§273 Defense to Infringement Based on Prior Commercial Use

Summary

Allows a person who used an invention in business before a patent was filed to defend against a patent infringement claim if they, in good faith, commercially used the process, machine, manufacture, or composition in the United States—either for internal business purposes or by selling the useful end result at arm’s length—and that use happened at least 1 year before the earlier of the patent’s effective filing date or the date the invention was publicly disclosed in a way covered by section 102(b). The person who raises this defense must prove it by clear and convincing evidence. Uses during a premarketing regulatory review count as commercial use. Nonprofit research labs or similar nonprofit entities’ uses for the public benefit count, but the defense then applies only to continued, noncommercial use by that nonprofit. Only the person who did or directed the commercial use, or an entity in control relation with them, may assert the defense; it generally can’t be sold or licensed except as part of transferring the whole business line, and then only for sites already using the subject matter. The defense covers only the specific subject matter used (and reasonable changes in amount or noninfringing improvements). Abandoned uses don’t count later. If the claimed invention was owned by a college or related tech-transfer group when made, the defense won’t apply unless it couldn’t have been reduced to practice with federal funds. If someone asserts the defense without a reasonable basis, the court may award attorneys’ fees. Raising this defense does not by itself make the patent invalid under sections 102 or 103.