A recent US Court of Appeals for the Federal Circuit ruling could make obviousness-type double patenting issues more prevalent in litigation and prosecution, say sources.
The Federal Circuit upheld the USPTO’s decision to invalidate four Cellect patents for ODP on August 28.
ODP is the judicial doctrine that prevents a party from improperly extending their exclusivity rights by obtaining a second patent on an obvious variation of an earlier expiring patent.
When there are multiple obvious variations of an earlier patent, those with later expiration dates can be cancelled under ODP.
Non-practising entity (NPE) Cellect argued that its four patents shouldn’t have been cancelled for ODP because they would have expired on the same day as an older patent if the NPE hadn’t received patent term adjustments (PTA). These are extensions of patent terms granted to compensate for USPTO delays.
The Federal Circuit disagreed.
Though this case could affect lawyers across industries, it may be especially important in the life sciences sector, where PTA grants are more common.
“This decision is going to make ODP a much bigger issue going forward for litigants,” says Richard McCormick, partner at Mayer Brown in New York.
“Patent owners are going to vigorously litigate any ODP issues on patents with PTA because every additional day of patent life can mean one less day of sales by infringing competitors,” he says.
A real shift?
Others agree that litigators shouldn’t sleep on this ruling.
Jeremy Edwards, partner at Procopio in Washington DC, says litigators should be inspecting patent families they plan to assert, or expect will be asserted against them, to watch out for ODP issues.
Not everyone is convinced the ruling is a gamechanger.
Peter Cuomo, member at Mintz in Boston, says litigators are will always explore any potential argument they can raise.
“ODP arguments might become more prominent, but I don’t think this decision really changes the approach for litigators,” he says.
Defendants facing infringement suits will continue to raise ODP as a defence, he adds.
“But I don’t think it’s necessarily a real shift.”
Paying for prosecution
Even if Cellect doesn’t drastically alter litigation strategies, it could cause applicants to take a second look at how they prosecute patents, especially when filing continuations. These are applications with claims based on the same specification as a pending parent application.
If a patentee gets PTA on an original patent but not on the continuation, it could lose that extra exclusivity in the event ODP issues come up. As a result, firms could be hesitant to file continuations in some circumstances.
Anita Meiklejohn, principal at Fish & Richardson in Boston, says she thinks the case could urge people to monitor situations where they accumulate PTA.
PTAs usually result from delays that arise early in the prosecution process, she says.
“You already know before the case gets active that you probably have some PTA. This will make people look out for situations where PTA is building up and be strategic about how they prosecute that case.”
Attorneys could draft their claims so that they cover as much ground as possible and don’t have to file continuations, Meiklejohn says.
Delving into disclaimers
If applicants are facing potential ODP rejections on a patent from the USPTO, they can overcome these by filing terminal disclaimers – statements in which patentees dedicate the entire term of the patent, or part of it, to the public.
The net result is that the patent would expire at the same time as the earlier patent, on which the ODP objection is based.
According to the Federal Circuit, Cellect should have filed such a disclaimer.
Filing terminal disclaimers could also help patent owners avoid counterclaims for ODP-related invalidity in litigation. The downside is that patent owners would lose the extra time granted through PTA.
It’s not always necessary to make the decision about whether to file terminal disclaimers right away.
McCormick notes that if a patent is found invalid for ODP, patent owners can just file terminal disclaimers at the end of the trial if the earlier patent hasn't expired yet. Then they would only lose the added PTA days, rather than the entire patent.
“But the real risk assessment comes when there’s a possibility that the patent could expire before the determination of OTDP is fully resolved, thus precluding the filing of a terminal disclaimer,” he says.
“In those cases, patent owners will be faced with the choice of either filing a pre-emptive terminal disclaimer or living with the risk that they could lose the patent in its entirety, even if they think there are solid arguments against ODP.”
If patent owners don’t file terminal disclaimers, they’ll have to fight ODP disputes by claiming that the second patent isn’t an obvious variation of the first.
McCormick notes that such cases could come down to an expensive “battle of the experts”.
“It could cost litigants more money because they’ll want to fight harder for these patents that have PTA,” he says.
Ripe for review?
Some parties, including Cellect, have argued that there’s a tension between ODP – which is a judicially created doctrine – and the law, which says parties are allowed PTA when there are delays.
Cellect noted that, in the 2018 case Novartis v Ezra Venture, the Federal Circuit didn't invalidate a patent with a patent term extension (PTE) for ODP.
PTE grants patent owners a longer term when there are delays caused by regulatory bodies such as the Food and Drug Administration – whereas PTA is awarded for delays at the USPTO.
The Federal Circuit stated, however, that PTE and PTA should be treated differently from one another.
There was nothing in the PTA statute to suggest that applying ODP to patents with PTA would be contrary to congressional intent, the court said.
Furthermore, the justices found, the fact that law allows terminal disclaimers was “tantamount to a statutory acknowledgement” that ODP concerns can arise out of PTA.
After all, they added, ODP rejections and terminal disclaimers were intertwined because these disclaimers are typically filed to overcome ODP rejections.
Says Cuomo: “In that way, the court got around duelling considerations of what the PTA statute requires verses a judicially created doctrine and found they were more aligned than Cellect had argued.”
But the fight may not be over yet.
McCormick at Mayer Brow says the case is ripe for en banc or even US Supreme Court review.
“Because ODP itself is judge-made and non-statutory, it would take a judge from a higher court to either remake it or unmake it to resolve the conflict with the PTA statute.
“I would not be surprised at all if this went to the Supreme Court,” he says.
If it does, that could be a relief to patent owners who are frustrated by the increased risk of losing PTA.
In the meantime, they’ll have to do their best to make sure that ODP issues don’t hamper their prosecution and litigation strategies.
