Background
OEA, Inc. developed an “all-glass header” technology used in automotive air bag inflators. OEA lacked the manufacturing capacity to mass-produce the invention itself, so it contracted with Coors Ceramics Co., which had that capacity. In April 1991, OEA sent Coors a proposal requesting that Coors manufacture at least half of OEA’s needs for the commercial embodiment of the invention. In May 1991, Coors accepted. In June 1991, OEA ordered 20,000 units for delivery beginning in July 1991, and subsequent orders eventually ran into the millions of units annually. OEA filed its patent application on August 27, 1992.
The critical date for the on-sale bar was August 27, 1991 — one year before the application filing date. Because OEA and Coors had entered commercial contracts for the mass production and delivery of the patented invention more than a year before filing, Special Devices (sued for infringement by OEA) argued that the on-sale bar invalidated OEA’s patent. OEA countered that the bar should not apply where the “sale” was between an inventor and its own supplier, rather than between an inventor and an ultimate customer.
The Court’s Holding
The Federal Circuit affirmed summary judgment of invalidity. Writing for the court, Judge Michel held that the on-sale bar contains no “supplier exception.” The statutory text of § 102(b) provides that a patent is invalid if the invention was “on sale” in the United States more than one year before filing. The statute makes no distinction between sales to suppliers, distributors, customers, or any other type of purchaser. The on-sale bar applies when someone — inventor, supplier, or other third party — commercially sells the invention before the critical date.
The court observed that the primary purpose of the on-sale bar is to encourage inventors to file patent applications promptly, rather than to extend their commercial advantage indefinitely by selling the invention for years before seeking patent protection. An inventor who arranges to have a supplier mass-produce the commercial embodiment of an invention — and who has already reaped commercial benefits by doing so — has no claim to additional protection from the statutory bar. The commercial exploitation is equally evident whether the sale is to a supplier or to an end customer.
The court also rejected the notion that the inventor-supplier relationship was so close as to treat OEA and Coors as a single entity for on-sale bar purposes. The two companies were independent entities with an arm’s-length commercial relationship.
Key Takeaways
- The on-sale bar applies to commercial sales between inventors and their suppliers — there is no “supplier exception” to § 102(b).
- The on-sale bar is triggered whenever an invention becomes the subject of a commercial offer for sale more than one year before the patent application is filed, regardless of who the buyer is.
- Inventors who contract with suppliers to mass-produce their inventions before filing a patent application risk invalidating their patents through the on-sale bar.
- The inventor-supplier relationship does not merge the parties into a single entity that could avoid the on-sale bar as an internal corporate transfer.
- After the America Invents Act (2011), the on-sale bar now includes a public disclosure exception, but the core principle that supplier sales can trigger the bar remains.
Why It Matters
Special Devices v. OEA is a significant on-sale bar decision that closed a potential loophole: inventors cannot delay filing patent applications while using suppliers to build commercial inventory, and then claim the supplier relationship was merely internal and thus exempt from the bar. The decision reinforces the statutory policy that inventors must promptly seek patent protection — within one year of any commercial exploitation of the invention, regardless of the distribution chain structure.
The case is frequently cited in on-sale bar analysis involving manufacturing relationships, particularly in industries like automotive, medical devices, and consumer electronics, where inventors often outsource production to specialized contract manufacturers. It also illustrates that the on-sale bar’s commercial-exploitation rationale is independent of the identity of the initial buyer — what matters is whether the invention has entered commercial channels.