Patent Docs

Former Directors Request Rescission of Proposed Rule Change

By Andrew Velzen and Joshua Rich --

As discussed previously on this blog (see "USPTO Proposed Rule Change to Terminal Disclaimer Practice" and "The USPTO's Proposed Terminal Disclaimer Rule: A Litigator's Perspective") and elsewhere, the U.S. Patent and Trademark Office has announced a proposed rule change to the required form for terminal disclaimers in an attempt to rein in abusive serial litigation practices.[1]  Since the proposal was announced, the public commentary about the proposed change has been overwhelmingly negative.[2]  Recently, several former high-ranking USPTO officials (including former directors) joined that chorus in a letter to Director Vidal.[3]  In their words, just the Notice of Proposed Rulemaking (NPRM) alone -- let alone adoption of the proposed rule -- "destabilizes the patent system and advances anti-innovation policies."

The letter attacks both the proposed rule on numerous grounds, both substantive and procedural.  At the most fundamental level, the former officials echoed our previous doubts that the proposed rule is proper exercise of agency discretion in rulemaking, albeit from a slightly different angle.  Their letter argues that the proposed rule would constitute a "substantive" rule and that implementing such a rule is beyond the USPTO's statutory authority (i.e., illegal).  Under 35 U.S.C. § 2(b)(2)(A), the USPTO "may establish regulations, not inconsistent with law, which . . . shall govern the conduct of proceedings in the Office."[4]  This is frequently interpreted as giving the USPTO the authority to make procedural rules but not substantive rules.[5]

According to the letter, because the proposed rule "impacts the scope of patent rights in one application based on validity determinations in another," it should be considered a "substantive," rather than a "procedural," rule.  In other words, because the proposed rule telescopes validity between patents after examination, it is beyond the USPTO's proper purview.

The USPTO has, unsurprisingly, preemptively disagreed with this contention.  For example, in the Federal Register Notice regarding the proposed change, the USPTO cited to In re Van Ornum, 686 F.2d 937 (CCPA 1982), as authority for the assertion that a rule regarding enforcement conditions resulting from terminal disclaimers filed to obviate nonstatutory double patenting rejections is within the USPTO's rulemaking authority.[6]  In addition, some Federal Circuit cases have suggested that the USPTO's interpretation of what the phrase "in the Office" means in the context of rulemaking authority should be entitled to Chevron deference, which (if it still exists) would suggest deference to the USPTO's determination of the proper scope of rulemaking.[7]  Further, the USPTO might argue that even current nonstatutory double patenting practice inherently can affect validity after issuance (e.g., since terminal disclaimers filed to overcome nonstatutory double patenting rejections include a "common ownership" requirement).  If so, the change could be argued to be a practical distinction without a legality difference.

In addition to arguing that the adoption of the proposed rule would be illegal because it exceeds the USPTO's statutory authority, though, the letter also uses the term "illegal" when discussing the way in which the proposed rule would render entire families of patents invalid or unenforceable whenever a single claim in an entirely different patent tied to it by a terminal disclaimer was found invalid or unenforceable.  That is, they are raising the same argument we did earlier (see "The USPTO's Proposed Terminal Disclaimer Rule: A Litigator's Perspective").  Using the term "illegal" here is not hyperbole, since the proposed rule likely runs afoul of the validity provisions of 35 U.S.C. § 282(a), which states:

A patent shall be presumed valid.  Each claim of a patent (whether in independent, dependent, or multiple dependent form) shall be presumed valid independently of the validity of other claims; dependent or multiple dependent claims shall be presumed valid even though dependent upon an invalid claim.  The burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity [emphasis added].

The proposed rule turns that calculus on its head and links the validity of all members of a terminal disclaimer family together.  If one claim falls, it would pull all of the others down with it.

In addition to criticizing the legality of the proposed rule, the letter also discusses the alleged justification (or lack thereof) for the proposed change.  In the authors' views, the USPTO did not conduct sufficient studies to justify this change.  Without any such studies, there is simply insufficient data to lend credence to any suggestion that present terminal disclaimer/nonstatutory double patenting practice is detrimental to innovation (let alone that the proposed change would remedy the alleged detriment).  In the authors' words, "[t]he proposal seeks to solve a problem that does not exist."

The USPTO did provide some "Rulemaking Considerations" under § IV of the Federal Register notice. However, most of these sections appear to be boilerplate language to satisfy bureaucratic requirements for rulemaking.  For example, under § IV(K), the USPTO states, without citing any evidence, that "[t]he changes proposed in this rulemaking are not expected to result in . . . significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets."  If this were indeed the case, I think many opponents of the proposed change would be put somewhat at ease.  Yet, there is simply no evidence cited in support of this assertion.

Importantly, some of the only data the USPTO did provide in the NPRM seems to highlight the substantial magnitude of the issue.  According to § IV(B) of the NPRM, roughly 14% of Office Actions include at least one nonstatutory double patenting rejection.  This number was provided only in the context of small entity applicants.  Thus, while 14% is not negligible in that context, the percentage would likely be even larger when considering all applicants (especially because non-discounted entities have larger patent budgets and may, on average, have larger patent portfolios with more overlapping patents, which are more susceptible to nonstatutory double patenting rejections).

While the evidence cited in the NPRM may not go far enough, the authors of the letter go too far.  There are parties that have used extended families in combination with sequential litigation (or the threat thereof) to chill the entry of other parties into the market.  This has been seen most clearly in the biosimilar and generic drug fields, where branded companies have kept patent families alive -- as is the best practice -- and rolled patents out one after another to be fought over by the non-branded companies. The result has been a war of attrition in which the branded company has more to lose than the non-branded has to gain, and the non-branded generally leave the field of battle or yield ground simply because of the cost of litigation.  The result is a net loss to the public, even if the USPTO did not cite specific examples.

Lastly, the letter highlights some of the unintended consequences that could result from the adoption of the proposed rule.  First, the letter asserts that the expected cost of obtaining and enforcing a patent will necessarily increase.  This is because, for example, applicants will be forced to amend claims in response to or argue against nonstatutory double patenting rejections instead of simply filing terminal disclaimers, given the risks involved with terminal disclaimers under the proposed rule.  According to the authors, this additional cost represents a greater burden to small companies and individual inventors (given their relative available resources).  But that assumes that applicants will be seeking more than one patent per family, or patents from continuations instead of divisionals (or otherwise prosecuting overlapping subject matter across a portfolio).

Under the Regulatory Flexibility Act (RFA), the USPTO actually had to estimate the costs to small entities based on the proposed change in the NPRM.  According to the USPTO in § IV(B) of the NPRM, the changes "will . . . not affect a substantial number (approximately 20%) of small entities" and that these 20% of small entities will be impacted by, at most, ~$26 Million a year, in total.  There are numerous assumptions that go into the math of how the USPTO came up with that figure, but even if it is a reasonable estimate, whether or not it is acceptably de minimis is certainly not a given.  Further, that figure only includes obtaining a patent for small entities (i.e., does not include enforcement for small entities or obtaining and enforcing patents for non-discounted entities), so it may not be representative of the total cost to all innovators.

As the former USPTO officials point out, one result related to enforcement may be a strong shift of the expense of enforcement from a relatively even split to strongly in favor of accused infringers.  In particular, under the proposed regime, an infringer can take an invalidity shortcut by attacking a single claim in the weakest patent in a grouping in order to render the strongest patents obsolete.  This means that, in order to assert one patent against an infringer, a patentee might need to successfully defend against two, three, five, ten, or more invalidity judgments depending on how many patents are tied together by terminal disclaimers.  Clearly, this would be a pricey endeavor for the patentee.

In addition to all the substantive commentary provided by the five distinguished individuals, the letter asserts an underlying urgency for action.  The authors assert that their plea represents an "unusual step" as a result of their being "deeply concerned."  Further, the letter goes beyond merely arguing against the ultimate implementation of the rule change.  It also calls on the USPTO to "withdraw [the proposal] immediately" because the NPRM "creates uncertainty every day that it remains under consideration."  So they suggest the extremely unusual step of withdrawing the proposed rule before the comment period even closes to mitigate the harm -- essentially an admission that the USPTO was wrong to even propose the rule.

[1] Full text of the proposed rule change can be found at https://www.federalregister.gov/public-inspection/2024-10166/terminal-disclaimer-practice-to-obviate-nonstatutory-double-patenting.

[2] As of writing, 22 public comments have been submitted at https://www.regulations.gov/, most of which oppose the change.

[3] The letter was signed by former directors Andrei Iancu, David Kappos, and Drew Hirshfeld and former deputy directors Laura Peter and Russell Slifer.  A copy of the full letter can be found here.

[4] https://www.law.cornell.edu/uscode/text/35/2.

[5] See also Merck & Co. v. Kessler, 80 F.3d 1543 (Fed. Cir. 1996); Animal Legal Def. Fund v. Quigg, 932 F.2d 920 (Fed. Cir. 1991).

[6] The USPTO also stated, in § IV(A) of the Federal Register Notice, that the proposed changes "involve rules of agency practice and procedure, and/or interpretative rules, and do not require notice-and-comment rulemaking" (citing to Perez v. Mortg. Bankers Ass'n, 575 U.S. 92 (2015); Cooper Techs. Co. v. Dudas, 536 F.3d 1330 (Fed. Cir. 2008)).

[7] Response to "Request for Comments on Eliciting More Complete Patent Assignment Information," Arti K. Rai (citing Bender v. Dudas, 490 F.3d 1361 (Fed. Cir. 2007)).

The USPTO's Proposed Terminal Disclaimer Rule: A Litigator's Perspective

By Joshua Rich --

As discussed at length in a previous post on this blog (see "USPTO Proposed Rule Change to Terminal Disclaimer Practice"), the U.S. Patent and Trademark Office has proposed amending the form of terminal disclaimer to be used by patent applicants.  Specifically, it proposes requiring terminal disclaimers filed to obviate nonstatutory (or obviousness-type) double patenting to include an agreement that the patent will be enforceable only if no claim of any patent to which it is tied by terminal disclaimers has been found by a final decision of a court or the USPTO to be invalid or unenforceable.  There is a real problem that the USPTO is trying to solve, but it is not directly linked to nonstatutory double patenting.  Given that incomplete overlap between the problem and the proposed solution, it seems pretty clear that the proposed amended form of terminal disclaimer is the wrong tool for the job.

Generally speaking, double patenting is a problem that arises when an applicant seeks more than one patent from a given chain.  It comes in two types:  statutory and nonstatutory.  Statutory double patenting arises when the applicant seeks more than one patent that claims the same invention; it is the equivalent of an anticipation rejection that is based on the applicant's own claims in another patent in the same chain.  It is termed statutory because it is based on the Patent Act's indication that "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title."[1]  Unlike the interpretation of some patent claims, courts have found that "a" there really means only one.  There is no solution to statutory double patenting, other than amending the claims of the rejected application.  Nonstatutory double patenting is the equivalent of obviousness for a single applicant.  It is a judicially-created doctrine that prevents an applicant from obtaining two patents that claim different, but too closely related inventions.  There is a solution to nonstatutory double patenting -- terminal disclaimers.

Terminal disclaimers align the terms of two or more related patents in order to solve two distinct problems.  The first problem is unfair extension of the exclusivity period beyond what could be obtained if the claims issued in a single patent.  Given the possibility of delayed issuance due to USPTO delay (a greater problem with pre-AIA patents, but still an issue) or other term adjustment, the two or more patents could have different terms that would add up to more than twenty years.  The terminal disclaimer solves that problem by shortening the term of a second patent to match the expiration of an earlier-issued patent.  The second problem is that the sale of one or more of the patents could lead to competitors being liable to two different patent owners for basically the same invention.  The purchaser could not have directly obtained the patent it seeks to assert because the claims would have been rejected as obvious over the unsold patent (or vice versa); it is just due to the quirk of the applicant being the same entity that allowed them to issue.  So a terminal disclaimer prevents alienation of the two patents from one another, to avoid the unfair possibility of "double jeopardy."

More recently, a different type of patent gamesmanship has developed:  parties obtaining a raft of closely-related patents to cover every aspect of a product or process.  Whether in the form of a "patent thicket" protecting the owner's product or a patent assertion entity's patent horde, the broad portfolio allows the patent owner to pick and choose which of the patents to assert against numerous defendants.  The extent of the portfolio allows the owner to keep some patents in reserve, asserting only a portion of the portfolio against each defendant (sometimes the same patents, sometimes a different group).  By doing so, the patent owner can bludgeon potential licensees into a favorable settlement on the entire portfolio or run the risk of serial litigation.[2]  In the end, most defendants end up taking the easier route of settling, even if they believe the assertion of each patent in the portfolio would be tenuous, at best.

It is this more recent problem that the new terminal disclaimer rule seeks to avoid.  As the USPTO phrased it, "This action is being taken to prevent multiple patents directed to obvious variants of an invention from potentially deterring competition and to promote innovation and competition by allowing a competitor to avoid enforcement of patents tied by one or more terminal disclaimers to another patent having a claim finally held unpatentable or invalid over prior art."[3]  It is true that the ability of patent owners to evergreen their patent litigation strategy by picking and choosing which patents to assert tamps down innovation.  But the proposed solution has lots of problems of its own.

First, it is more likely than not that demanding a patent owner yield other patents and claims upon the invalidation of one claim is not a proper exercise of agency discretion in rulemaking.  The Patent Act is very clear in establishing that every claim of every patent is independently presumed valid.[4]  The proposed new terminal disclaimer turns that presumption on its head if even a single claim has been found invalid, either through post-grant proceedings or litigation.  While the USPTO has said it has taken (and is taking) the presumption of validity into consideration in the rulemaking process, it is hard to reconcile the rule with the statute.  And it is especially questionable in an era when the Supreme Court is looking for a reason to overrule Chevron deference to agency interpretation of statutes.[5]  So this whole process may end up a frolic and detour, with compelled conditions of terminal disclaimers that cannot be enforced.

