Federal Circuit: Offer for sale before invention occurs may bar patentability

Sometimes, marketing gets ahead of R&D.  This can happen when a company’s marketing group promises to deliver a product to a customer, and then turns to R&D and asks “can you create what I just sold.”  In situations like this, does marketing’s “advance offer for sale” bar patentability of the resulting invention?  According to a new decision from the U.S. Court of Appeals for the Federal Circuit, the answer is “yes” if certain other conditions occur.

In August Technology Corp. v. Camtek, Ltd. (Fed. Cir. Aug. 22, 2011), the Court considered whether August Technology’s offer for sale of an integrated circuit inspection system triggered an on-sale bar to patentability, even though the system was not yet invented.  The Court looked at activity after the offer for sale and determined that subsequent development rendered the system “ready for patenting” more than one year before August Technology applied for the patent.  Based on this activity, the Court confirmed that the on-sale bar was triggered because the offer for sale occurred more than one year before the patent application was filed, and the invention was also ready for patenting more than one year before the filing date.

The case highlights that companies and inventors should not delay filing a patent application for new developments.  Offers for sale of even hypothetical developments can bar patentability if the hypothetical becomes reality.


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