Federal Circuit Clarifies Differing Effects of Terminal Disclaimer on Patent Term Adjustment and Extension
There are two scenarios where a patent term may run longer than 20 years from the date on which a U.S. patent application is filed or from the date on which the earliest U.S. application is filed if the application is filed with reference to 35 U.S.C. §§ 120, 121, 365(c), or 386(c). The first is denoted Patent Term Adjustment (PTA), which is granted due to examination delays by the USPTO during the prosecution of a patent application. The second is Patent Term Extension (PTE), which accounts for delays in commercializing an invention due to regulatory approval required for the invention. Distinctions between and the statutory language creating PTA and PTE was the subject of the recent decision in In re Cellect by the Court of Appeals for the Federal Circuit (CAFC or Federal Circuit).[1]
The CAFC distinguished the effect on PTA of a terminal disclaimer filed as the result of an obviousness type double patenting (ODP) rejection, as compared to PTE, where the CAFC previously held that PTE is not foreclosed by a terminal disclaimer. Specifically, the CAFC held that “while the expiration date used for an ODP analysis where a patent has received PTE is the expiration date before the PTE has been added, the expiration date used for an ODP analysis where a patent has received PTA is the expiration date after the PTA has been added.” This distinction was based on differences in the statutory language creating PTA and PTE.
The argument presented to the Patent Trial and Appeal Board (PTAB or Board) focused on, and the Federal Circuit emphasized in its decision, the mandatory phrasing of 35 U.S.C. § 154(b)(1) regarding PTA: “the term of the patent shall be extended 1 day for each day after the end of the period specified in clause (i), (ii), (iii), or (iv), as the case may be, until the action described in such clause is taken.” Such mandatory language is also present in § 156, the statutory section creating PTE.
However, PTA is subject to the limitations of § 154(b)(2)(B): “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.” Thus, the CAFC noted that § 154(b)(2)(B) expressly excludes patents in which a terminal disclaimer was filed from the benefit of PTA beyond that disclaimed date for delays caused by the USPTO, but that no similar prohibition exists in § 156 for PTE.
For Cellect, this distinction resulted in 4 of its patents (originally granted with PTA) to be found invalid due to ODP in ex parte reexamination proceedings. An ODP rejection is based on a judicially-created doctrine grounded in public policy which is primarily intended to prevent prolongation of the patent term. It accomplishes this goal by prohibiting claims in a second patent that are not patentably distinct from claims in a first patent. Usually, an ODP rejection can be overcome by filing a terminal disclaimer, tying the ownership and expiration date of the subject (later granted) patent and the reference (earlier granted) patent together. While terminal disclaimers are most often filed during the examination of the later-prosecuted application, they can also be submitted post-issuance. ForCellect, however, the ODP rejections could not be overcome by the filing of terminal disclaimers during reexamination proceedings of “subject” patents because the related “reference” patents had already expired. Without terminal disclaimers, the subject patents that received ODP rejections in the reexamination proceedings were simply unpatentable.
Cellect argued that the Board artificially created a substantial new question of patentability by second guessing the examiner’s judgment. In particular, Cellect argued that the same examiner analyzed all the challenged (subject) and reference patents, and was therefore aware of them, yet that examiner did not issue any ODP rejections during prosecution, despite issuing ODP rejections during the prosecution of other Cellect-owned applications. The CAFC was not convinced by such arguments, stating that “[t]he examiner’s willingness to issue ODP rejections of claims in other Cellect-owned patent applications but not in the challenged patents and his knowledge of the reference patents do not affirmatively indicate that he considered ODP here.” Because Cellect did not point to any portion of the prosecution history that demonstrated that the examiner considered ODP, the CAFC agreed with the Board that a substantial new question of patentability existed.
While some may urge that proactive filing of terminal disclaimers may prevent invalidation of families based on potential ODP assertions, there may be other options to consider. First, the ODP issues were raised in the ex parte reexamination proceedings as a substantial new question of patentability in Cellect’s situation. While the examiner in the original applications received notice of the relatedness of the applications through Information Disclosure Statements, it is possible that such notice would have been sufficient to avoid a substantial new question of patentability had the applicant specifically requested consideration of ODP. While the existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office or considered by the Office,[1] a request that ODP be considered could have provided evidence in the prosecution history that the examiner did consider the relatedness of the claims and potential ODP issues.
If all members of a family are issued, some of which granted with PTA and without a terminal disclaimer, a patent owner could also consider proactively requesting supplemental examination before embarking on any enforcement action. A request for supplemental examination may involve any ground of patentability, including but not limited to double-patenting. By submitting a request for supplemental examination, potential ODP issues may be considered, but a reexamination would only be instituted if the USPTO finds a substantial new question of patentability exists, during which time a terminal disclaimer could be filed within the term of the referenced patent. While it was too late for Cellect to file terminal disclaimers, earlier identification of potential issues Cellect might encounter could have been achieved. In all scenarios, however, the issues surrounding patents that are members of complicated webs of relatedness having different patent terms due to PTA just got a bit more complicated despite the Federal Circuit’s clarification.
