Bass, Berry & Sims attorney Terry Clark provided comments for an article in Law360 outlining the Federal Circuit's en banc decision in Medicines Co. as to under what circumstances would use of a third-party vendor trigger an invalidating on-sale bar in patent cases. The decision provides, among other things, that contracting with a third-party vendor to manufacture a product covered by process patent claims does not per se constitute an "on-sale" bar. As Terry points out in the article, the "court reached 'a very practical decision' reflecting a trend in the pharmaceutical industry (and elsewhere) to outsource drug manufacturing to third parties. 'They seem to have realized that it would probably be unfair to penalize those companies that don't have the ability to manufacture in-house.'" In light of this decision, drugmakers should carefully review and formalize their agreements with third-party vendors.
The full article, "Fed. Circ. Ruling Blunts On-Sale Bar's Threat To Patents," was published by Law360 on July 11, 2016, and is available online.