Payment Terms

Last Week in the Federal Circuit (February 7-11): Don’t Forget to File Your Patent Before You Hit the “Fax” Button

There’s no better way to start Valentine’s week than to think of another way to communicate. But as this week’s Case of the Week shows, what you say and how you say it can matter. Check out our usual weekly stats below and the detailed discussion of our Case of the Week – our highly subjective selection based on the case that piqued our interest.

Previous reviews: seven

Unprecedented notice: 13

Rule 36: 5

Longest pending case since argument: GlaxoSmithKline LLC v Teva Pharmaceuticals USA, Inc.n° 18-1976 (353 days) (order in bench)

Shortest pending case (excluding rule 36) from argument: Feiss v. United Statesn° 21-1986 (2 days)

Case of the week: Junker v Medical Components, Inc.No. 21-1649

Panel: Judges Dyk, Reyna and Stoll, with Judge Stoll writing the opinion

You should read this case if: you have an issue involving a bar for sale due to a pre-critical date letter which may be a trade offer to sell.

If you’re wondering if the Federal Circuit still handles cases involving outdated technology, the answer is yes. Indeed, the Court had to travel back to the days when people still used the good old fax machine to communicate.

Larry G. Junker owns a design patent covering an introducer sheath handle with “large rounded ears in the shape of Mickey Mouse”. The sheath handle can be used to insert a catheter into a patient’s vein. Mr. Junker sued MedComp for infringement.

But Mr. Junker’s suit ran into trouble with the pre-AIA § 102(b) sale bar. This provision prohibits patenting an invention that was “for sale in” the United States more than one year before the filing of the patent application. (Post-AIA Section 102 Section 102 also includes a sell bar, although some of the relevant language in the statute has changed.) The crux of the matter was whether a letter sent by fax was a sell trade offer such as the sell bar applied.

The letter was not sent by Mr. Junker but by a business partner who had developed a prototype of Mr. Junker’s invention. The partner sent a letter to a potential buyer with details of wholesale pricing information, specifically, a pricing table for sheath products of different sizes. The letter contained many specific business terms, such as payment terms, shipping terms, and delivery terms, and then ended with an invitation to discuss any other requirements.

The district court found that the letter was a preliminary negotiation and not a specific offer sufficient to trigger the sales ban. Although the district court recognized the business terms of the letter, it really focused on the word “quote” (which appeared three times) and the invitation at the end of the letter. Accordingly, the district court granted Mr. Junker’s motion for summary judgment of non-invalidity under the sale ban.

The federal circuit has reversed. The Court noted that the letter was a direct response to a request for a quote. Moreover, the letter was addressed to the only potential buyer. Thus, the letter was a specific offer to take further action, not an unsolicited price offer or an invitation to negotiate. The Court also noted the commercial conditions of the letter as being typical necessary conditions of a commercial contract: specific delivery conditions, allocation of risks and responsibilities of the buyer and the seller (for delivery, payment and loss of the product), and terms of payment. . And the icing on the cake was that the letter specified several different purchase options (the pricing table). Although the letter concluded with an invitation to continue discussions, the complete and precise business terminology used in the letter meant that it was a business offer to sell. It didn’t help that subsequent communications between the same parties used the exact same trade terms, indicating that the terms of the disputed letter were final. Whoops! The Court therefore concluded that the letter contained several offers to sell and thus triggered the ban on sale.

In the end, it wasn’t the “happiest [decision] on Earth” for its claims to a sheath handle with “large rounded ears in the shape of Mickey Mouse”.