<i>Gilead Sciences, Inc. v. Natco Pharma Ltd. </i>

Upon issuance, can a later-issued (but earlier-expiring) patent qualify as a double patenting reference against an already issued (but later-expiring) commonly owned patent of the same inventor? In Gilead Sciences, Inc. et al. v. Natco Pharma Ltd., 2014 WL 1584450 (Fed. Cir. Apr. 22, 2014), the Federal Circuit held that it could.

The court held that although a terminal disclaimer could preserve the validity of the earlier-issuing patent, it would shorten that earlier-issuing expiration date to the expiration date of the later-issuing patent. Had the later-issuing patent never issued, the earlier-issuing patent would have enjoyed its full term. Nevertheless, the majority found a basis for this seemingly unusual result. Chief Judge Rader's dissent characterized the decision as new judicially created grounds of double patenting.

Background

Gilead Sciences, Inc. (Gilead) owned U.S. Patent Nos. 5,763,483 (priority date 12-29-95) and 5,952,375 (priority date 2-27-95), which are directed to antiviral compounds and methods for their use. Although the patents listed the same inventors and the written descriptions disclosed similar content, they did not claim priority to a common patent application and therefore had different expiration dates. Because the earlier filed patent was commonly owned, and not “of another,” it was not prior art under ”102 or 103.

The '375 and '483 patents both relate to the inhibition of viruses through selective interference with certain enzymes. Though similar, the patents are not part of the same patent family and had different patent examiners. Gilead Sciences, at 1.

The '375 patent claims priority to an application filed on 2-27-95, was filed on 2-26-96, issued on 9-14-99, and is due to expire on 2-27-15. Id.

The '483 patent claims priority to a provisional application filed on 12-29-95, was filed on 12-27-96, issued on 6-9-98 and is due to expire on 12-27-16. Id.

The Federal Circuit used the diagram below to illustrate the relevant dates for each patent, and how, because of different priority dates, absent any terminal disclaimer, the two patents have different expiration dates.

[IMGCAP(1)]

After the '483 patent issued, Gilead filed a terminal disclaimer in the still pending application that led to the '375 patent, expecting it to cause no loss of patent term, since the '483 patent was due to expire after the '375 patent. No terminal disclaimer was filed for the '483 patent. Id. at 2.

The District Court Decision

In March 2011, before either patent was due to expire, Gilead sued Natco, alleging that Natco's Abbreviated New Drug Application No. 202'595 infringed the '483 patent. Natco countered that the '483 patent was invalid for obviousness-type double patenting in light of claim 8 of the '375 patent. Id. In December 2012, the district court granted summary judgment in favor of Gilead, denying Natco's double patenting defense. Id.

The district court concluded that “a later-issued but earlier-expiring patent” cannot “serve as a double-patenting reference against an earlier issued but later-expiring patent.” Id. Acknowledging that the Uruguay Round Agreements Act of 1994 (URAA)'changed the term for a U.S. patent from 17 years from the patent issue date to 20 years from the earliest effective filing date, the district court concluded that any potential extensions to Gilead's patent terms “were not unlawful because the extensions were not a result of gamesmanship, but instead were a result of changes to patent laws.” Id.

The district court certified its summary judgment ruling for appeal in May 2013, after Natco conditionally stipulated to infringement of two claims of the '483 patent. At the time, the district court noted that obviousness-type double patenting was Natco's only invalidity defense on the '483 patent.

The Federal Circuit Decision

The Federal Circuit indicated that “[fo]r purposes of this appeal, we assume that the '483 patent claims a mere obvious variant of the invention claimed in the '375 patent.” Id. The Federal Circuit summarized the issue as follows: “Can a patent that issues after but expires before another patent qualify as a double patenting reference for that other patent?” Id. The Federal Circuit answered that yes, it can.

The Federal Circuit began its analysis with the premise that granting multiple patents on the same invention has long been disfavored, noting that the rule against double patenting “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 3. The court stated that this extends to obvious variations of a patent. Id. at 4. On the other hand, the court observed, there is no prohibition against obtaining many claims on the same invention. Consequently, it has long been possible to obtain multiple patents on obvious variations of the same claims, as long as a terminal disclaimer was filed to limit the scope of the later issuing patent to the term of the patent on which an “obviousness-type double patenting” rejection was based. Id.

