By Kevin E. Noonan --
The Federal Circuit heard oral argument in Auribundo's appeal of the district court's decision in favor of plaintiff Merck, in a case captioned In re Sugammadex (alternatively, Aurobindo v. Merck Sharp and Dohme). The issue before the Court is whether Patent Term Extension under 35 U.S.C. § 156 in a reissue patent should be calculated from the original grant date of a patent or from the grant date of a subsequent reissue (wherein the length of PTE can be significantly shorter if the latter date is chosen). The panel consisted of Judges Dyk, Mayer, and Reyna. Auribindo was represented by Eric Werlinger, Merck was represented by Danny Krinski, and Maureen Queler argued for the U.S. Patent and Trademark Office.
Auribundo's argument (methodically structured to go through the different sections of the statute at issue) was focused on the statutory text and in particular the meaning of the word "term" in 35 U.S.C. § 156 (the part of the Hatch-Waxman Act providing for patent term extension, PTE). According to counsel, Congress enacted the PTE statute in the context of the reissue statute, arguing that patent law has contained statutory provisions for reissuing patents for 150 years. Judge Dyk asked the first question (from what was a fairly hot bench) about the effects of the same claim being in the original patent and the reissue. Specifically, Judge Dyk wanted to know why such a reissue patent should be treated any differently if there had been no change in the claim to the approved product. Judge Dyk called it counter-intuitive that Congress would draft § 156(c) in such a way that it would make a difference, and Counsel argued that Congress was aiming for the statute to have a "bright line" definition without getting into "claim-by-claim" analysis. Judge Dyk, sounding somewhat incredulous asked if Aurobindo's position was that "you could lose your PTE in a reissue even if the same claim [for the approved product] survived reissue"? Counsel hied back to the statutory language, seeming to hint that "policy reasons" for Congress intending the answer to Judge Dyk's question to be "no" could not trump the plain meaning of the statute. On the question of losing patent term, Counsel argued that Merck delayed ("a number of years") in filing for reissue even though they knew "full and well" that their patent did not contain the species claim for which the reissue was filed. Judge Dyk found those answers not to be responsive to his question of why Congress would want two different outcomes for PTE between the original patent and its reissue. Counsel's response was that this wasn't want Congress wanted, but rather to establish a "single regime" that would accommodate all patents applying for PTE.
Counsel returned to his theme that policy should not be a determinant, and instead that the Court should look to the plain meaning of the statute. Judge Dyk noted that the plain meaning of § 156(a) for the term to be extended could refer to the term of the original patent. Judge Dyk pressed counsel to get an answer to his question, and counsel argued that the word "original" refers to the situation before PTE is applied not before the patent was reissued. Judge Dyk interrupted this argument with a direct assertion that "you would lose" if the § 156(a) definition of "term" was directed to the original patent. "Not necessarily true" was counsel's response, based on the idea that what is meant is "when do we start counting" (presumably the time lost for which PTE is earned).
Counsel then referred to Merck's argument that the term of the reissue incorporated the term of the original patent and made three responsive arguments. First, that Section 251 recites that the reissue patent takes the unexpired part of the term of the original patent ("a piece of it, not the whole thing"), and if Congress intended the reissue to take the entire term they could have said so (but they didn't). Second, Section 251(c) incorporated Sections 151 through 154, and Section 154 defines when the term begins, i.e., the issue date. Third, that the issue date of a reissue patent is a "legally distinct and meaningful moment" based on Section 252 (that provides that date to be when the reissue patent "takes effect").
Moving on to Section 252, counsel explicated how the Federal Circuit had earlier addressed the section. He said, "PTE is not granted in litigation," and Judge Dyk reminded counsel that Sections 251 and 252 were enacted "long before" Section 156, so why not interpret Section 156 on its own terms? Counsel argued context: that Congress was aware of Sections 251 and 252 and the "mechanics" of reissuing patents when it enacted Section 156. Counsel characterized how Congress has behaved regarding the interactions of the reissue statute and Section 156 as being "purposeful silence." This silence is meaningful, counsel argued, and reading the statute as Merck asserts would violate canons of construction regarding the meaning of the word "issue" in the various sections.
Judge Reyna asked about the possibility of "absurd" results? Counsel did so with relish, speaking about the circumstances under which PTE could be lost by minor differences (a matter of days) resulting in 5 years of PTE or none at all. Counsel embraced these possibilities, asserting that such outcomes are not uncommon in patent law, here as a consequence of a purported "bright line" drawn by the statute regarding PTE. These possibilities are not sufficient to deviate from the "otherwise" plain text of the statute according to Aurobindo's counsel. Judge Reyna stated that the statute is not plain and counsel disagreed, asserting that neither Merck nor the PTO has identified a "facial ambiguity" in the text of the statute. Judge Dyk disagreed, returning to Section 156(a) as referring to the "term of the patent" phrase clearly referring to the original patent. Counsel attempted to rely on Section 156(f) for a definition of the term "patent" but Judge Dyk did not agree that the definition helped.