Second, the remedy of inability to assert patents later may come too much later to have real teeth.  The rule would prohibit assertion of other patents only after another claim has been finally adjudicated invalid or unenforceable.[6]  That means not only that the USPTO proceedings or district court litigation must be completed, but also that the appeal must be resolved.  But most litigation never goes to trial, let alone through appeal.  Instead, most parties settle, especially the parties threatened by patent assertion entities, who may be offered a far less costly deal if they settle before litigation begins.  So it may be many years from the first assertion of a patent in a terminal disclaimer family before any assertion of other patents is estopped.  That is especially true because patent owners' behavior may be altered by the incentives dictated by the terminal disclaimer, including potentially settling with a payment to the defendant to remove an invalidation from the books.

Third, there may be very substantial unintended consequences from the proposed changes in prosecution, post-grant proceedings, and litigation.  In prosecution, there will be more incentive for parties anticipating litigation of the family to avoid terminal disclaimers.  They may seek to fight against nonstatutory double patenting rejections much harder (including through appeal) to avoid the potential prejudice of a terminal disclaimer.  That shifts a burden from litigating parties to patent examiners.  In post-grant proceedings, there will be an incentive for accused parties to find the broadest claim of the weakest patent in the family to challenge, even if the patent has not be asserted against them (or anyone).  The accused parties can then fight the battle on a different front of their choosing as a proxy for litigation.  This would turn the process on its head, shifting power from patent owners to accused parties, without much benefit for innovation.  Finally, in litigation, the behavior of patent owners is more likely to be bimodal -- either they will want to settle early more often (and avoid potential invalidation of any patents) or they will fight tooth and nail to make sure the asserted claims are not invalidated.  In short, the proposed rule may cause changes in behavior, but they may not be the changes the USPTO is searching for.

[1] 35 U.S.C. § 101 (emphasis added).

[2] The proposed terminal disclaimer would give accused parties a stronger position than they could get even if they had won in litigation against the first invalid patent.  The Federal Circuit has held that a terminal disclaimer alone is not sufficient evidence to support the application of collateral estoppel in litigation of a second patent after the first has been found invalid.  XY, LLC v. Trans Ova Genetics LC, 968 F.3d 1323, 1334 (Fed. Cir. 2020).

[3] 89 Fed. Reg. 40439 (Mar. 10, 2024).

[4] 35 U.S.C. § 282.

[5] Chevron deference, named after the Supreme Court's Chevron v. Natural Resources Defense Council decision, involves courts deferring to administrative agencies' reasonable interpretation of statutes within their area of expertise.  The Supreme Court has been asked to overrule Chevron deference in this term's Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce cases.  Regulations that appear to be based on unreasonable statutory interpretations will provide more fuel to the fire burning down deference to the USPTO and other administrative agencies.

[6] The proposed rule also suggests that a statutory disclaimer would give rise to the prohibition on assertion of other patents, but a party knowing that to be the case would be unlikely to disclaim the claims -- it makes more sense to fight on, instead of giving up the portfolio of related patents all at once.

USPTO Proposed Rule Change to Terminal Disclaimer Practice

By Andrew Velzen --

On May 10, 2024, the U.S. Patent and Trademark Office announced a proposed rule change to terminal disclaimer practice.[1]  Unfortunately, the proposed change appears to further weaken issued patents in which terminal disclaimers have been filed and make obtaining robust patent protection more difficult and uncertain in the future.

Present Nonstatutory Double Patenting / Terminal Disclaimer Practice

One type of rejection a patent examiner can issue during pendency of a patent application is a nonstatutory double patenting rejection (sometimes called an "obviousness-type double patent rejection" or a "judicially created double patenting rejection").[2]  These rejections are "based on a judicially created doctrine grounded in public policy and which is primarily intended to prevent prolongation of the patent term by prohibiting claims in a second patent not patentably distinct from claims in a first patent" and traditionally arise when a subsequent asset (e.g., a patent application) has claims that are, in the patent examiner's eyes, obvious over a prior asset (e.g., a prior patent).[3]  Further, nonstatutory double patenting can be used after the fact (e.g., in litigation) as a grounds on which to invalidate a patent.

One way of overcoming nonstatutory double patenting rejections is by filing a terminal disclaimer.[4]  The terminal disclaimer must include "a provision that any patent granted on that application . . . shall be enforceable only for . . . such period that said patent is commonly owned with the application or patent which formed the basis for the judicially created double patenting."[5]  In other words, both the application in which the terminal disclaimer is being filed and the reference patent must permanently remain commonly owned.  If they do not, any patent that issues from the application will essentially be rendered worthless.  This is typically referred to as the "common ownership requirement" for terminal disclaimers.[6]

Proposed Change

In the proposed rule change to 37 C.F.R. § 1.321, the USPTO is considering adding another requirement for a terminal disclaimer to be used to overcome nonstatutory double patenting rejections (in addition to the common ownership requirement).  Namely, under the proposed rule, the terminal disclaimer would also need to "include an agreement . . . that the patent in which the terminal disclaimer is filed, or any patent granted on an application in which a terminal disclaimer is filed, will be enforceable only if the patent is not tied and has never been tied directly or indirectly to a patent by one or more terminal disclaimers filed to obviate nonstatutory double patenting rejections in which:  any claim has been finally held unpatentable or invalid as anticipated or obvious by a Federal court in a civil action or by the USPTO . . . or a statutory disclaimer of a claim is filed after any challenge based on anticipation or obviousness to that claim has been made."[7]  According to the USPTO, the proposed rule is being made to "promote innovation and competition by allowing a competitor to avoid enforcement of patents tied by one or more terminal disclaimers to another patent having a claim . . . held unpatentable."[8]

Essentially, what this means is that, if a patentee has multiple patents tied together by terminal disclaimers, a competitor would only need to successfully invalidate one claim in one of those patents based on prior art in order to render all of the patents invalid.  To highlight what a dramatic shift this represents, let's take an example.  Assume the following (which represents a relatively common occurrence in a traditional patent family involving multiple assets):

1.  Patentee owns Patent X, Patent Y, and Patent Z;
2.  During prosecution of Application Y (now Patent Y), the examiner gave a nonstatutory double patenting rejection over Patent X, so the patentee filed a terminal disclaimer in Application Y (now Patent Y) over Patent X; and
3.  Likewise, during prosecution of Application Z (now Patent Z), the examiner gave a nonstatutory double patenting rejection over Patent Y, so the patentee filed a terminal disclaimer in Application Z (now Patent Z) over Patent Y.

Under the current regime, a challenger would need to separately successfully challenge each of Patent X, Patent Y, and Patent Z (e.g., in district court or in an inter partes review or post-grant review before the Patent Trial and Appeal Board (PTAB)) in order to render each of Patent X, Patent Y, and Patent Z invalid.  Under the proposed rule change, though, the challenger would only need to successfully demonstrate that just one claim of Patent X is invalid over the prior art in order to automatically render all claims of Patent Y and Patent Z unenforceable.[9]  This is true even if the invalidated claim in Patent X is broader in all aspects than every claim in Patents Y and Z.

Commentary

This proposed change would substantially weaken a patent in which a terminal disclaimer is filed, since the patent's enforceability would be predicated entirely on the enforceability over the prior art of a separate patent over which the terminal disclaimer is filed.  Such a fundamental change to the patent system would be problematic.

i)  No Quid Pro Quo

First, this change lacks sufficient quid pro quo to be justified.  One impetus provided from the USPTO for this proposed change is that, presently, "multiple patents tied by terminal disclaimers that are directed to obvious variants of an invention could deter competition due to prohibitive cost of challenging each patent separately in litigation or administrative proceedings."[10]  While it is certainly true that, under the current terminal disclaimer regime, patents tied together by terminal disclaimers need to be challenged separately to render each of them invalid, it is also true that they need to be asserted separately.  In other words, demonstrating that a defendant has infringed one patent does not automatically lead to a finding of infringement over a related patent simply because there is a terminal disclaimer in place between the two patents.  Instead, the elements of the claims in each respective patent much be proved up separately against the putative infringer.  Under this proposed change, the paradigm would shift to being imbalanced.  While the burden would still be on the patentee to prove infringement in each and every patent separately, a purported infringer may only need to invalidate a single patent to automatically render an entire swath of patents unenforceable.

Likewise, an issued patent only confers protection against infringement of what is claimed, but notably does not confer protection against infringement of all obvious variations of the claims.[11]  Instead, to obtain protection of an obvious variation, a patentee must pay to file, prosecute, and have issued another patent with a different set of claims (not to mention paying maintenance fees on the subsequent patent).  Why, then, should an opponent be able to invalidate a patent without also having to address each patent on its own terms (rather than simply challenging the weakest link in the chain)?  As pointed out by some commentary previously provided to the USPTO, this raises some real concerns regarding the patentee's due process rights.[12]

ii)  The Issues are Compounded by Recent Changes in Jurisprudence and Other Proposed Changes by the USPTO

Obviously, this proposed change does not occur in a vacuum, but is accompanied by everything else swirling around in the world of patent law.  Two other recent issues are also worth noting here.  First is the recent Federal Circuit decision in In re Cellect and second is the recent fee changes proposed by the USPTO.

This blog has recently provided some insight on (and discussed the issues with) the In re Cellect decision.[13]  I also recently wrote a piece about practice steps that patentees / applicants can take to protect themselves against the fallout of the decision.[14]  To briefly summarize the primary result of that case, post In re Cellect, patentees can be put in the situation where patents with the same effective filing date can be used as prior art against one another for nonstatutory double patenting purposes based on the amount of patent term adjustment (PTA) awarded.  To be as safe as possible, and as I proposed in my post referenced above, patentees may want to consider filing proactive and/or bespoke terminal disclaimers.  This already seemed unduly onerous on the patentee (especially given that later-issued patent may result in invalidation of a prior-issued patent based solely on PTA, meaning that the patentee may need to retroactively file a terminal disclaimer in the prior-issued patent).

However, this situation gets even worse when compounded with this proposed rule change from the USPTO.  Now, assuming two patents are even arguably obvious variations over one another, the patentee will be given a "Sophie's choice."  On one hand, the patentee can choose to file a terminal disclaimer of the patent with additional PTA over the patent with less PTA, which will protect them against the In re Cellect issue but will expose them to the vulnerabilities resulting from this proposed new terminal disclaimer rule (should the patent with less PTA be deemed invalid).  On the other hand, the patentee can refrain from filing a terminal disclaimer in the patent with additional PTA so as not to risk the vagaries of this new terminal disclaimer rule, but the patentee then will then risk invalidation based on PTA differences under In re Cellect should the patent with additional PTA be determined to be an obvious variant of the patent with less PTA.  This is effectively a lose-lose decision.

Additionally, the USPTO recently proposed a set of fee changes.[15]  There are many changes proposed by the PTO therein, but I merely wish to highlight the proposed changes to the terminal disclaimer fee structure.  The fees for filing a terminal disclaimer are proposedly increasing by anywhere from 18% (if an applicant files a terminal disclaimer prior to a first action on the merits) to 724% (if an applicant files a terminal disclaimer in an issued patent).  This quite clearly indicates the USPTO's desire to encourage applicants / patentees to file terminal disclaimers proactively and early in prosecution.  It presents an interesting dichotomy that the USPTO is simultaneously encourage applicants to file terminal disclaimers early and often (with the proposed fee changes) while also severely increasing the risk associated with filing terminal disclaimers (with this proposed change). Further, even if an applicant ultimately does decide to file a terminal disclaimer, the applicant is clearly paying more (in terms of raw fees) and getting less (in terms of the value of the terminally disclaimed patent in light of the new risks invited by this rule change).

iii)  Practical Implications

Lastly, I'd like to highlight some practical implications that are created as a result of this new rule change.  As a result of the risks posed by terminally disclaimed patents under the new rule, applicants are likely to seek other ways of addressing nonstatutory double patenting rejections (rather than filing terminal disclaimers almost as a matter of course for expediency, as many applicants do currently).  The USPTO even provides some ways applicants might do so.[16]  The suggestions provided by the USPTO range from self-evident ("cancel[] or amend[] any conflicting claims in the application or in the other application containing the conflicting claims that formed the basis of the nonstatutory double patenting") to unhelpfully thermonuclear ("fil[e] a reissue application of the patent whose claims formed the basis of the nonstatutory double patenting in order to add canceled conflicting claims from the application into the reissue application, provided that the added claims do not introduce new matter into the reissue application").

I think that the most realistic course of action an applicant will take will be to either amend their claims in a fashion that gets around the nonstatutory double patenting rejections or argue the nonstatutory double patenting rejection on the merits.  The former option is, at the very least, undesirable.  The latter option, on the other hand, puts applicant in the unenviable position of being forced to characterize their own reference on the record.  Ideally, under the new rule, examiners would put more effort into determining whether or not a nonstatutory double patenting rejection should apply (so that applicants aren't unnecessarily forced to make such a touch decision).  However, I have not seen any evidence from the USPTO indicating that they will adjust how they instruct examiners to identify and issue nonstatutory double patenting rejections as a result of this proposed change.

Conclusion

This proposed rule change strikes me as counterproductive to the exact purposes the USPTO is purporting to advance with it (namely, to "promote innovation").  The Federal Circuit, itself, has said that a terminal disclaimer does not give rise to the presumption that two patents are patentably indistinct.[17]  Given all this, it seems like an incredibly bold and unnecessary step for the USPTO to promulgate this rule change.  Between the issues inherent with this proposed rule change and the result in In re Cellect, it may be time for Congress (rather than the judicial branch and the executive branch) to weigh-in substantively on nonstatutory double patenting rejections and terminal disclaimer practice.

Comments on this proposed rule change are being accepted by the USPTO until July 9, 2024.[18]  It will certainly be interesting to see how the public responds and what the USPTO does about it.

[1] Full text of the proposed rule change can be found at https://www.federalregister.gov/public-inspection/2024-10166/terminal-disclaimer-practice-to-obviate-nonstatutory-double-patenting.

[2] See the following for a full discussion of nonstatutory double patenting rejections -- https://www.uspto.gov/web/offices/pac/mpep/s804.html.

[3] M.P.E.P. § 804

[4] 37 C.F.R. § 1.321

[5] 37 C.F.R. § 1.321(c)(3)

[6] The "common ownership requirement" is obviously in addition to the inherent effect of a terminal disclaimer that limits any term of the disclaimed patent that would extend beyond the term of the patent over which it is disclaimed.

