Patent Term Adjustment And ODP: USPTO Defends Federal Circuit's Cellect Decision

Key Takeaways:

• Whether one family member can or should invalidate another family member (other than "a first-filed, first-issued, later-expiring" member) based upon ODP still remains an open issue – at least in the minds of some observers – while certiorari is pending.
• Under Federal Circuit precedent, patents with PTA other than the earliest to issue as a patent continue to be at risk for invalidation based upon ODP, but patents with PTE alone are not at risk.
• Cellect's reply to the USPTO's opposition brief is due to the Supreme Court by its next case conference, which is on September 30, 2024.

In December 2021, patent practice was upended by four related United States Patent and Trademark Office (USPTO) Patent Trial & Appeal Board (PTAB) decisions holding that patents subject to statutory Patent Term Adjustment (PTA) could be invalidated based upon the judicially created doctrine of Obviousness-Type Double Patenting (ODP), using earlier-expiring patents from the same family as references where those family members had no or less PTA. (Family membership refers to having a common ancestor patent application having the same priority date.) In August 2023, the Federal Circuit affirmed those decisions. In re Cellect, LLC, 81 F.4th 1216 (Fed. Cir. 2023). Cellect has filed a Petition for Certiorari.¹ See e.g. our prior posts dated May 15, 2024 and May 28, 2024 for further information and explanation.

After obtaining two extensions, the USPTO filed its opposition on August 21, 2024. The opposition advances three central arguments: (1) that the Federal Circuit was correct in holding that Section 154 of the Patent Act – the section governing PTA – does not "preclude ordinary application of obviousness-type double-patenting"; (2) that Section 154 explicitly "contemplates that [ODP] will apply in the same circumstances it otherwise would in the absence of PTA"; and (3) the petition should be denied because the question presented is not "sufficiently important" to warrant the Supreme Court's review, in light of an August 13, 2024 Federal Circuit decision that seeks to cabin the Cellect decision, which the government quoted (at p. 18 of its opposition) as stating "a first-filed, first-issued, later-expiring claim cannot be invalidated by a later-filed, later-issued, earlier-expiring reference claim having a common priority date."

Notably, neither the Federal Circuit nor USPTO think Cellect inconsistent with an earlier Federal Circuit decision addressing the other statutory regime for adding term to a patent, Patent Term Extension (PTE), that extends a patent's term for marketing delays caused by FDA regulatory review. Novartis AG v. Ezra Ventures LLC, 909 F.3d 1367, 1373 (Fed. Cir. 2018) (ODP does not invalidate an otherwise validly obtained patent that has PTE, applying ODP based upon the term before applying PTE).

U.S. Patent Office Tells SCOTUS to Reject Cellect Petition

Cellect and the USPTO presented two different questions in their brief:

• Cellect posed the central question as: "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."
• The USPTO narrowly framed the question as: "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."

According to the USPTO's brief, Section 154(b)(2)(B) limits PTA to patents that suffer undue UPSTO delays in prosecution: "[n]o 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." The brief seizes on this reference to a disclaimer, arguing that "an expiration date established by the terminal disclaimer controls over the expiration date that PTA would otherwise prescribe." According to the USPTO, it then follows that Section 154 does not "displace ordinary application of obviousness-type double patenting when a terminal disclaimer is not filed" (emphasis in brief). To hold otherwise, the government argues, would result in "applicants like Cellect [benefitting] from their failure to comply with established practice ...which contemplates terminal disclaimers as a solution to avoid invalidation of patents claiming obvious inventions." Thus, the USPTO squarely points the blame at Cellect for not filing terminal disclaimers when they had the chance, and it ultimately agrees with Cellect that ODP and terminal disclaimers are "two sides of the same coin: the problem and the solution".

To briefly review, four patents at issue in Cellect were statutorily granted PTA based on USPTO delays; the grant was mandatory. Without PTA, the patents would have expired simultaneously, together with another patent that had no PTA. Cellect never filed a terminal disclaimer and, when litigation arose, could not because some patents had expired. Here again the USPTO distinguished PTE under Section 156 and PTA under Section 154, saying that they should not be treated similarly since Section 156 contains no limiting terminal disclaimer language.

USPTO: ODP Has Been Supported Since "Inception" Of the U.S.'s Patent Laws

The USPTO did not rest its brief solely on the text of Section 154, but also traced the long history of double-patenting law to find support for continued application of obviousness-type double-patenting. As the USPTO writes, the Supreme Court tackled double patenting long ago and held that "two valid patents for the same invention cannot be granted either to the same or to a different party." Miller v. Eagle Mfg. Co., 151 U.S. 186, 197 (1894). The 1952 Patent Act codified this logic and provided the basis for statutory double patenting in Section 101.

Casting a sharp contrast with Cellect and its amici, the USPTO argues that obviousness-type double patenting is not a judge-made doctrine run amok. Rather, Miller, subsequent double-patenting jurisprudence, and the Patent Act itself prove that ODP is grounded in the origins of the patent system.

The USPTO, in conflating ODP and statutory § 101 double patenting (which prevents the same claim from being in more than one patent), further divorced ODP from any "gamesmanship" analysis – a historical test for ODP that appears in many cases (see prior updates). It argues that the Supreme Court itself has used the rule against double patenting "not as a mechanism to prevent gamesmanship, but as a means to ensure that 'the power to create a monopoly is exhausted by the first patent[.]" Miller, 151 U.S. at 198.

USPTO: Cellect Does not Merit Supreme Court Intervention

The USPTO argues that because the Federal Circuit's decision was unanimous and because the court of appeals denied rehearing without dissent, there is "no sound reason" for the Supreme Court to take up the case.

The USPTO also downplayed the patent industry's concerns with the impact of Cellect on patent prosecution. Dismissing amici's worries that half of all granted patents have been awarded PTA and may be invalidated under Cellect, the USPTO writes, "the [Supreme] Court's resolution of the question presented would likely affect only a small subset of the patents for which PTA is granted."

Next Steps

Only one amicus brief was filed in support of the government's position; in contrast, seven briefs were filed supporting Cellect or no party. Cellect, but not amici, will have the opportunity to file a reply.

Although the Supreme Court does not have a strict deadline for Cellect to file a reply, generally speaking that deadline is September 30, 2024. Cellect, however, may choose to submit its reply before the next Supreme Court distribution date of September 4, 2024, to ensure that the reply is considered alongside the petition and opposition brief should the Justices consider the petition soon after distribution.

Footnote

1. The Foley Hoag LLP attorneys authoring this alert filed amicus briefs on behalf of the New York Intellectual Property Association (NYIPLA) supporting rehearing at the Federal Circuit and certiorari.

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