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Peter A. Nieves
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Practice Areas
Intellectual Property and Technology

Offering an Invention for Sale Can Result in a Loss of Potential Patent Rights

Monday, July 07, 2008

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Patent law in the United States provides a one-year grace period for filing a provisional or utility patent application after the performance of certain commercial activities. Included in these commercial activities is the offering of an invention for sale. In such a case, if a provisional or utility patent application is not filed within one year of offering the invention for sale, the invention is considered donated to the public and no longer patentable.

The on-sale bar is triggered if (1) the invention at issue has become the "subject of a commercial offer for sale" more than one year prior to the filing of the patent application; and (2) the invention is ready for patenting.

To satisfy the commercial offer for sale component, the offer must be a commercial offer regarding the patented invention. Only an offer that the other party can make into a binding contract by simple acceptance (assuming consideration), constitutes an offer for sale. An offer for sale does not have to be accepted to implicate the on-sale bar. Nor is there a requirement that the seller makes a profit. Moreover, the offer for sale does not have to be made by the inventor. It may be made by anyone. Indeed, the on-sale bar applies to an invention that is stolen and later sold by an innocent buyer of that invention who subsequently offers it for sale. It is worth noting, however, that because a commercial offer requires an embodiment of the invention (i.e., a particular implementation or method of carrying out the invention) to be on sale, offering to sell or license patent rights is not considered a commercial offer, particularly if additional development work is necessary before the embodiment can be used or sold. It is not necessary, however, for all embodiments of an invention to be on-sale; one embodiment is enough to trigger the on-sale bar.

To satisfy the second component, requiring that the invention be ready for patenting, there must either be (1) proof of reduction to practice of the invention before a critical date (i.e., prior to one year before a patent application was filed); or (2) 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.

Reduction to practice of an invention can be proven by showing that the invention was produced (e.g., the product was made). It should be noted, however, that actual production of the invention is not required to prove reduction to practice.

For drawings or other descriptions of the invention to be enabling, they must be in such full, clear, concise, and exact terms as to enable any person skilled in the art to make and use the invention. Inventor preparation of drawings or other descriptions of the invention that are sufficiently specific to enable a person skilled in the art to practice the invention is enough to begin the one-year grace period, even if the invention was never built. Examples of enabling drawings and descriptions include: a description that is later used in the description of a patent application; a drawing identical to a figure later used in a patent application; and a brochure describing or showing the invention that is provided to the public at a trade show, where the brochure is in enough detail to enable a person skilled in the art to practice the invention.

Offering a patentable invention for sale has the potential to keep an inventor from obtaining a patent on that invention. It is, therefore, beneficial to consult a patent attorney prior to offering an invention for sale, such as prior to attending a trade show intending, among other things, to show the invention.

This article is intended to serve as a summary of the issues outlined herein. While it may include some general guidance, it is not intended as, nor is it a substitute for, legal advice. Your receipt of Good Company or any of its individual articles does not create an attorney-client relationship between you and Sheehan Phinney Bass + Green or the Sheehan Phinney Capitol Group. The opinions expressed in Good Company are those of the authors of the specific articles.