Obviousness-type double patenting, terminal
disclaimers and best IP practices

In its late August decision in In re: Cellect, LLC, the Federal Circuit resolved a question that has lingered since Congress's 1999 enactment of patent term adjustment. Nos. 2022-1293, 2022-1294, 2022-1295, 2022-1296 (Fed. Cir. August 28, 2023).

The court held that patent term-adjusted patents are subject to obviousness-type double patenting limitations in view of related patents with the same priority date and with shorter or no patent term adjustment. Specifically, a claim in a patent having a later expiration date solely because of patent term adjustment can be invalidated for obviousness-type double patenting over the claim of an earlier-expiring patent in the same family. The impact of this in Cellect was particularly acute because the reference patents on which the obviousness-type double patenting findings were based had all expired, foreclosing Cellect’s ability to file terminal disclaimers to overcome those findings. 

How can patent owners avoid Cellect’s fate? Review their patent family portfolios prior to the expiration of the first-to-expire family member, when terminal disclaimers are still available as a tool for curing potential obviousness-type double patenting issues. This article also provides other patent prosecution and litigation strategies that can be implemented to minimize the likelihood of obviousness-type double patenting problems and address those that arise in ways that maximize coverage and patent term.

Obviousness-type double patenting

Obviousness-type double patenting, also known as nonstatutory double patenting, can be triggered when two patents or applications share patentably-indistinct claims and are commonly-owned, share at least one common inventor or are subject to a joint research agreement (JRA). The judicially-created obviousness-type double patenting doctrine is grounded in public policy and is intended to prevent a patentee from obtaining an unjust extension of the length of a patent’s “right to exclude” for an obvious modification, and to prevent potential harassment from multiple parties asserting non-commonly-owned patents for essentially the same invention.

A determination of obviousness-type double patenting depends on an assessment of obviousness and is appropriate when the claims of a patent or application (Subject Patent) are not identical to but are anticipated by or obvious over the claims of a qualifying patent or application that is not necessarily prior art (Reference Patent). If challenged claims of the Subject Patent are determined to be obvious over claims of the Reference Patent, the challenged claims are invalid unless the Subject Patent’s owner files a terminal disclaimer, as provided for in 35 USC § 253 and 37 CFR § 1.321. How the term of the Subject Patent is determined for the purpose of obviousness-type double patenting is the focus of the In re: Cellect case.

Terminal disclaimers

To overcome an obviousness-type double patenting rejection (during prosecution or reexamination) or an obviousness-type double patenting finding (during litigation) by filing a terminal disclaimer, the terminal disclaimer must disclaim the terminal portion of the Subject Patent's term that extends past the Reference Patent's full statutory term, including any claims not rejected for obviousness-type double patenting. See 37 CFR § 1.321(b). The terminal disclaimer must also include a provision that the Subject Patent shall be unenforceable if it ceases to be commonly owned or, in instances of different owners subject to a JRA, commonly enforced with the Reference Patent.

The Federal Circuit has suggested that a terminal disclaimer can even be filed after an adverse obviousness-type double patenting finding, see Perricone v. Medicis Pharm. Corp., 432 F.3d 1368, 1375 (Fed. Cir. 2005); Boehringer Ingelheim Int’l GmbH v. Barr Labs., Inc., 592 F.3d 1340, 1347 (Fed. Cir. 2010), but has not ruled on whether such a filing would operate retroactively to permit damages to accrue before the filing.

Patent term adjustment and patent term extension

Patent term extension, provided for in 35 USC § 156, compensates patent holders for patent term that is effectively lost during the regulatory review and approval processes, such as during FDA approval of pharmaceutical drugs and medical devices. The Federal Circuit's decisions in Merck & Co. v. Hi-Tech Pharmacal Co. (482 F.3d 1317 (Fed. Cir. 2007)) and Novartis AG v. Ezra Ventures LLC (909 F.3d 1367 (Fed. Cir. 2018)) established that obviousness-type double patenting should be considered from the expiration date of the patent before the addition of patent term extension to determine which is the Subject Patent and which is the Reference Patent. Merck also established that patent term extension extends beyond the terminal disclaimer-mandated expiration date, thereby extending the Subject Patent's term past the expiration date a terminal disclaimer would otherwise require.

