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Supplier's Agreement to Manufacture May Trigger On-Sale Bar
August 16, 2013

In an Opinion on August 14, 2013 (Hamilton Beach Brands, Inc. v. Sunbeam Products, Inc.), the Federal Circuit ruled that the on-sale bar was triggered when a purchase order for slow cookers by patentee Hamilton Beach was confirmed by its supplier. The Court stated that Hamilton Beach’s transaction with its supplier was an offer for sale of a product that anticipated the asserted claims and that the invention was ready for patenting prior to the critical date.

Under § 102(b) (pre-AIA), a person shall be entitled to a patent unless "the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States." Note that, post-AIA, § 102(a)(1) includes similar language, but the Hamilton Beach patent falls under the pre-AIA rules. The on-sale bar invalidates a patent when the invention was sold or offered for sale more than one year prior to the filing date of the patent application. Although Hamilton Beach neither sold nor offered its invention for sale, the Federal Circuit considered the Hamilton Beach supplier's offer to manufacture the invention an offer for sale. The Court noted in its opinion that there is no "supplier exception" to the on-sale bar. Since the supplier's offer to manufacture the invention was more than one year prior to the patent application filing date, the Court ruled that the claims were invalid.

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