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This case involved product-by-process claims for a form of bivalirudin.  More than one year prior to the filing date of MedCo’s patent applications, it retained a company, Ben Venue, to manufacture three batches of bivalirudin according to the process of the claims.  MedCo paid Ben Venue for manufacturing the drug at an amount that was significantly less than the value of the drug itself.  Once manufactured, the drug was placed in quarantine with the distributor ICS pending FDA approval, at which time ICS would receive title to the drugs.  The batches were released and made available for sale less than one year prior to the filing of MedCo’s patent applications. 

The district court held that, although the second Pfaff prong (ready for patenting) was met, the first prong (the subject of a commercial offer for sale) was not met.  The court reasoned that the distribution contract with ICS was a contract to enter into a contract for future sales of the product.  The merits panel of the Federal Circuit, however, reversed, because it held that MedCo had “commercially exploited” the invention before the critical date even if title had not yet been transferred to the commercial embodiment of the invention. 

The en banc panel of the Federal Circuit reversed the merits panel.  It held that the fact that MedCo had hired Ben Venue to provide manufacturing services to create embodiments of the patent invention was not an invalidating commercial sale of the invention.  It further held that “stockpiling” of the commercial embodiment of the invention by the purchaser of manufacturing services does not trigger a Section 102(b) on sale bar.  The court also clarified that mere “commercial benefit” – even to both parties in a transaction – also is not enough to trigger an on sale bar. 

The court further held that product-by-process claims cover the product, not the process, and therefore the performance of the process to create the product does not by itself trigger the on-sale bar.  

The Medicines Company v. Hospira, Inc., Case Nos. 2014-1469, -1504 (July 11, 2016); En BancOpinion by: O’Malley, joined by Prost, Newman, Lourie, Dyk, Moore, Reyna, Wallach, Taranto, Chen, Hughes, and Stoll; Appealed From: United States District Court for the District of Delaware, Andrews, J. Read the full opinion here.

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