Under the U.S. patent statute (35 U.S.C. §102(b)), a valid patent cannot be obtained for an invention that has been on sale in this country more than one year prior to the date of the application for patent in the United States.
A recent decision by the Supreme Court, Pfaff v. Wells Electronics, Inc., 48 USPQ2d 1641 (U.S. 1998) has provided a new standard for determining whether a sale establishes an on-sale bar. In the case at issue, an inventor, Mr. Pfaff, who sued an accused infringer lost when the Supreme Court determined that his invention was on sale for more than one year before the patent application was filed. The relevant facts are as follows. Mr. Pfaff showed a sketch of his invention to a customer in March of 1981. On April 8, 1981, the customer placed an order for over 30,000 units of the invention. The order was filled by Mr. Pfaff in July of 1981. A patent application was filed by Mr. Pfaff on April 19, 1982, more than one year after the sketch was shown, and more than one year after the order for sale was taken. The patent subsequently issued in 1985.
The defense asserted by the accused infringer, or defendant, was that the claims of the patent were invalid because the invention was on sale for more than one year before the application was filed. The Supreme Court agreed with the defendant. Mr. Pfaff argued in part that the invention was not on sale because the invention was not complete. Mr. Pfaff further argued that the invention was not complete because there was no "reduction to practice" until the order was filled, less than one year before the application filing date. The Supreme Court disagreed with the conclusion that the invention was not complete until there was a reduction to practice, stating that while reduction to practice is sufficient evidence of completion, it does not follow that proof of reduction to practice is required in every case.
The Court established two conditions which must be satisfied for the on-sale bar to apply: (1) the product must be the subject of a commercial offer for sale; and (2) the invention must be ready for patenting.
Clearly, the first condition was satisfied by the acceptance of the purchase order by Mr. Pfaff. With regard to the second condition, the Court established two alternative ways of satisfying the requirement that the invention is ready for patenting: (1) providing proof of reduction to practice before the critical date (one year before the date of filing); or (2) providing 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. In the present case, the second way was satisfied by Mr. Pfaff's drawings.
This case serves as a reminder that it is very risky to delay filing for patent protection once an invention has been discussed with prospective customers.