Patent term adjustment, provided for in 35 USC § 154, compensates patent owners for time lost due to excessive delays by the United States Patent and Trademark Office (USPTO). Unlike patent term extension, the date from which patent term adjustment is applied and the interaction of patent term adjustment with terminal disclaimers and obviousness-type double patenting remained uninterpreted by the Federal Circuit prior to Cellect, which directly addresses this issue.

In re: Cellect, LLC

In In re: Cellect, LLC, the Federal Circuit affirmed holdings by the USPTO Patent Trial and Appeal Board (Board) affirming the reexamination finding that claims in US Patent 6,982,742, US Patent 6,424,369, US Patent 6,452,626 and US Patent 7,002,621 (Cellect's Subject Patents) are unpatentable for obviousness-type double patenting. Though the circumstances surrounding this case are not common, the lessons learned are relevant to and further inform the interplay between obviousness-type double patenting challenges, terminal disclaimers, patent term adjustment and patent term extension.

Cellect's Subject Patents all claim earliest priority to US Patent 6,275,255. Each would have expired on the same day, October 6, 2017, but for individual grants of patent term adjustment in all four patents.

Cellect sued Samsung Electronics, Co. in federal district court for infringement of Cellect's Subject Patents. Samsung requested ex parte reexaminations of several claims of each of Cellect's Subject Patents based on obviousness-type double patenting, which was not raised during original prosecution. The reexamination examiner issued obviousness-type double patenting rejections for all reexamined claims of Cellect's Subject Patents over other Cellect patents, including two of Cellect's Subject Patents (Cellect's Reference Patents), all of which ultimately traced back to US Patent 6,862,036, the single family member that did not receive patent term adjustment and expired October 6, 2017.

All of Cellect's Reference Patents had expired by the date Samsung requested ex parte reexaminations. Accordingly, Cellect did not have the option to file terminal disclaimers during reexamination to overcome the obviousness-type double patenting rejections, as any terminal disclaimer must be filed prior to expiration of the relevant Reference Patent(s).

Cellect appealed the obviousness-type double patenting rejections to the Board. Notably, Cellect did not dispute the merits of the obviousness-type double patenting rejections. The Board sustained the examiner's determinations of obviousness-type double patenting, and Cellect appealed to the Federal Circuit.

Cellect's principal argument on appeal was that claims should have been evaluated for obviousness-type double patenting based on their expiration dates before the addition of any patent term adjustment, just as the Federal Circuit had decided in Novartis for claims subject to patent term extension under 35 USC § 156, a facially-similar statutory extension of patent term. The USPTO, in defending the Board's decision, argued that, even aside from differences in the statutory language of patent term adjustment and patent term extension, the issue should be controlled by the Federal Circuit's previous explanation in AbbVie v. Mathilda & Terence Kennedy Inst. of Rheumatology Tr. (764 F.3d 1366, 1373 (Fed. Cir. 2014)) that the obviousness-type double patenting doctrine remained viable to prevent patent term adjustment from allowing patents filed at the same time to issue with patentably-indistinct claims and different effective patent terms.

In siding with the USPTO to affirm the Board's determination that the obviousness-type double patenting-rejected claims were unpatentable, the Federal Circuit held that "[obviousness-type double patenting] for a patent that has received [patent term adjustment], regardless whether or not a terminal disclaimer is required or has been filed, must be based on the expiration date of the patent after [patent term adjustment] has been added." In other words, patent term adjustment cannot cause a Subject Patent's patentably-indistinct claims to outlive an earlier-expiring (with or without patent term adjustment) Reference Patent. This ruling also clarifies that a terminal disclaimer filed to overcome an obviousness-type double patenting issue must disclaim any patent term adjustment beyond an earlier-expiring Reference Patent's expiration date, including any patent term adjustment granted to the Reference Patent. The court rejected Cellect's argument that patent term adjustment should be treated in an obviousness-type double patenting analysis like patent term extension as "an unjustified attempt to force disparate statutes into one."