[7] https://www.federalregister.gov/documents/2024/05/10/2024-10166/terminal-disclaimer-practice-to-obviate-nonstatutory-double-patenting.  In addition to the substantive changes, it might be of interest to some that the USPTO is also proposing changing the C.F.R.'s wording from the phrase "judicially created double patenting" to "nonstatutory double patenting."  This change, at least, is a positive in my view, as it brings the terminology of the C.F.R. into better conformance with the terminology of the M.P.E.P.

[8] https://www.federalregister.gov/documents/2024/05/10/2024-10166/terminal-disclaimer-practice-to-obviate-nonstatutory-double-patenting

[9] This example of cascading unenforceability is similar to Example 2 discussed in the proposed rule change.  It illustrates so-called "direct tying" under the proposed rule change between Patent X and Patent Y and "indirect tying" under the proposed rule change between Patent X and Patent Z.  Note, however, that the rendering of unenforceability remains unidirectional, even under the proposed new rule.  In other words, under this hypothetical, it wouldn't be sufficient to demonstrate that Patent Z is invalid in order to render Patent X or Patent Y unenforceable.  See, e.g., https://www.federalregister.gov/documents/2024/05/10/2024-10166/terminal-disclaimer-practice-to-obviate-nonstatutory-double-patenting ("As is the case under current practice, a terminal disclaimer under the proposed rule would be unidirectional, encumbering only the patent with the terminal disclaimer and not the conflicting patent.")

[10] https://www.federalregister.gov/documents/2024/05/10/2024-10166/terminal-disclaimer-practice-to-obviate-nonstatutory-double-patenting

[11] A patentee does ostensibly get protection of a slightly broader range of things than is literally described in the claims under the Doctrine of Equivalents.  See, e.g., Warner-Jenkinson Co. v. Hilton Davis Chemical Co. (1997).  However, the coverage under Doctrine of Equivalents is certainly not so broad as to cover all obvious variants (and, instead, only covers "insubstantial" differences relative to the claimed invention).

[12] See Request for Comments on USPTO Initiatives To Ensure the Robustness and Reliability of Patent Rights, 87 FR 60130 (October 4, 2022); https://www.federalregister.gov/documents/2024/05/10/2024-10166/terminal-disclaimer-practice-to-obviate-nonstatutory-double-patenting.

[13] https://www.patentdocs.org/2023/10/overcoming-the-consequences-of-in-re-cellect.html

[14] https://www.mbhb.com/intelligence/snippets/living-with-cellect-three-best-practices/

[15] https://www.federalregister.gov/documents/2024/04/03/2024-06250/setting-and-adjusting-patent-fees-during-fiscal-year-2025

[16] https://www.federalregister.gov/documents/2024/05/10/2024-10166/terminal-disclaimer-practice-to-obviate-nonstatutory-double-patenting

[17] SimpleAir, Inc. v. Google LLC (Fed. Cir. 2018).

[18] Comments may be submitted at https://www.regulations.gov/.

Rethinking In re Cellect and Its Consequences

By Kevin E. Noonan --

The Federal Circuit's In re Cellect decision has caused a great deal of commentary and proposals to avoid its consequences, including changing prosecution strategies and filing prospective, precautionary terminal disclaimers (see "Overcoming the Consequences of In re Cellect") to reimbue predictability regarding patent term to patent portfolio prosecution (as well as there being a pending certiorari petition before the Supreme Court).  While understandable reactions, the reality (provided it is appreciated) may be much simpler:  a proper understanding and resulting application of the patent term adjustment statute.

That reality is clearcut:  the text, history, and structure of 35 U.S.C. § 154(b) make clear that obviousness-type double patenting (ODP) shall not cut short the patent term adjustment (PTA) of a parent patent over a child patent if the child is still pending when the parent is granted, but instead is relevant only in situations where the earlier patent is from a different (albeit related) patent family.

The language of the statute, 35 U.S.C. § 154(b)(2)(B), is unambiguous.  The statute states that:  "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."   As noted by Federal Circuit in In re Cellect, terminal disclaimers and ODP are "inextricably intertwined," because "[t]erminal disclaimers are almost always filed to overcome an ODP rejection" and they are "two sides of the same coin."  In re Cellect, LLC, 81 F.4th 1216, 1228 (Fed. Cir. 2023).  Therefore, 35 U.S.C. § 154(b)(2)(B) is clearly directed to the application of ODP in the context of PTA, and requires that (1) the terminal disclaimer must be filed (or at least could have been filed, if a mistake has been made by the USPTO for not requiring such filing) before the PTA determination, which occurs at the time of the patent grant and (2) the terminal disclaimer must rely on a "specified" expiration date.  Accordingly, the statute is controlling, because when the statute "speaks directly" to the area of law, a court-made doctrine (such as ODP) cannot serve to subtract or add to what has already been legislatively prescribed.  See SCA Hygiene Prod. Aktiebolag v. First Quality Baby Prod., LLC, 580 U.S. 328, 335 (2017).

In a typical parent-versus-child situation where the child application is still pending when the parent is granted, a terminal disclaimer cannot be properly filed in the parent over the child, because the claims in the child application can subsequently change during prosecution, making the ODP assessment based thereon impractical if not impossible.  The "provisional" ODP practice at the USPTO has never been approved by (or fully challenged in) court to prevent the grant of a parent application over a child application that is pending and has not been allowed.  See In re Mott, 539 F.2d 1291 (CCPA 1976); In re Wetterau, 356 F.2d 556 (CCPA 1966).  Indeed, according to M.P.E.P. § 804 "[i]f a provisional nonstatutory double patenting rejection is the only rejection remaining in an application having the earlier patent term filing date, the examiner should withdraw the rejection in the application having the earlier patent term filing date and permit that application to issue as a patent, thereby converting the provisional nonstatutory double patenting rejection in the other application into a nonstatutory double patenting rejection upon issuance of the patent."  This practice implicitly recognizes (and avoids) the temporal distortions created in application of ODP by the Federal Circuit's Cellect decision.

Supporting this statutory construction basis for challenging the Court's interpretation is the fact that a pending child application does not have a "specified" expiration date as required by the statutory language.  Merriam-Webster defines "specified" as "to name or state explicitly or in detail."  A pending application cannot have a "specified" expiration date if its prosecution is still ongoing, because it is unpredictable whether future PTA events arising during continued prosecution will change the eventual expiration date.  In practice, the USPTO has never specified, or attempted to specify, the expiration date of a pending patent application.

This typical patent-versus-child situation is different from the situation where the parent patent in a line of related patents and applications is found obvious over an already-granted, commonly owned patent from a different family.  In such a scenario, a terminal disclaimer is required in the parent patent over the already-granted patent from the different family.  Pursuant to the governing statute 35 U.S.C. § 154(b)(2)(B), the PTA of the parent patent would be cut short or lost entirely by the terminal disclaimer, depending on how much PTA would go beyond the expiration date of the already-granted patent from the different family.

This interpretation of 35 U.S.C. § 154(b)(2)(B) is supported by legislative history, showing that Congress considered ODP in the context of PTA multiple times and each time Congress deliberately prescribed the conditions under which ODP can cut short PTA.  Congress first introduced PTA through the Uruguay Round Agreements Act in 1994 for three types of administrative delays:  (1) delays caused by secrecy orders, (2) delays caused by interference, or (3) delays caused by appellate review.  See 35 U.S.C. § 154(b)(1)-(2) (1994).  The 1994 version of Section 154(b) also prescribed the specific conditions under which ODP could limit PTA (albeit not yet formally referred to as such but in retrospect PTA in all but name).  Specifically, the 1994 version of the statute prevented PTA for patents "subject to a terminal disclaimer due to the issue of another patent claiming subject matter that is not patentably distinct from that under appellate review."  Id. § 154(b)(2) (1994) (emphasis added).  This reference to terminal disclaimers and "not patentably distinct" made clear that Congress considered ODP in establishing PTA in this consequence and in remedy of the distortions in term caused by adoption of the GATT/TRIPS changes in U.S. patent law.  Congress also decided to limit this ODP-cutting effect to PTAs associated with appellate review delays, but not PTAs associated with interference or secrecy order delays.  Importantly, this specific choice by Congress in 1994 also prevented the application of ODP to the parent PTA over the child where the child was not "issued" when the parent was under appellate review.

In 1999, Congress changed the PTA provisions to the current language by enacting the Patent Term Guarantee Act of 1999 to "guarantee" a diligent applicant a minimum 17-year effective patent term.  See 145 Cong. Rec. H6944 (1999) (Rep. Dana Rohrabacher) ("This approach essentially gives back to the nondilatory patent holder . . . a guaranteed 17 year patent term."); 145 Cong. Rec. S13258-13259 (1999) (Sen. Orrin Hatch and Patrick Leahy) ("[T]he bill will guarantee a minimum 17-year patent term for diligent applicants . . ."); H.R. Rep. No. 106-287, 48-49 (1999) (Sen. Trent Lott) ("Title III . . . includes a new provision guaranteeing diligent applicants at least a 17-year term . . . .").  Congress's intent to provide such guarantees is clear, wherein subsection 154(b)(1) is itself entitled "Patent term guarantees," and the subsection uses the term "guarantee" or "guarantees" four separate times.  A "guarantee," as Congress well knew, is an "assurance" or an "undertaking with respect to (a contract, performance of a legal act, etc.) that it will be duly carried out."  These Congressionally mandated guarantees are abolished by the Court's Cellect decision, after having been brought into serious question in earlier cases decided by the Court.

These intentions were not effected by Congress without regard to ODP, which was considered in the context of PTA in the statutory language of the 1999 revision.  Section 154(b)(2)(B) states:  "(B) Disclaimed term.  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."  35 U.S.C. § 154(b)(2)(B) (emphases added).  The terms "has been disclaimed" (past tense) and "specified date" (see Merriam-Webster definition above) show that ODP would apply in the context of PTA only when (1) a terminal disclaimer has already been filed before the PTA determination and (2) the reference expiration date used in the terminal disclaimer must be "specified" (not simply an unascertainable expiration date of a pending application without knowing whether any future PTA event would occur that will change the eventual expiration data).

In addition, there is no meaningful policy reason to apply the ODP-cutting effect to the parent PTA in a typical parent-versus-child situation in view of the overarching legislative intent to ensure a minimum 17-year effective patent term.  In practice, this statutory choice is consistent with the legislative intent to "guarantee" a minimum 17-year effective patent term.  A child application is generally filed and granted later, which makes the effective patent term of a child patent necessarily shorter than that of the parent, assuming no USPTO delay in both cases.  A child application is also generally examined much faster than the parent, thereby less likely to incur more USPTO delays than the parent.  This also leads to less effective patent term for the child than the parent.  Therefore, in a patent family, only the parent typically is capable of receiving a minimum 17-year effective patent term.

Properly construed, the text, history and structure of Section 154(b) make clear that ODP does not apply to the PTA of a parent over a child if the child is still pending when the parent is granted.  While it is rather late in the day for these realities to matter, the potential (however unlikely) that the Supreme Court will consider the question of the effect of ODP on PTA should be well within the Court's interest in determining whether the Federal Circuit has once again erred in interpreting U.S. patent law (see Bilski v. Kappos and KSR Int'l. Co. v. Teleflex, Inc., for example), despite its recognized "special expertise" (Warner Jenkinson Co. v. Hilton-Davis Chemical Co.) and needs the Court's correction.

*Hat tip to colleagues who contributed thoughts and perspectives on these issues.

In re Institut Pasteur (Fed. Cir. 2023)

By Kevin E. Noonan --

In the shadow of its recent, precedent-challenging In re Cellect decision, the Federal Circuit illustrated the pedestrian application of its obviousness-type double patenting jurisprudence in affirming the Patent Trial and Appeal Board's rejection on ODP grounds in In re Institut Pasteur.

The case arose in an appeal during ex parte prosecution of rejections on ODP grounds of claims directed to methods for treating pain using opiorphin, one of a number of preparations of peptides derived from human Basic Proline-rich Lacrimal Protein (BPLP) in Application No. 14/730,396 ("'396 Application").  Claim 17 is representative:

17.    A method for treating pain comprising administering a dose of 10-300 mg/day of a peptide consisting of the sequence Gln-Arg-Phe-Ser-Arg (SEQ ID NO:2) or Glp-Arg-Phe-Ser-Arg (SEQ ID NO:55) for 7 days.

The claims in the '396 patent were rejected over several claims of related U.S. Patent No. 9,403,871, claims 1 and 6 being representative:

1.    A method for treating pain comprising administering an effective amount of an isolated peptide consisting of up to 15 amino acids to a human subject,
    wherein the peptide comprises the sequence Glu-Arg-Phe-Ser-Arg (SEQ ID NO: 3) or Glp-Arg-Phe-Ser-Arg (SEQ ID NO: 7),
    wherein the peptide exhibits an inhibitory property against a neutral endopeptidase or an aminopeptidase and
    wherein the peptide has the same amino acid sequence as that found within human Basic Proline-rich Lacrimal Protein (SEQ ID NO:2) or differs from the amino acid sequence found within SEQ ID NO:2 by two or less amino acid substitutions. . . .

6.    The method of claim 1, comprising administering a dose of 10-100 mg of the peptide.

(where for the biochemically curious the abbreviation "Glp" stands for pyroglutamate).

The co-owned '871 patent was filed a little more than one year before the '396 application.  The basis for the ODP rejection asserted by the Examiner was that "it would have been 'obvious for one of ordinary skill in the art to treat chronic pain by the methods of claims [of the '871 patent] which would require treatment for several days, 7 included.'"  In Pasteur's earlier appeal to the PTAB, the Board agreed with the Examiner that "pain" as recited in the '871 patent includes "acute pain" and "chronic pain such as arthritis or inflammatory bowel disease."  It is important to note in view of this reasoning that there is a fine line to be drawn between assessing ODP based on the claims of a related patent having patentably indistinct claims and considering the teachings of the specification of such a related patent.  Here, the significance of the disclosure of such a related patent is in how the terms recited in the claims are interpreted (e.g., with regard to claims reciting "pain" to include "chronic pain" in view of how "pain" is construed in view of the specification).

