by Dennis Crouch
The Federal Circuit’s August 2023 decision in In re Cellect, LLC has set-up a significant question regarding the interplay between the patent term adjustment (PTA) statute, 35 U.S.C. § 154(b), and the judicially-created doctrine of obviousness-type double patenting (OTDP). Now, Cellect is seeking Supreme Court review, recently filing a petition for an extension of time that also indicated its intent to file. Cellect’s petition is now due May 20, 2024, and I expect significant support from the patent owner community.
Patentees often receive PTA due to USPTO delays that otherwise eat into the 20-year patent term. A fundamental issue in Cellect boils down to whether a patentee must forfeit their PTA term extensions to avoid an OTDP invalidity finding. This comes up in situations where a patentee has two patents that cover only slightly different inventions. Most often this is seen in family-member continuation applications, but it can also arise when applicants file several applications all within a short period.
Under the judge-made law of OTDP, it is generally improper for a patentee to obtain two separate patents that are obvious variants of one another. But, the practice is permitted if the patentee files a terminal disclaimer that links the patent terms together so that they will expire on the same date and also promises that the two patents will always be commonly owned. The idea here is that the two patents effectively become one. Cellect has challenged this approach — focusing particularly on the statutory PTA of § 154(b).
Of some importance here, patent law provides a second mechanism for adding to the patent term known as patent term extension or PTE under 35 U.S.C. 156. Rather than focusing on USPTO delay, PTE permits limited extension of a patent’s term due to regulatory review that delays a product’s commercial marketing or use. Most often this comes up in the context of FDA regulatory review. In Novartis AG v. Ezra Ventures LLC, 909 F.3d 1367 (Fed. Cir. 2018), the Federal Circuit concluded that a terminal disclaimer need not cut off the PTE because that “would mean that a judge-made doctrine would cut off a statutorily-authorized time extension.” Cellect argues this same reasoning applies to PTA.
20240402164244272_2024-04-02Cellect_Cert_Petition_Extension_Application
En Banc Denied in In re Cellect: Double Patenting and Patent Term Adjustment
I am sympathetic to both sides in this particular case. First, there are meaningful differences between the PTA and PTE statutes that can justify differential treatment for OTDP purposes. Most notably, § 154(b)(2)(B) expressly provides that PTA cannot extend a patent’s term beyond the date specified in a terminal disclaimer. While this provision did not directly apply in Cellect (because no disclaimer was filed) the Federal Circuit relied heavily on it to conclude that Congress intended that PTA should be limited by the OTDP doctrine. In contrast, § 156 governing PTE includes no such disclaimer provision. This statutory distinction, though not dispositive, lends support to the Federal Circuit’s divergent approaches.
At the same time, I am wary of allowing the stale judge-made of OTDP to unduly restrict a statutorily authorized term adjustment. OTDP arose years ago before the shift to a 20-year patent term running from the filing date. Under the old pre-GATT system, continuation practice could enable significant de facto term extensions through “submarine” patents that each had a 17 year term running from the issue date. Now that all patents in a family generally expire on the same date, the potential for abuse is greatly diminished.
But, the potential for abuse has not vanished. If Cellect were overturned I would expect a good amount of applicant gamesmanship in valuable families with the patentee seeking to prolong prosecution in order to maximize PTA.
Under 154(b), applicants can accrue adjustments for three types of USPTO delay: Type A delays, where the USPTO fails to meet certain deadlines; Type B delays, where the application pendency exceeds three years; and Type C delays, which encompass appeals, interferences, and secrecy orders. Each category presents opportunities for gamesmanship.
