Gilead Sciences, Inc. v. Natco Pharma Ltd., 2014-1418 (Fed. Cir. April 22, 2014)

The doctrine of obviousness-type double patenting prevents an inventor’s extension of its exclusivity period through multiple patents on obvious variations of the same invention.  In Gilead Sciences, Inc. v. Natco Pharma Ltd., the Federal Circuit held that an earlier-expiring patent qualifies as a double patenting reference against a later-expiring patent, even when the earlier-expiring patent is the later-issuing of the two patents.

In Gilead, the patentee filed two patent applications, both listing the same inventors and containing similar disclosures, but containing unrelated priority claims.  One application issued as the ’483 patent, and the second application subsequently issued as the ’375 patent.  Both patents are subject to the Uruguay Round Agreements Act (“URAA”) which creates a twenty- year patent term calculated from the earliest effective filing date.  The twenty-year term for the ’375 patent is calculated from the filing date of a nonprovisional application through which the ’375 patent claims priority.  The term for the ’483 patent is calculated from its actual filing date, as the ’483 patent only claims priority to a provisional application.  As such, the ’375 patent expires 22 months before the ’483 patent.  Additionally, the patentee filed a terminal disclaimer during prosecution of the ’375 patent, but did not do so during prosecution of the ’483 patent.

The patentee sued the accused infringer for infringement of both the ’483 and ’375 patents.  In district court, the accused infringer asserted that the ’483 patent was invalid for obviousness-type double patenting over the ’375 patent.  The district court disagreed, holding that the ’375 patent was not a double patenting reference against the ’483 patent because the ’375 patent was later-issued and its earlier expiration was irrelevant.

On appeal, the Federal Circuit disagreed with the district court and concluded that the ’375 patent was eligible as a double patenting reference against the ’483 patent.  Initially, the court assumed for purposes of appeal that the ’483 patent was not patentably distinct from the ’375 patent.  The court stressed that a bedrock principle of the patent system is to permit the public use of not only the same invention claimed in an expired patent, but also obvious or patentably indistinct modifications of that invention.  The double-patenting doctrine preserves this public right.  The Court noted that the double-patenting doctrine was further developed with the enactment of 35 U.S.C. § 253 in 1952, which created the ability of patentees to file a terminal disclaimer, which disclaimer aligns the expiration dates of several patents and creates a single term of limited exclusivity. This approach negates a double patenting rejection while removing the dangers of unjust extension of exclusivity.

The court reasoned that, in the instant case, the public should have the right to use the invention claimed in the ’375 patent upon its expiration, along with all obvious variants of that invention. The court reasoned that the ’483 patent impedes such right by covering obvious modifications for an additional 22 months.  The patentee, citing a series of cases, argued that the analysis should focus on the potential term extension for the ’483 patent and not the ’375 patent because the ’483 patent issued first.  The court responded that as those cases involved pre-URAA patents (where a patent’s expiration date was necessarily intertwined with its issue date), the analyses therein were not applicable to the post-URAA ’375 and ’483 patents.

The court also reasoned that if the patent issue date was the determining factor for double patenting inquiries for post-URAA patents, significant gamesmanship could occur.  For instance, applicants could file serial applications on obvious modifications, and arrange for the latest-filed application to issue first, thus unjustly extending exclusivity rights.  The court also noted that, if the issue dates of the patents were a determining factor, an inventor’s period of exclusivity among the multiple patents could vary greatly based on mere days’ difference in the issuance of the several patents.  Finally, the court held that use of the expiration date (as opposed to the issue date) is consistent with the PTO’s guidance in the Manual of Patent Examining and Procedure, which instructs a terminal disclaimer to be filed for the later-filed of the two applications (anticipated to have the later expiration date) before that application can issue.

The court concluded that a patent that is earlier-expiring but later-issued with respect to another patent can qualify as a double patenting reference against the other patent.  In such cases, a terminal disclaimer can preserve the validity of the later-expiring patent by aligning its expiration date with that of the earlier-expiring patent.

Judge Rader dissented, holding that the majority opinion improperly expanded the doctrine of obviousness-type double patenting.  Judge Rader initially noted that a primary policy concern behind the double-patenting doctrine was obviated by the URAA.  Post-URAA, a patentee cannot extend patent term through the practice of filing successive continuations (since patent term post-URAA is no longer calculated according to issue date, but rather from the earliest effective filing date).  Judge Rader also noted that a second policy concern—multiple infringement suits by different assignees asserting essentially the same patented invention—is mitigated in this case, because the terminal disclaimer filed in the ’375 patent requires common ownership.

Judge Rader also noted that if the ’375 patent had never issued, the patentee would certainly be entitled to the ’483 patent’s original expiration date.  Additionally, since the ’483 patent does not claim priority to the ’375 patent family, the ’483 patent is subject to roughly ten months of intervening prior art.  Judge Rader further emphasized that an expired patent does not necessarily grant the public an unfettered, affirmative right to practice the claims, but merely prevents the expired patent from barring the public’s use of the claimed subject matter.  Finally, Judge Rader raised a concern that, with the new “first-inventor-to-file” framework under the America Invents Act, prospective patentees are under tremendous pressure to file their applications early, and that the majority opinion could have unforeseen consequences in this new race to the Patent Office.