In addition, in the Board's view, the '871 recited a claim term for an "effective amount" of the peptide used in the claimed method that encompassed within its scope the 10-100 mg dosage recited in claim 6 of the '396 application.  Finally, with regard to the "7 day" limitation the Board held that chronic or persistent pain would be understood by the skilled worker to be subject to a 7-day course of treatment.

Applicant's response to the Board's affirmance of this rejection in the earlier appeal was to continue prosecution by filing an amendment, exemplified in the opinion as follows:

17.[] A method for treating pain in a human patient comprising administering a dose of 1 mg/kg to 2mg/kg at 10-300 mg/day of a peptide consisting of the sequence Gln-Arg-Phe-Ser-Arg (SEQ ID NO:2) or Glp-Arg-Phe-Ser-Arg (SEQ ID NO:55) to the patient for 7 days without inducing pharmacodependence or tolerance in the patient.

These amendments were of no avail, the Examiner asserting an ODP rejection to these claims.  According to the Examiner, simple math yielded a daily dosage of 80-160mg for an average-sized  patient (80kg), which daily dosages were within the scope of the '871 patent claims used to support the earlier ODP rejection previously affirmed by the Board (and not appealed to the Federal Circuit).  As for the limitation to avoid pharmacodependence or tolerance to the drug, the Board held that this limitation simply reflected "[t]he discovery of a previously unappreciated property of a prior art composition, or of a scientific explanation for the prior art's functioning, [that] does not render the old composition patentably new to the discovered," citing Atlas Powder Co. v. Ireco, Inc., 190 F.3d 1342, 1347 (Fed. Cir. 1999).

Not deterred, applicants filed a declaration by one of the inventors, who attested that "'opioid receptor agonists, such as morphine' are the 'most efficient drugs to alleviate severe pain' but their 'clinical usefulness has been limited by the development of tolerance and dependence that occurs after long-term treatment.'"  Further, the declarant attested that "'it was expected that opiorphin could induce tolerance and dependence – just as morphine does' and 'opiorphin's lack of the detrimental side effects of opioids – tolerance and dependence – was surprising and unexpected.'"  Thus, the declarant attested that the invention claimed in the '396 application "fulfill[ed] a long-felt need for efficient pain-controlling compounds without the detrimental side effects of opioids – tolerance and dependence."

The Examiner was unimpressed, finding in the declaration admissions that the analgesic properties of opiorphin were known in the art at the recited dosages, despite acknowledging the declarant to attest that "further research found opirphin [sic] to have a minimal adverse morphine-associated effect and to produce analgesic potency, and concludes that this effect was surprising and unexpected."  For the Examiner, the declaration admits that "the instant method of treatment of pain uses the same drug and the same dose as taught by the '871 patent," and so "[t]he only remaining disputed difference between the scope of the instant claims and the claims of the '871 patent is the duration of the treatment."  The latter distinction had been before the Board previously and although further research had adduced evidence of the mechanism of pharmacodependence this was just an instance of discovery of new properties of the drug which knowledge did not render the claims patentable, according to the Examiner in maintaining the ODP rejection.  Finally, regarding the assertion that the claimed invention satisfied the objective indicia of non-obviousness, the Examiner's position was that these claims recited "an identical process of administering the same drug to treat the same pathology, which is expected to produce identical results" and the recited adjustments in dose and treatment time were "a finite number of identified, predictable solutions, and one of ordinary skill in the art would have recognized that the results of this adjustment are predictable."

The Board affirmed, based on the inclusion of chronic pain in the methods claimed in the'871 patent and that "there is no dispute here that the '871 patent's claims teach treating chronic pain with the same drug, at the same dose, for the same duration as presently claimed."  Under these circumstances if this treatment regimen did not induce tolerance or pharmacodependence that was an inherent property of the treatment and did not render the '396 claims patentably distinct sufficient to overcome the ODP rejection.

The Federal Circuit affirmed, in an opinion by Judge Clevenger, joined by Judges Taranto and Stoll.  The opinion notes that the Board had relied on its decision in the first appeal of these claims that addressed the limitations argued by Pasteur in this second appeal to be wanting.  The Federal Circuit considered the Board's decision to be supported by substantial evidence as a consequence, including "concessions" by Pasteur at oral argument regarding the identity of the drug and the dosage between the '871 patent claims and the '396 application claims.  The panel also held that the Board's conclusion that the lack of tolerance or pharmacodependence in the '396 application claims was an inherent property of the claimed method also was supported by substantial evidence.  With regard to the objective indicia, the opinion also finds substantial evidence supported the Board's conclusions of obviousness under the ODP doctrine.  In particular, the Federal Circuit agreed that the '396 application claims did not satisfy a long-felt need over the '871 patent claims because practice of the method claimed in the '871 patent would satisfy that need.

Unlike the patentee in Cellect, of course, Pasteur will be able to bring these claims to grant by filing a terminal disclaimer.  However, this will result in a patent expiration date for these claims to be March 18, 2025 instead of (at a minimum) May 26, 2029 (subject to patent term adjustment for the time spent appealing the rejection before the Board and Federal Circuit).  These calculations provide ample explanation for Pasteur's efforts in overcoming the asserted ODP rejections without filing a terminal disclaimer.

In re Institut Pasteur (Fed. Cir. 2023)
Nonprecedential disposition
Panel: Circuit Judges Taranto, Clevenger, and Stoll
Opinion by Circuit Judge Clevenger

Overcoming the Consequences of In re Cellect

By Kevin E. Noonan --

In view of the unprecedented uncertainty in patent law generated by counter-doctrinal Supreme Court decisions over the past decade or so and a cowed Federal Circuit relegated to complaining that their hands are tied on most matters (even when acknowledging that the decisions they are rendering do violence to the U.S. patent system; see now-Chief Judge Moore's dissent in Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC), an occasional clear decision that establishes a bright line in the law (once the Court's stock in trade) is refreshing even if the clarity comes with unwanted consequences.  The Court's recent In re Cellect is one of those decisions, which held (as "once-and-for-all" as can be expected for the Court in its current incarnation) that the primary concern when assessing the interplay between obviousness-type double patenting (ODP) and patent term adjustment (PTA) is whether a patentee can obtain claim term that extends past 20 years from its earliest priority date for any reason (other than patent term extension under 35 U.S.C. § 156 for FDA delay in approving a patented drug, a small and unique subset of all granted patents) in favor of the public's right to having the patented invention freely available upon expiration of the earliest to expire patent claiming patentably indistinguishable embodiments of the invention.

The issue, of course, is ODP and the extent to which terminal disclaimers are required under circumstances where a patent is entitled by statute to patent term adjustment (PTA) under circumstances where the claims in such a patent is deemed to be an obvious variant of claims in a related, earlier-expiring patent.  To recap, 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 four of these patents were invalidated, the fifth, U.S. Patent No. 6,862,036 not having any PTA that raised the issue).  The chronological situation is set forth in an exhibit from Cellect's Federal Circuit appeal brief and reproduced in modified form in the opinion:

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) 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 ODP must be determined after application of PTA.  (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.")  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)).  The Board further held 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 Federal Circuit affirmed the Board's judgment in these re-examinations in an opinion by Judge Lourie joined by Judges Dyk and Reyna.  The primary basis for the Court's decision was that it is inequitable to the public that a second, later-expiring patent should be obtained ("an unjustified timewise extension of patent term") on an obvious variant of a patented invention, based on AbbVie Inc. v. Mathilda & Terence Kennedy Inst. of Rheumatology Tr., 764 F.3d 1366, 1373 (Fed. Cir. 2014).  The panel's opinion found support in the statute (as had the Board), wherein application of PTA was limited under circumstances where there was or should have been a terminal disclaimer filed, which stated that "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."  35 U.S.C. § 154(b)(2)(B)*  This conclusion was based in part by the Court's precedent, particularly AbbVie, and by the panel's determination that the overriding policy consideration is the need to "ensure that the applicant does not receive an unjust timewise extension of patent term" (as it has for over a decade; see "In re Janssen Biotech, Inc.; G.D. Searle LLC v. Lupin Pharmaceuticals, Inc."; "AbbVie Inc."; "Gilead Sciences, Inc. v. Natco Pharma Ltd."; "Eli Lilly & Co. v. Teva Parenteral Medicines, Inc."; and "Sun Pharmaceutical Industries, Ltd. v. Eli Lilly & Co.").

Having spoken plainly (and seeing that the likelihood the Supreme Court will weigh in is substantially zero), the question is what prosecution stratagems can be devised to permit maximizing patent term by (at a minimum) having a patent receive its statutory PTA without running afoul of concerns over public expectations.  Some have argued that filing "preemptive" terminal disclaimers would at least prevent patents from being invalidated on ODP grounds after the exclusivity of such patents has been relied upon to protect investment in drugs and other inventions requiring exclusivity terms that provide a sufficiently robust return on investment (see, for example, Mitra et al., 2023, In re Cellect: The Federal Circuit Alters Terminal Disclaimer Strategy; Huis et al., 2023, Patent Owners Must Consider New Terminal Disclaimer Strategies in View of the Federal Circuit's Decision in In re Cellect).  The drawback of these strategies is that by definition they relinquish PTA even before entitlement to such PTA has been challenged and thus such terminally disclaimed patents may not provide the requisite exclusivity to support investment in the claimed technology.

There are, however, several alternative approaches.  The most direct is to take advantage of the safe harbor provisions of 35 U.S.C. § 121 for claims subject to a restriction requirement.  Particularly for inventions having claims encompassing several statutory categories under 35 U.S.C. § 101 (compositions, methods of making, methods of using, etc.) having a restriction requirement issued can provide a basis to avoid having to file a terminal disclaimer because the various claim groupings have been judged by the patent examiner to be patentably distinct.  While not immune from later challenge, the presumption is that the Office's determination was correct and thus will be subject to the clear and convincing standard for invalidating patents for ODP.  This tactic carries the responsibility to make certain that claims in the various groups are kept within their patentably distinct "silos" to maintain the safe harbor (see Boehringer Ingelheim Int'l. v. Barr Laboratories, Inc. (Fed. Cir. 2010); Obviousness-type Double Patenting after Amgen v. F. Hoffmann-LaRoche), a concept termed "consonance" in this regard.  And it can also be prudent to avoid taking the opportunity to request rejoinder under M.P.E.P. § 821.04 of certain otherwise patentably distinct groups of claims (such as method claims being rejoined to allowed composition claims) which has the effect of having these patentably distinct claims issued in the same granted patent and thus having the same expiration date (which could in some instances be less than could be obtained under the PTA statute).

Substantively, assertion of ODP can be addressed as with any other obviousness rejection, by challenging motivation-to-combine disclosure of related applications with other prior art references, or whether species encompassed by ODP-rejected claims have features (like unexpected results) not shared with earlier claimed embodiments.  Other objective indicia (like commercial success) may be available for species claims to the eventual commercial embodiment.  Such strategies will require more careful consideration of what claims are pursued and in what order, which in turn will benefit from close coordination between business development actors and patent prosecutors that, while always recognized as being beneficial has not always been pursued with sufficient diligence.  In this regard, it is important to remember that "the patent disclosure [of an earlier related patent asserted in an ODP rejection] is not 'prior art' and cannot be looked to for what it teaches," In re Baird, 348 F.2d 974, 979 (C.C.P.A. 1965), which renders such patents much more limited than prior art to another (which can be considered for obviousness purposes for all that it teaches and is not limited to whether the reference is enabling, see Amgen Inc. v. Hoechst Marion Roussel Inc., 314 F.3d 1313, 1357 (Fed. Cir. 2003) ("Under [§]103, however, a reference need not be enabled; it qualifies as a prior art, regardless, for whatever is disclosed therein) (emphasis added).  Moreover, a species claim is not necessarily obvious over an earlier genus claim and can be found to be patentably distinct using the analytical rubrics contemplated herein.  In re Sarett, 327 F.2d 1004 (C.C.P.A. 1964); an illustrative example is In re Vogel, where the Court of Customs and Patent Appeals held that claims to a method of preparing a beef product in a later application was patentably distinct from claims to a similar but not identical method for preparing a pork product but claims to a similar method for making a meat product were not patentably distinct.  422 F.2d 438 (C.C.P.A. 1970).  This is also true for distinguishing claims to compositions and methods for using them.  In re Boylan, 392 F.2d 1017, 1022-23 (C.C.P.A. 1968).

Implementing these various ways of avoiding ODP rejections and the need for PTA-destroying terminal disclaimers takes intentional planning when drafting claims and assessments that heretofore have not had compelling reasons to be performed for time-saving and drafting-efficiency reasons.  In view of the Federal Circuit's decisions precluding any consideration of what is fair to the patentee (as opposed to the public), making the effort to avoid the need for filing a terminal disclaimer seems worth doing to the broadest extent possible.

* There is no such limitation in 35 U.S.C. § 156, even though both statutes recite that an extension of the term shall be granted.

In re Cellect (Fed. Cir. 2023)

By Kevin E. Noonan --

The Federal Circuit decided a question left open during a recent spate of opinions involving the judicially created doctrine of obviousness-type double patenting (ODP):  the effect patent term adjustment (PTA) can (or should) have on creating circumstances where ODP will operate to find a patent invalid in the absence of a timely filed terminal disclaimer, in its opinion handed down yesterday in In re Cellect.

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 four of these patents were invalidated, the fifth, U.S. Patent No. 6,862,036 not having any PTA that raised the issue).  The chronological situation is set forth in an exhibit from Cellect's Federal Circuit appeal brief and reproduced in modified form in the opinion:

The opinion also set forth the chain of invalidation under obviousness-type double patenting, stating that:

[T]he '621 patent claims were found to be unpatentable over the '626 patent claims, which were found to be unpatentable over the '369 patent claims.  The '742 patent claims were also found to be unpatentable over the '369 patent claims.  The '369 patent claims were themselves found to be unpatentable over the '036 patent claims.  Thus, although the ODP invalidating reference patents form a network across the four ex parte reexamination proceedings, all invalidated claims can be traced back to the single family member patent that did not receive a grant of PTA:  the '036 patent.

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 ODP 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 left 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 Federal Circuit affirmed the Board's judgment in these re-examinations in an opinion by Judge Lourie joined by Judges Dyk and Reyna.*  Although patentee asserted five arguments in its briefing, the Court discussed only three of these arguments (albeit in some instances apparently condensing the five arguments to three).