For Type A delays, applicants might deliberately file complex specifications or claims in order to increase the likelihood of missed deadlines by the USPTO. This step could be coupled with a strategy to intentionally shift the continuation application to a new examiner and art unit who is unfamiliar with the application. Under Type B delays, applicants could potentially draw out prosecution by prompting minor objections and by filing office action responses that introduce new issues or arguments late in the process (and at the PTA deadline) with the hope of pushing their applications past the three-year mark. There is also some potential of using petition practice to delay issuance without the patentee sacrificing PTA. The biggest potential though is for Type C delay. Applicants would have some incentive to pursue appeals in continuation applications in order to gain additional term based upon the lengthy appellate process. Although appeals may have a fairly low likelihood of winning, this strategy can be viable when the patentee already holds a similar patent covering the invention, and the appeal has the potential of extending the patent term by years. In that situation, the patentee does not lose much if the patent is denied because they have a fallback position, but could potentially gain years of PTA from the successful appeal. Although each of these processes are permitted under the rules of practice, their become problematic if done with the intent to delay patent issuance, and so it would require patent attorneys willing to blur the ethics line.
I’ve responded to OTDP rejections where the Examiner agreed that the rejections were bad but then decided yet another claim(s) in the same reference (i.e., issued patent from the grandparent or parent application) rendered a number of claims in the child application obvious and wanted to send out yet another Office Action with nothing but more OTDP rejections. It’s frustrating to deal with OTDP rejections. It’s almost like there’s a compulsive need to squeeze a TD from the applicant no matter what. How much is it worth it to the applicant to fight OTDP rejections when time is running out on patent term measured from the earliest filing date?
In one situation a few years back, after addressing OTDP rejections in a response, the Examiner came back to me by just flat out asking for a TD in advance of actually sending out a new Office Action with new OTDP rejections so that it would save them the effort.
“. . . judge-made law . . .”
Says it all. Here in the U.S., judge-made laws are unconstitutional.
But unless someone stops them (here’s looking at you, Congress), SCOTUS and the CAFC get away with it. Over and over again.
Fundamentally, these jokers just love to air out their robes and play un-elected congressmen and women from time to time.
Playing make-believe is so much fun!
Regarding A delays, any complex case will usually be restricted into numerous different groups of invention, which simplifies the prosecution for the examiner. And, in my experience, continuations go to the same examiner (because they are continuations).
Regarding B delays, in my technology group, it is rare that the second action is NOT a final. So, applicants are often faced with filing an appeal, continuation, or RCE. An RCE cuts off the B delay counted; a continuation slows down the process without necessarily adding to term adjustment, and an appeal only adds to term adjustment if successful.
I’ve got a case pending right now where there are only OTDP rejections and it’s been over 7 months since the response was filed. If the Examiner comes back with revised or new OTDP rejections (which they invariably do), all that time (plus any other delays by the Examiner) won’t be reflected in PTA if the client files a TD.
Plain reading of the statute is against Cellect. I am doubtful that this SCOTUS will want to re-write the statute.
I largely agree AM: But there are a number of points of distinction. The 154(b) statute states that “(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.” The first point of distinction has to do with the facts of Cellect — namely that the patentee never filed a terminal disclaimer and so the provision does not apply to them at all. Second, is the argument that some patentees are making that the USPTO should permit disclaimers that take into account potential PTA (and that the courts should require the USPTO to do so). Finally, some folks argue that a disclaimer tied to the date of enforceability of another patent does not provide “a specific date.” I see these as somewhat weak arguments, but I wanted to note them.
While I think the first two scenarios you suggest are impracticable (and carry their own disadvantages) the possibility of using the appeal process has some merit, but of course the PTO has the capacity to reduce at least the frequency of such shenanigans by offering applicants claims of narrower scope when a NOA is submitted
Well, depending on how you parse the commas, Congress could have been thinking that terminal disclaimers will only be required in 17-years-from-grant cases (which, imho, would have been more-consistent with the original OTDP balance-of-equities). But obviously, the Fed. Cir. didn’t side with the patentees here.
“(1) DETERMINATION.-The term of a patent … shall be the greater of the 20-year term as provided in subsection (a), or 17 years from grant, subject to any terminal disclaimers.”