§273 Defense to infringement based on prior commercial use

Summary

You can defend against a patent claim if you were using the invention in the United States for business before the patent or certain public disclosures, as long as you acted in good faith and the use happened at least 1 year before the earlier of the patent’s filing date or the disclosure covered by section 102(b). You must prove the defense by clear and convincing evidence. Time spent in a required premarketing safety review (including any period in section 156(g)) counts as commercial use. Use by a nonprofit research lab, university, or hospital that benefits the public is treated as commercial use, but the defense only applies for continued, noncommercial use inside that nonprofit. If someone with this defense sells the useful result, that sale uses up the patent owner’s rights the same as if the owner had sold it. Only the person who actually did or directed the commercial use, or a company that controls or is controlled by them, can claim the defense. It generally cannot be transferred or licensed except when sold as part of the whole business, and then only for places where the use already happened before the later of the patent filing date or the sale. The defense won’t help if the subject matter came from the patent owner, it only covers the specific thing used (plus changes in amount or simple improvements), abandoned uses don’t count after abandonment, certain university-owned inventions are excluded unless federal funds couldn’t have paid for the work, a failed or unreasonable defense can make the case exceptional for attorney fees, and raising this defense does not by itself make the patent invalid under sections 102 or 103.