In view of the Supreme Court's "long conference" on September 30th, it seems timely to review the arguments, pro, con, and amicus briefs submitted to the Court asking for certiorari over the Federal Circuit's In re Cellect decision. While that Court's recent Allergan USA Inc. v. MSN Laboratories Private Ltd. opinion may have made the issues (and whether the Supreme Court grants cert) less urgent, the pending U.S. Patent and Trademark Office (PTO) proposed rules limiting terminal disclaimer practice for overcoming obviousness-type double patenting and the permissible scope of those rules by an administrative agency after Loper-Bright Enterprises v. Raimondo continue to garner interest regarding whether the Court will take up review of this decision.
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:
The Federal Circuit affirmed the Patent Trial and Appeal Board decision invalidating the four patents that had term extending longer than that of the earliest to expire patent, U.S. Patent No. 6,862,036, which had amassed no patent term adjustment under 35 U.S.C. § 154(b) based on the provision of subsection 35 U.S.C. § 154(b)(2)(B) that stated:
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 . . . .
According to the Federal Circuit, 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) (there was no dispute that the claims in these five patents were not patentably distinct). 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 under 35 U.S.C. § 154(b)(2)(B); the fact that no such terminal disclaimer(s) were filed were not relevant to the Court's decision that the principle applied because they should have been filed. The Court's decision was supported by the overriding policy consideration that the Court focuses 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."). In so ruling, the Federal Circuit dismissed patentee's argument that patent term adjustment should not be treated any differently from patent term extension (PTE), for which the Court ruled in Novartis AG v. Ezra Ventures LLC (Fed. Cir. 2018) that a statutorily mandated extension of term should not be lost under a judicially created doctrine. The reasoning by the Court was that the statutes were independently enacted and had "quite different purposes."
Cellect's cert petition asserts error in the Federal Circuit's decision on grounds set forth in the Question Presented:
Whether a patent procured in good faith can be invalidated on the ground that statutory Patent Term Adjustment, which requires lengthening a patent's term to account for time lost to Patent and Trademark Office delays, can trigger a judge-made patent-invalidation doctrine.
In support of this Question, the Petition asserts that "the Federal Circuit has substituted a judge-made equitable doctrine for a patent term guaranteed by Congress." In arguments in support of the Petition, Cellect asserts that the only reason for the different expiration dates of these patents is that "the Patent Office did not comply with its statutory deadlines for acting on patent applications," which raised patent term adjustment under the statute, with there being no evidence or allegations of gamesmanship, bad faith, or improper actions by patentee. Cellect's arguments contrast the Federal Circuit's treatment of the statute under this case and Novartis AG v. Ezra Ventures LLC, 909 F.3d 1367, 1375 (2018), analogizes the PTA statute with how Congress enacted the earlier PTE statute, and asserts as evidence of Congressional intent to harmonize the two statutes the inclusion of the phrase "which shall include any patent term adjustment granted under section 154(b)" to § 156(a) when § 154(b) was enacted. The PTE (§ 156a) and PTA (§ 154b) statutes "serve the same purpose," the brief contends, restoring patent term lost by bureaucratic delay (by FDA and PTO, respectively), and both use the mandatory phrase that lost term "shall be extended" for the appropriate period.
The brief contains a very simplified example to illustrate how PTA is applied (although the wisdom of making it too simple may be questioned):
By way of illustration, ODP applies when the owner of a patent for sliced bread goes on to seek related patents for sliced white bread and sliced wheat bread, and prosecutes those patent applications strategically so that they expire after the original patent and enlarge, in effect, the original patent's term through patenting obvious or marginal variations of its claims.
As to reasons for granting the petition, the brief asserts that the Federal Circuit "turned a congressional 'guarantee' of a minimum effective patent term on its head by converting that guarantee into a threat to the validity or term of countless continuation patents." Additional reasons supporting cert grant are that this change is "extremely consequential" to patentees, the issue here is plainly presented (should a judge-made doctrine supersede "an express statutory grant"?), and the Supreme Court is the only resort against the Federal Circuit, the brief stating that "the Federal Circuit's word on the question will be the last one in all patent cases unless this Court grants review."
