In re Cellect*

By Kevin E. Noonan --

The Federal Circuit soon will have the opportunity to decide a question left open during a recent spate of opinions involving the judicially created doctrine of obviousness-type double patenting (OTDP):  the effect patent term adjustment (PTA) can (or should) have on creating circumstances where OTDP will operate to find a patent invalid in the absence of a timely filed terminal disclaimer.

The issue arose in a series of ex parte reexaminations over five patents owned by Cellect, U.S. Patent Nos. 6,424,369; 6,452,626; 6,982,742; and 7,002,621, that involve "solid state image sensors which are configured to be of a minimum size and used within communication devices specifically including video telephones" according to the '621 patent (only 4 of these patents were invalidated, the fifth not having any PTA that raised the issue).  The chronological situation is set forth in an exhibit from Cellect's brief in its Federal Circuit appeal brief:

There was no dispute that the claims in these applications were patentably indistinct.  The Board issued four Decisions on Appeal affirming the reexamination division's invalidation of the '369, '626, '621, and 742 patents, all on the grounds that the provisions of 35 U.S.C. § 154(b)(2)(B),

"No patent the term of which has been disclaimed beyond a specified date may be adjusted under this section beyond the expiration date specified in the disclaimer"

mandated that a terminal disclaimer be filed under circumstances where obviousness-type double patenting arose due to extension of patent term as PTA, i.e., that OTDP must be determined after application of PTA.  (It will be recalled that the Federal Circuit reached a different conclusion with regard to patent term extension (PTE) under 35 U.S.C. § 156 in Novartis AG v. Ezra Ventures LLC, the Court expressly refusing to permit "a judge-made doctrine to cut off a statutorily-authorized time extension.")  Because all of these patents had expired (but Cellect retained the right to sue for prior infringement under 35 U.S.C. § 286), the Board's decision invalidated these patents with no available remedy for Cellect.  In its consolidated decision, the Board emphasized the potential inequities to the public due to the possibility of harassment by different parties owning patents to obvious variants of one another (in the absence of a terminal disclaimer preventing this potentiality) as representing an unjust extension of patent term to the public's detriment; see In re Fallaux, 564 F.3d 1313 (Fed. Cir. 2009)).  Finally, the Board rejected arguments that the Federal Circuit's jurisprudence did not rely on whether or not there was gamesmanship or the potential thereof under Gilead Sciences, Inc. v. Natco Pharma Ltd. but that under In re Longi, the public was entitled to the assumption that it is free to practice what is claimed in the patent and obvious modifications and variants thereof once the patent has expired.  759 F.2d 887 (Fed. Cir. 1985).

The questions before the Court according to Cellect are summarized in five arguments.  The first is based on the Board's putative legal error in interpreting the statute to justify treating term extension under PTA differently from term extension under PTE.  Second, Cellect argued that application of OTDP in this case was inequitable, due to the lack of remedy as well as there being no unjust extension because Cellect had engaged in no gamesmanship.  Third, Cellect argued as a fallback position that OTDP should be used here to cancel the term extended by PTA rather than invalidating the patents in their entirety.  The final two arguments were that the reexamination had been improperly instituted because there was no substantial new question of patentability and that any ancillary obviousness rejections raised in the reexamination was ultimately based on the OTDP of these patents (which argument the Board argued Cellect had waived).

Cellect's first argument was based on statutory interpretation.  Cellect argues that both PTA and PTE are statutory grounds for extending a patent term and there was no legal nor logical basis for treating them differently, i.e., the Court should interpret the PTA statute here as the Court had interpreted the PTE statute in Ezra.  Further, Cellect argues that the statutory language for PTA is that the term "shall" be extended (although there have been other instances, e.g. regarding provisions of the BPCIA, see Sandoz Inc. v. Amgen Inc., where "shall" has not been given commanding effect).  Cellect argues that the provisions the Board relied upon were intended for situations where a terminal disclaimer had been filed, not one where PTA creates OTDP (compare the language of the statute regarding a "patent the term of which has been disclaimed" to how Cellect argues the Board interpreted the language regarding a "patent the term of which [may need to be] disclaimed [if adjustment is granted]").  The consequence of the Board's interpretation creates a situation requiring "preemptive" terminal disclaimer filings, Cellect argues which Congress had not intended.  Cellect also cited several district court cases, including Amgen, Inc. v. Sandoz Inc. (D.N.J. 2021), and Mitsubishi Tanabe Pharma Corp. v. Sandoz Inc. (D.N.J. 2021), that had interpreted the Court's Ezra decision to support giving statutory deference to respecting PTA over a "judge-made doctrine."

