Distribution Agreement Constitutes an “Offer for Sale” Under Pre-AIA 35 U.S.C. § 102(b)

Following the court’s en banc decision that a contract manufacturing arrangement did not give rise to an on-sale bar, the Medicines Co. v. Hospira, Inc. appeal returned to the original Federal Circuit panel on remand.  827 F.3d 1363 (Fed. Cir. 2016) (en banc).  The panel proceeded to analyze the on-sale bar effects of a particular distribution agreement between MedCo and its product distributor, ICS, before the § 102(b) critical date. 

Reversing the district court, the Federal Circuit held that the particular distribution agreement at issue qualified as an “offer for sale” under § 102(b). First, the particular agreement stated that MedCo “now desire[d] to sell the Product” and ICS “desire[d] to purchase and distribute the Product.”  Second, the particular agreement specified a “commercial price” for any sales.  Third, the particular agreement provided for a transfer of title upon product delivery to ICS.  These terms in the particular agreement led the court to conclude that a commercial offer for sale in this case had occurred.  But because the record did not reflect any determination of whether the distribution agreement covered the patented invention, rather than a previous version of the pharmaceutical product, the Federal Circuit remanded to the district court to address this issue in the first instance.

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