Navigating the On-Sale Bar Globally, Realities in the US, Europe, and China

In today’s global innovation economy, the bridge between a technology’s commercial launch and its patent protection is often complicated by legal issues. One of the most critical, yet unevenly understood, concepts across international patent systems is the restriction placed on a patent application following commercial activity—broadly referred to in the US as the “on-sale bar.”

While international patent laws have made great strides toward harmonisation, the treatment of pre-filing commercial sales remains a major point of divergence. For multinational enterprises, understanding how the United States, Europe, and China handle commercial transactions prior to filing a patent application is essential to safeguarding international patent portfolios.

The United States: A Strict Commercial Focus and the Pfaff Two-Step Test

In the US, the on-sale bar (governed by 35 U.S.C. § 102) functions fundamentally as an anti-commercial-exploitation mechanism. Its primary policy purpose is to prevent inventors from commercialising their inventions as trade secrets for prolonged periods and then subsequently securing a patent monopoly.

The on-sale bar originated as case law in the 1940s and was codified in the US Patent Act of 1952. However, the case law specifically related to this aspect of US patent law evolved slowly as interest in patents grew in the 1980s. As established in the seminal US Supreme Court case Pfaff v. Wells Electronics, Inc. (1998), the US on-sale bar does not strictly rely on traditional “prior art”, absolute novelty, or public disclosure. Instead, it triggers a strict one-year grace period if a two-step test is met before the “critical date” (one year prior to filing):

1. Commercial Offer for Sale: The activity must rise to the level of a formal commercial sale or an offer of sale under standard contract law. The test here is essentially identical to whether a given transaction in normal commercial law amounted to a legally recognisable “sale”; there is no special patent test. Crucially, even confidential or private sales can trigger the bar if they represent commercial exploitation. Of course, there may be some subtleties regarding licenses, which may require close review.

2. Ready for Patenting: The invention must be sufficiently complete. This does not require a physical prototype (“reduction to practice”), but rather that engineering drawings or descriptions are specific enough for someone skilled in the art to replicate the invention. In other words, the invention is complete to the point that a valid patent application could be filed. Otherwise, the invention is not ready for patenting. In some circumstances, a commercial sale may have occurred for an invention that was not ready for patenting at the time of sale – as such, on the day that the invention becomes ready for patenting, then both conditions of the bar are triggered, starting the grace period.

If both conditions are met, the inventor has exactly one year to file a patent application, or the right is permanently lost. To be clear, the USPTO does not typically have the resources to investigate whether the on-sale bar has been triggered for a given patent application. Among other things, patent examiners are not typically privy to information regarding confidential sales. As such, the question of invalidity of a patent due to an on-sale bar may arise many years later when the patent is in litigation, especially given the US’ robust litigation discovery rules.

Europe: Absolute Novelty and the G 0001/23 Prior Art Expansion

Unlike the US, the European Patent Convention (EPC) contains no separate, independent “on-sale bar” mechanism or commercial grace periods. Europe enforces a strict doctrine of absolute novelty (EPC Article 54(2)). Any commercial activity before the filing or priority date is viewed purely through the lens of whether it constitutes “prior art” made available to the public.

A monumental shift in Europe’s approach arrived via the EPO Enlarged Board of Appeal’s landmark decision in G 0001/23 (2025). Historically, under older case law (G 1/92), many believed that if a complex commercial product (such as a polymer chemical) was put on the market but could not be perfectly reverse-engineered or reproduced without undue burden, it was legally excluded from the state of the art.

The G 0001/23 decision completely dismantled this notion, branding it an “absurd legal fiction.” The Enlarged Board ruled that a product put on the market cannot be excluded from prior art merely because it cannot be fully analysed and reproduced. Consequently, while the EPO still does not penalise purely private, confidential sales, it will now aggressively treat any public market sales events—and their associated technical data sheets, manual publications, or measurable parameters—as prior art capable of destroying the novelty or inventive step of a subsequent patent application.

China: Public Technical Disclosure under Strict Novelty

China’s approach represents an interesting mid-point between the two Western systems but leans heavily toward the European model. The Chinese Patent Law does not feature a separate “on-sale bar” system; instead, pre-filing commercial activities are evaluated solely under the statutory requirements for absolute novelty under Article 22 of the Chinese Patent Law.

Under this strict framework, a pre-filing commercial sale will only defeat a patent application if it results in the public disclosure of the invention’s technical details. Consequently, Chinese practice draws a sharp, clear line regarding confidentiality: if a transaction is strictly limited to specific customers under a confidentiality agreement (NDA) or a tacit obligation of secrecy, it generally does not constitute prior art. However, exceptions apply if the NDA is merely boilerplate while the buyer gains unrestricted control to perform reverse engineering, if the NDA is breached beyond the 6-month statutory remedy window, if the technology spills over to unbound third parties, or if a tacit obligation lacks sufficient evidence.

However, multinational companies must be cautious about the standard for public availability via product sales in China. If a product is sold without confidentiality restrictions, Chinese courts and the China National Intellectual Property Administration (CNIPA) assess whether the technical solution can be ascertained by a person skilled in the art through standard visual inspection, measurement, or conventional reverse engineering. If the technical details can be laid bare through routine analysis of the sold product, novelty is lost, regardless of whether the buyer actually analysed the product.

Conversely, if the core technical solution (such as a hidden internal structure or a specific chemical formulation) is inherently incapable of being detected, analysed, or derived by a person skilled in the art through conventional reverse engineering, such technical solution is not considered “disclosed to the public” and will not defeat the novelty of a subsequent patent application.

Furthermore, while Article 24 of the Chinese Patent Law allows for a strict 6-month grace period under highly specific, non-commercial circumstances—such as disclosures at government-hosted international exhibitions or specified academic conferences—this grace period absolutely does not apply to standard commercial sales or market rollouts. Any non-confidential public commercial sale within or outside China instantly and irreversibly invalidates the invention’s novelty. Unlike Article 11 of the Paris Convention—which applies to officially recognised international exhibitions across any member state and allows the exhibition date to serve as a baseline for priority—Article 24 of the Chinese Patent Law is a specific national rule that requires strict Chinese government approval for qualifying exhibitions, covers additional scenarios (such as unauthorized disclosures), and confers merely a 6-month novelty grace period rather than a right of priority.

The Core Differences: Key Strategy Takeaways

The differences between the three jurisdictions centre on three main pillars:

• The Definition of Disclosure: The US penalises the act of commercial exploitation itself, meaning private or confidential transactions can start the one-year clock. Conversely, Europe and China focus on public availability; confidential sales generally do not jeopardise an application, but any public sale introduces catastrophic prior art risks.
• The Grace Period: The US provides a robust one-year window post-sale and public disclosure; Europe offers zero grace period for commercialisation; China offers a 6-month grace period that explicitly excludes commercial sales.
• The Stage of Development: The US bar can be triggered by mere technical drawings (but sufficient to comprise a valid invention disclosure) if an offer to sell is extended, whereas Europe and China require a real, physical product to be transacted or public technical data to be circulated.
• Conclusion
• For global filers, the safest baseline strategy remains the same: keep track of the firm’s commercial activities regarding new inventions and always file your patent applications before engaging in any commercial discussions or product rollouts. Relying on grace periods or confidentiality wrappers leaves a footprint that varies dangerously from the US to Europe and China.