First-to-file only relates to who has priority between two patent applicants. It does not relate to patentability with respect to prior subject matter such as things that have been publically disclosed or on sale. Since you know about the product that has been on sale, you are oblicated to disclose it to the Patent Office and if it is the same as you design, you will not get a patent. If you do not disclose it and you get a patent the patent will not be valid or enforcible.
Answered on Jun 17th, 2013 at 8:59 AM