Federal Circuit Denies Cellect’s En Banc Rehearing Petition: Patent Term Adjustment May Invalidate Patent in Light of Earlier-Expired, Related Patent for Obviousness-Type Double Patenting

The Federal Circuit recently denied a petition for rehearing en banc in the much watched In re Cellect matter.  The landmark panel decision determined how obviousness-type double patenting (“ODP”) is impacted when patent term adjustment (“PTA”) is added to the term of one or more patents in a family under 35 U.S.C. § 154(b), resulting in different terms for the family member patents that would otherwise expire on the same day.

Cellect owns four interrelated patents (“the challenged patents”), each claiming priority from a single application.  Each of the challenged patents was granted differing lengths of PTA because of Patent Office delay during prosecution under pre-AIA 35 U.S.C. § 154(b).  As each family member claimed priority to the same application, each would have expired on the same day but for the differing grants of PTA.  After Cellect sued Samsung for infringement of the challenged patents, Samsung requested ex parte reexamination of the challenged patents, asserting that the patents were unpatentable for ODP.  In each reexamination proceeding, the Patent Office issued a final office action determining that the challenged patents’ claims were obvious variants of Cellect’s prior-expiring reference patent claims.  Cellect’s appeals to the Patent Trial and Appeal Board were denied, and Cellect then appealed to the Federal Circuit.

For detailed analysis of Cellect’s arguments and the panel decision, please see our previous alert.  In short, Cellect raised two main arguments—that PTA should not be considered in the ODP analysis (just as PTE is not) and that the PTAB should have considered evidence of its good faith and lack of gamesmanship.  In its panel decision, the Federal Circuit rejected both arguments and “conclude[d] that, while the expiration date used for an ODP analysis where a patent has received PTE is the expiration date before the PTE has been added, the expiration date used for an ODP analysis where a patent has received PTA is the expiration date after the PTA has been added.”  And because Cellect conceded that the claims of the challenged patents were patentably indistinct from its prior-expired claims, Cellect should have filed terminal disclaimers to disclaim the term added by the statutory PTA.  As Cellect could no longer file disclaimers because the patents were expired, the Federal Circuit affirmed the Patent Office’s finding that the claims of the challenged patents were invalid for ODP. 

In its petition for en banc review, Cellect argued in part that review was necessary to maintain uniformity and also to prevent the judicial doctrine of ODP from overriding a statutory grant of PTA.  Cellect argued that “the Panel improperly adopted an overreaching interpretation of its [ODP] precedent that permits a judicially created equitable doctrine to supersede a statutory award of additional patent term.”  

The Patent Office opposed Cellect’s petition, asserting that “Cellect’s challenged patent claims, which admittedly recite obvious variants of Cellect’s earlier-expiring reference patent claims, are unpatentable under ODP.”  Any PTA on those challenged claims beyond the expiration of the reference claims, “is an unjustified extension of patent term.” The Patent Office also noted that a terminal disclaimer filed by Cellect would have avoided an ODP challenge and addressed the public policy concerns underlying the doctrine.  But without the terminal disclaimer, Cellect received unjustified time extensions of its patent terms regardless of how the extensions were obtained. Indeed, the Patent Office asserted that “no evidence of good faith before the USPTO, or lack of gamesmanship in prosecution of the patent, overcomes that [ODP] determination.”

Despite the public interest in this decision, evidenced by the number of amicus briefs filed, the Federal Circuit declined to revisit the panel decision.  As a result, the panel’s precedential holding stands unless the Supreme Court takes up the issue.  In light of Cellect, patent owners and practitioners must evaluate patent families and assess the risk of ODP unpatentability.  Many existing portfolios likely include at least one patent with PTA that, after Cellect, is now at risk of invalidation due to ODP.  While a terminal disclaimer may appear on its face to be a quick and easy fix, it comes at the expense of extra term, so the costs and benefits of this approach should be weighed carefully.  And there may be cases where a terminal disclaimer is not an option, like here, if one of the patent family members is already expired.  In addition to monitoring their own patent portfolios, patent owners should also assess their competitors’ patent portfolios to look for patents having PTA that are now potential targets for an ODP challenge under Cellect.