Finally, counsel turned to Section 156(c) because in applying it the phrase "the term of the patent eligible for extension" cannot refer to the original patent because it no longer existed when PTE was obtained for the reissue patent. Counsel also brought up the situation where a broadening reissue is obtained where the claim or claims relevant to the approved product was first obtained in such a reissue; this would create a problem, which Judge Dyk dismissed as not being eligible for extension.
Counsel for Merck (who underwent much less questioning by the panel) addressed the argument that Merck is attempting to avoid the statutory text, specifically with regard to Sections 251 and 252. Judge Reyna asked why the Court should reference the original patent where the claims are "dead" under Section 252. Counsel argued that the original patent's claims are dead but the reissued patent is essentially the same regarding the claims that recite the approved drug product. Judge Reyna noted that the statute does not recite the "claims" but rather the "patent." Counsel argued that Section 251 ("reissuing a/the patent") indicates that the statute is referring to "one and the same patent with one and the same term." Considering a patent that claimed a drug under FDA review and was subject to effective loss of patent term thereby and then reissued, this "one and the same" interpretation is the only interpretation that gives a sensible result under the Hatch-Waxman Act, counsel argued.
Counsel obliquely answered the allegation by Aurobindo's counsel of Merck's delay being strategically intentional by noting that the decision in In re Tanaka clarified the opportunity for reissue under these circumstances and prompted its filing. He also emphasized that the original patent and the reissue had a claim (claim 4) unaffected by the reissue that encompassed the approved drug. Nor should the fact that the patent was reissued prior to FDA approval and PTE length determination make any difference according to counsel, confirmed by Sections 251 and 252 (which referred to a single term that remains the same term). When beginning to address the effect on litigation under Section 252, Judge Dyk interrupted, saying "well, it isn't litigation"; when counsel disagreed, the Judge went on to say "not the kind of litigation [Congress] was talking about" when the statute was enacted. Counsel mentioned in response that filing the ANDA and filing the complaint in response thereto occurred after the reissue, and thus the intervening rights provisions of Section 252 "compels that the claims be treated as if they had been present all along" (further supported by the "continuous effect clause" in the statute).
Another issue counsel addressed was the effect of a broadening reissue, which he was careful to emphasize (again) was not the case here (nor does Merck advocate for PTE under such circumstances). Counsel also mentioned that this situation had not arisen in any of the ~40 cases where reissue applications were the basis for PTE request, and that (perhaps) Section 156(a) was the more appropriate section of the statute to consider when deciding this question. In response to counsel's assertion that under these circumstances the court need not address this issue here, Judge Dyk disagreed, saying that the Court's decision must take this into account ("we [can't] view this with blinders on") and counsel was quick to say "if the court wishes to decide [that question] it should result in affirmance either way" under both Sections 156(a) and 156(c). And this interpretation was also supported by the "continuous effect" clause under Section 252, he reiterated, under circumstances as here "where there is a substantially identical claim" that survived the reissue. And here, the change effected by the reissue was not a change to the claim the encompassed the drug.
Turning to policy, counsel argued there was no "gamesmanship" involved due to the timing of the reissue request being recognition after Tanaka that Merck could so seek it. Also to be considered according to counsel was that at the date of the reissue request filing the drug had not been approved, no one knew how long FDA review would take or if it would be approved at all. Further, without drawing the court's attention to this being an absurd result, counsel suggested that it would be unlikely that Congress intended that the "relative ordering" of reissue and FDA approval should make a difference of whether PTE was curtailed by that ordering ("it doesn't make any sense" otherwise), if only because neither when FDA review is completed nor the date the PTO grants the reissue patent was within the patentee's control. Counsel also asserted that Section 156 is an remedial statute to enable patentees to recover lost term for patents reciting claims to the approved drug.
Finally, counsel addressed the argument that a reissue patent needed to be treated as a different patent than the original patent because the latter is "dead." Counsel contends that the "dead" case law stems from Seattle Box Co. v. Indus. Crating Packing, which also says "the statute permits the claims in the reissue to reach back to the claims in the original" provided that those claims are identical (i.e., unchanged by the reissue proceedings).
Ms. Queler, arguing for the U.S. Patent and Trademark Office, began a strong presentation by saying that, taken in the context of the Patent Act as a whole, the "issue date" used in determining patent term adjustment under Section 156 is best interpreted under Sections 251 and 252 as the date the original patent was issued. As Merck's counsel had argued, the PTO interprets Section 252 to require that a reissue patent has "the same effect" as the original patent. Judge Dyk once again stated his uncertainty regarding his view that Section 252 does not relate to PTE because that section was enacted well before Section 156. PTO counsel addressed this argument by saying it is counterintuitive (it "doesn't make sense") to assess the patent term in an administrative procedure differently than in litigation involving such a patent. She cited Section 251 to require that a reissue expires on the same date (pre-AIA, 17 years from issue) as the original patent. Everything, she stated, is tied to the original patent and it "would simply not make sense" to under these statutory provisions to have the expiration date be derived from a different date.
