License Omitting Material Terms Does Not Trigger On-Sale Bar

In reversing a district court’s decision declaring a patent invalid due to a prior offer to sell, the U.S. Court of Appeals for the Federal Circuit clarified the parameters of the on-sale bar under 35 USC §102(b) in the licensing context. Elan Corp., PLC v. Andrx Pharmaceutical, Inc., Case Nos. 30-1354, -1355, -1386, -1387 (Fed.Cir. May 5, 2004) (Lourie, J.).

Elan planned to develop a time release formulation of naproxen, a non-steroidal anti-inflammatory drug sometimes sold under the name Aleve, for projected sale in 1993. In 1987, Elan sent letters to Lederle Labs and others, proposing a license with specified up-front fees, milestone payments and a running royalty. In addition, Elan offered to supply bulk tablets at a price "based on current naproxen price." Approximately three years later, Elan filed a patent application claiming a once-daily naproxen formulation, which issued as U.S. Pat. No. 5,637,320.