A Prior Agreement To Outsource Manufacturing Does Not Invalidate A Patent

Abstract

A patent is invalid if a product embodying the claimed invention was "on sale" more than one year before the filing of an application for the patent. In a recent en banc decision, the Court of Appeals for the Federal Circuit held that, for an invention to be "on sale," a product must be the subject of a commercial sale or offer for sale, and that a commercial sale is one that bears the general hallmarks of a sale pursuant to Section 2-106 of the Uniform Commercial Code, specifically, the passing of title from the seller to the buyer for a price, evidencing relinquishment of interest and control over the product.

Under Supreme Court precedent, parties to a contract are released from their contractual obligations when a contract expires. But a court will compel arbitration under an expired contract if a dispute falls within the scope of the arbitration clause of that contract.