Offering a product for sale that you do not have even a prototype of can be a risky business in more ways than one. Indeed, the United States Supreme Court has added a new wrinkle when it comes to filing for a patent on that product more than 1 year after the offer sale. In Pfaff v Wells Electronic, Inc., the Supreme Court affirmed the judgment of the federal appellate court that the patent on a computer chip socket was invalid because the invention was "on sale" more than a year before the patent was filed for.

In the Pfaff case, the inventor, Wayne Pfaff, filed for a patent on this computer chip socket on April 19, 1982. Pfaff had commenced work on this socket in November 1980, when representatives of Texas Instruments asked him to develop a new device for mounting and removing semiconductor chip carriers. In response to this request, Pfaff prepared detailed engineering drawings that described the design, the dimensions, and the materials to be used in making the socket and sent those drawings to a manufacturer in February or March 1981.

On April 8, 1981, more than 1 year prior to filing his patent, Pfaff confirmed in writing a previously placed oral purchase order for 30,100 of his new sockets at a total price of $91,155. In accord with his normal practice, Pfaff did not make and test a prototype of the new socket before offering to sell it in commercial quantities.

After his patent was granted in January 1985, Pfaff sued Wells Electronics, the maker of a competing socket. The federal district court held two claims of Pfaff's patent invalid because of prior art, but then held three other claims valid and infringed by various sockets made by Wells Electronics. The federal appellate court reversed, finding all of the patent claims at issue to be invalid because the Pfaff's invention had been "on sale" more than 1 year because of the purchase order that he had accepted in April 1981.

In affirming the federal appellate court, the Supreme Court held that the "on sale" bar to patenting an invention applied if: (1) the product is subject to a commercial offer for sale; and (2) the invention is ready for patenting. Like the federal appellate court, the Supreme Court also held that an invention was "ready for patenting" if it could be shown that the invention was "reduced to practice" at the time of the offer for sale.

However, the Supreme Court diverged from the federal appellate court as to an alternative way that an invention could be "ready for patenting." The federal appellate court had held that an invention could be "ready for patenting" if it was "substantially complete" at the time of the offer for sale. The Supreme Court found this alternative standard too vague and held that an invention was "ready for patenting" if it could be shown that the inventor, at the time of the offer for sale, had prepared drawings or other descriptions of the invention that were sufficiently specific to enable a person skilled in the art to practice the invention. Since this is what happened with the Pfaff invention, the Supreme Court held that Pfaff patent was invalid because his invention had been "on sale" more than 1 year.

Since the Pfaff case just came out in November of last year, how its holding will be applied, especially as to when an invention is "ready for patenting" still needs to be determined. However, the Pfaff case should cause manufacturers who are interested in patenting their inventions to be wary of offering products for sale before a prototype is even in existence. The 1-year grace period for filing the patent after such an "offer for sale" can go by fairly quickly. Once it does, any potential patent on the product is doomed from the outset

Moreover, any "obvious" improvements of the product that is offered for sale will likewise be in trouble. In the Pfaff case, two of the patent claims described a feature that had not been included in Pfaff's initial design. Nonetheless, the federal appellate court concluded that the additional feature was not itself patentable because it was an "obvious" addition over the initial design that was barred by the "offered for sale."