § 102 (b).

The term "on-sale" has a special meaning in U.S. law. No public disclosure of the invention is necessary for application of this "on-sale" provision; the entire structure of the product placed "on-sale" becomes Prior Art. The issue is not whether the marketing discloses the invention, but whether the marketing relates to a device that embodies the invention. Thus, in general, a confidentiality, or non disclosure agreement (NDA), will not prevent a finding of "on-sale."

This "on-sale" provision has been called a trap for the unwary, because it may apply to certain types of marketing even if no formal offer for sale occurs. Further, the "on-sale" provision may apply even if no product prototype exists.

The "critical date" is one year prior to the date of the patent application. The current state of the law is that an on-sale event occurs when two conditions are satisfied before the critical date. First, the product must be the subject of a commercial offer for sale. Second, the invention must be ready for patenting. The second condition may be satisfied in at least two ways: by implementation of the invention, or by drawings or other descriptions of the invention sufficiently specific to enable a person to make the invention.

How did the law reach its current state?

Historical Background - Erosion of the Invention Development Requirement

An on-sale event may be viewed as having two basic requirements. The first requirement is that a product embodying the invention be the subject of sufficient commercial activity. The second requirement is that the invention have sufficient development. A recurring issue has been, How much invention development is sufficient to trigger an on-sale event?

Decades ago, a prominent line of court cases held that an on-sale event could not be created unless the product embodying the invention was actually "on hand" in inventory. For example, the Court of Appeals for the Second Circuit stated, "The [statutory] provision ought to be construed favorably to patentees. . . . [If patented articles are not on hand ready to be delivered to any purchaser], they cannot be said to be on sale." Burke Electric Co. v. Independent Pneumatic Tool Co., 234 F. 93, 93 (2d Cir. 1916). See Also, McCreery Engineering Co. v. Massachusetts Fan Co., 195 F. 498, 502 (1st Cir. 1912) (" 'on sale' intended by the statute [does not encompass] agreements which contemplate both a future production and a future transfer of title.").

Subsequently, in a case less favorable to patent owners, the Second Circuit rejected the "on hand" requirement, stating, "102(b) bars an application for patent filed more than one year after the solicitation of an order for a specific article to be produced later, where the following requisites are present: (1) The complete invention claimed must have been embodied in or obvious in view of the thing offered for sale. . . 2). . . [implementation of the invention] . . ." Timely Products Corp. v. Arron, 523 F. 2d 288, 302 (2d 1975).

Subsequently, in a case even less favorable to patent owners, the Federal Circuit rejected the implementation requirement of Timely Products, stating, "we conclude that [implementation] of the claimed invention has not been and should not be made an absolute requirement of the on-sale" provision of U.S. patent law. UMC Electronics Co. v. United States, 816 F. 2d 647, 656 (Fed. Cir. 1987).

The Pfaff Case

Prior to the critical date, a Mr. Pfaff showed a sketch of his new computer chip socket to representatives of Texas Instruments, prepared detailed engineering drawings that described the design and materials to make the sockets, and received confirmation of a previously placed oral purchase order for the sockets. Mr. Pfaff did not make a prototype of the sockets before offering to sell them in commercial quantities. Mr. Pfaff first implemented the sockets after the critical date.

In a patent infringement suit, the defendant argued that the invention was on-sale prior to the critical date and therefore argued that the patent is invalid under § 102 (b). The trial court, however, relied on the fact that Mr. Pfaff implemented after the critical date and, therefore, rejected the §102(b) on-sale defense.

On petition to the U.S. Supreme Court, however, the defendant prevailed. The Supreme Court concluded that the on-sale bar applies when two conditions are satisfied before the critical date:

First, the product must be the subject of a commercial offer for sale. . . .

Second, the invention must be ready for patenting. That condition may be satisfied in at least two ways: by [implementation of the invention] before the critical date; or by proof that prior to the critical date the inventor had prepared drawings or other descriptions of the invention that were sufficiently specific to enable a person skilled in the art to practice the invention.

Pfaff v. Wells Electronics, 119 S.Ct. 304, 311-312 (1998).

Applying this newly promulgated second condition to the facts of Pfaff, the Supreme Court reasoned that, because the manufacturer was able to produce the sockets using Pfaff's pre-critical-date drawings and specifications, the invention was ready for patenting; Pfaff's patent is invalid because the invention had been on sale for more than one year before he filed his patent application. Id. at 312.

Conclusion

In certain commercial contexts, even non-public documents, containing an enabling description of the invention, may be Prior Art to a later filed patent application. Thus, in certain commercial contexts, a secret lab notebook, or other documentation of the invention, may actually cause a § 102 (b) event.

The patent laws of most other countries have provisions similar to some parts of § 102 (b) but do not have a one year grace period.

Thus, even if you wish to delay filing a patent application, you should seek legal counsel early. Legal counsel can help you determine if and when filing deadlines exist.