The first argument which was dispositive for the Court in its affirmance was Cellect's position that PTA under 35 U.S.C. § 154 and PTE under 35 U.S.C. § 156 should be treated equivalently as Congressional mandates that should not be abridged by judicially created doctrines like obviousness-type double patenting.  The Court's opinion to the contrary was based on three principles.  The first was that it is inequitable to the public that a second, later-expiring patent should be obtained ("an unjustified timewise extension of patent term") on an obvious variant of a patented invention, based on AbbVie Inc. v. Mathilda & Terence Kennedy Inst. of Rheumatology Tr., 764 F.3d 1366, 1373 (Fed. Cir. 2014).  The panel's opinion found support in the statute (as had the Board), wherein application of PTA was limited under circumstances where there was or should have been a terminal disclaimer filed (35 U.S.C. § 154(b)(2)(B)): "Disclaimed term.— 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" (emphasis in brief).  There is no such limitation in 35 U.S.C. § 156 and even though both statutes recite that an extension of the term shall be granted this distinction between the two types of extension was enough to convince the Court that the Board had come to the correct conclusion.

This conclusion was based in part by the Court's precedent, particularly AbbVie, and by the panel's agreement with the distinction in statutory construction between 35 U.S.C. § 154 and § 156 as advocated by the Solicitor representing the USPTO.  The overriding policy consideration is the Court's focus on the need to "ensure that the applicant does not receive an unjust timewise extension of patent term" (as it has for over a decade; see "In re Janssen Biotech, Inc.; G.D. Searle LLC v. Lupin Pharmaceuticals, Inc."; "AbbVie Inc."; "Gilead Sciences, Inc. v. Natco Pharma Ltd."; "Eli Lilly & Co. v. Teva Parenteral Medicines, Inc."; and "Sun Pharmaceutical Industries, Ltd. v. Eli Lilly & Co.").  The fact that the limitations of terminal disclaimers is in the PTA statute but not the PTE statute indicates to the Court that Congress intended the effect of ODP to differ between these two approaches to statutory term restoration.  They "are dealt with in different statutes and deal with differing circumstances" and while "the expiration date used for an ODP analysis where a patent has received PTE is the expiration date before the PTE has been added" pursuant to Novartis AG v. Ezra Ventures LLC (Fed. Cir. 2018), and Merck & Co. v. Hi-Tech Pharmacal Co., 482 F.3d 1317 (Fed. Cir. 2007), the "expiration date used for an ODP analysis where a patent has received PTA is the expiration date after the PTA has been added" as the holding in this case.  Cellect's argument that both PTA and PTE should be treated equally because they "provide statutorily authorized time extensions" is "an unjustified attempt to force disparate statutes into one" according to the opinion.

The panel perceived differences in the statutes ("each has its own independent framework established through an independent statutory schema") that justify the distinctions raised in this opinion despite the similarities that "both PTA and PTE are statutorily authorized extensions, and each serves to recover lost term," because they have "quite distinct purposes."  Importantly, the panel construes the statute in this manner because for them "[t]here is nothing in the PTA statute to suggest that application of ODP to the PTA-extended patent term would be contrary to the congressional design."  On the contrary, the Court understands Cellect's position to "effectively extend the overall patent term awarded to a single invention contrary to Congress's purpose" (which is to limit an extended term for a patentably distinct invention).  In the panel's view, the overriding consideration is "to ensure that the applicant is not receiving an unjust extension of time."

Finally, in this regard, the Court understands that if terminal disclaimers are the solution to the problem of unjust extensions of time precluded by ODP, permitting PTA to apply where a terminal disclaimer has not been filed (to avoid application of 35 U.S.C. § 154(b)(2)(B)) would "frustrate the clear intent of Congress [by permitting] applicants to benefit from their failure, or an examiner's failure, to comply with established practice concerning ODP" (i.e., using terminal disclaimers to avoid invalidation).

The opinion refuses to find the equities asserted in Cellect's second argument arising from the particular circumstances in this case to be a basis to come to a different conclusion than the Board had.  The Federal Circuit recognizes the preeminent policy purpose for applying ODP to the PTA circumstances in this case like every other.  If, as the Board asserted and the Federal Circuit agreed, Cellect's patents received an "unjust timewise extension" of their patent term, the absence of gamesmanship does not remedy these circumstances nor excuse Cellect from the consequences arising therefrom ("it does not matter how the unjustified extensions are obtained").  Moreover, the Federal Circuit agreed with the Board that a risk continued to exist regarding the other consideration in ODP, the possibility of separate ownership of patents that are not patentably distinct (no matter Cellect's promises that it would not alienate them, nor how remote or theoretical these risks might be).

Finally, the Federal Circuit rejected Cellect's third argument that the re-examinations were improvidently granted because there was no substantial new question of patentability raised in them, based on the same examiner being responsible for permitting these patents to grant and not issuing a rejection in any of them based on ODP.  The panel found that institution of these re-examinations was supported by substantial evidence because, inter alia, there was nothing in the prosecution history of any of these patents that "affirmatively indicates that the examiner considered whether or not an ODP rejection should be made."  The Court also rejected the alternative proposed by Cellect of only considering the adjustment term, and not the entire patent term, for invalidation as an attempt to have the PTO or the Court grant a "retroactive" terminal disclaimer, giving Cellect "the opportunity to benefit from terminal disclaimers that it never filed."

While we have come a long way from the conventional use of terminal disclaimers to protect the public from shenanigans of intentional delay by doling our patentably indistinct variations on an invention to extend protection beyond the statutory 17-year term prior to revision of the patent stature in response to U.S. accession of the GATT/TRIPS agreement, the philosophy applied by the Court in this decision is consistent with that judicial attempt to prevent "unjust" extensions of patent rights.  Of course, there are stratagems existing and to be developed to adapt to the regime established by the Federal Circuit's decision, which only reinforces the value of the clever draftsman in protecting important technologies under creative applications of the law as the Federal Circuit construed it in this case.

* In June, the Court affirmed the Board's judgment under Rule 36 in Reexamination No. 90/014,452 and Cellect, LLC v. Samsung Electronics Co. in inter partes review proceedings IPR2020- 00475, IPR2020-00476, IPR2020-00477, and IPR2020-00512.

In re Cellect (Fed. Cir. 2023)
Panel: Circuit Judges Lourie, Dyk, and Reyna
Opinion by Circuit Judge Lourie

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

Takeda Pharmaceutical Co. v. Torrent Pharmaceuticals Ltd. (Fed. Cir. 2021)

By Kevin E. Noonan --

In a terse, non-precedential opinion, the Federal Circuit affirmed a district court's judgment that Defendants Torrent Pharmaceuticals and Indoco Remedies Ltd. had failed to prove that the claims asserted by Plaintiff/patentee Takeda were obvious, either under the statute or the judicially created doctrine of obviousness-type double patenting, in Takeda Pharmaceutical Co. v. Torrent Pharmaceuticals Ltd.

The case arose in ANDA litigation over Takeda's allegations that Defendants would infringe claims 4 and 12 of Orange Book-listed U.S. Patent No. 7,807,689:

4.  A compound of the formula

or pharmaceutically acceptable salts thereof.

12.  A compound of the formula

wherein the compound is present as a benzoate salt.

These claims cover the active ingredient for Takeda's alogliptin benzoate formulations, marketed under the brand names Nesina®, Kazano®, and Oseni® for treatment of Type II diabetes.  Defendants' challenges were based on factual determinations by the District Court, including testimony from three experts; based on this evidence the District Court found that Defendants had not established invalidity on either statutory (over the cited art) or obviousness-type double patenting grounds.

Not surprisingly the Federal Circuit affirmed, in an opinion by Judge Chen joined by Judges Mayer and Dyk.  The Court recognized Defendants' arguments to be grounded in whether a skilled worker would have had a reasonable expectation of success, in the context of what the opinion characterized as "the undisputed factual finding" that "in the relevant art of pharmaceutical development, very small changes in molecular structure can have dramatic effects on the properties of the molecule" and "the more distantly related two chemical structures are, the less probable it will be that they have the same biological effect."  Regarding obviousness-type double patenting, Defendants asserted Takeda's co-owned U.S. Patent No. 7,723,344 as disclosing a "lead compound" (termed F162 in the opinion) that upon further development would have rendered the alogliptin compound obvious.  This contention was that the structural differences between these compounds (replacement of a pyrimidinone scaffold with uracil) would have been obvious in view of two scientific references, which Defendants argued taught "scaffold replacement techniques" and that uracil lowered blood glucose in animal studies, respectively.  The opinion rejected this argument on the grounds that "[c]ollectively, these references, along with other evidence of record, do not demonstrate that uracil was known to possess DPP-IV inhibitory activity or other characteristics desirable in a scaffold for DPP-IV inhibition as of the relevant priority date" and accordingly that there was no clear error in the District Court's determination that Defendants failed to establish invalidity on obviousness-type double patenting grounds over this art.

Defendants' second argument in favor of obviousness-type double patenting is that the skilled worker would have been motivated to replace a fluoro-olefin substituents in F162 by an amide in alogliptin, based on the skilled worker recognizing these substituents as isosteres.  The District Court had found that the skilled worker would not have been motivated to make this substitution, which the Federal Circuit held was not clear error because Defendants had not cited any art that provided this motivation and there were "myriad more conservative and predictable modifications that were available for transforming F162 into a 'novel' compound" (and Takeda had elicited an admission from Defendants' expert at trial that he did not know of any prior art disclosing this specific modification.

Turning to obviousness under 35 U.S.C. § 103, Defendants asserted art purportedly teaching substitution of a xanthine scaffold moiety for the uracil moiety in alogliptin.  The Federal Circuit agreed that the District Court did not err in concluding that Defendants had not shown that the skilled worker could reasonably expected this substitution to be successful.  This was because "the interchangeability references on which Indoco relies do not pertain to DPP-IV inhibitors or diabetes [thereby failing any expectation that the substituted compound would be operative], nor do they, or any other prior art of record, teach substituting an existing xanthine scaffold for uracil (thereby failing to establish the viability of the substitution on structural grounds]."

The opinion concludes by considering Defendants' argument that the District Court erred as to the level of skill of the ordinarily skilled worker.  This question arose with regard to whether the skilled person should have "specific experience developing DPP-IV inhibitors and/or type II diabetes drugs," and was relevant to the weight the District Court gave to the testimony of Takeda's expert who lacked such experience.  The Federal Circuit found this distinction immaterial because the District Court considered the prior art from both perspectives (i.e., a skilled artisan with and without such expertise) and found Defendants had not shown Takeda's asserted claims to be obvious ("[g]iven the substantive gaps in establishing motivation and reasonable expectation of success identified above, the record supports the district court's conclusion that it would have reached the same outcome under either definition of a skilled artisan").  Moreover, the opinion states that Defendants failed to show that applying the standard to the skilled artisan issue they espouse would have made any difference.   Accordingly, the Federal Circuit affirmed the District Court's finding against Defendants.

Takeda Pharmaceutical Co. v. Torrent Pharmaceuticals Ltd. (Fed. Cir. 2021)
Nonprecedential disposition
Panel: Circuit Judges Dyk, Mayer, and Chen
Opinion by Circuit Judge Chen

Immunex Corp. v. Sandoz Inc. (Fed. Cir. 2020)

By Kevin E. Noonan --

The Federal Circuit held recently that the "all substantive rights" test, used heretofore to determine the identity of the "patentee" for purposes of satisfying 35 U.S.C. § 281, should be the standard for determining common ownership in applying the judicially created doctrine of obviousness-type double patenting (ODP), in Immunex Corp. v. Sandoz Inc.  This decision may serve to complicate the legal landscape for patent licensees when addressing a common ownership question.  As in the St Regis Mohawk Tribe v. Mylan decision, ultimately contract law, not patent law, provides the basis for the Court's decision in this case.

The case arose in litigation under the Biologics Price Competition and Innovation Act (BPCIA, relevant provisions codified under 42 U.S.C. § 262(l)) over Sandoz' biosimilar application for its product Erelzi, a generic form of Enbrel® (etanercept), which is used for reducing the signs and symptoms of moderately to severely active rheumatoid arthritis.  Etanercept is a fusion protein "made by combining a portion of a 75 kilodalton human tumor necrosis factor receptor protein (the extracellular portion) with a portion of immunoglobulin G1 (IgG1), specifically, the portion including the hinge region, CH2 and CH3 domains."  Immunex is the exclusive licensee of Hoffmann-La Roche for U.S. Patent Nos. 8,063,182 (to the etanercept composition of matter) and 8,163,522 (methods for making etanercept).

Immunex received FDA approval for Enbrel® and entered into a royalty-bearing license agreement for Roche for patents and applications that contained claims relevant to this product (including the '182 and '522 patents).  Amgen later acquired Immunex and entered into an "Accord and Satisfaction" agreement with Roche, the purpose of which was "to eliminate the continuing obligations to pay royalties to Roche."  The terms of this agreement gave Immunex a "paid-up, irrevocable, exclusive license to the U.S. patent family for the patents-in-suit."  Relevant to the Federal Circuit's decision, the Agreement gave Immunex "the sole right to grant sublicenses, to make, have made, use, sell, offer for sale and import products covered by the patent family" and "the exclusive right to prosecute patent applications in the U.S. patent family."  Immunex also received the right to enforce the patents in the first instance, Roche reserving the right to sue (and retain all damages received) upon Immunex' notice that it would not bring suit.  Also, Roche can practice the claimed invention only for internal, research purposes under the terms of the agreement.

Sandoz stipulated to Infringement and trial was held on patent validity.  The District Court held that Sandoz had not established by clear and convincing evidence that the claims were invalid for obviousness, failure to satisfy the written description requirement nor obviousness-type double patenting.  With regard to the OPD issue, the District Court set forth the following reasons why Sandoz' arguments were not persuasive:

(1) that Sandoz's proposed test for common-ownership does not apply;
(2) even if that test applies, the patents-in-suit and the asserted double-patenting reference patents are not commonly owned;
(3) even if they are commonly owned, the two-way, rather than the one-way test for obviousness-type double patenting applies as to some of the double-patenting references; and
(4) the patents-in-suit are patentably distinct from each of the asserted double patenting references.

