How to guard against challenges to Patent Term Adjustment post-Cellect

If August’s decision by the US Court of Appeals for the Federal Circuit in In re Cellect is not reversed, child patents may place years of patent term adjustment (PTA) for parent patents at risk.

This article discusses how applicants can prosecute patent applications to reduce the risk of collisions between patents within the same family (typically, parent and child patents).

In re Cellect was the first Federal Circuit decision to hold that a patent in a post-Uruguay Round Agreements Act (URAA) patent family could be used in an obviousness-type double-patenting (ODP) rejection of another patent within that patent family.

Depending on the patents at issue, a challenge under Cellect could extinguish years of patent term adjustment (PTA).

Although arising out of re-examinations involving imaging sensors relevant to smartphones, Cellect will be acutely felt in the life sciences, where clinical trials often shift product launches towards the end of patent terms, which run for 20 years from the first non-provisional patent application in a family being filed.

Patent term adjustment was created by the American Inventors Protection Act of 1999 to ameliorate the potential for erosion of effective patent terms.

The URAA created the concept of ‘effective patent terms’ when it changed patent terms from 17 years from being issue to 20 years from the patent’s earliest effective filing date.

Examination delays did not diminish historical 17-year patent terms, but they do reduce 20-year terms. For example, if an examination takes three years, a 20-year patent can still be enforced for 17 years, but if an examination takes five years, the patent can only be enforced for 15 years.

The parameters for using PTA are spelled out over thousands of words contained in the various iterations of the US Code, Title 35, Section 154(b), and the Code of Federal Regulations, Title 37, Section 1.702-1.705.

While many have written entire articles and presentations on how to maximise the nominal PTA award from the US Patent and Trademark Office, this article focuses on how to guard against Cellect’s impact on those awards.

Obviousness-type double patenting (ODP) is a century-old judicially created doctrine, which, in the pre-URAA world, prevented parties from obtaining improperly long patent terms. For example, without ODP, a party could present commercially valuable patent claims in a later application within a chain of continuations to delay the start of a 17-year patent term.

ODP differs from obviousness analysis under the US Code, Title 35, Section 103 in two key ways, which make it both more potent in some ways, and less in others.

First, the primary reference in an ODP challenge must be the claims of the patent or application. The specification cannot be considered except for the purpose of construing a claim.

Second, under Cellect, members of a patent family can be applied as ODP references against another family member. Thus, ODP can provide a distinct avenue for challenging a post-20-year-from-filing term by utilising a patentee’s own claims as teachings that pre-priority date references would lack.

Although PTA was created in 1999, the interaction between ODP and PTA has only recently been litigated in US federal district courts, culminating in the Cellect decision.

A significant reason for this dearth of case law is that PTA awards tend to decline over the course of a patent family. For example, in a typical family of serially filed (and issuing) applications, a continuation application is usually entitled to a lower PTA than its parent patent. That is because USPTO docketing procedures consider the priority date, so that later filed applications tend to wait for shorter periods before an examination begins.

Accordingly, when the USPTO rejects a continuation application for ODP over its parent (as often occurs), the applicant usually has little incentive to challenge whether the parent patent can serve as an ODP reference. That is because a disclaimer of the continuation application over the parent patent would not result in a shorter effective term, unless the PTA for the continuation is projected to be greater than the PTA for the parent, which is unlikely.

Cellect held that patents within family lacking a PTA can serve as ODP references against claims in patents with significant PTA. Using the timeline from Cellect, all of the challenged patents, two of which had almost or more than two years of PTA, were invalidated as obvious in view of the claims of the ’036 patent having no PTA. The ’036 patent’s expiration date was 6 October 2017, not 1997.

Although I believe the use of ODP to truncate PTA awards makes little sense within a post-URAA patent family, and a further appellate review is possible, applicants can take three actions to guard against Cellect challenges going forward.

The first two reflect decades-old decisions and are fairly easy to implement. The third requires careful consideration of dependent claims that is unusual in patent prosecution.

Parties often file further applications in response to restriction requirements, which preclude examination of claims directed to multiple, distinct inventions. If divisional applications are filed for these reasons, they are subject to an ODP safe harbour and cannot be cancelled for ODP.

But the Federal Circuit has held that this safe harbour does not apply to applications styled as a continuation or continuation-in-part (CIP). Therefore, parties should ensure that they style these filings as divisional applications – not continuations.

Applicants will not benefit from the safe harbour discussed above unless they are filing divisional applications as a result of restriction requirements. Accordingly, they need to make sure that the claims in divisional applications follow the contours of the prior restriction requirement and do not cross over into an invention elected in the parent application if they want to take advantage of the safe harbour.

The third approach, neutering the dependent claims of continuation applications, requires the applicant to sacrifice potential fall-back validity positions in order to avoid creating a more potent reference against a family member (typically a parent or grandparent) with a longer PTA award.

For example, consider a simple patent family in which a parent patent was found to be allowable based on feature X and awarded a PTA of 1,000 days. A continuation is allowable based on feature Y, but is projected to receive no PTA.

So while you may think it would be worth having a dependent claim that requires both features Y and X in the continuation, the issuance of a patent reciting feature X in a dependent claim can create a potent ODP weapon (by virtue of the claim’s “teaching” of X) aimed at the independent claims reciting X in the parent application having significant PTA.

To be sure, cancelling a dependent claim reciting feature X would prevent the applicant from arguing that such dependent claim is separately non-obvious in the event of a prior-art challenge in district-court litigation. But there will likely be times when certain dependent claims in a child application lack sufficient benefits to outweigh the potential for such claims to be later used against longer PTA awards within the patent family.

Judge Giles Rich observed more than 50 years ago that, “The life of a patent solicitor has always been a hard one.”

To be sure, Cellect creates additional challenges, that, unlike most prior art, can spring forward from claims drafted by patentees. But despite requiring a careful approach to child applications, patentees can calibrate their portfolios to optimise both patent terms and claim scopes.