Patent Term Adjustment and Obviousness-Type Double Patenting: Cellect’s Bid for Supreme Court Review

by Dennis Crouch
The Federal Circuit’s August 2023 decision in In re Cellect, LLC has set-up a significant question regarding the interplay between the patent term adjustment (PTA) statute, 35 U.S.C. § 154(b), and the judicially-created doctrine of obviousness-type double patenting (OTDP). Now, Cellect is seeking Supreme Court review, recently filing a petition for an extension of time that also indicated its intent to file. Cellect’s petition is now due May 20, 2024, and I expect significant support from the patent owner community.
Patentees often receive PTA due to USPTO delays that otherwise eat into the 20-year patent term.  A fundamental issue in Cellect boils down to whether a patentee must forfeit their PTA term extensions to avoid an OTDP invalidity finding.  This comes up in situations where a patentee has two patents that cover only slightly different inventions.  Most often this is seen in family-member continuation applications, but it can also arise when applicants file several applications all within a short period.
Under the judge-made law of OTDP, it is generally improper for a patentee to obtain two separate patents that are obvious variants of one another. But, the practice is permitted if the patentee files a terminal disclaimer that links the patent terms together so that they will expire on the same date and also promises that the two patents will always be commonly owned.  The idea here is that the two patents effectively become one.  Cellect has challenged this approach — focusing particularly on the statutory PTA of § 154(b).
Of some importance here, patent law provides a second mechanism for adding to the patent term known as patent term extension or PTE under 35 U.S.C. 156. Rather than focusing on USPTO delay, PTE permits limited extension of a patent’s term due to regulatory review that delays a product’s commercial marketing or use. Most often this comes up in the context of FDA regulatory review.  In  Novartis AG v. Ezra Ventures LLC , 909 F.3d 1367 (Fed. Cir. 2018), the Federal Circuit concluded that a terminal disclaimer need not cut off the PTE because that “would mean that a judge-made doctrine would cut off a statutorily-authorized time extension.”  Cellect argues this same reasoning applies to PTA.
20240402164244272_2024-04-02Cellect_Cert_Petition_Extension_Application
En Banc Denied in In re Cellect: Double Patenting and Patent Term Adjustment

I am sympathetic to both sides in this particular case. First, there are meaningful differences between the PTA and PTE statutes that can justify differential treatment for OTDP purposes. Most notably, § 154(b)(2)(B) expressly provides that PTA cannot extend a patent’s term beyond the date specified in a terminal disclaimer. While this provision did not directly apply in Cellect (because no disclaimer was filed) the Federal Circuit relied heavily on it to conclude that Congress intended that PTA should be limited by the OTDP doctrine. In contrast, § 156 governing PTE includes no such disclaimer provision. This statutory distinction, though not dispositive, lends support to the Federal Circuit’s divergent approaches.
At the same time, I am wary of allowing the stale judge-made of OTDP to unduly restrict a statutorily authorized term adjustment. OTDP arose years ago before the shift to a 20-year patent term running from the filing date. Under the old pre-GATT system, continuation practice could enable significant de facto term extensions through “submarine” patents that each had a 17 year term running from the issue date. Now that all patents in a family generally expire on the same date, the potential for abuse is greatly diminished.
But, the potential for abuse has not vanished. If Cellect were overturned I would expect a good amount of applicant gamesmanship in valuable families with the patentee seeking to prolong prosecution in order to maximize PTA.
Under 154(b), applicants can accrue adjustments for three types of USPTO delay: Type A delays, where the USPTO fails to meet certain deadlines; Type B delays, where the application pendency exceeds three years; and Type C delays, which encompass appeals, interferences, and secrecy orders. Each category presents opportunities for gamesmanship.
For Type A delays, applicants might deliberately file complex specifications or claims in order to increase the likelihood of missed deadlines by the USPTO. This step could be coupled with a strategy to intentionally shift the continuation application to a new examiner and art unit who is unfamiliar with the application. Under Type B delays, applicants could potentially draw out prosecution by prompting minor objections and by filing office action responses that introduce new issues or arguments late in the process (and at the PTA deadline) with the hope of pushing their applications past the three-year mark. There is also some potential of using petition practice to delay issuance without the patentee sacrificing PTA. The biggest potential though is for Type C delay.  Applicants would have some incentive to pursue appeals in continuation applications in order to gain additional term based upon the lengthy appellate process. Although appeals may have a fairly low likelihood of winning, this strategy can be viable when the patentee already holds a similar patent covering the invention, and the appeal has the potential of extending the patent term by years.  In that situation, the patentee does not lose much if the patent is denied because they have a fallback position, but could potentially gain years of PTA from the successful appeal.   Although each of these processes are permitted under the rules of practice, their become problematic if done with the intent to delay patent issuance, and so it would require patent attorneys willing to blur the ethics line.