I've worked with a lot of inventors, ranging from sophisticated universities to guys who just like to tinker with stuff in their garage. In nearly every case, the inventor considers his or her invention to be the greatest thing since sliced bread. Naturally, before filing a patent application, the inventor will often try to generate commercial interest in the invention.
Consider this example. It's a nice hot summer day so Mr. Inventor decides to take a break from the garage heat and do a little marketing. Mr. Inventor writes to Manufacturer: "I have developed a machine which can slice bread better than anyone. I could provide the machine and/or the technology and work on a license royalty basis." About six months later, Manufacturer and Mr. Inventor finally meet. They may even sign a confidential disclosure agreement. Everything seems to be going along nicely. Then, all of a sudden, Manufacturer cancels the next meeting. After a more than a year of trying to negotiate with Manufacturer, Mr. Inventor receives a letter from Manufacturer indicating that Manufacturer "had developed its own machine for slicing bread and therefore we are not interested in purchasing such a machine from you."
Mr. Inventor now wants help. Mr. Inventor wants to seek patent protection and sue Manufacturer for patent infringement once the patent issues. However, there's a big hitch: the Patent Act does not permit a patent on any invention that was "on sale" in this country more than one year prior to the patent application date. The federal courts have construed the statute so that offers to sell trigger the one-year bar date. So is that letter that Mr. Inventor wrote in the summer more than a year ago a problem?
If you'd asked me that question a few months ago, I would have said yes. Indeed, in a fact scenario similar to the one described above, a federal district judge thought so and held that a patent was invalid because the on-sale one-year bar date was triggered by a letter similar to the one from Mr. Inventor to Manufacturer. However, in a landmark decision, the Federal Circuit (the exclusive appeals court for patent infringement cases) reversed that decision, finding that only a commercial offer for sale – one in which the party could make into a binding contract by simple acceptance -- constitutes an offer for sale that would bar patent rights. Mr. Inventor's letter did not meet this test.
Naturally, you are now thinking, I'm not a lawyer so what is an "offer for sale" in the contract sense. That can be a gray area. A few months ago, however, the Federal Circuit issued another opinion which helps clarify the situation (at least to some of us lawyers). In general, an inventor may be able to solicit pricing information from potential distributors or consumers to see what they feel the invention is worth. In such a situation, there is likely no intent from the inventor to be bound by a contract so those actions are not "offers." The inventor may also be able to publish preliminary data sheets and promotional information in preparation for putting the item on sale. These are generally construed as "invitations for offers to sell" rather than an "offer" itself. But, I caution, it really depends on the facts.
Clearly, the safe thing was for Mr. Inventor to get a patent application on file before any commercial activities occurred. Of course, that is not always economically or practically feasible. Thus, at a minimum, if you are faced with this situation, you should sit down with an attorney to discuss your marketing plans in order to determine if you are somehow jeopardizing your United States patent rights. Otherwise, the ability to protect your bread slicing machine may be "toast."