Specific aspects of Cellect's arguments include that the plain text of the statute ("shall be extended") "forecloses" the Federal Circuit's opinion under Supreme Court precedent, including Jennings v. Rodriguez, 583 U.S. 281, 300 (2018) (quoting Kingdomware Techs., Inc. v. United States, 579 U.S. 162, 171 (2016)); that courts are prohibited from adding exceptions to a statute not included by Congress, citing Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980) (quoting United States v. Dubilier Condenser Corp., 289 U.S. 178, 199 (1933)); that the decision is contrary to Supreme Court decisions on consistency when statutes used same language, "serve the same purpose" and are "analogous," Abbott v. Perez, 585 U.S. 579 (2018); criticizes the Federal Circuit's reasoning regarding the language in § 154(b) suggesting a role for terminal disclaimers where such language was not found in § 156(a); is inconsistent with the Federal Circuit's decision in Novartis Pharmaceuticals Corp. v. Breckenridge Pharmaceutical Inc., 909 F.3d 1355, 1366 (Fed. Cir. 2018); and that "[i]n spurning the traditional, equitable ODP inquiry in favor of rigid presumptions of its own invention, the Federal Circuit repeated an error that this Court has often granted certiorari to correct," citing eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 393 (2006); Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 157 (2010); Nken v. Holder, 556 U.S. 418, 435, 436 (2009); Munaf v. Geren, 553 U.S. 674, 690 (2008); New York Times Co. v. Tasini, 533 U.S. 483, 505 (2001); KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 419 (2007).
As to the importance of the question, the brief asserts that the Federal Circuit's decision "upsets investment-backed expectations" contrary to Supreme Court admonitions in, for example, Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 739 (2002); that it generates uncertainty, harming investment decisions, and "radically undermines . . . predictability"; and that it cause confusion in the lower courts, comparing district court decisions in Allergan USA, Inc. v. MSN Labs. Priv. Ltd., No. Civ. A. 19-1727-RGA, 2023 WL 6295496, at *22 (D. Del. Sept. 27, 2023) (since reversed by the Federal Circuit) with Acadia Pharms. Inc. v. Aurobindo Pharma Ltd., No. Civ. A. 20-985-GBW, 2023 WL 8803448, at *8 (D. Del. Dec. 13, 2023). The brief also notes the importance for "long-lead-time, high-investment industries like pharmaceuticals," using PTE as an example (keeping in mind that the technology here does not have these attributes); is "especially burdensome" on smaller businesses; "upends well-established patent practice"; and predicts that inventors "will be compelled to prepare larger, all-but-the-kitchen-sink applications right out of the gate, thus delaying the arrival of important innovations and then swamping the Patent Office with administrative difficulty." Consequently, the decision raises the potential for "invalidation of hundreds of patents worth billions or trillions of dollars" due to "retroactive invalidation" under circumstances where "these are problems of the Patent Office's own making" because "[a]s long as the Patent Office acts on applications within the statutory deadlines, there is no PTA in the first place"
Finally, the brief characterizes this case as an ideal vehicle for the Court to decide, because there are no underlying issues of fact, no challenge that the claims were not patentably distinct, and that the Court can reach these issues for both PTE and PTA.
The government's response in opposition has the tone of "move along, nothing to see here" regarding Cellect's assertions in their Petition. The government's contrasting Question Presented to the Court is:
Whether the ban on obviousness-type double patenting applies when patent-term adjustment causes a challenged patent to remain in force after the reference patent expires.
The brief dismisses Cellect's reliance on Section 156 as being a different part of the statute enacted for a different purpose and sees no contradiction with Section 156 because Section 154 contains express provisions regarding terminal disclaimers and Section 156 does not. According to the government, the statutory entitlement for PTA is bounded by exceptions including the one for patents having restricted term, and these differences evince a distinction Congress made between Sections 154 and 156 that justify the Federal Circuit treating them differently here and in Novartis v. Ezra Ventures.