The court also rejected Cellect's argument that the obviousness-type double patenting rejections in the reexaminations did not present substantial new questions of patentability (SNQs) sufficient to justify ordering the reexaminations. In particular, Cellect argued that, during original prosecution, the same examiner knew of all of Cellect's Reference Patents and had issued obviousness-type double patenting rejections in other Cellect-owned applications. This, Cellect contended, was sufficient to show that the examiner had considered and decided against obviousness-type double patenting rejections over Cellect's Reference Patents, which did not support the required SNQs. But the court held that it was unclear that obviousness-type double patenting consideration had occurred during original examination, so an obviousness-type double patenting determination met the threshold for finding an SNQ.

Finally, the court rejected Cellect's late-raised argument that obviousness-type double patenting invalidation should be limited to only the PTA-extended portion of the Subject Patent's term. Aside from finding that Cellect forfeited that argument by not raising it before the Board, the Federal Circuit found that invalidating "only the adjustment would be tantamount to granting [Cellect] a retroactive terminal disclaimer" when Cellect had already declined the opportunity to do so itself.

Best practices and takeaways

In view of the Federal Circuit's holdings, here are a few key takeaways and best practices regarding obviousness-type double patenting issues.

First, the way to avoid Cellect's unique situation of facing obviousness-type double patenting issues in patent term-adjusted Subject Patents after the Reference Patents had expired can be avoided by implementing a program of reviewing the claims of patents in a family sufficiently in advance (e.g., six months) of the expiration of the first-to-expire family member.

Second, if an obviousness-type double patenting issue arises after a patent issues, a terminal disclaimer might not be the best option. A terminal disclaimer limits the term for all claims, not just those with the obviousness-type double patenting issue. In contrast, a successful obviousness-type double patenting challenge will invalidate only the patentably-indistinct claims—the remaining claims will retain the full term, including any patent term adjustment. One should therefore carefully consider whether filing a terminal disclaimer to address an obviousness-type double patenting issue is worth shortening the patent term of all the Subject Patent's claims. If the Reference Patent instead provides sufficient patent coverage or has expired and a terminal disclaimer is not available, alternative approaches include canceling or amending the otherwise obviousness-type double patenting-invalid claims, statutorily disclaiming them according to 35 USC § 253(a), which, unlike a terminal disclaimer, does not require disclaiming the terminal portion of a granted patent, or arguing they are patentable, including with secondary considerations evidence. 

Third, if a challenged claim is invalidated by obviousness-type double patenting, the entire term of that claim is invalidated, not just the term that extends past the Reference Patent. This precludes one from obtaining any infringement remedies, past and present, for obviousness-type double patenting-invalidated claims. While Cellect did not definitively decide this issue because of Cellect's waiver of the argument that obviousness-type double patenting invalidation should only apply to the term adjustment in question, this guidance is relevant unless and until a change in the law occurs.

Fourth, if planning or defending a reexamination of a patent, and the original prosecution does not mention obviousness-type double patenting, be aware that obviousness-type double patenting may be considered a substantial new question of patentability warranting grant of a reexamination request. Per Cellect, an examiner’s mere knowledge of patents or applications with a common inventor or common ownership, or that are covered by a JRA, such as may be reflected in an information disclosure statement, may not be sufficient to show consideration of obviousness-type double patenting. Accordingly, a patent or application owner should consider actively requesting, on the USPTO record, consideration of obviousness-type double patenting over potential Reference Patents or preemptively filing terminal disclaimers if such a challenge is likely where, for example, an application is a continuation of an earlier patent with claims of a similar scope.

Fifth, an obviousness-type double patenting rejection in a child application or patent (child) over a parent application or patent (parent) can be avoided when the child is considered a divisional application or patent of the parent. One may consider attempting to provoke a restriction requirement in the parent to take advantage of 35 USC § 121's safe harbor provision, which provides that a child application filed during the pendency of the parent in response to the restriction requirement is considered a divisional application when the claims of the child are directed to only the subject matter restricted out of examination of the parent due to the restriction requirement. Thus, filing multiple, patentably-indistinct independent claims is a practice that, though potentially more expensive due to excess claim fees, may help avoid the Cellect obviousness-type double patenting issue.

This case may not be finally settled. Cellect has until October 12, 2023, to petition for panel or en banc rehearing. Any petition for writ of certiorari to the  US Supreme Court is due ninety days from denial of such a petition or the judgment following the grant of such a petition, and otherwise by November 27, 2023, if no rehearing petition is filed.