Free Post: En Banc Review in Allergan: Rehearing Petition Tackles ODP Safe Harbor and WD Essential Elements

by Dennis Crouch

This post focuses on the issues raised in the patent challenger Sun Pharma’s recent en banc petition in Allergan USA, Inc. v. MSN Laboratories Private Ltd and Sun Pharmaceutical Indus. Ltd., No. 2024-1061 (Fed. Cir. 2024).  The original panel majority opinion is controversial on two separate fronts. First, it created an obviousness-type double patenting (ODP) safe harbor for certain patents whose term had been extended via patent term adjustment (PTA); Second, the court OK’d the omission of what appeared to be an essential element (a glidant) from the claims, finding sufficient written description support despite the specification only describing formulations that included a glidant. This omission was particularly notable as it occurred after the patentee learned during litigation that the accused products did not include a glidant.

• Allergan – Sun Petition for Rehearing

I’ve divided this post into two parts: Part I – ODP Safe Harbor and Part II – Written Description Essential Element.

Part I: ODP Safe Harbor for Certain First Filed, First Issued Patents in a Patent Family

Over the past year patent portfolios have been under major pressure regarding obviousness-type double patenting (ODP) and terminal disclaimers. The focus began with cases like Cellect and Sonos v. Google, and then extended with the USPTO’s proposed rule changes that would strongly discourage patentees from submitting terminal disclaimers to overcome ODP rejections.  But, the pressure eased somewhat this summer with the Federal Circuit’s decision in Allergan.  Now Sun has petitioned for en banc rehearing — arguing that the Allergan decision conflicts with “with Gilead, Cellect, and other precedent holding that expiration dates control in ODP analysis.”  On the underlying merits, the petition also argues that the panel erred in “creating a blanket exception to ODP for first-filed, first-issued patents.”

In Cellect, the Federal Circuit held that differences in PTA between family member patents can create an ODP problem rendering the patent with the longer term unenforceable, even where the PTA is due to USPTO delays.  In re Cellect, LLC, 81 F.4th 1216, 1229 (Fed. Cir. 2023).  After that decision, I reviewed the patent family of currently in-force patents and identified 400,000+ patents at risk of being held unenforceable due to one family-member having a longer patent term due to PTA. In my study, the majority of at-risk patents were, first-filed, first-issued patents that  are set to expire later than other family-members due to PTA.  And, because the USPTO has not typically required a terminal disclaimer in this situation, this extra patent term had not yet been disclaimed.  [Until recently, Cellect has been pending on petition for writ of certiorari to the Supreme Court, but the court recently denied that petition — allowing the Federal Circuit’s opinion to stand.]

All the arrows were pointed in one direction, but the Federal Circuit then reversed course in during the 2024 Summer in Allergan, holding that Cellect does not apply to first-filed, first-issued patents within a family. Specifically, the court ruled that “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.”  As such, Allergan came as a major relief to many patent holders because it offered safe harbor protection to these first-issued patents.

At the time, I noted the “major tension” between Allergan and Cellect as well as the court’s prior Gilead decision; and, that the Allergan result produces “a dramatic opposite outcome” as would be expected after reading Cellect.

The clincher here is that Cellect appears to include an almost identical factual situation as in Allergan with a first-filed, first-issued, but later-expired patent being challenged for ODP based upon a later-filed, later-issued patent that did not have the  same PTA.   In Cellect this situation resulted in an unenforceable patent; but the same situation in Allergan led to the creation of a safe harbor.  I.e., the subsequent Allergan panel effectively overruled the holding of Cellect — something that is generally not permitted under the court’s rule of respecting its own precedent.

The Allergan panel distinguished Cellect based upon what was argued on appeal — noting that the patent owner in Cellect did not particularly challenge whether the reference claims used to invalidate the asserted claims were proper ODP reference claims, and therefore, under the principle of “party presentation”, the court in Cellect did not consider that specific issue. Allergan at n.6.  But in its en banc petition, Sun argues this point of distinction is insufficient.

Background on ODP and Patent Term Evolution: To fully grasp the issues at stake, I believe it is useful to understand the evolution of patent terms and how these changes have impacted ODP analysis:

1. Pre-1995: Patent terms lasted 17-years from issuance. Courts primarily looked at issuance dates to determine if ODP applied, since issuance and expiration were directly linked. As continuation practice expanded post-1952, ODP limitations became quite important to limit patent term expansion since each continuation would get its own 17-year term that began at issuance.  But, the Patent Act itself does not provide for the ODP doctrine – it is entirely judge-made.
2. 1995 Uruguay Round Agreements Act (URAA): Patent terms changed to 20 years from the earliest effective filing date. This shift reduced ODP concerns for related patents sharing a priority date, as they would typically expire on the same day.  Although it has taken some time to change-over, well over 99% of patents currently in force are post-URAA patents.
3. 1999 Patent Term Guarantee Act: Introduced Patent Term Adjustment (PTA) to extend patent terms for USPTO delays. 35 U.S.C. § 154(b). This created the potential for related patents to have different expiration dates despite sharing a priority date.  This particular legislation was very poorly drafted and has created substantial confusion and difficulty both for patentees and for the USPTO.  The law ‘guarantees’ the adjusted patent term, but also indicates that terminal disclaimers filed by the patentee also disclaim any PTA.
4. 2014 Gilead Sciences, Inc. v. Natco Pharma Ltd.: The Federal Circuit held that ODP applied to a first-issued but earlier-expiring patent . The court emphasized that expiration dates, not issuance dates, should control ODP analysis post-URAA. 753 F.3d 1208 (Fed. Cir. 2014).
5. 2023 In re Cellect, LLC: The Federal Circuit affirmed that ODP analysis should consider expiration dates including PTA, not just the 20-year term from the priority date.  Applied this to affirm unenforceability of a first-filed, first-issued patent. 81 F.4th 1216 (Fed. Cir. 2023).
6. 2024 Allergan USA, Inc. v. MSN Laboratories Private Ltd.: The panel created a new rule that “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.” 2024 U.S. App. LEXIS 20294 (Fed. Cir. 2024).

