By Paul A. Ragusa and Jack Chen*
A pdf version of this article may be downloaded here.
In Pfaff v. Wells Elecs., Inc., [FN1] the Supreme Court formulated the now well known test for determining when an invention cannot be patented due to a sale or offer for sale more than one year prior to the filing of a patent application. Specifically, the Court held that an invention need not be “reduced to practice” at the time of the sale or offer to create a statutory bar against patent protection. [FN2] Instead, a sale or offer of an invention “ready for patenting,” is sufficient to raise a statutory bar. [FN3] The purpose of the on-sale bar is to encourage early disclosure of inventions to the public as well as to prevent a de facto patent term extension by those who would commercially exploit an invention for an extended period of time prior to filing a patent.
During the past twelve years, the courts have applied the Pfaff test to various technologies, some with more clarity than others. One thorny area involves the application of the Pfaff test in the context of software related inventions. Although the Pfaff Court rejected precedent that an invention needed to be “substantially complete” to provide a statutory bar, [FN4] it did not address how a software related invention can be ready for patenting where the code is incomplete, and untested. As a practical matter, how is a court to determine whether an unfinished software-related invention is ready for patenting and therefore can operate to trigger an on-sale bar? A recent district court decision addresses this issue head-on and is discussed below.