<em> Sanho Corp. v. Kaijet Tech. Int'l Ltd., Inc. </em>
A recent Federal Circuit decision has narrowed the public disclosure requirement for obtaining patents. The requirement now limits what qualifies as “reasonably available to the public” under the prior art requirement for obtaining a patent. A private sale was not found to meet the narrowed requirement.
108 F.4th 1376 (Fed. Cir. 2024)
A recent Federal Circuit decision has narrowed the public disclosure requirement under the America Invents Act (“AIA”). During the prosecution process to obtain a patent, prior art can be applied to block a patent from being received if it anticipates and predates the subject matter disclosed in the patent application. Prior art is “any evidence that your invention is already known.” Prior art is used under 35 U.S.C. § 102 rejections for anticipation and under 35 U.S.C. § 103 rejections for obviousness.
Prior art has a so-called “safe harbor” that allows inventors to attribute the disclosure to themselves, predate the prior art reference, or identify that both were commonly owned or assigned at filing. The public disclosure requirement is one of three “safe harbor” pathways that can remove prior art from United States Patent and Trademark Office (“USPTO”) patent prosecution.
The provisions for prior art disclosures come from 35 U.S.C. § 102(b). A disclosure can be removed from consideration as prior art under any of the three pathways. The first pathway is under § 102(b)(1)(A), which requires that the prior art was made from the inventor’s subject matter either directly or indirectly from the inventor. The second pathway falls under § 102(b)(1)(B), where the inventor had made a public disclosure of the material in the cited prior art before the effective filing date of the prior art so long as the disclosure was within one year of the inventor’s effective filing date. The final pathway falls under § 102(b)(2)(C) and involves common ownership. If the prior art and the invention are owned by or assigned to the same person at the time of filing, there is no valid prior art application. If an inventor can apply any of the three pathways above to a prior art reference, the reference cannot be used to prevent the application from issuing as a patent.
On July 31, 2024, the United States Court of Appeals for the Federal Circuit decided Sanho Corp. v. Kaijet Technology International. The appeal came from the Patent Trial and Appeal Board at the USPTO. The Board found that a private sale of a product (the “Kuo sale”) in this case, the HyperDrive was not exempt under § 102(b)(2)(B) and was therefore considered prior art. The Federal Circuit affirmed the decision. Each ground for rejection relating to obviousness relied on prior art combinations that included the Kuo reference. The Kuo reference had an effective filing date of December 13, 2016, which predated the earliest priority date of the patent in question: April 27, 2017. The question at issue was whether the HyperDrive sale was a public disclosure under the applicable section of the Manual of Patent Examining Procedure (“MPEP”). The patent holder offered the HyperDrive for sale on November 17, 2016, and an order was placed for 15,000 units on December 6, 2016.
Sanho narrows the public disclosure requirement under § 102(a)(2) and the related exemption under § 102(b)(2) to require the invention be “reasonably available to the public.” Thus, a private sale like in Sanho does not meet the Federal Circuit’s requirement for the § 102(b)(2)(B) exemption.
Because the details surrounding the invention were not made publicly available through the product or disclosures, the federal circuit found that the publicly disclosed requirement under § 102(b)(2)(B) was not satisfied through the private sale. The court did not address some clarifying points, such as Sanho employees working with the patentee and a public Kickstarter campaign. These issues may warrant further review.
The outcome of this case indicates that inventors should take considerable care when disclosing an invention before filing their patent application. Inventors should also file a patent application before any sales–private or otherwise to ensure the disclosure requirement is not an issue. After Sanho, there is a risk that a disclosure may only be considered prior art if it is sufficiently public. Still, a disclosure could also be prior art used against the inventor’s own application. While AIA disclosure exemptions are still evolving, the current best practice is to file a patent application before any planned disclosure or sale, whether private or public.