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IP and Health Care Economics

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A federal appeals court recently ruled that a patent on a successful birth control product is invalid  because the patent owner made an offer to sell the invention more than one year before it applied for said patent.  This sounds like a straightforward application of what patent lawyers call the "on sale bar." MERCK & Cie v. WATSON LABS, 125 F.Supp 3d 503 (D. Del. 2015).

Merck is appealing this to the SCOTUS. It sought a "stay of mandate," that is, it tried to get Chief Justice Roberts to rule that the decision would not take effect until the high court heard and decided the matter. But they failed to get the stay, so Watson, the generic drug manufacturer, gets to sell the drug at issue in the US pending further developments.

Here's a relevant brief from Watson's lawyers.

On July 27, Roberts denied that application for stay in a brief order, providing no rationale.

Merck's argument is that what it did more than one year prior to the application was not
the sort of public offer of sale that is supposed to trigger the one-year clock on a filing, and that the Federal Circuit Court has now overturned decades of precedents by treating private negotiations as a public sale.

Here's a more complete discussion:

I have no profound point to draw from all this. But the law of IP and the economics of health care are both subjects of abiding fascination for me, so their intersection is likewise.


  1. What is the rationale for the on-sale bar? (Wikipedia, which uses the hyphen, doesn't say in its "On-sale bar" entry. It discusses what constitutes a sale and when the one-year period starts.)

  2. The law incorporates an intuitive sense that before an inventor starts to sell something at all, THAT is the time to make the decision -- "shall I be putting this into the public domain, or will I seek to keep proprietary control of it?" Acting as if something is available to the public, but then, after a year, seeking to assert proprietary rights, seems capricious and likely to make life unnecessarily complicated for other parties developing related technologies. Predictability, certainty, repose, all the words of that order may be applied here.


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