The recent Federal Circuit Court of Appeals decision in Sanho Corp. v. Kaijet Technology International Limited, Inc., No. 2023-1336 (Fed. Cir. July 31, 2024), has clarified an important aspect of the America Invents Act (the “AIA”): What constitutes a “public disclosure” of an invention? By ruling that a private, non-confidential sale does not necessarily qualify as a public disclosure under 35 U.S.C. § 102(b)(2)(B), the court has narrowed an important exception to prior art. This decision offers important guidance for navigating the first-to-file landscape of patent law.
Background
The AIA, enacted in 2011, transformed the U.S. patent system from a “first-to-invent” to a “first-inventor-to-file” regime. Central to this transformation is 35 U.S.C. § 102(b)(2)(B), a provision designed to protect inventors who publicly disclose their inventions before filing a patent application. This “safe harbor” provision states that a disclosure in a patent application shall not be considered prior art if “the subject matter disclosed had, before such subject matter was effectively filed under subsection (a)(2), been publicly disclosed by the inventor.”
The precise meaning of “publicly disclosed” has been murky since the AIA’s enactment. Does it include any non-confidential disclosure, such as private sales? Or does it require a more comprehensive revelation to the general public?
The Sanho v. Kaijet Decision
The case revolves around U.S. Patent No. 10,572,429 (“the ‘429 patent”), owned by Sanho Corporation, which was challenged by Kaijet Technology in an inter partes review proceeding. Kaijet Technology challenged most claims of the ‘429 patent as obvious and, according to the court, each obviousness ground included U.S. Patent Application Publication No. 2018/0165053, known as Kuo, a prior art reference with an earlier effective filing date than Sanho’s patent.
Sanho argued that Kuo should not be considered prior art under § 102(b)(2)(B) because the subject matter of the ‘429 patent had been “publicly disclosed” through a private sale of its HyperDrive product before Kuo’s effective filing date. They contended that a non-confidential sale to a single customer constituted a public disclosure under the statute.
The Federal Circuit rejected this broad interpretation, emphasizing that “publicly disclosed” in § 102(b)(2)(B) is distinct from and narrower than mere “disclosure.” The court reasoned that for the exception to apply under the facts of this case, the relevant subject matter must have been made reasonably available to the public, not just revealed in Sanho’s private transaction.
Analyzing “Reasonably Available to the Public”
The Federal Circuit’s decision in Sanho v. Kaijet provides important insight into what it means for an invention to be “reasonably available to the public” under the AIA. The court’s analysis is nuanced and multifaceted, touching on several key aspects of patent law and statutory interpretation.
- Distinguishing “Disclosed” from “Publicly Disclosed”
The court emphasized that the phrase “publicly disclosed” in § 102(b)(2)(B) is distinct from and narrower than mere “disclosure” used elsewhere in the statute. This distinction is critical, as it sets a higher bar for invoking the prior art exception. The court reasoned that if Congress had intended “publicly disclosed” to encompass all disclosures, including private sales—even when not subject to confidentiality—it could have simply used the term “disclosed” without the “publicly” qualifier.
- Interpreting Congressional Intent
The court delved into the purpose of § 102(b)(2)(B), noting that it appears designed to protect inventors who share their inventions with the public before filing a patent application. This interpretation aligns with the fundamental goal of the patent system: to encourage the public dissemination of innovations in exchange for temporary exclusivity rights.
- Rejection of “Public Use” Judicial Interpretations
The court also rejected Sanho’s argument “that the language ‘publicly disclosed’ incorporates earlier judicial interpretation of the word ‘public’ in the context of invalidating ‘public use’” under 102(a)(1). According to the court, this argument, again, impermissibly conflates 102(b) and 102(a). As the court explains, “While public disclosure of the features of the invention under section 102(b)(2)(B) could be accomplished through a public disclosure involving a public use, there is no requirement that such a public use necessarily ‘publicly disclose[s]’ the invention.”
- Emphasis on Public Accessibility
While not providing an exhaustive definition of what constitutes “reasonably available to the public,” the court’s analysis suggests that the invention must be accessible and comprehensible to the public in a meaningful way. This goes beyond mere technical disclosure to a single party or a limited group.
Implications
This ruling has important implications, and a few key takeaways include:
- Given the fact specific caselaw, patent applications should preferably be filed prior to any public use or sale.
- To minimize risk, it is best to consult with patent counsel prior to any planned public disclosure or sale.
- Maintain detailed records of all disclosures and their public accessibility.
Again, this decision relates specifically to the facts of this case. As the court stated, “We need not decide exactly what is necessary for demonstrating that a sale publicly disclosed the relevant subject matter, or whether to apply the prevailing standard for when a printed publication is sufficiently publicly accessible to qualify as prior art.”
While a private sale was deemed insufficient in this case, such a sale may be sufficient in other cases. And other forms of disclosure—such as presentations at public conferences, publications in widely accessible journals, or detailed online postings—might meet the “publicly disclosed” standard, depending on their reach and comprehensiveness.
In short, the Sanho v. Kaijet decision provides a helpful clarification of the standards for public disclosure with respect to AIA interpretation of § 102(b)(2)(B): “public disclosure” must truly be “public.”