Turning to the question presented on appeal, the Federal Circuit stated that:

[I]t is a bedrock principle of our patent system that when a patent expires, the public is free to use not only the same invention claimed in the expired patent but also obvious or patentably indistinct modifications of that invention.

Id.

Therefore, the Federal Circuit concluded that the public should have the right to practice the invention claimed in the '375 patent and all obvious modifications thereof on Feb. 28, 2015 ' the day after the '375 patent expires. The Federal Circuit explained:

The '483 patent does not expire until [Dec.] 27, 2016, and it (we assume for this appeal) covers obvious modifications of the invention claimed in the '375 patent. The '483 patent, therefore, extends the inventors' term of exclusivity on obvious variants of the invention claimed in the '375 patent for an additional twenty-two months past the expiration of the '375 patent. That plainly violates the public's right to use the invention claimed in the '375 patent and all obvious variants of it after the '375 patent expires.

Id.

Gilead argued that because the '483 patent issued first, this patent should serve as the reference on which the double patenting inquiry should be based. Gilead contended that since the '375 patent does not extend the term of exclusivity for the '483 patent, the double patenting bar should be held inapplicable. Moreover, Gilead cited a number of cases to support its contention that the later issued patent is the only patent that can be barred under the double patent doctrine. However, the Federal Circuit noted that all of those cases predated the URAA and therefore concerned “patents for which the expiration date was inextricably intertwined with the issuance date.” The Federal Circuit explained: “Thus, the focus on controlling the patent term of later issued patents in those cases makes perfect sense: before the URAA, later issued patents expired later.”

Id. at 5.

The Federal Circuit explained how the URAA changed the focus:

[L]ooking to patent issue dates had previously served as a reliable stand-in for the date that really mattered ' patent expiration. But as this case illustrates, that tool does not necessarily work properly for patents to which the URAA applies, because there are now instances, like here, in which a patent that issues first does not expire first. Therefore, 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.

Expressing a high regard for the abilities of patent applicants to control the dates when patent applications issue, the Federal Circuit also stated that Gilead's argument of relying only on the issue date could lead to “significant gamesmanship during prosecution” by patent owners:

[I]f the double patenting inquiry was limited by issuance date, 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. If that were to occur, inventors could potentially obtain additional patent term exclusivity for obvious variants of their inventions while also exploring the value of an earlier priority date during prosecution.

Id.

The Federal Circuit addressed the issue that relative issue dates could have effects on patent terms:

Here, for example, if the '375 patent issued the day before the '483 patent, in Gilead's view, the last [22] months of the term of the '483 patent would be an improper extension of patent term.”

Id. at 6

Now if the '375 patent issued the day after the '483 patent, those last [22] months of the term of the '483 patent would not be an improper extension of patent term.'
Such significant vacillations in an inventor's period of exclusivity over his invention and its obvious variants is simply too arbitrary, uncertain, and prone to gamesmanship. Congress could not have intended to inject the potential to disturb the consistent application of the doctrine of double patenting by passing the URAA.

Id.

The Federal Circuit explained that the purpose of the double patenting doctrine is best served by using the earliest expiration date of all the patents an inventor has on his invention as the relevant date: “permitting 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.” Id.

Furthermore, using the expiration date as a benchmark in post-URAA cases of obviousness-type double patenting preserves the ability of inventors to use a terminal disclaimer of later-expiring patents to create one expiration date for their term of exclusivity over their inventions and obvious variants, 'which is tantamount for all practical purposes to having all the claims in one patent.'
'
We therefore hold that an earlier-expiring patent can qualify as an obviousness-type double patenting reference for a later-expiring patent under the circumstances here. 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. That disclaimer will most effectively enforce the fundamental right of the public to use the invention claimed in the earlier-expiring patent and all obvious modifications of it after that patent's term expires.

Id.

The Federal Circuit concluded that absent its ruling, after the '375 patent expired, the public would not be free to use the claimed invention ' and all obvious modifications thereof ' because the '483 patent would not expire for another 22 months. “Therefore, if [the '483 patent] does indeed claim obvious variants of the invention claimed in the '375 patent, the '483 patent would violate the doctrine against double patenting.” Id. at 7.

