In re: Cellect Presents New Challenges and Opportunities in U.S. Patent Litigation
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Tech companies should take note of the Federal Circuit’s recent precedential decision In re: Cellect, LLC,1 which may present new invalidity risks for certain patents granted additional term by the U.S. Patent and Trademark Office (USPTO).
Under statute, U.S. Patents are eligible for two different types of grants of additional term: Patent Term Adjustment (PTA) and Patent Term Extension (PTE). PTA is granted based on certain delays in prosecution at the USPTO.2 PTE is granted based on certain periods for which a New Drug Application is under regulatory review by the U.S. Food and Drug Administration.3
The Cellect decision is focused on a grant of PTA, and considers whether such a grant can invalidate patent claims under the doctrine of obviousness-type double patenting (ODP). ODP is a judge-made doctrine designed to prevent an inventor from obtaining an improper extension of patent term by obtaining a second, later-expiring patent on an obvious variation of an invention claimed by an earlier-expiring patent. For example, if the inventor’s second patent outlives the first, then any obvious variations claimed by the second patent may be held invalid under the doctrine of ODP. In other words, the doctrine of ODP ensures that patent owners receive one patent term for one invention.
In Cellect, the Federal Circuit held for the first time that ODP could apply where a grant of PTA extends the life of a patent beyond the expiration of related patents claiming obvious variations of the same invention. For example, a continuation patent might outlive its parent patent by 45 days due to a grant of PTA. If the claims of the continuation are obvious variations of the claims of the parent, then the claims of the continuation become invalid once the parent patent expires and the continuation lives on. Importantly, once the claims become invalid, it is too late to save them by filing a terminal disclaimer to reject the grant of PTA.4
Notably, the Federal Circuit’s approach to PTA is different from its approach to PTE. For PTE, the period of additional term is not counted against the patentee for purposes of ODP. Instead, ODP is assessed as of the original expiration date of the patent at issue, not the extended expiration date. Thus, a grant of PTE will not invalidate a patent that claims obvious variations of another patent, provided that the two patents have the same original expiration date.
For this reason, the Cellect opinion has attracted the attention of numerous amici, both before and after the decision issued. At the time of writing (December 2023), the patentee has moved for rehearing en banc, and several amici have filed additional briefing. The Federal Circuit has requested a response from the USPTO, which is expected this month.
Patent owners and accused infringers should keep an eye on Cellect. If en banc review is granted, then the entire court will reconsider whether PTA and PTE should be treated differently for purposes of ODP, and the reasoning of Cellect could be confirmed, altered, or rejected. If en banc review is denied, then the original opinion will likely stand, absent review by the U.S. Supreme Court. Patent owners may want to assess their portfolios now and identify candidates for terminal disclaimers should the reasoning of Cellect stand. Companies accused of patent infringement may want to assess whether any asserted claims are potentially subject to ODP should the reasoning of Cellect stand.