Federal Circuit Holds Patent Term Adjustment May Lead To Invalidation by Obviousness-Type Double Patenting for Related Patents

The Federal Circuit issued an important and precedential decision in In re Cellect, LLC regarding the interaction of patent term adjustment (“PTA”), terminal disclaimers, and obviousness-type double patenting (“ODP”).  Under the judicially-created ODP doctrine, patent claims that are not patentably distinct from those in a commonly owned, earlier-expired patent are subject to invalidation.  The issue in In re Cellect was whether the challenged patents that expired after another family member solely because of PTA can be unpatentable over the earlier-expired patent under ODP.  As the ODP analysis requires determining which are the later-expiring patents, the answer hinges on when the PTA is applied. 

This case settles a split in the district courts and establishes that for a patent that has received a PTA, ODP must be based on the expiration date of the patent after the PTA is added.  This treatment of PTA is in contrast to a patent that has received a patent term extension (“PTE”).  The Federal Circuit previously held that a later-filed, later-issued patent that expires before an earlier-filed, earlier-issued patent due to PTE cannot act as an ODP reference because ODP must be based on the expiration date of the patent before PTE is added.  Novartis AG v. Ezra Ventures LLC, 909 F.3d 1367 (Fed. Cir. 2018).

The In re Cellect case involved a family of expired patents, four of which were challenged in the underlying ex parte reexaminations by Samsung entities as unpatentable under ODP.  The challenged patents at issue in this appeal are four of 11 patents that Cellect asserted against various Samsung defendants.  The case has been stayed pending the reexaminations and appeals to the Federal Circuit. 

In this consolidated appeal, the Federal Circuit determined all claims of ODP could be traced back to one unchallenged patent.  Each of these five patents claimed priority to the same original application.  The four challenged patents all received varying amounts of PTA; the non-challenged patent did not receive any PTA.  None of the patents were subject to an ODP rejection or terminal disclaimer during prosecution.  As such, each of the four challenged patents expired after the unchallenged patent.  Given the common claim of priority, but for their individual grants of PTA, the four challenged patents would have expired on the same day as the unchallenged patent.

In the underlying ex parte reexaminations, the asserted claims of the four challenged patents were found invalid under ODP as obvious variants of the claims in earlier expiring family members, and neither Cellect nor the USPTO disputed that.  The obviousness of the claims could be traced back to the earlier expired, unchallenged patent that did not receive a PTA.  Cellect could not file terminal disclaimers to overcome the ODP finding because all of the patents had expired.  On appeal, the Patent Trial and Appeal Board (“PTAB”) sustained the examiner’s determinations that the asserted claims were unpatentable under ODP.    

The Federal Circuit affirmed the PTAB’s decision invalidating the challenged patents.  Cellect had argued that for ODP purposes, PTA should be treated like PTE, where ODP is considered from the expiration date of the patent before the addition of PTE.  Cellect relied on the earlier Novartis decision, stating that any statutorily mandated extension, including PTA and PTE, cannot be cut short by a judge-made law like ODP.

The Federal Circuit disagreed, emphasizing that PTA and PTE are dealt with in different statutes and deal with differing circumstances.  Specifically, the PTA statute contains an express exclusion whereby PTA cannot adjust a patent’s term beyond the disclaimed date in any terminal disclaimer (i.e., any terminal disclaimer should be applied after any PTA is granted).  35 U.S.C. § 154(b)(2)(B).  Unlike PTA, PTE grants are not limited by the filing of terminal disclaimers.  35 U.S.C. § 156.  This difference “indicate[s] a congressional intent to speak to terminal disclaimers and ODP in the context of PTA,” but not PTE.  The PTE and PTA statutes also have “quite distinct purposes.”  PTE is meant to effectively extend the overall patent term for a single invention due to regulatory delays in product approval, while PTA is meant to extend the term of a particular patent due to delays in the processing of that patent by the USPTO.  The Federal Circuit thus found no conflict between ODP, the PTA statute, the prior Novartis decision, and its holding that PTA and PTE should be treated differently when determining whether or not claims are unpatentable under ODP.

In light of the In re Cellect decision, patent owners and practitioners should evaluate patent families and assess the risk of ODP unpatentability due to grants of differing amounts of PTA across family members.  For patent families with ongoing prosecution activity, patent owners and practitioners should remain vigilant as to (1) whether a current application may be accumulating PTA, (2) the PTA for other family members, and (3) whether terminal disclaimers should be filed.  If the earlier reference patent has expired, however, there is no ability to cure an ODP finding by filing a retroactive terminal disclaimer.  See Boehringer Ingelheim Int’l v. Barr Laboratories, 592 F.3d 1340, 1347 (Fed. Cir. 2010).