Chief Judge Rader's Dissent

Chief Judge Rader dissented: “Today the court expands the judicially-created doctrine of obviousness-type double patenting.” He argued that the expansion of the double patenting doctrine to allow a later-issued, but earlier-expiring patent to invalidate a first-issued, but later expiring patent (where the patents are subject to a requirement of common ownership) was “unwarranted.” Id.

Chief Judge Rader explained that the doctrine of obvious-type double patenting was predicated on two policy concerns: preventing the effective extension of patent terms and preventing different assignees from filing multiple infringement suits over essentially the same invention. He concluded that “in this case, neither policy concern justifies an extension of double patenting.” Rather, he indicated that he “would view the question through the lens of judicial restraint.” Id. at 8.

Chief Judge Rader also urged the court to consider how its decision impacted a key provision of the 2011 America Invents Act. “Under the AIA's new 'first-inventor-to-file' framework, prospective patentees are under tremendous pressure to file their applications early” Id. at 10. “I am concerned that today's opinion will have unforeseen consequences in this new race to the Patent Office.” Id.

Looking Ahead

The Federal Circuit's holding presents challenges for patent applicants. The majority based its decision, in-part, on its perception that patent applicants are in direct control of the timing of the examination and allowance of their patent applications. It considered the holding necessary to deter such “gamesmanship.”

However, the Federal Circuit has already recognized in the context of obviousness-type double patenting that delays may result because of the Patent Office. For example, the two-way test for obviousness-type double patenting is predicated on a situation where the Patent Office is “solely responsible for the delay in causing the second-filed application to issue prior to the first.” In re Berg, 140 F.3d 1428, 1437 (Fed. Cir. 1998).

How this plays into Chief Judge Rader's concern about the new need to race to the Patent Office, perhaps before all embodiments of an invention are developed, remains to be seen.

Matthew Siegal and Irah H. Donner are partners in the Intellectual Property Group of Stroock & Stroock & Lavan LLP. Mr. Siegal concentrates his practice on extensive patent litigation, prosecution, opinion, licensing and due diligence activities for both large multi-national corporations and smaller start-ups. Mr. Donner concentrates on patent prosecution, technology audits, intellectual property transactional due diligence, licensing and litigation support.

Upon issuance, can a later-issued (but earlier-expiring) patent qualify as a double patenting reference against an already issued (but later-expiring) commonly owned patent of the same inventor? In Gilead Sciences, Inc. et al. v. Natco Pharma Ltd., 2014 WL 1584450 (Fed. Cir. Apr. 22, 2014), the Federal Circuit held that it could.

The court held that although a terminal disclaimer could preserve the validity of the earlier-issuing patent, it would shorten that earlier-issuing expiration date to the expiration date of the later-issuing patent. Had the later-issuing patent never issued, the earlier-issuing patent would have enjoyed its full term. Nevertheless, the majority found a basis for this seemingly unusual result. Chief Judge Rader's dissent characterized the decision as new judicially created grounds of double patenting.

Background

Gilead Sciences, Inc. (Gilead) owned U.S. Patent Nos. 5,763,483 (priority date 12-29-95) and 5,952,375 (priority date 2-27-95), which are directed to antiviral compounds and methods for their use. Although the patents listed the same inventors and the written descriptions disclosed similar content, they did not claim priority to a common patent application and therefore had different expiration dates. Because the earlier filed patent was commonly owned, and not “of another,” it was not prior art under ”102 or 103.

The '375 and '483 patents both relate to the inhibition of viruses through selective interference with certain enzymes. Though similar, the patents are not part of the same patent family and had different patent examiners. Gilead Sciences, at 1.

The '375 patent claims priority to an application filed on 2-27-95, was filed on 2-26-96, issued on 9-14-99, and is due to expire on 2-27-15. Id.

The '483 patent claims priority to a provisional application filed on 12-29-95, was filed on 12-27-96, issued on 6-9-98 and is due to expire on 12-27-16. Id.

The Federal Circuit used the diagram below to illustrate the relevant dates for each patent, and how, because of different priority dates, absent any terminal disclaimer, the two patents have different expiration dates.

[IMGCAP(1)]

After the '483 patent issued, Gilead filed a terminal disclaimer in the still pending application that led to the '375 patent, expecting it to cause no loss of patent term, since the '483 patent was due to expire after the '375 patent. No terminal disclaimer was filed for the '483 patent. Id. at 2.

