{"id":57515,"date":"2024-08-06T20:03:00","date_gmt":"2024-08-06T20:03:00","guid":{"rendered":"https:\/\/www.dinsmore.com\/?post_type=publications&#038;p=57515"},"modified":"2025-11-24T18:31:47","modified_gmt":"2025-11-24T18:31:47","slug":"excluding-prior-art-based-on-private-sales-federal-circuit-says-no","status":"publish","type":"publications","link":"https:\/\/www.dinsmore.com\/publications\/excluding-prior-art-based-on-private-sales-federal-circuit-says-no\/","title":{"rendered":"Excluding Prior Art Based on Private Sales? Federal Circuit Says No."},"content":{"rendered":"\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.dinsmore.com\/wp-content\/uploads\/2024\/08\/IP-private-sales-Header.jpg\" alt=\"\"\/><\/figure>\n\n\n\n<p>A private sale may start an inventor\u2019s one-year filing clock, but it likely won\u2019t save a patentee from an intervening prior art reference. On July 31, 2024, in <a href=\"https:\/\/cafc.uscourts.gov\/opinions-orders\/23-1336.OPINION.7-31-2024_2359524.pdf\">a precedential decision<\/a>, the U.S. Court of Appeals for the Federal Circuit (CAFC) elaborated on the prior art public sale exception set forth in 35 U.S.C. \u00a7102(b)(2)(B).&nbsp; Specifically, the CAFC affirmed that a secret sale of a product would not be sufficient to pre-date a prior art reference under 35 U.S.C \u00a7102(b)(2)(B).&nbsp;<\/p>\n\n\n\n<p>What patent owners should know:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Private sales are not likely to help you avoid patent applications of another filed between the private sale and your patent application.<\/li>\n\n\n\n<li>If you\u2019re ready to make a sale, try to get your patent application filed first.\u00a0<\/li>\n\n\n\n<li>When arguing a prior art exception based on a prior public disclosure, be sure to provide all relevant corroborating evidence to support sufficiency of the prior public disclosure.<\/li>\n\n\n\n<li>Don\u2019t forfeit potential arguments through failure to raise them in your opening brief.\u00a0\u00a0<\/li>\n<\/ul>\n\n\n\n<p>Generally speaking, 35 U.S.C \u00a7102(a) sets forth criteria for novelty and disclosures that qualify as prior art, and 35 U.S.C. \u00a7102(b) sets forth criteria for exceptions to the disclosures that would qualify as prior art under 35 U.S.C. \u00a7102(a). This case turns on the applicability of the 35 U.S.C. \u00a7102(b)(2)(B) exception, which says a disclosure is <em>not<\/em> deemed prior art under (a)(2) if \u201cthe subject matter disclosed had, before such subject matter was effectively filed under subsection (a)(2), been publicly disclosed by the inventor \u2026 who obtained the subject matter disclosed \u2026 from the inventor.\u201d Basically, if you disclose your invention to the public, and someone files an intervening application after that public disclosure but before you file, you can pre-date the intervening application based on the earlier public disclosure.<\/p>\n\n\n\n<p>In this case, the Appellant, Sanho Corp., challenged the decision by the Patent Trial and Appeal Board (PTAB), which held that all challenged claims (as part of an Inter Partes Review petition filed by Kaijet Technology International Limited, Inc.) of U.S. Patent No. 10,572,429 (\u201cthe \u2018429 patent\u201d) were unpatentable as obvious over, in part, U.S. Patent Application Publication No. 2018\/0165053 (\u201cKuo\u201d). <em>Sanho Corp., v. Kaijet Technology International Limited, Inc.<\/em>, 2023-1336 at 2-3 (Fed. Cir. July 31, 2024). Sanho asserted that the inventor of the \u2018429 patent, prior to its effective filing date, \u201cpublicly disclosed\u201d the relevant subject matter of Kuo through a private sale of a product (referred to as the HyperDrive) that allegedly embodied the claimed invention. <em>Id. <\/em>at 2-3<em>. <\/em>&nbsp;Sanho argued Kuo is disqualified from being prior art. <em>Id. <\/em>The PTAB disagreed, stating that Sanho had failed to demonstrate that the invention was \u201cpublicly disclosed.\u201d <em>Id.<\/em> at 2-4.<\/p>\n\n\n\n<p>The CAFC agreed with the PTAB. First, the CAFC analyzed the plain language of the statute, reasoning that the terms \u201cpublicly disclosed\u201d are not the same as \u201cdisclosed.\u201d <em>Id.<\/em> at 8-9. Second, the CAFC looked at Sanho\u2019s assertion in view of the purpose of 35 U.S.C. \u00a7102(b), holding that \u201cpublicly disclosed by the inventor\u201d means that the invention \u201cis available to the public.\u201d <em>Id.<\/em> at 9-10. Third, the CAFC explained that the legislative history behind the prior art exceptions further supports the requirement that a \u201cpublic disclosure\u201d be made \u201cavailable to the public.\u201d <em>Id.<\/em> at 11. Sanho further argued that the sale constituted \u201cpublic use,\u201d but the CAFC reasoned that such an assertion improperly conflated \u201cpublic use\u201d and \u201cpublic disclosure.\u201d<em> Id.<\/em> at 11-13.<\/p>\n\n\n\n<p>The CAFC explained that the testimony established the sale of 15,000 HyperDrive products was private and arranged via private messages, and there was no \u201cpublic disclosure\u201d of the invention through this sale. <em>Id.<\/em> at 13-14. The CAFC also acknowledged the PTAB\u2019s rejection of Sanho\u2019s arguments pertaining to public disclosure of the alleged product via a Kickstarter campaign with descriptions and photographs due to Sanho\u2019s failure to raise this in its opening brief, as it was brought up instead in a reply brief. <em>Id.<\/em> at 4, n.1.<\/p>\n\n\n\n<p>Please reach out to your Dinsmore attorney should you have any questions about this ruling.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A private sale may start an inventor\u2019s one-year filing clock, but it likely won\u2019t save a patentee from an intervening prior art reference. On July 31, 2024, in a precedential decision, the U.S. Court of Appeals for the Federal Circuit (CAFC) elaborated on the prior art public sale exception set forth in 35 U.S.C. \u00a7102(b)(2)(B).&nbsp;\u2026<\/p>\n","protected":false},"author":8,"featured_media":0,"menu_order":0,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"tags":[],"publication-type":[12],"class_list":["post-57515","publications","type-publications","status-publish","format-standard","hentry","publication-type-legal-alerts"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.5 (Yoast SEO v26.9) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Excluding Prior Art Based on Private Sales? Federal Circuit Says No. - Dinsmore &amp; Shohl<\/title>\n<meta name=\"description\" content=\"Excluding Prior Art Based on Private Sales? 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