In re Cellect: Patent term adjustments cut short by obviousness-type double patenting

The United States Court of Appeals for the Federal Circuit‘s ruling in In re Cellect, LLC addresses how a patent term adjustment (PTA) impacts the analysis of whether a patent is invalid under obviousness-type double patenting (ODP).

The court issued the following bright-line rule: ODP for a patent that has received PTA must be based on the expiration date of the patent after PTA has been added.

This is the first time the Federal Circuit has addressed this issue. Prior to this ruling, there existed a grey area with respect to how courts ruled on the issue of whether ODP applies when the expiration dates of two patents differ solely due to a PTA. Some courts suggested ODP did not apply when the expiration dates of two patents differ solely due to PTA and others suggested ODP does apply.[1]

As a result of this ruling, patent owners are increasingly vulnerable to ODP attacks by patent challengers when the expiration dates have been adjusted via PTA.

Holding

The court in In re Cellect resolved, for the first time, how PTA impacts the analysis of whether a patent is invalid under ODP. The court concluded that “ODP for a patent that has received PTA, whether or not a terminal disclaimer is required or has been filed, must be based on the expiration date of the patent after PTA has been added.” In re Cellect, LLC, No. 2022-1293, 2023 WL 5519716, at *9 (Fed. Cir. Aug. 28, 2023) (emphasis added).

Background

Cellect first sued Samsung for patent infringement of the “Cellect patents.” Samsung then requested ex parte reexamination, the USPTO next invalidated the Cellect patents, and, finally, Cellect appealed to the Federal Circuit. Id. at *1.

Cellect argued the following on appeal:

(1) The Board erred in determining the date of expiration of the patent that included a duly issued PTA
(2) The Board failed to consider equitable concerns in the reexamination process and
(3) The Board erred in finding that there was a substantial new question of patentability.

Id. at *4.

 

The Federal Circuit ruled as follows:

(1) The Federal Circuit concluded that the (a) statutory language and (b) precedent reveal that PTA and PTE should not be considered in the same way when determining whether or not claims are unpatentable under OGP. Id. at *6. Even though Ezra found that an extension pursuant to PTE is added to the patent term after a consideration of ODP, an adjustment pursuant to PTA should be added to the patent term before consideration of ODP. Id. (citing Novartis AG v. Ezra Ventures LLC, 909 F.3d 1367, 1375 (Fed. Cir. 2018)). The court further noted that the statutory language is clear that terminal disclaimers cut short PTA but not PTE. Id. (explaining that § 154 mentions terminal disclaimers where § 156 does not). The fact that § 154 limits PTA by the presence of a terminal disclaimer indicates that Congress intended to treat the two frameworks differently, as evidenced in Merck & Co. v. Hi-Tech Pharmacal Co., Inc., 482 F.3d 1317 (Fed. Cir. 2007). Id.

(2) The court disposed of Cellect’s equity concerns by noting that neither (a) the fact that Cellect has not engaged in actions that resulted in divided ownership nor (b) the mere “promise” not to do so in the future abrogates the potential risk of multiple owners or assignees. Id. at *10.

(3) The court finally found that there was no indication that the examiner raised ODP as a relevant issue during the prosecution of the challenged patents, and mere knowledge by the examiner, including ODP rejections in other applications, did not suffice to find ODP was previously considered. Id. at *11.

Impact

(1) During patent prosecution: ODP comes into play for patents that are patently indistinct. Said differently, there is no ODP concern when two patents do not cover the same subject matter. Thus, ODP concerns can arise when PTA results in a later-expiring claim that is patently indistinct from an earlier-expiring claim. As such, patent portfolios should be carefully crafted to avoid patently indistinct subject matter, to the extent possible, so that there is no compromise to the statutory time allotted for the patents in the portfolio.

(2) Impact on the patent owner: Patent owners need to be aware that ODP is treated differently for PTE versus PTA. For PTE, the terminally disclaiming party (the patent owner) will receive the benefit of the extension of time granted by the PTE, which is why ODP does not impact patents that have a date adjusted via PTE. However, the terminally disclaiming party will no longer receive the benefit of the adjustment of time granted by the PTA. Thus, the strategic decision of whether and when to terminally disclaim a patent challenged on ODP grounds has never been more important.

(3) Impact on the patent challenger: For those attacking the validity of a patent on ODP grounds, this ruling represents a significant win and adds another tool to their toolkit. For patently indistinct patents with the same expiration date, where one has been adjusted via PTA, patents challenged on ODP grounds effectively put patent owners between a rock and a hard place, requiring patent owners to either terminally disclaim the challenged patents, thereby cutting off their exclusivity, or fight the ODP argument, hoping their patents withstand ODP reexamination.

Going forward

In the wake of this decision, the pendulum for patent challengers wishing to make ODP arguments for patents having received a PTA has now swung in their favor. This bright-line rule makes clear that the terminally disclaiming party will not benefit from the adjustment of time granted by the PTA for ODP arguments.

Find out more about the implications of this ruling by contacting any of the authors or your usual DLA Piper relationship attorney.

 

[1] Compare Amgen, Inc. v. Sandoz Inc., No. 18-11026, 2021 WL 5366800, *26 (D.N.J. Sept. 20, 2021) (affirmed on appeal) (finding ODP did not apply, in reliance on Novartis AG, v. Ezra Ventures LLC, 909 F.3d 1367 (Fed. Cir. 2018)); Magna Electron. Inc. v. TRW Auto. Hold. Corp., Nos. 1:12-cv-654, 1:13-cv-324, 2015 WL 11430786, *4 (W.D. Mich. 2015) (finding ODP did apply, noting that an earlier-expiring patent can qualify as an obviousness-type double patenting reference for a later expiring patent even if the later expiring patent only expires later because of PTA).