May 16, 2022
Congress sought to keep Patent Office delays from prejudicing a patentee by granting PTA to compensate for the Patent Office delays. While one might expect the Patent Office to work mightily to avoid administrative delays in prosecution, today the average time to first action is about 17 months, three months longer than the target of 14 months adding on average 3 months to the patent term. Other delays during prosecution add still more time to the PTA period. Since these are averages, the additional time can be significant. In pharmaceuticals the PTA added for delays of even a few months can mean hundreds of millions of dollars in revenue. The two district courts have addressed this issue where an ODP defense is raised against the later expiring patent because of PTA and came to different conclusions. See Mitsubishi Tanabe Pharma Corp. v. Sandoz, Inc., 533 F. Supp. 3d 170 (D.N.J. 2021) (the judicially created ODP does not trump the statutory PTA) and Mitsubishi. Magna Elecs., Inc. v. TRW Automotive Holdings Corp., No. 12-cv-654, 2015 WL 11430786 (W.D. Mich. Dec. 10, 2015) (ODP trumps PTA).
The PTAB weighed in on this issue in deciding the appeal in Ex parte Cellect in Appeal 2021-00528 (Cellect) that PTA trumps ODP, that is ODP denies the patentee the benefit of PTA. In Cellect the PTAB that claims 25–29 and 33 of U.S. Patent No. 7,002,621 (’621) were not patentable because of double patenting over U.S. Patent No. 6,452,626 (’626). The two patents shared a common parent application serial number 08/944,322, filed October 6, 1997, now U.S. Patent No. 5,929,901 (‘901) and ‘’621 claimed continuation-in-part status to ‘626. Thus the ‘621 examiner was aware of the earlier application during its examination but did not issue an ODP rejection.
In ex parte Examination the USPTO issued an ODP rejection even though the original examiner did not find ODP. Based on the record, it appears that the examiner could have made the rejection but did not. Because of USPTO delays the ‘621 patent received 759 days of PTA while ‘626 received only 59 days resulting in the two patents expiring at different times instead of simultaneously as the applicant chose by its filing strategy. The relationship was illustrated by the PTAB as:
The PTAB rejected the approach of the district court in Mitsubishi based primarily on its reading of 35 U.S.C. §§ 154 and 156, Novartis AG v. Ezra Ventures LLC, 909 F.3d 1367, 1373–74 (Fed. Cir. 2018) (Ezra) as well on equitable grounds which was the weakest of the reasons. The differences between §§ 154 and 156 are that §154(b)(2)(B) provides that PTA could not extend the PTA beyond the date specified in a disclaimer filed in the application while § 156 provides that the extension is “. . . from the original expiration date of the patent, which shall include any patent term adjustment granted under section 154(b) . . ..” Thus, § 154(b)(2)(B) expressly excludes PTA extending a patent beyond the date specified in the terminal disclaimer. Here there was no terminal disclaimer since the patent examiner did not make an ODP rejection even though the record in ‘621 informed the examiner of ‘626. Thus, it was the USPTO’s two errors, delayed prosecution, and failure to review the co-pending claims during its examination of ‘621, which created the ODP. Cellect did not hide the existence of ‘626 from the ‘621 examiner and by claiming priority to it expressly disclosed it. No games were played. Equitable principles should apply since here there was no terminal disclaimer was filed because the USPTO made no ODP rejection even though it was aware of both sets of claims and it was the USPTO’s dilatory examination that caused the PTA which resulted in the different expiration dates.
The PTAB, however, relying on Novartis AG v. Ezra Ventures, LLC, 909 F.3d 1367 (Fed. Cir. 2018) determined that equitable principles mandated invalidating under ODP. In Ezra the Court in deciding ODP did not cut off PTE noted the difference between §§ 154 and 156 at pages 1373-4 “We then noted the contrast between § 156 for PTE with the language of § 154 for patent term adjustments: § 154 ‘expressly excludes patents in which a terminal disclaimer was filed from the benefit of a term adjustment for PTO delays,’ but § 156 contains ‘no similar provision that excludes patents in which a terminal disclaimer was filed from the benefits of Hatch-Waxman extensions.’” citing Merck & Co. v. Hi-Tech Pharmacal Co., 482 F.3d 1317, 1322 (Fed. Cir. 2007). The Ezra Court went on, in dicta, to state “[F]or example, if a patent, under its original expiration date without a PTE, should have been (but was not) terminally disclaimed because of obviousness-type double patenting, then this court's obviousness-type double patenting case law would apply, and the patent could be invalidated.”
Thus, the PTAB’s decision is reasonable if equitable principals are not applied but Ezra did not exclude applying equity. The ODP results in the entire patent being held invalid not the just the excessive term. Here Cellect was put in this position because the USPTO didn’t do its job correctly. Equity should simply hold the patent term of ‘621 extending post the ‘626 expiration either as forfeited or invalid. Since the patents were co-owned for the entire period, the need for the terminal disclaimer language regarding common ownership should not apply. The PTAB’s view was that since common ownership was not guaranteed as in the case of a terminal disclaimer this was another reason for applying ODP. However, common ownership in fact was maintained and the required common ownership requirement was met.
The key takeaway is that interplay between ODP and PTA remains an open question. Where PTA is available one should take care in filing multiple applications without considering the implications of possible ODP on the extended term. Patent portfolio’s protecting commercial drugs should be reviewed for lurking ODP issue so that corrective action can be taken.