The backlog of pending patent applications at the USPTO is growing. As of May 2022, the USPTO estimates an average pendency of approximately 20 months from filing to the mailing of a first office action, which is an increase of three months from the average pendency from the prior year. (An average pendency of 17 months in May 2021 can be seen on the USPTO website by clicking the “View the last two years chart” button.) Because of this nearly two-year average pendency, applicants may be tempted to take advantage of and exploit the patent system to unreasonably delay prosecution and extend the patent term of a patent family member far beyond the lifetime of the original parent application. This strategy may have been especially common prior to the USPTO’s June 8, 1995, implementation of rules under the General Agreement on Tariffs and Trade (GATT). These rules resulted from the 1994 signing of the Uruguay Round Agreements Act, whereby applications filed prior to June 8, 1995, have their patent terms expire 17 years from the issue date and the patent terms for applications filed on or after June 8, 1995, expire 20 years from the filing date of the earliest application to which priority is claimed. In view of the patent term adjustment (PTA) for post-GATT patents, applicants still may be tempted to exploit prosecution delays―especially if they can be said to be caused by the USPTO―and add to the patent term via PTA. In addition, in this post-GATT environment, patent applicants may be tempted to keep an application in a patent family during the 20-year patent term pending to introduce claims based thereon when a market develops and a competitor designs around granted claims but possibly still within the original disclosure.
To prevent this gaming of the patent system in the hopes of extending patent term and to prevent prejudice to others, the equitable affirmative defense of prosecution laches may be raised to render an asserted patent unenforceable. Although raising the defense of prosecution laches is relatively uncommon, prosecution laches has attracted attention in two recent cases: Hyatt v. Hirshfeld, 998 F.3d 1347 (Fed. Cir. 2021) and Personalized Media Communications, LLC v. Apple, Inc., 552 F. Supp. 3d 664 (E.D. Tex. 2021) (PMC). The courts in both Hyatt and PMC, involving patents claiming priority to pre-GATT applications, held that there was unreasonable delay in prosecution and prejudice―the former vacating the district court’s determination that the USPTO failed to meet its burden in proving prosecution laches and the latter applying prosecution laches in an infringement action, rendering the asserted patent unenforceable. See Hyatt, 998 F.3d at 1372; PMC, 552 F. Supp. 3d at 691.
Prosecution laches were again raised as a defense to patent infringement in an even more recent case, Seagen Inc. v. Daiichi Sankyo Co., No. 2:20-cv-00337-JRG, 2022 WL 2789901 (E.D. Tex. July 15, 2022). In contrast to Hyatt and PMC, the Seagen court found neither unreasonable delay nor prejudice and thus refused to apply the defense of prosecution laches.
Seagen is the assignee of U.S. Patent No. 10, 808,039 (’039 patent), which issued from U.S. Patent Application No. 16/507,839 (’839 application) and is directed to antibody-drug conjugates. Seagen alleged that Daiichi Sankyo Company, Limited's (DSC) drug Enhertu infringes the ’039 patent. AstraZeneca Pharmaceuticals LP and AstraZeneca UK Ltd., involved in the commercialization and marketing of Enhertu, intervened as defendants.
A jury returned a verdict of infringement in favor of Seagen and rejected DSC’s arguments that the ’039 patent was invalid for lack of written description and enablement. The jury determined that such infringement was willful, as Seagen and DSC had engaged in a collaboration agreement in 2008 to develop antibody-drug conjugates and DSC would have been aware of all of the inventions that could be disclosed in the ’839 application. The court held a bench trial on prosecution laches.
The finding of prosecution laches requires satisfaction of two elements: i) the patentee’s unreasonable and unexplained delay in prosecution; and ii) prejudice to the accused infringer or the public that is attributable to the delay. See Cancer Rsch. Tech. Ltd. v. Barr Lab’ys, Inc., 625 F.3d 724, 729-30 (Fed. Cir. 2010).
No Finding of Unreasonable Delay in Prosecution
Whether an applicant engages in an unreasonable delay in prosecution requires “an examination of the totality of the circumstances including the prosecution history of all of a series of related patents and overall delay in issuing claims… .” See Seagen, 2022 WL 2789901 at *5 (quoting Hyatt, 998 F.3d at 1362)). The analysis is not limited to the particular patent application at issue. See id.