The District Court Decision

In March 2011, before either patent was due to expire, Gilead sued Natco, alleging that Natco's Abbreviated New Drug Application No. 202'595 infringed the '483 patent. Natco countered that the '483 patent was invalid for obviousness-type double patenting in light of claim 8 of the '375 patent. Id. In December 2012, the district court granted summary judgment in favor of Gilead, denying Natco's double patenting defense. Id.

The district court concluded that “a later-issued but earlier-expiring patent” cannot “serve as a double-patenting reference against an earlier issued but later-expiring patent.” Id. Acknowledging that the Uruguay Round Agreements Act of 1994 (URAA)'changed the term for a U.S. patent from 17 years from the patent issue date to 20 years from the earliest effective filing date, the district court concluded that any potential extensions to Gilead's patent terms “were not unlawful because the extensions were not a result of gamesmanship, but instead were a result of changes to patent laws.” Id.

The district court certified its summary judgment ruling for appeal in May 2013, after Natco conditionally stipulated to infringement of two claims of the '483 patent. At the time, the district court noted that obviousness-type double patenting was Natco's only invalidity defense on the '483 patent.

The Federal Circuit Decision

The Federal Circuit indicated that “[fo]r purposes of this appeal, we assume that the '483 patent claims a mere obvious variant of the invention claimed in the '375 patent.” Id. The Federal Circuit summarized the issue as follows: “Can a patent that issues after but expires before another patent qualify as a double patenting reference for that other patent?” Id. The Federal Circuit answered that yes, it can.

The Federal Circuit began its analysis with the premise that granting multiple patents on the same invention has long been disfavored, noting that the rule against double patenting “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 3. The court stated that this extends to obvious variations of a patent. Id. at 4. On the other hand, the court observed, there is no prohibition against obtaining many claims on the same invention. Consequently, it has long been possible to obtain multiple patents on obvious variations of the same claims, as long as a terminal disclaimer was filed to limit the scope of the later issuing patent to the term of the patent on which an “obviousness-type double patenting” rejection was based. Id.

Turning to the question presented on appeal, the Federal Circuit stated that:

[I]t is a bedrock principle of our patent system that when a patent expires, the public is free to use not only the same invention claimed in the expired patent but also obvious or patentably indistinct modifications of that invention.

Id.

Therefore, the Federal Circuit concluded that the public should have the right to practice the invention claimed in the '375 patent and all obvious modifications thereof on Feb. 28, 2015 ' the day after the '375 patent expires. The Federal Circuit explained:

The '483 patent does not expire until [Dec.] 27, 2016, and it (we assume for this appeal) covers obvious modifications of the invention claimed in the '375 patent. The '483 patent, therefore, extends the inventors' term of exclusivity on obvious variants of the invention claimed in the '375 patent for an additional twenty-two months past the expiration of the '375 patent. That plainly violates the public's right to use the invention claimed in the '375 patent and all obvious variants of it after the '375 patent expires.

Id.

Gilead argued that because the '483 patent issued first, this patent should serve as the reference on which the double patenting inquiry should be based. Gilead contended that since the '375 patent does not extend the term of exclusivity for the '483 patent, the double patenting bar should be held inapplicable. Moreover, Gilead cited a number of cases to support its contention that the later issued patent is the only patent that can be barred under the double patent doctrine. However, the Federal Circuit noted that all of those cases predated the URAA and therefore concerned “patents for which the expiration date was inextricably intertwined with the issuance date.” The Federal Circuit explained: “Thus, the focus on controlling the patent term of later issued patents in those cases makes perfect sense: before the URAA, later issued patents expired later.”

Id. at 5.

The Federal Circuit explained how the URAA changed the focus:

[L]ooking to patent issue dates had previously served as a reliable stand-in for the date that really mattered ' patent expiration. But as this case illustrates, that tool does not necessarily work properly for patents to which the URAA applies, because there are now instances, like here, in which a patent that issues first does not expire first. Therefore, 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.

