Sanho Corp. v. Kaijet Technology International Limited

Under the patent laws of the United States, and more specifically under the America Invents Act, inventors typically have a grace period of one year from their first public disclosure to seek patent protection on their invention. (Other countries lack a similar grace period; if reliance on this grace period can be avoided, it should be.)

The federal circuit’s recent decision in Sanho Corp. v. Kaijet Technology International Limited, Inc., No. 2023-1336 (Fed. Cir. July 31, 2024) clarifies the grace period codified in 35 U.S.C. § 102(a)(2) and (b)(2)(B) in the circumstance where an inventor discloses some or all of the invention, and someone else discloses something at a later date but before the invention’s effective filing date.

Prior patent disclosures are not available as prior art—that is, the USPTO may not consider them in determining patentability—under section 102(a)(2) unless the prior patent disclosure names another inventor and was effectively filed before the effective filing date of the invention at issue.

Subsection (b)(2) provides certain exceptions to that general rule. Under subsection (b)(2), a prior patent application that is later published or patented is not prior art under subsection (a)(2) if the subject matter disclosed originated from any inventor (sub. (b)(2)(A)) or if the prior patent subject of the disclosure is shares an assignment obligation to the present applicant (sub. (b)(2)(C)). Relevant to the Federal Circuit’s Sanho v. Kaijet decision, subsection (b)(2)(B) provides an exception if the subject matter of the disclosure had been “publicly disclosed” by any inventor before the effective date of the patent disclosure.

 The Federal Circuit’s Sanho v. Kaijet decision clarifies what counts as “publicly disclosed” for subsection (b)(2)(B) (and presumably clarifies subsection (b)(1)(B), too). In Sanho, the inventor had offered his invention for sale to a third party within a year of their own patent application filing. The purchaser made a YouTube video exploring a product embodying the invention and put it on the internet. A potential-prior-art patent application was then filed about a month after the sale and a day or two after the YouTube video.

According to the Federal Circuit, the inventor’s prior public sale did not “publicly disclose[]” the invention under section 102(b)(2)(B). Following a rigidly textual approach to section 102, the court held that “publicly disclosed by the inventor” means “that it is reasonable to conclude that the invention was made available to the public” and requires more than a sale to a single other party.

There is an asymmetry in this holding to the “on sale bar” under subsection (a)(1); a single public sale of a product is enough to qualify the product as prior art under subsection (a)(1). That is not enough, however, to “publicly disclose[]” the invention to predate a piece of potential prior art.

The Federal Circuit’s decision does not address whether the YouTube video exploring the invention is a “public disclos[ure]” under subsection (b)(B)(2) because, according to the court, the issue was not sufficiently raised in the opening brief on appeal. The Patently-O blog (run by Professor Dennis Crouch) suggests the Federal Circuit should reissue its decision to handle this issue.  

This case may serve as another reminder to inventors that even though a one-year grace period generally exists under U.S. patent law, there are often good reasons to treat the grace period as an emergency backstop, rather than a rule that should be relied upon as a matter of course.

(Wholly separate from the merits of the decision, I wish that courts would stop printing sentences like “We assume Congress means what it says and says what it means” in their decisions. Pithy platitudes clarify little about Congress’s intent, and courts would do better to holistically analyze a statute’s text in view of the overall statutory scheme. They should not, in general, apply a more rigid and hyper-technical parsing of the specific isolated phrases than a reasonable legislator would have, and if they do, they should not so harshly assert that a litigant “ignores” the adverse result such an approach delivers. In this case, the court’s rigid textualism lacked persuasive power, but its review of the rationales behind different rules for prior art versus prior art exceptions was reasonably good.)

This post may be considered an advertisement for legal services. It is provided for general information purposes only and may not be relied upon as legal advice. Connor Lynch is a licensed lawyer in California and before the USPTO and is responsible for this content. You can reach Connor at contact at lynchllp.com.