The Federal Circuit's In re Cellect decision has caused a great deal of commentary and proposals to avoid its consequences, including changing prosecution strategies and filing prospective, precautionary terminal disclaimers (see "Overcoming the Consequences of In re Cellect") to reimbue predictability regarding patent term to patent portfolio prosecution (as well as there being a pending certiorari petition before the Supreme Court). While understandable reactions, the reality (provided it is appreciated) may be much simpler: a proper understanding and resulting application of the patent term adjustment statute.
That reality is clearcut: the text, history, and structure of 35 U.S.C. § 154(b) make clear that obviousness-type double patenting (ODP) shall not cut short the patent term adjustment (PTA) of a parent patent over a child patent if the child is still pending when the parent is granted, but instead is relevant only in situations where the earlier patent is from a different (albeit related) patent family.
The language of the statute, 35 U.S.C. § 154(b)(2)(B), is unambiguous. The statute states that: "No patent the term of which has been disclaimed beyond a specified date may be adjusted under this section beyond the expiration date specified in the disclaimer." As noted by Federal Circuit in In re Cellect, terminal disclaimers and ODP are "inextricably intertwined," because "[t]erminal disclaimers are almost always filed to overcome an ODP rejection" and they are "two sides of the same coin." In re Cellect, LLC, 81 F.4th 1216, 1228 (Fed. Cir. 2023). Therefore, 35 U.S.C. § 154(b)(2)(B) is clearly directed to the application of ODP in the context of PTA, and requires that (1) the terminal disclaimer must be filed (or at least could have been filed, if a mistake has been made by the USPTO for not requiring such filing) before the PTA determination, which occurs at the time of the patent grant and (2) the terminal disclaimer must rely on a "specified" expiration date. Accordingly, the statute is controlling, because when the statute "speaks directly" to the area of law, a court-made doctrine (such as ODP) cannot serve to subtract or add to what has already been legislatively prescribed. See SCA Hygiene Prod. Aktiebolag v. First Quality Baby Prod., LLC, 580 U.S. 328, 335 (2017).
In a typical parent-versus-child situation where the child application is still pending when the parent is granted, a terminal disclaimer cannot be properly filed in the parent over the child, because the claims in the child application can subsequently change during prosecution, making the ODP assessment based thereon impractical if not impossible. The "provisional" ODP practice at the USPTO has never been approved by (or fully challenged in) court to prevent the grant of a parent application over a child application that is pending and has not been allowed. See In re Mott, 539 F.2d 1291 (CCPA 1976); In re Wetterau, 356 F.2d 556 (CCPA 1966). Indeed, according to M.P.E.P. § 804 "[i]f a provisional nonstatutory double patenting rejection is the only rejection remaining in an application having the earlier patent term filing date, the examiner should withdraw the rejection in the application having the earlier patent term filing date and permit that application to issue as a patent, thereby converting the provisional nonstatutory double patenting rejection in the other application into a nonstatutory double patenting rejection upon issuance of the patent." This practice implicitly recognizes (and avoids) the temporal distortions created in application of ODP by the Federal Circuit's Cellect decision.
Supporting this statutory construction basis for challenging the Court's interpretation is the fact that a pending child application does not have a "specified" expiration date as required by the statutory language. Merriam-Webster defines "specified" as "to name or state explicitly or in detail." A pending application cannot have a "specified" expiration date if its prosecution is still ongoing, because it is unpredictable whether future PTA events arising during continued prosecution will change the eventual expiration date. In practice, the USPTO has never specified, or attempted to specify, the expiration date of a pending patent application.
This typical patent-versus-child situation is different from the situation where the parent patent in a line of related patents and applications is found obvious over an already-granted, commonly owned patent from a different family. In such a scenario, a terminal disclaimer is required in the parent patent over the already-granted patent from the different family. Pursuant to the governing statute 35 U.S.C. § 154(b)(2)(B), the PTA of the parent patent would be cut short or lost entirely by the terminal disclaimer, depending on how much PTA would go beyond the expiration date of the already-granted patent from the different family.
