December 13, 2018

Federal Circuit Holds § 156 Patent Term Extension Not Invalid for Obviousness-Type Double Patenting

On December 7, 2018, a Federal Circuit panel (Moore, Chen, and Hughes) in Novartis AG v. Ezra Ventures LLC, No. 2017-2284, held that a patent term extension (PTE) granted pursuant to 35 U.S.C. § 156 was not invalid for obviousness-type double patenting. The Federal Circuit's decision in this case should provide pharmaceutical patentees with some assurance that their PTEs generally will not fall afoul of the obviousness-type double patenting doctrine.

As background, a PTE is intended to compensate a pharmaceutical patentee for the portion of the patent term it loses while commercial approval of its patented drug product is delayed because of the FDA's regulatory review process. The Patent and Trademark Office (PTO) may grant a PTE of up to five years, depending upon the length of the FDA's regulatory review.

If there are multiple patents that cover the drug product in question, the patentee may choose only one patent to which to attach a PTE. 35 U.S.C. § 156(c)(4). The patentee in that situation will then be in possession of two (or more) patents that cover related subject matter, and that expire at different times. The doctrine of obviousness-type double patenting, however, under certain circumstances prohibits a patentee from owning two patents that claim non-"patentably distinct" subject matter, but that expire at different times. And under those circumstances, a patentee may be required to submit to the PTO a "terminal disclaimer" that disclaims any portion of the term of the later-expiring patent that extends beyond the term of the earlier-expiring patent. Pharmaceutical patentees thus have expressed concern over the possibility that their PTEs might be abrogated or cut short by the obviousness-type double patenting doctrine.

In this case, Novartis owned two patents, U.S. Patents Nos. 5,604,229 and 6,004,565. The '229 patent claims fingolimod, the active ingredient in Novartis's multiple sclerosis drug product Gilenya®. The '565 patent claimed a method of administering fingolimod. The '229 patent originally was set to expire on February 18, 2014. However, the PTO granted a five-year PTE for Gilenya®, and Novartis chose to attach the PTE to the '229 patent, thereby extending the term of the '229 patent to February 18, 2019. The '565 patent expired on September 23, 2017.1

Novartis sued Ezra for infringement of the '229 patent in the District of Delaware. Ezra moved for judgment on the pleadings, arguing that Novartis's PTE violated § 156(c)(4) because it "effectively" extended the terms of both the '229 and '565 patents, and arguing that the '229 patent was invalid based on the doctrine of obviousness-type double patenting in view of the '565 patent. The district court denied Ezra's motion and entered final judgment in Novartis's favor on the § 156(c)(4) and double patenting issues. Ezra appealed.

On December 7, 2018, the Federal Circuit, in a decision authored by Judge Chen, affirmed the district court.

As an initial matter, the Federal Circuit rejected Ezra's argument that Novartis "effectively" extended the terms of two patents in violation of § 156(c)(4). According to Ezra, Novartis's choice to attach PTE to the '229 patent "effectively" extended the term of the '565 patent term, because the '229 patent covers the compound (fingolimod) required to practice the method of the '565 patent. The Federal Circuit, however, observed that the statutory language of § 156 did not foreclose any such "effective" extension, noting, "That the method of the '565 patent cannot be practiced during the '229 patent's extended term is a permissible consequence of the legal status conferred upon the '229 patent by § 156." The Federal Circuit also observed that nothing in the statute could be read to limit a patentee's choice as to which of its patents to extend.

Turning to the question of whether Novartis's PTE was invalid under the doctrine of obviousness-type double patenting, the Federal Circuit relied on its prior decision in Merck & Co. v. Hi-Tech Pharmacal Co., 482 F.3d 1317 (Fed. Cir. 2007), to hold that Novartis's PTE was not so invalid. In Merck, the Federal Circuit upheld the validity of a PTE that had been attached to a patent that previously had been terminally disclaimed to overcome an obviousness-type double patenting rejection by the PTO. The Federal Circuit reasoned that its holding in the Novartis case was a "logical extension" of its holding in Merck:

We agree with the district court's observation that if a patent is terminally disclaimed to another patent to overcome an obviousness-type double patenting rejection and then term-extended under § 156 (as in Merck), it necessarily will expire after the patent to which it had been subject to an obviousness-type double patenting rejection. Such an extension would result in the situation, as here, where the term of patent protection afforded to the patentably indistinct patent to which the extended patent was terminally disclaimed is—in Ezra's words—"effectively" extended because of a PTE granted pursuant to § 156.

Last, the Federal Circuit dismissed Ezra's policy-based arguments against Novartis's PTE. The Federal Circuit noted that Novartis had chosen to extend the earlier-filed '229 patent, and, thus, Novartis "does not raise the traditional concern with obviousness-type double patenting of a patent owner 'extending his exclusive rights to an invention through claims in a later-filed patent that are not patentably distinct from claims in the earlier filed patent.'" The Federal Circuit also noted that the facts of the case did not give rise to any "potential gamesmanship issue" and that, "[b]ut for the § 156 PTE, the '229 patent would have expired before the '565 patent." The Federal Circuit further noted that a "judge-made doctrine," such as obviousness-type double patenting, should not curtail a "statutorily authorized time extension," such as a PTE.

The Federal Circuit concluded, "we hold that a PTE pursuant to § 156 is valid so long as the extended patent is otherwise valid without the extension."

[1] The '229 patent is a pre-URAA patent; its original term was set to expire 17 years after its February 18, 1997 issue date. The '565 patent is a post-URAA patent; it expired 20 years after its September 23, 1997 effective filing date.