Regarding the equities, Cellect argues that the purpose of OTDP was to prevent "unjust timewise extension of patent term" and to prevent "harassing litigation filed by multiple patent owners" for patents on "not-patentably-distinct" inventions.  Cellect's argument emphasizes the unjust extension aspect, which Cellect ties to the gamesmanship the Court recognized in Gilead.  And in this case Cellect contends that "[t]he Board used an equitable doctrine to achieve an inequitable result" because the circumstances provided no basis for Cellect to cure.  In an effort to avoid this outcome, Cellect argues that applying the Board's interpretation to retroactively disclaim the PTA-extended term but not invalidate the patents would not only cure the inequitable effects of the Board's decision but also as precedent notify future applicants who could have the opportunity to decline PTA to avoid invalidation on OTDP grounds.

The Solicitor's argument emphasized the inequities to the public occasioned by any extension of patentably-indistinct inventions (in view of the government's interpretation of the statute).  The brief cites in opposition the Court's decision in Abbvie Inc. v. Mathilda & Terence Kennedy Institute of Rheumatology Trust, 764 F.3d 1366, 1373 (Fed. Cir. 2014), that OTDP apples whenever there is an extension of patent term for patents claiming patentably-indistinct invention.  The Solicitor also notes that under circumstances where OTDP would invalidate a patent having PTE will not save it and that the differences in the statutes permit PTA to produce OTDP where PTE cannot (because § 156 does not contain the "disclaimer" in § 154(b)(2)(B)).  Regarding Cellect's arguments for forswearing PTA but preserving the patent, PTO cites Boehringer Ingelheim Int'l. GmbH v. Barr Laboratories Inc. that a patentee that had benefited from notice to public of the later expiration date has already obtained an "unjustified advantage."  Finally, the Solicitor argues that the term extension issue here is not dispositive because OTDP also prevents potential harassment by multiple assignees.

A number of amici filed briefs were filed in favor and against the Board's decision.  Briefs in opposition to the Board's application of OTDP in these circumstance were filed by the Intellectual Property Owners (IPO), the Pharmaceutical Research and Manufacturers of America (PhRMA), and the Biotechnology Innovation Organization (BIO).**  The IPO's brief emphasized that the only reason OTDP arose in this case was the application of PTA, and that the statute mandates extension (and accordingly the Board's decision was contrary to congressional intent).  PhRMA's brief focused on the purpose of OTDP that was to avoid unjust enrichment and that the PTO's "speculative" harassment rationale was inconsistent with Federal Circuit precedent.  BIO's brief discussed the Board's statutory interpretation errors and that the inequitable outcome in this case is inconsistent with the equitable underpinnings of OTDP.

Briefs in favor of the Board's decision were filed by Alvogen, the Association for Accessible Medicines (AAM), and Samsung.  Alvogen's brief argued that there was no reason OTDP should not apply to PTA because the doctrine was intended to establish term limits on patents to patentably-indistinct inventions.  Gamesmanship is not required under the statute and is an "unstable benchmark" in Alvogen's view.  AAM's brief was entirely outcome-oriented, based on the amici's perspective that patents increase drug costs and the Board's decision was a good one because it reduced patent term (no matter that the patents at issue were not related to drug products).  Finally, Samsung's brief argued that the decision was consistent with the policy bases for the OTDP doctrine and that accordingly there was no inequitable result.  (It should be noted that Samsung is a competitor and is involved in litigation with Cellect on other patents.)

The deadline for Cellect's Reply brief has been extended to October 18th, and barring further delay should be heard at oral argument within the next 4-6 months.  Thus a decision can be expected in the first quarter of next year.

From a panel discussion with Jeremy Lowe and Steve Horowitz at the 8th Annual Paragraph IV Disputes Master Symposium in Chicago on September 22, 2022

*On appeal to the Federal Circuit
**Patent Docs authors Kevin Noonan and Donald Zuhn participated in filing the BIO brief

Comments

[Nancy Linck]

As a former Solicitor of the PTO, my opinion has always been that the business of the PTO should not be addressing the potential for post-issuance harrassment by multiple parties holding patents to obvious variations of an invention. Once the "unjust timewise extension" issue became a non-issue, the PTO should have been relieved from its role in addressing non-statutory double patenting. It's time for the Federal Circuit to overrule earlier opinions that have held otherwise. In fact, getting rid of non-statutory double patenting altogether would be an even better idea. Such law has been very confusing for a long time and added significant burdens to litigation.

[Greg DeLassus]

"Once the 'unjust timewise extension' issue became a non-issue.."

But it has not become a "non-issue." Just because *continuations* no longer result in a term extension does not mean that an applicant cannot file a *new filing* on something that is no more than an obvious variation of an earlier filing. Perhaps the CAFC can obviate ODP as a category of invalidity for members of the same family, but that would not put an end to ODP as a category of invalidity altogether.