Also known as: on-sale · onsale · on-sale bar · on sale doctrine
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
A contractual provision in a mortgage that authorizes the lender to declare the entire debt immediately due upon any transfer of the mortgaged property without the lender's consent. Federal law such as the Garn-St. Germain Act generally permits enforcement of these provisions. The clause protects the lender by allowing it to reassess the creditworthiness of any new owner.
A contractual provision in a mortgage that authorizes the lender to declare the entire debt immediately due upon any transfer of the mortgaged property without the lender's consent. Federal law such as the Garn-St. Germain Act generally permits enforcement of these provisions. The clause protects the lender by allowing it to reassess the creditworthiness of any new owner.
Select any source to read its text and confirm it supports the definition.
The commercial offering of an invention for sale before the effective filing date of a patent application. Such an offer constitutes prior art that bars patentability under the on-sale provision of 35 U.S.C. § 102(a)(1). Even a single offer, whether accepted or not, can trigger the bar if the invention is ready for patenting.
Select any source to read its text and confirm it supports the definition.
The commercial offering of an invention for sale before the effective filing date of a patent application. Such an offer constitutes prior art that bars patentability under the on-sale provision of 35 U.S.C. § 102(a)(1). Even a single offer, whether accepted or not, can trigger the bar if the invention is ready for patenting.
Each sense below has its own examples, sources, and questions.
David owned a restaurant building subject to a mortgage containing a due-on-sale clause. He granted Gail an exclusive purchase option after five years plus day-to-day operational control without notifying the lender. The lender treated the arrangement as an unauthorized transfer and accelerated the full debt. David argued no transfer had occurred because the option remained unexercised.
A due-on-sale clause is triggered when the mortgagor grants rights that effectively transfer incidents of ownership without lender consent. An exclusive option coupled with operational control can constitute such a transfer even if the option remains unexercised. Courts examine whether the arrangement alters the risk profile of the loan.
Supporting sources
Onyx Pharmaceuticals developed a new compound and offered it to a distributor under a confidentiality agreement six months before filing a patent application. The offer described the compound in detail and set a price. When the patent issued, a competitor challenged validity on the ground that the compound had been placed on sale.
Octavia Okonkwo offered her new mechanical device to a potential buyer for evaluation and possible purchase more than one year before filing. The buyer received detailed specifications and a firm price quote. After the patent issued, the buyer asserted the on-sale bar in an infringement defense.
Oskar Ocampo offered his improved boat hull design to a foreign manufacturer before the U.S. filing date. The offer included technical drawings and a purchase price. A competitor later argued that the foreign offer placed the invention on sale and defeated patentability.
Olivia Owens invented a medical device. A distributor independently offered identical devices for sale to hospitals before Olivia filed her application. The distributor had no connection to Olivia. The patent office rejected the application on the ground that the invention had been placed on sale by another.
No. The statutory language requires only that the invention be placed on sale. A single offer to sell is sufficient even if the offer is never accepted. The offer must occur before the effective filing date and the invention must be ready for patenting.
Supporting sources
Yes. The on-sale bar applies to commercial offers regardless of confidentiality. The focus is on whether the inventor placed the invention in the stream of commerce before filing. Secret offers by the inventor or third parties can both invalidate the patent.
Supporting sources
…or “(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States, or “(c) he has abandoned the invention, or “(d) the invention was first patented…