Sandoz appealed.

The Federal Circuit affirmed, in an opinion by Judge O'Malley joined by Judge Chen; Judge Reyna filed a dissenting opinion directed to the ODP issue.  The opinion characterized Sandoz' common ownership argument as "novel," in that although the patents in suit are owned by Roche they are "effectively" owned by Immunex under the Accord & Satisfaction agreement.  This amounted to an application of the "all substantial rights" test used to determine standing to sue under 35 U.S.C. § 281.  The majority agreed that this test can be "informative" in determining common ownership but Sandoz has not done so here because "the agreement at issue here did not transfer all substantial rights from the assignee, Roche, to the exclusive licensee, Immunex."  Further:

Under Sandoz's theory of common ownership, if a party is the effective patentee for purposes of the ability to bring an infringement suit, then it is also an effective patentee for purposes of obviousness-type double patenting," according to Sandoz and if the rule were contrary an assignment can be turned into a license.  In particular, "if a party acquires all substantial rights in a patent application, including the right to control prosecution, then obviousness-type double patenting should apply to prohibit issuance of claims that are not patentably distinct from claims in patents already owned by that party.

The majority expressly rejected Immunex' position, that common ownership arises only when "the relevant inventions were owned by the same entity at the time of the invention," citing MPEP § 804.03(II) for its analysis of 35 U.S.C. 102(b)(2)(C) or pre-AIA 35 U.S.C. 103(c)(1).  The majority further rejected Immunex' historical argument that revisions to the patent statute in 1984 created a "gap" that ODP was intended to fill to prevent two patents arising on obvious variants of a patented invention, citing In re Longi, 759 F.2d 887, 893 (Fed. Cir. 1985) (the opinion noting that the Court had more recently rejected this interpretation in Geneva Pharm., Inc. v. GlaxoSmithKline PLC, 349 F.3d 1373, 1377, 1386 (Fed. Cir. 2003), as has the PTO in Ex Parte Maurice, No. 2005-2463, 2005 WL 4779419, at *2 (B.P.A.I. Sept. 19, 2005)).

The Federal Circuit agreed with Sandoz that the interpretation that the "all substantial rights" test was an appropriate measure for common ownership was more consistent with the purpose of the ODP doctrine, but refused to "import into this judicially-created doctrine the entirety of our body of law analyzing who is a statutory 'patentee' pursuant to 35 U.S.C. § 281," making the distinction:

We conclude only that where one of the rights transferred is the right to prosecute the patent at issue, identification of the effective "patentee" is informative in evaluating whether the patents are "commonly owned" for purposes of obviousness-type double patenting.

Here, the Accord and Satisfaction agreement did not satisfy this test, according to the panel majority.  While there are many factors that can be assessed for this determination, the panel focused on two:  "enforcement and alienation," and "the scope of the licensee's right to sublicense, the nature of license provisions regarding reversion of rights, the duration of the license grant, and the nature of any limits on the licensee's right to assign its interests in the patent," citing Alfred E. Mann Found. v. Cochlear Corp., 604 F.3d 1354, 1360-1 (2010).  Under Delaware law, the majority applied the de novo standard of review regarding interpreting the District Court's construction of the terms of the contract and clear error for parole evidence of the parties' intent (although in view of the express terms of the agreement the Federal Circuit found no need to resort to parole evidence).

With regard to the parties' intent, the District Court found, and the Federal Circuit agreed, that the parties "specifically intended for the Accord & Satisfaction to be a license such that Roche would remain the owner of the patents-in-suit."  This determination was supported in the District Court by the express language of the agreement (wherein it was termed a "license") as well as testimony from an Amgen witness.  This portion of the District Court's opinion came in for criticism by the panel opinion, the majority stating that "we have clarified that 'whether a transfer of a particular right or interest under a patent is an assignment or a license does not depend upon the name by which it calls itself, but upon the legal effect of its provisions,'" citing Lone Star Silicon Innovations LLC v. Nanya Tech. Corp., 925 F.3d 1225, 1230 (Fed. Cir. 2019) (emphasis in original) (quoting Waterman v. Mackenzie, 138 U.S. 252, 256 (1891)).

But the panel opinion is intentionally parsimonious in instructing that rather than "import[ing] into [the] judicially created doctrine [of obviousness-type double patenting] the entirety of our body of law analyzing who is a statutory 'patentee' pursuant to 35 U.S.C. § 281," rather setting forth the principle that "only that where one of the rights transferred is the right to prosecute the patent at issue, identification of the effective 'patentee' is informative in evaluating whether the patents are 'commonly owned' for purposes of obviousness-type double patenting" (emphasis in opinion).  The panel opinion held that the party having the right to control prosecution satisfies the "all substantial rules" test, and as a result "prevent[s] the unjustifiable issuance of claims that are patentably indistinct from claims already owned by that party."  Perhaps most importantly, "looking to the 'all substantial rights' test achieves the proper balance between deterring gamesmanship in prosecution, on the one hand, and avoiding any chilling effect on routine collaborations and licensing between parties working in the same field of research, on the other."

Applying these principles to this case, the panel majority held that Roche had not transferred all substantial rights to Immunex and thus the patents were not commonly owned because the license was not substantially an assignment, as Sandoz had argued.  Considering the enforcement and alienation provisions of the agreement the Federal Circuit majority held that it is "clear" that Roche did not transfer all its substantive rights in the patents.  For the panel majority, retention by Roche of the "secondary" right to sue for infringement was dispositive, saying it was "thoroughly inconsistent" with a conclusion that the license was effectively an assignment.

The opinion expressly distinguished the Court's earlier decision in Speedplay, Inc. v. Bebop, Inc., 211 F.3d 1245 (Fed. Cir. 2000), because there the licensee could frustrate the licensor's secondary right to sue by offering putative infringers a license, whereas here Immunex could not do so once Roche's secondary right has been triggered by Immunex's decision not to bring suit.

The panel also considered Roche retaining the right to veto any assignment by Immunex to a third party to be inconsistent with transfer of all substantial rights in the license.

The majority also affirmed the District Court's decision that Sandoz had not established by clear and convincing evidence that the claims were invalid for obviousness or failure to satisfy the written description requirement (Judge Reyna did not dissent from this part of the opinion).  Regarding written description, the panel affirmed the District Court's decision that the existence of the full-length p75 amino acid sequence in the prior art adequately supported claims directed to a fusion protein between full-length p75 and the F_c portion of IgG, even though the specification only disclosed such a fusion protein comprising a truncated p75 sequence, on the grounds that "[i]t is well-established that a patent specification need not re-describe known prior art concepts," citing Capon v. Eshhar, 418 F.3d 1349, 1357 (Fed. Cir. 2005) (these sequences were also available to the public from deposited materials).  In addition, the panel credited the District Court's reliance on expert witness testimony, wherein the lower court was due deference under the clear error standard of review.

Regarding obviousness, the panel found unpersuasive Sandoz' arguments regarding motivation to combine and secondary indicia.  The panel found Sandoz' own arguments at trial and in post-trial motions regarding the relationship between motivation to combine and use of etanercept for treating inflammatory disorders contradicted its position.  For the relevant objective indicia (clinical success, long-felt need, and failure of others) the panel held that the District Court had properly concluded that Immunex had demonstrated the required nexus between the claims and the etanercept product.  As stated in the opinion, "Sandoz's arguments regarding objective indicia are merely disagreements with the district court's weighing of the evidence," which is not clear error.

Judge Reyna's dissent on the ODP question amounted to his disagreement with the majority's application of the "all substantial rights" standard to the Accord and Satisfaction agreement between the parties; he discerned "gamesmanship" in the course of prosecuting the patents-in-suit.  On substantive law, Judge Reyna also opined that the "one-way" test for obviousness-type double patenting should be applied to this situation.  His reasoning was that because the District Court found that both the Patent Office and Roche were responsible for the delay in prosecution leading to the later-filed application granting first as a patent, the situation did not satisfy the requirement for applying the two-way test that the Patent Office be solely responsible for the delay.

Immunex Corp. v. Sandoz Inc. (Fed. Cir. 2020)
Panel: Circuit Judges O'Malley, Reyna, and Chen
Opinion by Circuit Judge O'Malley; dissenting opinion by Circuit Judge Reyna

Boehringer Ingelheim Pharmaceuticals Inc. v. Mylan Pharmaceuticals Inc. (Fed. Cir. 2020)

By Donald Zuhn –-

Last month, in Boehringer Ingelheim Pharmaceuticals Inc. v. Mylan Pharmaceuticals Inc., the Federal Circuit reversed a decision by the U.S. District Court for the District of New Jersey finding certain claims of U.S. Patent No. 8,853,156 to be directed to ineligible subject matter under 35 U.S.C. § 101, and remanded for further proceedings.  The Federal Circuit also affirmed the District Court's finding that the asserted claims of U.S. Patent Nos. 9,173,859 and 8,673,927 were invalid for obviousness and obviousness-type double patenting.

Plaintiffs-Appellants Boehringer Ingelheim Pharmaceuticals, Inc.; Boehringer Ingelheim International GmbH; Boehringer Ingelheim Corp.; and Boehringer Ingelheim Pharma GmgH & Co. KG ("Boehringer") filed suit against Defendants-Appellees Mylan Pharmaceuticals Inc.; Mylan Inc.; Mylan Laboratories, Ltd.; Aurobindo Pharma Ltd.; and Aurobindo Pharma USA, Inc. ("Mylan") for infringement of the '156, '859, and '927 patents.  The asserted patents relate to the treatment of type 2 diabetes mellitus with DPP-IV inhibitors such as linagliptin.  Mylan moved for partial summary judgment on the pleadings, alleging that claims 10-17, 24, and 25 of the '156 patent are directed to ineligible subject matter under 35 U.S.C. § 101.  The District Court granted Mylan's motion, finding that claims 10-17, 24, and 25 of the '156 patent are directed to the "abstract idea" of "administering the DPP-IV inhibitor to the targeted patient population," and that these claims fail to recite an inventive concept.

At trial, the District Court determined that claims 1, 14, 15, 20, and 21 of the '859 patent and claims 7, 9, 15, 17, 19, 25, and 26 of the '927 patent are invalid for obviousness-type double patenting in view of the claims of U.S. Patent No. 8,178,541, and invalid as obvious in view of U.S. Patent Application Publication No. 2004/0097510.  In particular, the District Court determined that because the claimed invention's doses of linagliptin in 2.5 mg and 5 mg fall within the '510 publication's disclosed range of 1–100 mg, there is a presumption of obviousness.  The District Court alternatively found that a person of ordinary skill in the art would have obtained the claimed dosages through routine experimentation.

In an opinion by Judge Moore, joined by Judges Dyk and Hughes, the Federal Circuit concluded that claims 10–17, 24 and 25 of the '156 patent are directed to patent eligible subject matter.  The opinion notes that the '156 patent relates to the treatment and/or prevention of metabolic diseases such as type 2 diabetes mellitus with DPP-IV inhibitors such as linagliptin in patients for whom normal metformin therapy is not appropriate, setting forth claims 1 and 10 of the '156 patent:

1.  A method of treating and/or preventing metabolic diseases in a patient for whom metformin therapy is inappropriate due to at least one contraindication against metformin comprising orally ad-ministering to the patient a DPP-IV inhibitor wherein the contraindication is selected from the group consisting of: renal disease, renal impairment or renal dysfunction, unstable or acute congestive heart failure, acute or chronic metabolic acidosis, and hereditary galactose intolerance.

10.  The method according to claim 1 wherein the metabolic disorder is type 2 diabetes mellitus and wherein the contraindication is renal disease, renal impairment or renal dysfunction, and wherein said DPP-4 inhibitor is used for said patient in the same dose as for a patient with normal renal function.

On appeal, Boehringer argued, echoing language from Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals International Ltd., 887 F.3d 1117 (Fed. Cir. 2018), that the claims are directed to a "method of treating a specific disease ([type 2 diabetes mellitus]) for specific patients (with renal impairment) using a specific compound (linagliptin) at specific doses (same dose in patients with renal impairment as in patients with normal renal function) to achieve a specific outcome."  Mylan argued that the claims are directed to the natural law that "certain DPP-IV inhibitors (including linagliptin) are metabolized by the liver rather than the kidney."

In finding claims 10–17, 24 and 25 of the '156 patent  to be patent eligible, the Federal Circuit determined that "consistent with this court's decision in Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals International Ltd., 887 F.3d 1117 (Fed. Cir. 2018), the claims are directed to a particular method of treatment under step one and are therefore patent eligible."  The Court explained that even though "certain DPP-IV inhibitors (including linagliptin) are metabolized by the liver rather than the kidney," this "does not make the claim 'directed to' that natural ability."  The panel also noted that because the claims are directed to a method of treatment at step one, the Court could "conclude [that] the claims are patent eligible and need not reach step two" under the two-step framework of Alice Corporation Pty. Ltd. v. CLS Bank International, 573 U.S. 208 (2014).  The Federal Circuit therefore reversed the District Court's grant of judgment on the pleadings of patent ineligibility and remanded to the District Court for further proceedings.

Turning to the District Court's finding that claims 1, 14, 15, 20, and 21 of the '859 patent and claims 7, 9, 15, 17, 19, 25, and 26 of the '927 patent were invalid for obviousness-type double patenting and invalid as obvious in view of the prior art, the opinion notes that the claims at issue relate to the treatment of type 2 diabetes mellitus with linagliptin in 2.5 or 5 mg doses, setting forth claim 14 of the '859 patent:

14.  An oral tablet formulation comprising 1-[(4-me-thyl-quinazolin-2-yl)methyl]-3-methyl-7-(2-butyn-1-yl)-8-(3-(R)-amino-piperidin-1-yl)-xanthine in an amount of 2.5 mg or 5 mg optionally in combination with metformin, and a pharmaceutically acceptable carrier or diluent.

and claim 7, which depends from claim 1, of the '927 patent as illustrative:

1.  A method of treating type II diabetes mellitus comprising administering to a patient in need thereof a pharmaceutically effective oral amount of 1-[(4-methyl-quinazolin-2-yl)-methyl]-3-methyl-7-(2-butyn-1-yl)-8-(3-(R)-amino-piperidin-1-yl)-xanthine, and a pharmaceutically effective amount of metformin, which is from 300 mg to 1000 mg once or twice a day, or delayed-release metformin in a dose of 500 mg to 1000 mg once or twice a day or 500 mg to 2000 mg once a day.