Sun’s Petition for Rehearing En Banc: Sun contends that the panel’s decision directly conflicts with Gilead‘s holding that “a later-issued patent can serve as a double patenting reference for an earlier-issued patent if the later one expires first.” The petition emphasizes that Gilead expressly rejected arguments based on filing and issuance order, holding that the “date that really matter[s]” for ODP is “patent expiration.”  See also Abbvie Inc. v. Mathilda & Terence Kennedy Institute of Rheumatology Trust, 764 F.3d 1366, 1373 (Fed. Cir. 2014) (applying Gilead’s expiration date focus to invalidate earlier-issued claims).

With regard to Cellect, Sun makes several arguments:

1. Mischaracterization of Cellect: The petition contends that the Allergan panel mischaracterized Cellect as merely holding that PTA is relevant to ODP analysis. Sun argues that Cellect went further, actually applying ODP to invalidate claims in the same situation as Allergan.
2. Inconsistent Application of ODP: Sun argues that the Allergan decision creates an arbitrary distinction based on filing and issuance order, which is inconsistent with the broader principles of ODP established in cases like Cellect.
3. Overlooked Aspects of Cellect: The petition suggests that the Allergan panel overlooked key aspects of the Cellect decision, including its statement that if “claims of a later-expiring patent would have been obvious over the claims of an earlier-expiring patent owned by the same party…, the later-expiring claims are invalid.” (Cellect, 81 F.4th at 1226)

Sun’s second main argument is that the panel erred in creating a blanket exception to ODP for first-filed, first-issued patents without considering the equities or underlying purposes of the doctrine. The petition emphasizes that ODP is an equitable doctrine designed to prevent unjustified extensions of patent monopolies. See Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d 955, 967 (Fed. Cir. 2001). Here, making this simple rigid safe harbor fails to consider whether there is actually an unjustified extension of patent rights in a given case.  One idea here is that a patentee could strategically rely upon this safe harbor to receive “unjustified timewise extension of the right to exclude granted by a patent.” In re Longi, 759 F.2d 887 (Fed. Cir. 1985).  One example of this would be to file broad initial applications that take a long time in prosecution to maximize PTA, then file quick continuations with narrower claims. Under the panel’s rule, those continuation claims could never serve as ODP references against the extended term of the first patent, even if they are patentably indistinct.  (Query whether this result is ‘bad’).

Part II: Amending Claims to Omit Elements and Capture Identified Infringing Activity

The second big issue raised in the petition is Sun’s argument that the panel majority’s written description holding conflicts with established Federal Circuit precedent regarding the omission of essential elements and in contravention of the fundamental purpose of the written description requirement: to ensure that the inventor actually possessed the full scope of the claimed invention at the time of filing.

Patent prosecutors are careful to draft patent applications to avoid triggering the essential element test.  Notably, conventional wisdom training tells drafters to entirely avoid words such as “essential,” “required,” or even “the invention.”  The idea is to use the specification fully enable and describe the potential invention, but to keep its particular definition somewhat loose — allowing the specific requirements and limitations to be spelled out only within the claims.  This approach recognizes that most applications go through a series of amendments during patent prosecution and that the true value of an invention is at times not fully recognized until much later during the prosecution of a continuation application.

Here, Allergan’s attorneys were careful to avoid any statements that particularly ingredients were required or necessary.  However, they also failed to include explicit embodiments showing each possible combination of disclosed elements.  In fact, all of the disclosed embodiments included one particular ingredient – a glidant – and Sun argues that the disclosure therefore only supports tablets with glidants.

Lets pause for a moment to consider the invention.  Allergan’s asserted claims require a tablet formulation of the drug eluxadoline used to treat IBS-D.  All of the examples provided in the original specification include a “glidant” as part of the tablet, as did the originally filed claims. However, the patentee apparently learned that generic competitors were planning to make the tablet without the glidant and subsequently prosected and obtained claims that do not require the glidant.  Most notably, several claims now state expressly that the glidant is “optional.”

Sun’s briefing relies heavily relies on ICU Medical, Inc. v. Alaris Medical Systems, Inc., 558 F.3d 1368 (Fed. Cir. 2009), as a key precedent. In ICU Medical, the court held that claims to medical valves lacking a “spike” element were invalid for lack of written description because the specification only described valves with spikes, each designed to pierce a seal inside the valve. Sun argues that Allergan’s patent presents an analogous situation, where the asserted claims omit a glidant that was present in every formulation described in the specification. The petition contends that the panel majority misapplied ICU Medical by focusing on whether the glidant was described as “necessary” rather than whether the specification actually demonstrated possession of glidant-free formulations.

The petition also cites the sectional sofa case of Gentry Gallery, Inc. v. Berkline Corp., 134 F.3d 1473 (Fed. Cir. 1998), and Tronzo v. Biomet, Inc., 156 F.3d 1154 (Fed. Cir. 1998), to argue that when a specification clearly describes an essential element of an invention, claims omitting that element lack written description support. Sun asserts that the panel’s decision effectively overrules this line of cases without the authority to do so, creating an intra-circuit split that requires en banc resolution.