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Allergan USA v. MSNLabs, 24-1061 (Fed. Cir. August 13, 2014) 

We perceive a sigh of relief from some patent holders following issue of the US Federal Circuit’s decision in Allergan USA v. MSNLabs, 24-1061 (Fed. Cir. August 13, 2014) (“Allergan”). This decision appears to forestall the revocation of some patents following the concerning precedential Federal Circuit decision In re Cellect (No. 22-1293) (“Cellect”). 

Background 

For valuable inventions it is relatively typical for a US patent to be expanded into a family of patent rights. Naturally, the value of patents is further enhanced by extra patent term. 

Patents with expiry dates beyond the normal 20 year period can be obtained through “Patent Term Adjustment” (PTA), which is an extra period of patent term granted under US practice when prosecution of a patent application is delayed due to delays by the United States Patent and Trademark Office (USPTO).  

Conversely, a family of related patent rights can be affected by the doctrine of obviousness-type double-patenting (ODP) objections between related applications. ODP objections from the USPTO are often addressed by filing a terminal disclaimer to make patents that are not considered to be patentably distinct expire on the same date, i.e. by curtailing patent term.  

In re Cellect  

This led to a conflict between rights flowing from PTA and truncated by ODP. This matter was considered in the earlier “Cellect” decision (In re Cellect (No. 22-1293)). In Cellect the Federal Circuit held that when members of a patent family differ in their expiration dates solely on the basis of PTA, the earlier-expiring family members can be used as the basis for an ODP validity attack on later-expiring family members. 

Thus the risk for patent owners flowing from the Cellect decision was that later filed and issued applications could be used to invalidate earlier filed and issued applications even if they had the same priority date and expired later. 

The Court’s holding in Cellect was thus wide-ranging and likely to particularly affect life science and pharmaceutical patents, where patentees grants of PTA yield valuable additional market exclusivity. 

Allergan USA v. MSNLabs 

However, in the Allergan decision (Allergan USA v. MSNLabs, 24-1061 (Fed. Cir. August 13, 2014)) the Federal Circuit has decided that some obviousness-type double-patenting will not serve as basis for revocation. This is because the Allergan decision holds that a later filed and issued but earlier expiring patent cannot serve as a reference for invalidating an earlier filed and issued patent on the grounds of obvious-type double-patenting. 

The obviousness-type double-patenting rules are intended to prevent patentees improperly extending patent term through multiple later filings that might be delayed and thus accrue PTA.  The court found that this was not the case for the original and earlier filed application.  As the court wrote: 

“To hold otherwise—that a first-filed, first-issued parent patent having duly received PTA can be invalidated by a later-filed, later-issued child patent with less, if any, PTA—would not only run afoul of the fundamental purposes of ODP, but effectively abrogate the benefit Congress intended to bestow on patentees when codifying PTA. That is because such a holding would require patent owners, in order to preserve the validity of the parent patent, to file a terminal disclaimer disclaiming any term of the parent that extends beyond that of the child, which, given that the patents share a priority date, would amount to the disclaimer of only PTA. That parent patent, then, would not receive the benefit of its congressionally guaranteed patent term, see 35 U.S.C. § 154(b), and would instead be limited to the, presumably shorter, term of its own child. Such a result would be untenable.” 

Allergan USA v. MSNLabs, 24-1061, page 20, paragraph 2 

The present case also confirms that US patent law is intended to protect against a patentee improperly trying to extend patent term by obtaining subsequent patents with ever-later expiry dates.  

This decision gives some relief to patent owners but also appears to make common sense and be in line with typical patent practice. Typically, the first patent in a patent family requires longer to prosecute to grant and thus is most likely to accrue Patent Term Adjustment (PTA). This might also be the case because the Examiner assigned by the USPTO learns and becomes familiar with the issues at hand for both the parent and any divisional or continuation applications. Accordingly, divisional or continuation applications generally tend to be prosecuted more quickly. 

Reference to Cellect in Allergan 

Thus, the present decision in Allergan appears to reverse the opposite holding that was given by the Federal Circuit in Cellect.  This difference in decision by the Federal Circuit is addressed in the present Allergan decision wherein the court found that the issue was not properly raised in Cellect.  The judges in the case of Allergan (who are identical to the judges in the case of Cellect) noted that the “patent owner in Cellect did not challenge whether the reference claims used to invalidate the asserted claims were proper ODP reference claims.”   Thus, the Allergan decision appears to have the reasoning of Cellect to confirm only that patent term adjustment is relevant to obviousness-type double-patenting – but without following the decision of Cellect. 

Changes in Prosecution Strategy 

We note also that an appeal of the Cellect decision is still pending before the US Supreme Court and thus this matter is not yet definitively resolved.  However, in the meantime the Allegan decision appears likely to affect basic patent portfolio filing strategy to focus on the initial issued (and likely first filed) application having the longest Patent Term Adjustment (PTA).  This might behove a patent attorney to seek broader claims for the initial patent rather than gaining narrow claims quickly for the initial patent, and then pushing for broader claims in later-filed family members (assuming that these expire first). 

In conclusion, the decision in Allergan gives some relief to patent holders with large patent families that benefit from Patent Term Adjustment.  This decision also directs patent holders and their representatives to push for broader protection from the initial applications in order to, hopefully, gain the longest term of Patent Term Adjustment available for the broadest claims without collision with later filed applications. 

 


Our articles are for general information only. They should not be considered specific legal advice, which is available upon request. All information in our articles is considered to be accurate at the date of publishing.

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