This interpretation of 35 U.S.C. § 154(b)(2)(B) is supported by legislative history, showing that Congress considered ODP in the context of PTA multiple times and each time Congress deliberately prescribed the conditions under which ODP can cut short PTA. Congress first introduced PTA through the Uruguay Round Agreements Act in 1994 for three types of administrative delays: (1) delays caused by secrecy orders, (2) delays caused by interference, or (3) delays caused by appellate review. See 35 U.S.C. § 154(b)(1)-(2) (1994). The 1994 version of Section 154(b) also prescribed the specific conditions under which ODP could limit PTA (albeit not yet formally referred to as such but in retrospect PTA in all but name). Specifically, the 1994 version of the statute prevented PTA for patents "subject to a terminal disclaimer due to the issue of another patent claiming subject matter that is not patentably distinct from that under appellate review." Id. § 154(b)(2) (1994) (emphasis added). This reference to terminal disclaimers and "not patentably distinct" made clear that Congress considered ODP in establishing PTA in this consequence and in remedy of the distortions in term caused by adoption of the GATT/TRIPS changes in U.S. patent law. Congress also decided to limit this ODP-cutting effect to PTAs associated with appellate review delays, but not PTAs associated with interference or secrecy order delays. Importantly, this specific choice by Congress in 1994 also prevented the application of ODP to the parent PTA over the child where the child was not "issued" when the parent was under appellate review.
In 1999, Congress changed the PTA provisions to the current language by enacting the Patent Term Guarantee Act of 1999 to "guarantee" a diligent applicant a minimum 17-year effective patent term. See 145 Cong. Rec. H6944 (1999) (Rep. Dana Rohrabacher) ("This approach essentially gives back to the nondilatory patent holder . . . a guaranteed 17 year patent term."); 145 Cong. Rec. S13258-13259 (1999) (Sen. Orrin Hatch and Patrick Leahy) ("[T]he bill will guarantee a minimum 17-year patent term for diligent applicants . . ."); H.R. Rep. No. 106-287, 48-49 (1999) (Sen. Trent Lott) ("Title III . . . includes a new provision guaranteeing diligent applicants at least a 17-year term . . . ."). Congress's intent to provide such guarantees is clear, wherein subsection 154(b)(1) is itself entitled "Patent term guarantees," and the subsection uses the term "guarantee" or "guarantees" four separate times. A "guarantee," as Congress well knew, is an "assurance" or an "undertaking with respect to (a contract, performance of a legal act, etc.) that it will be duly carried out." These Congressionally mandated guarantees are abolished by the Court's Cellect decision, after having been brought into serious question in earlier cases decided by the Court.
These intentions were not effected by Congress without regard to ODP, which was considered in the context of PTA in the statutory language of the 1999 revision. Section 154(b)(2)(B) states: "(B) Disclaimed term. No patent the term of which has been disclaimed beyond a specified date may be adjusted under this section beyond the expiration date specified in the disclaimer." 35 U.S.C. § 154(b)(2)(B) (emphases added). The terms "has been disclaimed" (past tense) and "specified date" (see Merriam-Webster definition above) show that ODP would apply in the context of PTA only when (1) a terminal disclaimer has already been filed before the PTA determination and (2) the reference expiration date used in the terminal disclaimer must be "specified" (not simply an unascertainable expiration date of a pending application without knowing whether any future PTA event would occur that will change the eventual expiration data).
In addition, there is no meaningful policy reason to apply the ODP-cutting effect to the parent PTA in a typical parent-versus-child situation in view of the overarching legislative intent to ensure a minimum 17-year effective patent term. In practice, this statutory choice is consistent with the legislative intent to "guarantee" a minimum 17-year effective patent term. A child application is generally filed and granted later, which makes the effective patent term of a child patent necessarily shorter than that of the parent, assuming no USPTO delay in both cases. A child application is also generally examined much faster than the parent, thereby less likely to incur more USPTO delays than the parent. This also leads to less effective patent term for the child than the parent. Therefore, in a patent family, only the parent typically is capable of receiving a minimum 17-year effective patent term.
Properly construed, the text, history and structure of Section 154(b) make clear that ODP does not apply to the PTA of a parent over a child if the child is still pending when the parent is granted. While it is rather late in the day for these realities to matter, the potential (however unlikely) that the will Supreme Court consider the question of the effect of ODP on PTA should be well within the Court's interest in determining whether the Federal Circuit has once again erred in interpreting U.S. patent law (Bilski v. Kappos and KSR Int'l. Co. v. Teleflex, Inc., for example), despite its recognized "special expertise" (Warner Jenkinson Co. v. Hilton-Davis Chemical Co.) and needs the Court's correction.
*Hat tip to colleagues who contributed thoughts and perspectives on these issues.
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