The brief raises an historical prohibition against double patenting relying on Miller v. Eagle Mfg. Co., 151 U.S. 186, 197 (1894), and Odiorne v. Amesbury Nail Factory, 18 F. Cas. 578, 579 (C.C.D. Mass. 1819) (No. 10,430) (Story, J.), that mandate that it is the later patent that "must be declared void," with Section 101 of the 1952 Patent Act as codifying this prohibition and Gilead Scis., Inc. v. Natco Pharma Ltd., 753 F.3d 1208, 1212 (Fed. Cir. 2014), as extending this prohibition to "obvious modifications of that invention that are not patentably distinct improvements," now termed obviousness-type double patenting, citing Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d 955, 967 (Fed. Cir. 2001), cert. denied, 534 U.S. 1109 (2002). The ready remedy is filing a terminal disclaimer under Section 253(b) according to their brief, citing Application of Robeson, 331 F.2d 610, 614 n.4 (C.C.P.A. 1964).
The government urges the Court to recognize that the current situation arose, in part, due to changes in the Patent Act caused by adoption of the Uruguay Round Amendments, and the government sees the current situation as being how it has handled the likelihood that certain patentees would lose term due to PTO delay. Similarly, the brief discusses the origins and policy rationales for Section 156 and by contrasting them hopes to distinguish them. The brief asserts that the Federal Circuit took into consideration the plain meaning of the statute in reaching its decision and that the absence of any evidence of gamesmanship by patentee did not change the analysis.
In an instance where a Federal Circuit-derived "bright line rule" may be justified and helpful for achieving consistency, the brief argues that "the statutory recognition of the binding power of terminal disclaimers in § 154(b)(2)(B) is tantamount to a statutory acknowledgement that [obviousness-type double patenting] concerns can arise when PTA results in a later-expiring claim that is patentably indistinct" and "when a terminal disclaimer has been entered in a patent subject to PTA, no patent (or claim) may be extended beyond the disclaimed expiration date." The Federal Circuit properly recognized that ODP and terminal disclaimers were "two sides of the same coin" and thus was justified in its interpretation of § 154(b)(2)(B) according to the government. The government's brief attempts to blunt Cellect's argument that the Federal Circuit used the judge-made doctrine of ODP to overcome the provisions of the statute by saying that "while sometimes 'described as a court-created doctrine, obviousness-type double patenting is grounded in the text of the Patent Act,'" citing Abbvie Inc. v. Mathilda & Terence Kennedy Inst. of Rheumatology Trust, 764 F.3d 1366, 1372 (Fed. Cir. 2014), and Miller v. Eagle Mfg. Co., 151 U.S. 186, 197 (1894), Parker Drilling Mgmt. Servs., Ltd. v. Newton, 587 U.S. 601, 611 (2019), and AbbVie.
With regard to the differences in treatment by the Federal Circuit between Section 154 and Section 156, the brief states that a critical textual distinction between Section 154 and Section 156 shows that Congress intended the two schemes to operate differently. Whereas Section 154 precludes the use of PTA to extend a patent's expiration date beyond the "date specified in [a terminal] disclaimer," 35 U.S.C.154(b)(2)(B), Section 156 contains no comparable carveout and the Federal Circuit "recognized that distinction" in Novartis AG v. Ezra Ventures LLC, 909 F.3d 1367 (2018) (which decision also recognized this distinction regarding Section 154).
The brief also asserts that the fact that it is undisputed that the claims in the different Cellect patents at issue were obvious variants of each other trumps the equity argument because undisputably these claims were in force after their proper expiration date and equity demands that they be invalidated under these circumstances, citing Boehringer Ingelheim Int'l GMBH v. Barr Labs., Inc., 592 F.3d 1340, 1348 (Fed. Cir. 2010). The brief also argues that there is also no requirement for gamesmanship nor fraud for Section 154 to be applied here, based on the need to protect the public from unjustified extension of the patent term.