Reasonable delays in prosecution may include, for example, filing a divisional application in response to a restriction requirement on the issue date of the parent application, refiling an application to present new evidence of unexpected results, and refiling an application to include additional subject matter to support a broader set of claims. See id. (citing Symbol Techs., Inc. v. Lemelson Med., Educ. & Rsch. Fund., LP, 422 F.3d 1378, 1385 (Fed. Cir. 2005)). An unreasonable delay may include refiling an application with previously allowed claims to delay their issue. See id. (citing Symbol, 422 F.3d at 1385)).
Unlike Hyatt and PMC, whose patents at issue claimed priority to pre-GATT applications, the ’039 patent’s family members were filed between November 5, 2004, and July 10, 2019. See id. at *2. Thus, a prosecution strategy of keeping a patent family member, whose issue date would be 17 years from issue, perpetually pending to extend the patent term was not available to Seagen. The court noted this distinction from that of Hyatt and PMC, indicating that Seagen did not bulk file hundreds of applications containing hundreds of thousands of claims during the “GATT bubble” to administratively burden the USPTO in an attempt to extend patent term. It also did not keep a family member perpetually pending at the USPTO as a “submarine patent” to encompass a competitor’s product. See id. at *6. Rather, the court found that Seagen continuously filed patent applications within the ’039 patent’s patent family since 2004 and has diligently prosecuted each application within the patent family. See id. Furthermore, the court noted that Seagen even sought prioritized examination for the ’839 application, which issued as the ’039 patent. See id. at *2.
The court did not find DSC’s argument that Seagen’s prosecution of the ’039 patent followed DSC’s disclosure and encompassed its product convincing. In particular, the court reiterated that it is permissible to tailor the claims to encompass a competitor’s product as long as there is an adequate basis and support within the application. See id. (quoting SynQor, Inc. v. Artesyn Techs., Inc., No. 2:07-cv-497, 2011 WL 2729214, at *7 (E.D. Tex. July 11, 2011).
Seagen had not engaged in any conduct to extend its patent term, diligently prosecuted its applications―even seeking expedited prosecution on the ’839 application leading to issue of the ’039 patent in contention―and did not seek to hide its disclosures or prosecution. Therefore, the court held that DSC had failed to demonstrate unreasonable delay in prosecution and thus failed to satisfy the first element of prosecution laches. Because both elements of unreasonable delay and prejudice must be satisfied for a finding of prosecution laches, the court did not address the second element of prejudice and concluded that DSC had failed to meet its burden that the ’039 patent should be held unenforceable under prosecution laches.
Conclusion and Analysis
Seagen provides an example of the flipside of recent cases Hyatt and PMC, in which the courts determined that the applicants engaged in unreasonable delay in prosecution and prejudice, which may warrant the application of prosecution laches. In Seagen, the applicant’s continuous filing of continuation applications within the patent family and diligent prosecution of family members precluded a finding of unreasonable delay in prosecution and further precluded the application of prosecution laches.
Unlike Hyatt and PMC, the patent family at issue in Seagen is a post-GATT patent family whose patent terms expire 20 years from the filing date of the earliest application to which priority is claimed. Thus, post-GATT, it is harder to keep a patent family perpetually pending and it would be much more difficult to unreasonably extend patent terms to almost 50 years after the original parent application. See, e.g., PMC, 552 F. Supp. 3d at 689 (indicating that “the asserted claims will expire 34 years after the application was filed, 42 years after the 1987 specification, and 48 years after the 1981 parent application”). Because such unreasonable and unfair extensions of patent terms are much less likely to reach the level of PMC in a post-GATT patent family, the defense of prosecution laches may see a decrease in usefulness within an overall patent litigation strategy. Additionally, the courts may be more hesitant to apply prosecution laches, relying on precedent founded upon examples of unreasonable delay and prejudice in a pre-GATT context. If accused infringers continue to raise the defense of prosecution laches, especially in the context of a post-GATT asserted patent, courts may need to reevaluate what constitutes unreasonable delay in prosecution and prejudice in the much narrower post-GATT potential patent lifetime in their determination of whether the elements of prosecution laches are satisfied.
Although Seagen demonstrates an unsuccessful attempt at raising the defense of prosecution laches in a post-GATT patent application family in which the potential patent lifetime is narrower than that of pre-GATT applications, applicants should still aim to diligently prosecute their applications before the USPTO because the defense of prosecution laches is not rendered obsolete in a post-GATT environment. Although it is still possible post-GATT for an applicant to stake out the market and delay the introduction of claims that encompass a competitor’s product, applicants and stakeholders still must weigh the risks of acquiring a shortened patent term or having an unenforceable patent, becoming a poster child for a court’s post-GATT analysis of unreasonable delay and prejudice in the application of prosecution laches against the benefits of license agreements with competitors.