Expressing a high regard for the abilities of patent applicants to control the dates when patent applications issue, the Federal Circuit also stated that Gilead's argument of relying only on the issue date could lead to “significant gamesmanship during prosecution” by patent owners:

[I]f the double patenting inquiry was limited by issuance date, 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. If that were to occur, inventors could potentially obtain additional patent term exclusivity for obvious variants of their inventions while also exploring the value of an earlier priority date during prosecution.

Id.

The Federal Circuit addressed the issue that relative issue dates could have effects on patent terms:

Here, for example, if the '375 patent issued the day before the '483 patent, in Gilead's view, the last [22] months of the term of the '483 patent would be an improper extension of patent term.”

Id. at 6

Now if the '375 patent issued the day after the '483 patent, those last [22] months of the term of the '483 patent would not be an improper extension of patent term.'
Such significant vacillations in an inventor's period of exclusivity over his invention and its obvious variants is simply too arbitrary, uncertain, and prone to gamesmanship. Congress could not have intended to inject the potential to disturb the consistent application of the doctrine of double patenting by passing the URAA.

Id.

The Federal Circuit explained that the purpose of the double patenting doctrine is best served by using the earliest expiration date of all the patents an inventor has on his invention as the relevant date: “permitting 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.” Id.

Furthermore, using the expiration date as a benchmark in post-URAA cases of obviousness-type double patenting preserves the ability of inventors to use a terminal disclaimer of later-expiring patents to create one expiration date for their term of exclusivity over their inventions and obvious variants, 'which is tantamount for all practical purposes to having all the claims in one patent.'
'
We therefore hold that an earlier-expiring patent can qualify as an obviousness-type double patenting reference for a later-expiring patent under the circumstances here. 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. That disclaimer will most effectively enforce the fundamental right of the public to use the invention claimed in the earlier-expiring patent and all obvious modifications of it after that patent's term expires.

Id.

The Federal Circuit concluded that absent its ruling, after the '375 patent expired, the public would not be free to use the claimed invention ' and all obvious modifications thereof ' because the '483 patent would not expire for another 22 months. “Therefore, if [the '483 patent] does indeed claim obvious variants of the invention claimed in the '375 patent, the '483 patent would violate the doctrine against double patenting.” Id. at 7.

Chief Judge Rader's Dissent

Chief Judge Rader dissented: “Today the court expands the judicially-created doctrine of obviousness-type double patenting.” He argued that the expansion of the double patenting doctrine to allow a later-issued, but earlier-expiring patent to invalidate a first-issued, but later expiring patent (where the patents are subject to a requirement of common ownership) was “unwarranted.” Id.

Chief Judge Rader explained that the doctrine of obvious-type double patenting was predicated on two policy concerns: preventing the effective extension of patent terms and preventing different assignees from filing multiple infringement suits over essentially the same invention. He concluded that “in this case, neither policy concern justifies an extension of double patenting.” Rather, he indicated that he “would view the question through the lens of judicial restraint.” Id. at 8.

Chief Judge Rader also urged the court to consider how its decision impacted a key provision of the 2011 America Invents Act. “Under the AIA's new 'first-inventor-to-file' framework, prospective patentees are under tremendous pressure to file their applications early” Id. at 10. “I am concerned that today's opinion will have unforeseen consequences in this new race to the Patent Office.” Id.

Looking Ahead

The Federal Circuit's holding presents challenges for patent applicants. The majority based its decision, in-part, on its perception that patent applicants are in direct control of the timing of the examination and allowance of their patent applications. It considered the holding necessary to deter such “gamesmanship.”

However, the Federal Circuit has already recognized in the context of obviousness-type double patenting that delays may result because of the Patent Office. For example, the two-way test for obviousness-type double patenting is predicated on a situation where the Patent Office is “solely responsible for the delay in causing the second-filed application to issue prior to the first.” In re Berg, 140 F.3d 1428, 1437 (Fed. Cir. 1998).

How this plays into Chief Judge Rader's concern about the new need to race to the Patent Office, perhaps before all embodiments of an invention are developed, remains to be seen.

Matthew Siegal and Irah H. Donner are partners in the Intellectual Property Group of Stroock & Stroock & Lavan LLP. Mr. Siegal concentrates his practice on extensive patent litigation, prosecution, opinion, licensing and due diligence activities for both large multi-national corporations and smaller start-ups. Mr. Donner concentrates on patent prosecution, technology audits, intellectual property transactional due diligence, licensing and litigation support.