7.  The method according to claim 1, wherein the 1-[(4-methyl-quinazolin-2-yl)methyl]-3-methyl-7-(2-butyn-1-yl)-8-(3-(R)-amino-piperidin-1-yl)-xanthine is administered in an oral dosage of 2.5 mg or 5 mg.

On appeal, Boehringer argued that the District Court's conclusions of invalidity for obviousness-type double patenting and obviousness depended on its determination that the claimed dosages would have been obvious.  In affirming the District Court's findings of invalidity for obviousness-type double patenting and obviousness, the Federal Circuit concluded that the District Court's alternative finding (i.e., that a person of ordinary skill in the art would have obtained the claimed dosages through routine experimentation) is not clearly erroneous.  The Court therefore did not need to decide whether the District Court's presumption determination of obvious was correct.  The Federal Circuit thus affirmed the District Court's decision finding the asserted claims of the '859 and '927 patents to be invalid for obviousness and obviousness-type double patenting.

Boehringer Ingelheim Pharmaceuticals Inc. v. Mylan Pharmaceuticals Inc. (Fed. Cir. 2020)
Nonprecedential disposition
Panel: Circuit Judges Dyk, Moore, and Hughes
Opinion by Circuit Judge Moore

Top Stories of 2018: #11 to #15

By Donald Zuhn –-

After reflecting upon the events of the past twelve months, Patent Docs presents its 12th annual list of top patent stories.  For 2018, we identified fifteen stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants.  Today, we count down stories #15 to #11, and in the coming week, we will work our way towards the top stories of 2018.  As with our other lists (2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look.  As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know.  In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2018" on January 16, 2019 from 10:00 am to 11:15 am (CT).  Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.

15.  USPTO Implements New Authentication System

In October, the U.S. Patent and Trademark Office announced the implementation of a new authentication method for signing into the EFS-Web and Private PAIR, which will replace the use of PKI certificates, and which constitutes a major change in the way stakeholders interact with the USPTO's Patent Electronic Business Center (EBC).  The Office has indicated that the new method will provide users with access to the EFS-Web and Private PAIR until the full release of Patent Center, which is scheduled to replace the EFS-Web and Private PAIR, in 2020.  When announcing the new authentication system, the Office cautioned practitioners that migration to link USPTO.gov accounts to PKI certificates should be completed by the end of October (using the Office's migration tool), sponsorship of support staff should be completed by the end of November (using the Office's sponsorship tool), and that PKI certificates would be phased out on December 31, 2018.  While implementation of the new authentication system has been a fairly straightforward process for many stakeholders, many others were happy to receive an early holiday gift from the USPTO on December 21, when the Office announced that it was delaying the date on which PKI certificates would be retired.  The Office's latest word on PKI certificate retirement is that "EFS-Web and Private PAIR users will no longer be able to authenticate using PKI certificates as of February 15."

For information regarding this and other related topics, please see:

• "USPTO Delays PKI Certificate Termination Date," December 23, 2018
• "USPTO Director Issues Notice on New Authentication System for EFS-Web and Private PAIR," December 3, 2018
• "USPTO News Briefs," October 25, 2018
• "USPTO Moving to New Authentication System for EFS-Web and Private PAIR," October 4, 2018

14.  Federal Circuit Affirms PTAB Decision Finding No Interference in CRISPR Dispute

CRISPR (an acronym for Clustered Regularly lnterspaced Short Palindromic Repeats), which is part of a system for altering chromosomal sequences in situ in a cell in combination with a bacterially derived protein called Cas9, was hailed as a "Breakthrough of the Year" for 2015.  CRISPR provides a mechanism for inserting or deleting specific DNA sequences using CRISPR-associate targeting RNAs and the Cas9 RNA-guided DNA endonuclease enzyme.  Given the commercial potential of this method, patenting was an obvious concern and, as it turned out, more than one group of inventors filed patent applications on the reagents, methods, and cells produced or used to produce CRISPR modifications.  Because these applications were filed prior to March 16, 2013, the dispute regarding who was the first to invent had to be resolved via an interference.  In 2016, the USPTO declared Interference No. 106,048, naming Feng Zhang and his colleagues, the named inventor of the Broad Institute/MIT's patents, as the Junior Party, and Jennifer Doudna and her colleagues at UC/Berkeley as Senior Party.  In February of 2017, the Patent Trial and Appeal Board handed down its decision, finding no interference-in-fact between several patents and patent applications owned by The Broad Institute and applications owned by the Regents of the University of California, Berkeley.  The decision ended the interference and allowed both parties to license (and assert) their patents to (or against) any third party.  The basis for the decision was that UC's claims would not anticipate Broad's claims-in-interference because all of Broad's claims contained the affirmative limitation that the CRISPR technology be operative in eukaryotic cells, and the UC's claims were devoid of any limitation regarding the context in which CRISPR was applied.  In September, the Federal Circuit affirmed the PTAB's decision that there is no interference-in-fact between the Broad's twelve patents and one application-in-interference and the University of California/Berkeley's pending application, thereby concluding the interference between the parties.  This marks the third consecutive appearance – and perhaps the last -- on our Top Stories list for the CRISPR dispute (the dispute was #19 in 2017 and #18 in 2016).

For information regarding this and other related topics, please see:

• "Whither CRISPR? University of California/Berkeley Granted Another CRISPR Patent," October 30, 2018
• "Regents of the University of California v. Broad Institute, Inc. (Fed. Cir. 2018)," September 10, 2018
• "The CRISPR Chronicles -- Broad Institute Wins One and Loses One," January 24, 2018

13.  Federal Circuit Defines Contours of Obviousness-type Double Patenting Doctrine

Four years after issuing decisions in AbbVie Inc. v. Mathilda & Terence Kennedy Institute of Rheumatology Trust and Gilead Sciences, Inc. v. Natco Pharma Ltd., the Federal Circuit again handed down opinions concerning the proper application of the judicially created doctrine of obviousness-type double patenting (OTDP).  In January, in In re Janssen Biotech, Inc., the Federal Circuit affirmed a rejection by the Patent Trial and Appeal Board of certain claims of U.S. Patent No. 6,284,471 for OTDP.  The co-assignees of the '471 patent argued on appeal that OTDP was not applicable because the safe-harbor provision of 35 U.S.C. § 121 protected the '471 patent claims.  The Federal Circuit determined, however, that the '471 patent was not entitled to safe-harbor protections because the '471 patent had issued from a CIP application (even though the co-assignees sought to re-designate the application as a divisional during a reexamination twelve years after the '471 patent issued).  In December, the Federal Circuit issued two more decisions that help define the contours of the OTDP doctrine.  In Novartis AG v. Ezra Ventures LLC, the Court addressed a narrow but important question regarding its OTDP jurisprudence:  whether a first patent filed earlier than a second patent, but that issued later, could be used to invalidate the second patent on OTDP grounds if the reason the later-expiring patent was later expiring was due to Patent Term Extension (PTE) awarded under 35 U.S.C. § 156.  The Federal Circuit affirmed the District Court's determination that OTDP does not invalidate an otherwise validly obtained PTE under § 156.  In Novartis Pharmaceuticals Corp. v. Breckenridge Pharmaceutical Inc., the Federal Circuit was provided with an opportunity to decide whether the operation of the OTDP doctrine was the same for (a) two patents granted after the Uruguay Round Agreements Act of 1994 (URAA) changed the term of U.S. patents from 17 years from the grant date to 20 years from the earliest claimed priority date, and (b) circumstances in which one patent is subject to the pre-URAA term and the other to the post-URAA term.  In reversing the District Court, the Federal Circuit determined that its decision in Gilead Sciences, Inc. v. Natco Pharma Ltd. did not control in this instance, because the difference between how the patents were related to one another with respect to their expiration dates made a difference in how the doctrine of OTDP should be applied.  The Court noted that "because a change in patent term law should not truncate the term statutorily assigned to the pre-URAA '772 patent," the '990 patent "cannot properly be used as an OTDP reference."

For information regarding this and other related topics, please see:

• "Novartis Pharmaceuticals Corp. v. Breckenridge Pharmaceutical Inc. (Fed. Cir. 2018)," December 11, 2018
• "Novartis AG v. Ezra Ventures LLC (Fed. Cir. 2018)," December 9, 2018
• "In re Janssen Biotech, Inc. (Fed. Cir. 2018)," January 29, 2018

12.  Federal Circuit Finds Method of Treatment Claims Patent Eligible

Although there were several interesting decisions issued in 2018 that addressed the issue of subject matter eligibility in the context of life sciences inventions (see list below), the most interesting of these decisions to most life sciences practitioners and applicants is likely one issued by the Federal Circuit in April.  In Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals, the Federal Circuit affirmed a District Court decision finding, inter alia, that the claims of U.S. Patent No. 8,586,610, which are directed to methods of treating a patient suffering from schizophrenia with iloperidone, were not invalid under 35 U.S.C. § 101.  Two months after that decision, the U.S. Patent and Trademark Office distributed a memorandum to the patent examining corps that addressed the impact of the Vanda decision.  The memorandum explains that in Vanda, the Federal Circuit determined that the claims at issue are "patent eligible under 35 U.S.C. § 101 because they are not 'directed to' a judicial exception" (emphasis in memorandum).  The memorandum also states that (with emphasis in memorandum):

The USPTO's current subject matter eligibility guidance and training examples are consistent with the Federal Circuit's decision in Vanda, with the understanding that: (1) "method of treatment" claims that practically apply natural relationships should be considered patent eligible under Step 2A of the USPTO's subject matter eligibility guidance; and (2) it is not necessary for "method of treatment" claims that practically apply natural relationships to include nonroutine or unconventional steps to be considered patent eligible under 35 U.S .C. § 101.  For example, claims 5 and 6 of USPTO Example 29 (Diagnosing and Treating Julitis) should be considered patent eligible under Step 2A of the USPTO's subject matter eligibility guidance in light of the Federal Circuit decision in Vanda.

Last week, Hikma Pharmaceuticals and West-Ward Pharmaceuticals filed a Petition for a Writ of Certiorari for Supreme Court review of the Federal Circuit's decision.

For information regarding this and other related topics, please see:

• "Illumina, Inc. v. Ariosa Diagnostics, Inc. (N.D. Cal. 2018)," December 27, 2018
• "A Glimmer of an Idea on an Experimental Use Exemption," November 7, 2018
• "Roche Molecular Systems, Inc. v. Cepheid (Fed. Cir. 2018)," October 10, 2018
• "Ex parte Galloway (PTAB 2018)," July 26, 2018
• "Illumina, Inc. v. Natera, Inc. (N.D. Cal. 2018)," July 11, 2018
• "USPTO Issues Memorandum on Vanda Pharmaceuticals v. West-Ward Pharmaceuticals," July 9, 2018
• "Supreme Court Denies Certiorari Again in Patent Eligibility and Safe Harbor Cases," June 20, 2018
• "Pernix Ireland Pain DAC v. Alvogen Malta Operations Ltd. (D. Del. 2018)," June 12, 2018
• "Genetic Veterinary Sciences, Inc. v. LABOklin GmbH (E.D. Va. 2018)," May 22, 2018
• "Exergen Corp. v. Kaz USA, Inc. (Fed. Cir. 2018)," March 11, 2018
• "Ex parte Kotanko (PTAB 2018)," February 12, 2018

11.  Supreme Court: Patentees Can Recover Lost Foreign Profits

In June, in WesternGeco LLC v. ION Geophysical Corp., the Supreme Court determined that, based on the "focus" of 35 U.S.C. § 284 of the Patent Act (the general damages provision) when read in light of domestic infringement under 35 U.S.C. § 271(f)(2) (barring exportation of components specifically adapted for a patented invention), a patent owner could recover lost foreign profits.  The decision overruled the Federal Circuit's general practice of interpreting damages under § 271(f)(2) in the same fashion as § 271(a) (the general infringement provision, which does not allow patent owners to recover lost foreign profits).  Justice Thomas, joined by Chief Justice Roberts and Justices Kennedy, Ginsburg, Alito, Sotomayor, and Kagan, determined that despite the "presumption against extraterritoriality" in the enforcement of federal statutes, foreign lost profits due to domestic acts of infringement under § 271(f)(2) should not be categorically barred.  The majority reiterated the facts presented and that "the focus of § 284, in a case involving infringement under § 271(f)(2), is on the act of exporting components from the United States."  In this context, because the infringing act happens domestically, any lost profits (foreign or otherwise) based on that domestic infringement were merely a domestic application of § 284.  The dissent (Justices Gorsuch and Breyer) takes issue with the majority's decision permitting a patentee to be sued for damages for the use abroad of a patented article infringed under the provisions of 35 U.S.C. § 271(f)(2), arguing that "[p]ermitting damages of this sort would effectively allow U. S. patent owners to use American courts to extend their monopolies to foreign markets," and that this "would invite other countries to use their own patent laws and courts to assert control over our economy."

For information regarding this and other related topics, please see:

• "WesternGeco LLC v. ION Geophysical Corp. (2018)," June 24, 2018

Novartis Pharmaceuticals Corp. v. Breckenridge Pharmaceutical Inc. (Fed. Cir. 2018)

By Kevin E. Noonan --

On Friday, December 7th, the Federal Circuit handed down two opinions concerning the proper application of the judicially created doctrine of obviousness-type double patenting (OTDP).  The first, Novartis AG v. Ezra Ventures LLC (Fed. Cir. 2018), set forth the narrow, albeit important, holding that a terminal disclaimer, or loss of term for a later-expiring patent based on an earlier-expiring patent in relation to which the later-expiring patent recited patentably indistinct claims, did not include extension of term pursuant to the provisions of 35 U.S.C § 156.  The Court held that, insofar as patent term extension under § 156 was a statutory grant, and loss of term under OTDP was a judicially created doctrine, the statutory grant was not trumped by OTDP.

