United States: A Later-Issued But Earlier-Expiring Patent Can Serve As An Obviousness-Type Double Patenting Reference To Invalidate An Earlier-Issued, Later-Expiring Patent

In Gilead Sciences, Inc. v. Natco Pharma Ltd., No. 13-1418 (Fed. Cir. Apr. 22, 2014), the Federal Circuit vacated and remanded the district court's SJ decision that Gilead Sciences, Inc.'s ("Gilead") asserted patent was not invalid, holding that a later-issued, earlier-expiring Gilead patent could serve as an obviousness-type double patenting reference against the asserted patent.  

Gilead owns U.S. Patent Nos. 5,763,483 ("the '483 patent") and 5,952,375 ("the '375 patent"), both directed to antiviral compounds and methods for their use.  The '483 and '375 patents list the same inventors, but they do not claim priority to a common patent application and they have different expiration dates as governed by the provisions of the Uruguay Round Agreements Act ("URAA").  As illustrated in the figure below, the '375 patent, which claims priority to an application filed on February 27, 1995, issued on September 14, 1999, and will expire on February 27, 2015.  The '483 patent, which was filed on December 27, 1996, and claims priority to a provisional application filed on December 29, 1995, issued on June 9, 1998 (before the '375 patent), but will expire on December 27, 2016 (after the '375 patent).  A terminal disclaimer was filed for the '375 patent based on the '483 patent, but no terminal disclaimer was filed for the '483 patent.

Slip op. at 4.

Gilead sued Natco Pharma Limited ("Natco") for infringement of the '483 patent after Natco filed an ANDA seeking FDA approval to market a generic version of one of Gilead's drugs allegedly covered by the '483 patent.  As its only invalidity defense, Natco asserted that the '483 patent was invalid for obviousness-type double patenting over the '375 patent.  The district court granted SJ in favor of Gilead, concluding that a later-issued but earlier-expiring patent cannot serve as a double patenting reference against an earlier-issued but later-expiring patent.  After Natco conditionally stipulated to infringement, the district court certified its SJ ruling for appeal.

"In cases where such obviousness-type double patenting is present, a terminal disclaimer can preserve the validity of the later-expiring patent by aligning its expiration date with that of the earlier-expiring patent."  Slip op. at 16.

On appeal, the Federal Circuit held that the district court erred in excluding the '375 patent as a potential double patenting reference against the '483 patent.  The Court first reviewed the obviousness-type double patenting doctrine, explaining that this long-standing patent law doctrine "is based on the core principle that, in exchange for a patent, an inventor must fully disclose his invention and promise to permit free use of it at the end of his patent term."  Id. at 6.  The Court also explained that the scope of the bar against double patenting has been well established, with federal courts applying the doctrine's principles for over a century to preserve the public's right to use not only the exact invention claimed by an inventor but also obvious modifications of that invention that are not patentably distinct.  The Court noted the addition of 35 U.S.C. § 253 in 1952, which in part permits a patentee to disclaim any terminal part of a patent term, as well as the Court's recognition in In re Robeson, 331 F.2d 610, 614 (CCPA 1964), that § 253's terminal disclaimer provision provided patent owners a remedy against a charge of obviousness-type double patenting.  

The Federal Circuit then held that the principle protected by the obviousness-type double patenting doctrine "is violated when a patent expires and the public is nevertheless barred from practicing obvious modifications of the invention claimed in that patent because the inventor holds another later-expiring patent with claims for obvious modifications of the invention," as "is the case here."  Slip op. at 11.  Assuming for the appeal that the '483 patent covers obvious modifications of the invention claimed in the '375 patent, the Court explained that once the '375 patent expires on February 27, 2015, the public will not be free to use the invention claimed in that patent and all obvious variants of that invention for another twenty-two months, because the '483 patent will not expire until December 27, 2016.  Rejecting Gilead's argument that the '375 patent in no way extends the term of the '483 patent, which issued first, the Court saw "little import here in the fact that the '483 patent issued first."  Id. at 12.  The Court distinguished cases directed to pre-URAA patents, explaining that for double patenting inquiries, looking to patent issue dates had in those cases served as a reliable stand-in for the date that mattered—patent expiration.  Thus, according to the Court, "in light of the principles reflected in our prior case law as explained above, it is the comparison of Gilead's patent expiration dates that should control, not merely the issuance dates."  Id. at 13. 

The Court decided that relying only on issuance dates for post-URAA patents would have several shortcomings.  First, "the terms of such patents could be subject to significant gamesmanship during prosecution."  Id.  Specifically, the Court contemplated that "inventors could routinely orchestrate patent term extensions by (1) filing serial applications on obvious modifications of an invention, (2) claiming priority to different applications in each, and then (3) arranging for the application claiming the latest filing date to issue first," thus allowing inventors to obtain additional patent term while also exploring the value of an earlier priority date.  Id.  Second, the Court noted the possibility for significant yet arbitrary differences in patent term based on mere days' difference in patent issuance.  Using Gilead's patents as an example, the Court observed that if the '375 patent issued the day before the '483 patent, going strictly by issuance date would make the last twenty-two months of the '483 patent's term an improper patent term extension, but not if the '375 patent issued the day after the '483 patent.  In contrast, the Court concluded, "[p]ermitting any earlier expiring patent to serve as a double patenting reference for a patent subject to the URAA guarantees a stable benchmark that preserves the public's right to use the invention (and its obvious variants) that are claimed in a patent when that patent expires" and preserves the ability of inventors to use a terminal disclaimer of later-expiring patents to create one expiration date for their term of exclusivity.  Id. at 15.  Finally, the Court noted that looking to the expiration date was consistent with the PTO's guidance in MPEP § 804(I)(B)(1), which instructs that a terminal disclaimer is required for the later-filed (and thus later-expiring) of two pending applications.

The Court therefore held that Gilead's earlier-expiring '375 patent could qualify as an obviousness-type double patenting reference for Gilead's later-expiring '483 patent.  Accordingly, the Court vacated the district court's SJ decision and remanded for further proceedings consistent with this opinion.

Judge Rader dissented.  According to Judge Rader, none of the policy concerns behind obviousness-type double patenting justified in this case the "new rule" crafted by the Court—that in the case of competing patents, the earliest expiration date governs the inquiry irrespective of filing or issue dates. 
Rader Dissent at 3, 4-5.  First, Judge Rader observed that this case did not raise the policy concern regarding subsequent extensions of patent term, since Gilead's subsequent '375 patent unquestionably did not extend the term of the earlier-issued '483 patent, noting that "if the '375 patent had never issued, Gilead would certainly be entitled to the '483 patent's 2016 expiration date."  Id. at 4.  Second, the case did not involve the potential for harassment by multiple assignees asserting essentially the same patented invention since the '375 patent was subject to a terminal disclaimer over the '483 patent and thus was only enforceable so long as both were commonly owned.  Judge Rader found the Court's reasoning not only unpersuasive, since under 35 U.S.C. § 154(b) Gilead followed the precise approved course—obtaining a longer patent term by subjecting the '483 patent to roughly ten months of intervening prior art—but also based on a flawed assumption that, upon expiration of a patent, the public obtained an absolute right to use the previously claimed subject matter.  Viewing the question through "the lens of judicial restraint," Judge Rader concluded that Gilead's conduct was not so manifestly unreasonable to warrant the Court's new judicially created exception to invalidate patents.  Id. at 6.

Judges: Rader (dissenting), Prost, Chen (author)

[Appealed from D.N.J., Judge Wigenton]

This article previously appeared in Last Month at the Federal Circuit, May 2014.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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