While an offer for sale must qualify as a commercial offer under the law of contracts to trigger the on-sale bar under 35 U.S.C. § 102(b), it is not necessary that an actual sale ever be consummated. Here, for example, a fax detailing price and delivery terms, soliciting an order, and explaining that the patentee would “arrange everything,” was found to be sufficiently definite to qualify as a commercial offer. “An offer to sell is sufficient to raise the on-sale bar, regardless of whether that sale is ever consummated.” It may therefore be best when counseling clients to emphasize that a patent application should be filed before even entering into discussions regarding the sale of a new product.
Background / Facts: The patent being asserted here in response to a generic drug ANDA submission is directed to a crystalline calcium salt of a tetrahydrofolic acid (“MTHF”). More than one year before filing the corresponding application, the patentee received interest from a potential customer and sent them a fax detailing the price and delivery terms, soliciting an order, and explaining that the patentee would “arrange everything.”
Issue(s): Whether the fax was sufficiently definite to qualify as a commercial offer even though no sale ever took place
Holding(s): Yes. “[The patentee’s] fax was not an unsolicited price quote sent to numerous potential customers.” Rather, it was a “detailed fax—providing essential price, delivery, and payment terms” and “contained all the required elements to qualify as a commercial offer for sale.” “Notably, [the patentee] did not qualify his offer to sell MTHF. To the contrary, he expressly invited [the other party] to send its purchase order to his attention and assured it that he would ‘arrange everything.’” “Regardless of whether the communications between [the parties] were sufficient to establish a binding contract for the sale of MTHF, they confirm that, at a minimum, both parties understood that [the] fax was an offer to sell the product. Although [the patentee] ultimately failed to deliver any MTHF to [the customer] … this is not dispositive. An offer to sell is sufficient to raise the on-sale bar, regardless of whether that sale is ever consummated.”