The second case decided by the Federal Circuit that day, Novartis Pharmaceuticals Corp. v. Breckenridge Pharmaceutical Inc., provided the Court with the opportunity to decide whether the operation of the OTDP doctrine was the same for two patents that were granted under U.S. patent law after the term of a U.S. patent was changed from 17 years from the grant date to 20 years from the earliest claimed priority date under the Uruguay Round Agreements Act of 1994 (URAA), compared with circumstances where one patent is subject to pre-URAA term and the other to the post-URAA term.

The case arose in ANDA litigation concerning Novartis's Zortress® and Afinitor® drugs (active ingredient: everolimus), used to treat cancer and prevent rejection in kidney and liver transplantations.  Before the District Court, Breckenridge Pharmaceutical challenged the validity of Orange Book-listed patent in suit (to the compound), U.S. Patent No. 5,665,772, based on obviousness-type double patenting.  The invalidating reference, Novartis's U.S. Patent No. 6,440,990 (directed to methods of treatment using pharmaceutical compositions of the claimed compound), was filed after but issued before the '772 patent (a fact pattern akin to that before the Court in Gilead Sciences Inc. v. Natco Pharma Ltd.); the relationship between the two Novartis patents is illustrated below:

This pattern is in contrast to the relationship between the two patents in the Gilead decision, a difference important to the Federal Circuit's decision here:

Despite these differences, the District Court, relying on the rubric from Gilead that "a later-filed but earlier-expiring patent can serve as a double patenting reference for an earlier-filed but later-expiring patent," invalidated the '772 patent claims under OTDP over the '990 patent claims.  As explained in the opinion, the District Court also relied on decisions by district courts following Gilead, including Janssen Biotech Inc. v. Celltrion Healthcare Co., 210 F. Supp. 3d 278 (D. Mass. 2016); MLC Intellectual Property, LLC v. Micron Technology, Inc., 2016 WL 4192009 (N.D. Cal. Aug. 9, 2016); and DDB Technologies, LLC v. Fox Sports Interactive Media, LLC, 2014 WL 12167628 (W.D. Tex. May 15, 2014), in support of its decision.  The District Court rejected four arguments asserted by Novartis attempting to distinguish Gilead.  First, that grant of the '990 patent did not affect the expiration date of the '772 patent; the Court held that "it was Novartis's choice to file the '990 patent, and the harm to the public lies in the inability to practice the invention claimed in the '990 patent once it expired."  Second, that Novartis had not engaged in any gamesmanship which was the basis for the Gilead court's concerns; the Court held that gamesmanship was not required to violate proscription against OTDP under Gilead (or AbbVie, Inc. v. Mathilda & Terence Kennedy Institute of Rheumatology Trust, 764 F.3d 1366 (Fed. Cir. 2014)).  Third, that allowing the earlier-expiring, post-URAA patent to be an OTDP reference against a later-expiring, pre-URAA patent would impermissibly shorten the statutorily mandated 17-year term of the pre-URAA patent; the Court found that Novartis had courted that risk by filing the earlier-expiring patent having patentably indistinct claims.  Finally, that the patent term extension Novartis had obtained for the '772 patent "immunized" the patent from a double patenting challenge; the Court found no precedent for this contention and noted that the question was not at issue.  The parties having stipulated to infringement and that the '772 patent claims would be invalid for OTDP if the '990 was a proper OTDP reference, the District Court entered judgment that the '772 patent was invalid and this appeal followed.

The Federal Circuit reversed, in an opinion by Judge Chen joined by Chief Judge Prost and Judge Wallach.  The panel held that their decision in Gilead did not control in this instance, because the difference between how the patents were related to one another with respect to whether their expiration dates made a difference in how the doctrine of OTDP should be applied.  According to the opinion:

[T]he correct framework here is to apply the traditional obviousness-type double patenting practices extant in the pre-URAA era to the pre-URAA '772 patent and look to the '772 patent's issuance date as the reference point for obviousness-type double patenting.

Under their analysis, "because a change in patent term law should not truncate the term statutorily assigned to the pre-URAA '772 patent," the '990 patent "cannot properly be used as an OTDP reference."

One aspect of this decision useful for the bar is the careful explication of how courts have "applied the principles of obviousness-type double patenting for over a century to restrict a patent owner's patents on an invention and obvious variants to one 17-year patent term," particularly with regard to the issuance dates of earlier- and later-expiring patents.  Gilead, according to the opinion, represents a realization by the Court:

[T]hat the change in patent term law under the URAA altered the analytical inquiry for double patenting; issuance dates of post-URAA patents did not serve as reliable stand-ins for the expiration date of the patent as is true for pre-URAA patents, and the proper reference point for an obviousness-type double patenting inquiry is the expiration date of the patent in question.

The circumstances before the Court here are not the same and Gilead does not control, according to the opinion ("Gilead addressed a question that is not applicable here").  And the opinion characterizes the Court's Gilead opinion as being dependent upon the changes that arose post-URAA, because patent issue dates no longer "served as a reliable stand-in for the date that really mattered -- patent expiration."  This is because, as in the Gilead case, "a patent that issues first does not [necessarily] expire first."  The relationship of the earlier- and later-expiring patents before the Court here also does not have the potential negative consequences the Court cautioned against in Gilead, such as the opportunity for patentees to engage in gamesmanship regarding patent application and issue dates, and the potential that a difference of even one day in issue date could change the relationship in an OTDP-determining way.

The panel also concluded that the Court's AbbVie decision did not control the outcome.  The relationship of the earlier- (U.S. Patent No. 7,846,422) and later- (U.S. Patent No. 6,270,766) expiring patents (both having post-URAA filing dates) in that case was as follows:

The AbbVie situation is "a prime example of the post-URAA scenario [the Court] contemplated in Gilead," according to the opinion (noting that, as in Gilead, the effective filing date (EFD) of the '422 patent represents applicant choice, because it did not have the same EFD of the '766 patent).  That factor was not at play regarding the Novartis patents and thus AbbVie does not control the outcome here.

The Federal Circuit also found support (and solace) for its decision in the choice Congress made in the URAA transition statute, which gave applicants a patent term that was "the greater of" 17 years from issue date or 20 years from the effective filing date.  Thus evinced a choice by Congress for patentees "to enjoy the maximum possible term available for their resulting patents under either patent term regime."  Breckenridge's position, that OTDP could be used to "truncate any portion of the statutorily assigned term of a pre-URAA patent that extends beyond the term of a post-URAA patent would be inconsistent" with this Congressional choice.  The panel also believes the outcome here is consistent with the "core principle underlying the double patenting doctrine:  giving one invention and nonobvious variants of that invention the same patent term."  Stating its rationale succinctly, the Court said:

The key purpose of obviousness-type double patenting is to prevent a patent owner from extending the exclusivity rights over his invention beyond a full patent term.  We saw this impermissible practice in Gilead and in AbbVie, where the patent owners claimed different effective filing dates for different patents to extend the life of patent exclusivity.  Gilead[.]  Here, critically, Novartis did not seek to extend its patent rights over its everolimus invention beyond one patent term, in this case, 17 years from issuance of the '772 patent.  Had the law not changed, regardless of whether Novartis obtained the '990 patent, the '772 patent would have expired on September 9, 2014 (September 9, 2019 with the patent term extension).  The fact that the law for the term of a patent changed, resulting in the later-issued '990 patent having an earlier expiration date than it would have pre-URAA should not affect the '772 patent's statutorily-granted 17-year patent term.  Rather than Novartis receiving a windfall with a 17-year term for its '772 patent, its '990 patent's term was truncated by the intervening change in law.  To find that obviousness-type double patenting applies here because a post-URAA patent expires earlier would abrogate Novartis's right to enjoy one full patent term on its invention (citations omitted).

Novartis Pharmaceuticals Corp. v. Breckenridge Pharmaceutical Inc. (Fed. Cir. 2018)
Panel: Chief Judge Prost and Circuit Judges Wallach and Chen
Opinion by Circuit Judge Chen

Novartis AG v. Ezra Ventures LLC (Fed. Cir. 2018)

By Kevin E. Noonan --

In Novartis AG v. Ezra Ventures LLC, the Federal Circuit addressed a narrow but important question regarding its jurisprudence on the issue of obviousness-type double patenting (OTPD).  That question was whether its decision in Gilead Sciences Inc. v. Natco Pharma Ltd., which established that a first patent filed earlier than a second patent but that issued later, could be used to invalidate the second patent on OTDP grounds, if the reason the later-expiring patent was later-expiring was due to Patent Term Extension under 35 U.S.C. § 156.

To recap, the Gilead Court decided that a later-issued but earlier-expiring patent could be used to establish OTDP over the later-expiring patent, as illustrated here:

In rendering its decision, the Gilead panel held that the intervening change in U.S. patent term occasioned by ratification of the GATT-TRIPS agreement did not influence its decision.  Rather, the panel grounded its decision on the "bedrock" principle that the public had a right to practice an invention (and its obvious variants) once a patent on that invention had expired.  Important to the instant Novartis decision, the Gilead panel also voiced its concern that holding to the contrary in that case could raise the possibility of "significant gamesmanship" regarding patent term depending on when related applications were filed and when they were allowed to issue.  The Gilead decision has been applied to mean that the relevant dates for considering OTDP are the expiration dates of the later and earlier-expiring patents, and whether the claims in the later-expiring patent were mere obvious variants of the earlier-expiring claims.

The Novartis case arose in ANDA litigation brought by Novartis against Ezra Ventures over its multiple sclerosis drug Gilenya^® over Orange Book-listed U.S. Patent No. 5,604,229.  As explained in the opinion, claims of the '229 patent encompassed fingolimod, the active ingredient in Gilenya^®.  The '229 patent was filed prior to the GATT-TRIPS changes in U.S. patent law, and thus had a patent term calculated as 17 years after issuance (in this case, corresponding to February 18, 2014).  In addition, Novartis had been granted five years of Patent Term Extension under § 156, thus expiring on February 18, 2019.

Novartis owned another patent, U.S. Patent No. 6,004,565 that claims methods for administering fingolimod; this patent was filed after the U.S. changed how patent term was calculated under the GATT-TRIPS agreement and thus expired September 23, 2017 (20 years from its filing date).  The filing and expiration dates of the '229 and '565 patents are related as illustrated below:

Before the District Court, Ezra Ventures filed a motion to dismiss (that the Court denied) under Fed. R. Civ. Pro. 12(c) for judgment on the pleadings, on three grounds.  First, that extension of the '229 patent "de facto also extends the life of the '565 patent, and thereby violates § 156(c)(4)'s requirement that only 'one patent be extended.'"  Second, that this extension "violates the 'bedrock principle' that the public may practice an expired patent."  And third, that the '565 patent "renders the '229 patent invalid for statutory- and obviousness-type double patenting because Novartis's '229 patent claims are not patentably distinct from its '565 patent claims."  With regard to the argument that this is an impermissible extension in violation of § 156(c)(4), the District Court held that "de facto" extension as argued here was inconsistent with the meaning of the extension statute.  In addition, the lower court relied on the Federal Circuit's decision in Merck & Co. v. Hi-Tech Pharmacal Co., 482 F.3d 1317 (Fed. Cir. 2007), that the term of a terminally disclaimed patent can be extended under § 156, which "de facto" extends the term of that patent over the term of the patent over which it has been terminally disclaimed.  Thereafter, Ezra Ventures stipulated infringement and withdrew its defenses, and the District Court entered final judgment against Ezra Ventures, clearing the procedural path for this appeal.

The Federal Circuit affirmed, in an opinion by Judge Chen joined by Judges Moore and Hughes.  The panel first addressed Ezra Venture's argument that extension of the '229 patent by Patent Term Extension also (improperly) extended the term of the '565 patent.  As an initial matter, the opinion notes that "nothing in the statute restricts the patent owner's choice for patent term extension among those patents whose terms have been partially consumed by the regulatory review process," despite it not being uncommon for a patented drug to also be the subject of patents on "a product, a method of using that product, and/or a method of manufacturing the product."  The panel agreed with the District Court that Congress did not choose language that would preclude extension of a patent on a drug product because it also "effectively" extends the patent, for example, on a method of using that drug product.  Here, only one patent term was extended -- the '229 patent -- and this satisfies the statutory mandate and does not violate § 156(c)(4).

Next the Federal Circuit considered the "interaction" between § 156 and OTDP.  In what the panel states is "a logical extension" of its holding in Merck & Co. v. Hi-Tech Pharmacal Co., the Court held here that OTDP does not invalidate extension of the patent term under § 156.  After explicating the Court's basis for its Merck opinion (inter alia, the plain meaning of the § 156 and the differences in statutory language between § 156 and § 154, the patent term adjustment statute, which cannot extend the term of a terminally disclaimed patent) the opinion notes that the Merck decision involved just the issue raised here:  that a terminally disclaimed patent can still receive the benefit of a patent term extension under § 156.  Accordingly, extension of the term of the '229 patent past the expiration date of the '565 patent was not improper.

It is when the opinion turns to "Ezra's policy concerns" that the panel took the opportunity to set forth its reasoning on the question of the function of the OTDP doctrine.  Citing Proctor & Gamble Co. v. Teva Pharm. USA, Inc., 566 F.3d 989, 999 (Fed. Cir. 2009), the opinion states that the instant situation "does not raise the traditional concern with obviousness-type double patenting of a patent owner 'extending his exclusive rights to an invention through claims in a later-filed patent that are not patentably distinct from claims in the earlier filed patent.'"  The opinion then distinguishes the policy considerations at play here with more recent OTDP decisions of the Court, particularly Gilead Sciences, Inc. v. Natco Pharma Ltd., specifically referring to that Court's concerns with gamesmanship not present here.

The other distinction between the situation in Gilead and the one here is whether the differences in the relationship between the patents (patents filed pre- and post-URAA here, in contrast to having two post-URAA patents in Gilead) are addressed in the opinion accompanying this one, Novartis Pharmaceuticals Corp. v. Breckenridge Pharmaceutical.  That case will be the subject of a later post.

Novartis AG v. Ezra Ventures LLC (Fed. Cir. 2018)
Panel: Circuit Judges Moore, Chen, and Hughes
Opinion by Circuit Judge Chen