Regarding Cellect's assertions on the importance of this case for Supreme Court review, the government argues that the Question Presented by petitioners is "not sufficiently important to warrant this Court's intervention" because it was consistent with earlier Federal Circuit precedent, was a unanimous decision and was not subject to rehearing. Petitioner Cellect's argument that no other circuit will be able to consider the question is not germane because there hasn't been any disagreement among the Federal Circuit indicating a need for further review. The Question Presented by petitioners is "not sufficiently important to warrant this Court's intervention" because it also "lacks substantial practical importance" due to limited applicability, i.e., when "a patent owner obtains a later-expiring patent that has claims that are not patentably distinct from those of an earlier-expiring patent; the USPTO's delay in examining and processing the later patent is sufficient to trigger PTA; the USPTO examiner does not recognize the indistinct nature of the claims of the later patent and does not reject them based on double patenting; and the patent owner does not follow the usual practice of filing a terminal disclaimer with respect to the later-expiring patent." And any frustrated expectations by investors are not justified under the "bedrock principle" against double patenting (i.e., their expectations are not justified in the first place, particularly in view of "Section 154(b)(2)(B)'s express carve-out of terminal disclaimers from that grant [of PTA]").
The brief also mentions the Federal Circuit's decision in Allergan USA, Inc. v. MSN Laboratories Private Ltd., No. 24-1061, 2024 WL 3763599 (Fed. Cir. Aug. 13, 2024), as removing any inconsistencies in the Court's jurisprudence. The government's brief dismisses Petitioner's assertions that patentees will be newly burdened with the need to review all claims in related patents (which exists now) and disruptions in continuation practice based on Allergan.
Cellect Reply Brief
Cellect, in its Reply brief, addresses some "misstatements" made by the government (such as that "the rule against obviousness-type double patenting (ODP) is statutory rather than judge-made") and the government's arguments. The first of these is displacement by the PTA statute which Cellect asserts it did not advance and, perhaps more importantly is actually about ODP displacing PTA rather than (as the government asserts according to Cellect) the other way around. Cellect characterizes this argument as an admission by the government that the Federal Circuit's opinion is "indefensible." Cellect challenges the government for trying to avoid the reality that the Federal Circuit performed a "massive and consequential rewrite of the statute." And the Reply brief reiterates Cellect's contention that it is inexplicable (or at least the government has not provided an explanation) of why the Federal Circuit treated the application of ODP for PTE differently than PTA.
The argument focuses on the Federal Circuit's construction of the portion of the statute that specifically mentions terminal disclaimers and criticizes for being counterintuitive the government's position regarding situations (like the one at issue) where terminal disclaimers have not been filed and the effect on PTA. The government's reading amounts to a "back door limitation" to the statutory guarantee of PTA extension of patent term according to the Reply brief which is "especially implausible because the proffered limitation case (as it did [in this case]) wholly invalidate a patent that has no terminal disclaimer" (emphasis in brief) (the brief characterizes such actions by Congress if intentional to be nothing less than "cagey," citing Whitman v. Am. Trucking Assoc. for the principle that Congress "does not hide elephants in mouseholes"). The brief uses an analogy from immigration law to illustrate the incongruity Petitioner believes the government's (and Federal Circuit's) statutory construction produces. The best and most consistent answer Cellect proffers is that "the [statutory] text limits PTA only when a terminal disclaimer has been filed and states that 'PTA shall be granted' when no terminal disclaimer is filed" (albeit avoiding the issue of the proper determination in cases like this where a terminal disclaimer should have been filed).
The brief also provides its rebuttal to the government's position on the disparity between how ODP is applied to awarding term extensions for PTA and PTE; the effects of the changes in U.S. patent term by adoption of the URAA/TRIPS regime; and the equitable foundation of ODP.
Regarding the importance of the Question Presented and whether the Court should grant certiorari, the brief reiterates its arguments (and criticizes the government's attempts to "minimize the importance" by "protestations [that] ring hollow" and "fail to grapple" with experiences contrary to their arguments by better-informed amici. And the brief characterizes the recent Federal Circuit decision in Allergan v. MSN to be an "ad hoc turnabout" as being "the wages of ignoring the statutory text."
The amicus briefs that were filed on behalf of Petitioner and Respondent will be the subject of a subsequent post.
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