For the PTO, she argues, the paradox raised by Aurobindo's calculus is that a patentee would be entitled to less PTE as the amount of FDA delay increases. This is nonsensical; if Merck had waited to file its reissue patent until after FDA approval, they would have been entitled to the full PTE to which they were entitled. The best reading is to use the original patent issue date according to the PTO.
Judge Reyna asked whether it is the case that these instances are rare, and counsel agreed that they are, saying that there had been only about 40-50 instances responsive to questions from Judge Reyna and that that in almost all such cases the PTO had used the original patent issue date for determining PTE.
A line of questioning arose that was to some extent amusing and illustrates how delving deeply into these questions can obscure a simple solution. Judge Dyk asked about the situation where a claim for the approved drug product is cancelled in reissue. This question was because Section 156 is concerned with patents and not claims, could the reissue patent still be entitled to PTE even though it no longer (due to reissue) recited a claim encompassing the approved drug product? Counsel responded by reminding the Court that Section 156(a) requires a patent requesting PTE to be only one "which claims a product," so such a reissue patent would not be entitled to PTE. The Judge was concerned about an original patent having a claim that encompassed the approved drug product being granted PTE but then cancelling that claim upon reissue. Counsel addressed the situation where PTE was obtained before the reissue occurs, but Judge Dyk asked about the situation where the reissue happens before PTE is granted. The Judge believes the construction of Section 156 needs to accommodate such a circumstance to ensure that a reissued patent that had a claim or claims that encompassed the drug product, but cancelled any/all claims that encompassed the approved drug, is not entitled to and does not get PTE. Counsel responded that PTE could not be obtained for a patent that does not encompass the approved drug product. Judge Dyk then asked counsel to confirm that if PTE was applied for after the reissue that cancelled all drug-related claims such PTE would be denied and asked her how to get to that outcome under the language of the statute. Counsel again resorted to Section 156(a), but the Judge said that would be the case for a new claim (i.e., in a broadening reissue). PTO counsel also stated that the Office does not have a policy on this scenario because it has never arisen (it is theoretical and highly unlikely in practice). She suggested that such an unlikely eventuality should not motivate changes in statutory interpretation of Sections 251 and 252 that would have the consequences discussed in this case.
Stepping back, it seems evident that this scenario is a tempest in a teapot (however entertaining). Any patent (reissue or not) no longer reciting any claim that encompasses the approved drug product could not be asserted in litigation (ANDA or otherwise) and would likely lead to an immediate and successful motion to dismiss, risking sanctions for asserting a patent where the patentee took affirmative steps to cancel the claims on the FDA-approved product and then tried to assert such a patent in litigation. Moreover, such a patent could not be properly Orange Book listed for failure to satisfy the requirement that any Orange Book listed patent must recite claims to the drug product or methods for using the product to treat a disease, ailment, or disorder. (The FTC had recently started a delisting campaign for improper listing, threatening sanctions, for listing patents for which the propriety of listing was much less uncertain than in the case argued here.)
Judge Reyna raised the possibility for gamesmanship -- "shenanigans" -- and asked whether the likelihood would increase if PTE was to be determined using the reissue date rather than the earlier date. Counsel responded by speculating that the patentee could delay seeking a reissue (which would be contrary to the public interest in not disclosing the errors motivating the reissue) but wait until the original patent was granted PTE (which extension of term would remain with the reissue under the express terms of the statute).
On rebuttal, Aurobindo's counsel went through with increased vigor a number of issues raised by Merck and the PTO. Counsel argued that the Court should recognize that the arguments raised by Plaintiff and amicus were not identical. He also argued that the term "term" was not defined in the statute (at least expressly) and thus should be construed for the ordinary meaning (such as by using a dictionary definition). He disputed Merck's position that the reissue and original patent are the same patent, citing Seattle Box for contrary precedent from the Federal Circuit (and unnamed Supreme Court precedent to the same effect). He mentioned that Merck amended its complaint to recite the reissue patent and updated the Orange Book as evidence that Merck itself recognized they were not the same patent ("a different bundle of rights"); Judge Dyk interjected to mention that what Merck thought doesn't determine proper claim construction. Counsel responded that Merck's opinion matters because it illustrates an attempt to obliquely provide an alternative definition for the term "issue" that Merck cannot give through a plain text analysis. He also made the distinction that reissue is itself distinct from the original patent (which is what Congress wanted). Judge Dyk interjected that it appeared Auribindo thinks that someone was thinking of these issues when the statutes were enacted and counsel responded that Congress is presumed to have done so. Counsel also criticized the PTO's amended MPEP § 2766 for proposing that broadening reissue patents are entitled to the original patent issue date only if the original and reissue both recite claims to the drug product, which while sensible policy is, according to counsel, even further from the text of the statute. Finally, counsel asserted that Skidmore deference is not appropriate, because using conventional canons of construction, the interpretive issues can be resolved and because the Office has not provided a coherent articulation for Section 156.
It would be imprudent for an observer to assert any definitive predictions regarding how the Federal Circuit will rule, but the tenor of the argument seems to have favored Merck's (and the PTO's) position.
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