How will the CAFC’s Cellect case affect Acadia Pharma’s fight to keep out generic Nuplazid?
Zachary Silbersher
Acadia Pharmaceutical has been litigating to keep out generics for its Parkinson’s Disease drug Nuplazid®. Although Acadia initially sued five separate generics for infringement of multiple patents, all the generics settled-out except one, MSN Pharmaceuticals. And in the case against MSN, only a single patent remains at issue (U.S. Patent No. 7,601,740). MSN recently moved for summary judgment on the ground that the ‘740 patent is invalid for obviousness-type double patenting (ODP). A recent precedential Federal Circuit decision, In Re: Cellect, LLC, addressed the ODP doctrine in detail. How will Cellect affect Acadia’s defense against the last generic holdout for Nuplazid®?
In Re: Cellect, LLC
Cellect sued Samsung for alleged infringement of four patents. All four patents were part of the same family, and they were each children of an original parent patent. Each of the four asserted patents claimed subject matter that was not patentably distinct. Put another way, there was no material dispute that Cellect had essentially acquired four patents that each covered essentially the same invention.
This happens more often than one might think—namely, companies pursue multiple patents essentially covering the same invention. In fact, patent thickets that have successfully stifled entry of lower-cost medications exist because pharmaceutical companies deliberately pursue multiple patents that all cover essentially the same inventions.
When the Patent Office is examining a patent application, and it determines that the application may be directed to the same invention as an earlier patent owned by the same company, the Patent Office often provisionally rejects the application on the basis of obviousness-type double patenting (ODP). That’s another way of the Patent Office saying to the patent applicant: we believe you’re trying to patent the same thing twice. Faced with such a rejection, patent applicants can file what is known as a terminal disclaimer. That’s another way of the applicant saying: ok, regardless of whether we agree that we’re trying to patent the same invention twice, we will stipulate that any patent issuing from this application will not expire later than the earlier patent you (the Patent Office) believe covers the same invention.
In theory, terminal disclaimers do not deprive companies from holding multiple patents on the same invention. But the policy behind terminal disclaimers is that they presumably prevent companies from indirectly extending the lifetime of a patent monopoly on that invention. Upon filing terminal disclaimers, all the patents covering the same invention will presumably expire at the same time. (The inefficiencies born out of patent thickets nevertheless persists because it can take a lot more time to litigate through multiple patents, even if they all essentially cover the same invention, versus just a single patent.)
There are only two ways that an inventor can extend the lifetime of a patent—either through Patent Term Extension (PTE) or Patent Term Adjustment (PTA). (The difference in terminology says nothing about the different types of extension.) Both PTE and PTA are mechanisms that are supposed to address delays by a federal agency. PTE can extend the life of a patent for delays attributable to the FDA for approval of a pharmaceutical drug. PTA can extend the life of a patent for delays attributable to the Patent Office for examining the patent application.
PTA, in particular, is necessary since the lifetime of a patent is generally measured from the date the patent application is filed, rather than the date the patent is issued. It can take several years for the Patent Office to examine your patent application. Yet, during those years, an inventor cannot enforce his or her patent against infringers, even though those years are eating into the lifetime of the patent. Inventors do not automatically get PTA for all the time it takes for the Patent Office to examine a patent, but instead, PTA is typically granted for delays attributable to the failure of the Patent Office. Many patents are issued without any grant of PTA, but it is far from uncommon for a patent to be awarded a period of PTA.
Back to Cellect. Samsung filed multiple re-examination proceedings challenging Cellect’s patents. In particular, Samsung argued Cellect’s four patents were each invalid under an ODP analysis. The Patent Office agreed, and it invalidated the patents. On appeal, Cellect argued that the Patent Office clearly erred, as a matter of law, because it applied the ODP analysis after application of the PTA. Cellect argued that the Patent Office should have first performed the ODP analysis, determined that all four patents should expire on the date of the earliest patent covering the invention, and then after that, reapplied the granted PTA for each patent. If that had happened, then Cellect’s patents may still be in force.
During the appeal, Cellect argued that there is prior Federal Circuit precedent holding that, in the case of PTE, the PTE is added back to the patent term after application of the ODP analysis. In other words, courts have held that even a successful ODP analysis cannot deprive a patentee of granted PTE time. Indeed, one rationale for this holding is that PTE is a statutorily-granted extension of time, whereas ODP is a judicially-created doctrine. As a result, a judicially-created doctrine lacks power to deprive a patentee of a right granted by statute, i.e., PTE time. Based on this, Cellect argued that the same rationale should apply to PTA time. Just like PTE time, PTA time is also statutorily granted.
Yet, the Federal Circuit disagreed. It held that PTE and PTA stem from different statutes, and although they share some similarities, they differ in material respects regarding their policies and requirements. In particular, Section 154 of the Patent Statute is the provision that addresses PTA. It specifically says that PTA cannot be added onto a patent for which a disclaimer has been filed. See 35 U.S.C. 154(b)(2)(B). In other words, if a patent applicant receives an ODP rejection from the Patent Office, and then files a terminal disclaimer, that terminal disclaimer is an agreement that the later patent will not expire later than the earlier filed patent that covers essentially the same invention. If that happens, then the statute states that the terminal disclaimer thus bars the applicant from receiving PTA. Importantly, no such similar provision exists within the statute governing PTE. (At least one commentator, however, has pointed out that Section 154 does not actually use the phrase “terminal disclaimer,” thus calling into question the soundness of the Court’s rationale.)
In Cellect’s case, during examination of the challenged patents before the Patent Office, the Examiner never rejected the patents for potential obviousness-type double patenting. And, as a result, Cellect never filed any terminal disclaimers against any of the challenged patents. Yet, had Examiner issued ODP rejections, or had Cellect filed terminal disclaimers, then Cellect’s primary argument on appeal—that its statutorily-granted PTA should be added back onto the patents even if the ODP analysis applies—would have had no traction. Accordingly, the Federal Circuit reasoned that Cellect should not be permitted to profit from the Examiner’s failure to file ODP rejections or from Cellect’s failure to file terminal disclaimers, especially considering that Cellect did not really challenge the merits of Samsung’s ODP defense on appeal.
MSN’s ODP defense against Acadia’s ‘704 patent
Back to Acadia’s effort to block MSN’s generic for Nuplazid. MSN has moved for summary judgment on the ground that the only remaining patent in the case, the ‘704 patent, should be invalidated for ODP. Acadia has opposed MSN’s motion on two separate grounds, namely, MSN’s defense is barred by the safe harbor provision of 35 U.S.C. § 121 and an ODP analysis cannot otherwise cutoff PTA that has been awarded to the patent.
Yet, Acadia’s second argument relates directly to the issue decided in Cellect. Acadia has argued that, for the same reason that the Federal Circuit previously held that an ODP analysis cannot deprive a patent of statutorily-granted PTE, ODP cannot deprive a patent of statutorily-granted PTA. Acadia made that argument before the Federal Circuit’s decision in Cellect, and yet, that argument now appears to be circumscribed by the Court’s recent decision.
Acadia’s primary argument against MSN’s ODP defense appears to still be in play. That argument is that a safe harbor provision protects the ‘704 patent from being invalidation based on ODP. Very generally, the safe harbor provision protects a divisional patent application, which is filed in response to a restriction requirement, from facing invalidation for ODP. It is a technically complex and convoluted argument—both from a legal and factual perspective. The court may therefore decide that it is not suited for summary judgment. Acadia may therefore still have to face a trial on its last remaining generic holdout for Nuplazid.