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Article: February 2019: Life Sciences Litigation Update

Business Litigation Reports

Federal Circuit Provides Certainty Regarding Patent Term Extensions and Clarifies Limits of Obviousness-Type Double Patenting. In Novartis AG v. Ezra Ventures, LLC, 909 F.3d 1367 (Fed. Cir. 2018), the Court of Appeals for the Federal Circuit issued a widely-anticipated decision concerning the interplay between a patent term extension (“PTE”) granted pursuant to 35 U.S.C. § 156 and obviousness-type double patenting – a judicially created doctrine that precludes a patentee from extending the statutorily defined patent term for a single invention with claims in a later-expiring patent that are the same or an obvious modification of the claims in an earlier-expiring patent. The Court held that obviousness-type double patenting does not invalidate an otherwise validly obtained PTE under § 156.

Section 156 is part of the Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”) and was enacted to restore the value of the patent term that a patent owner loses during the early years of the patent because the product cannot be commercially marketed without approval from a regulatory agency, such as the Food and Drug Administration (“FDA”). Pub. L. No. 98-417, 98 Stat. 1585, 1598. Section 156 provides for a term extension of up to five years, equal to the regulatory review period, on a patent covering a product subject to regulatory review. See 35 U.S.C. §§ 156(a), (c), (g)(6). The term of only one patent can be extended, even if a patent owner owns more than one patent covering the same product that has been subject to regulatory review. See 35 U.S.C. § 156(c)(4). Under the statute, the patent owner is permitted to make a choice among any of its qualifying patents. Merck & Co. v. Hi-Tech Pharmacal Co., 482 F.3d 1317, 1323 (Fed. Cir. 2007).

Novartis owned at least two patents covering its multiple sclerosis drug Gilenya® that could qualify for PTE under § 156(a). Novartis, 909 F.3d at 1369-70. Novartis chose to apply for PTE on its first patent – U.S. Patent No. 5,604,229 (“the ‘299 patent”) – directed to various compounds, including fingolimod, the active ingredient in Gilenya®. Id. at 1370. With the PTE, the ‘299 patent expires on February 18, 2019. Id. The second Novartis patent – U.S. Patent No. 6,004,565 (“the ‘565 patent”) – is directed to methods of administering fingolimod and expired on September 23, 2017. Id.

Ezra filed an Abbreviated New Drug Application (“ANDA”) seeking to market a generic version of Gilenya® before expiration of the ‘229 patent. Id. at 1369. In response, Novartis filed an action for infringement of the ‘229 patent in the District of Delaware. Id. Ezra moved for judgment on the pleadings that the ‘229 patent was invalid or otherwise terminally disclaimed for the patent term past the 

expiration date of the unasserted ‘565 patent. Id. at 1370. The district court denied Ezra’s motion. Id. In an unanimous decision, the Federal Circuit affirmed. Id. at 1375. The Court explained that Section 156 “recognizes that a patent owner may own multiple patents relating to a product, a method of using that product, and/or a method of manufacturing the product,” and “nothing in the statute restricts the patent owner’s choice for patent term extension among those patents whose terms have been partially consumed by the regulatory review process.” Id. at 1372.

The Federal Circuit rejected Ezra’s argument that Novartis violated the requirement under § 156(c)(4) that only “one patent be extended.” Id. According to Ezra, Novartis obtained a term extension for two patents – i.e., the PTE for the ‘229 patent “effectively” extended the ‘565 patent term as well, because the ‘229 patent covers a compound necessary to practice the methods claimed by the ‘565 patent. Id. The Federal Circuit concluded, however, that “there is no reason to read ‘effectively’ as a modifier to ‘extend’ in the language of § 156(c)(4).” Id. at 1372. Likewise, “nothing in the text, structure, or history of § 156” imposes a requirement on patent owners to ensure that no more than one patent is “effectively” extended. Id. In fact, “Congress chose not to limit the availability of a patent term extension to a specific patent and instead chose ‘a flexible approach which gave the patentee the choice.’” Id. (quoting Merck, 482 F.3d at 1323). Thus, the Court concluded that Novartis’ selection of its ‘229 patent for term extension did not violate § 156(c)(4). Id. “That the method of the ‘565 patent cannot be practiced during the ‘229 patent’s extended term is a permissible consequence of the legal status conferred upon the ‘229 patent by § 156.” Id.

Next, the Federal Circuit considered “the question of whether the ‘299 patent is invalid due to obviousness-type double patenting because the term extension it received causes the ‘299 patent to expire after Novartis’s allegedly patentably indistinct ‘565 patent.” Id. The Court concluded “as a logical extension” of the holding in Merck & Co. v. Hi-Tech Pharmacal Co. that obviousness-type double patenting does not invalidate a validly obtained PTE in such a scenario. Id. In Merck, the Court found that “a straightforward reading of § 156 mandates a term extension so long as the other enumerated statutory requirements for a PTE are met.” Id. (citing Merck, 482 F.3d at 1321-22). Applying that reasoning here, the Federal Circuit concluded that “if a patent, under its pre-PTE expiration date, is valid under all other provisions of law, then it is entitled to the full term of its PTE.” Id. at 1374.

The Federal Circuit was not persuaded by Ezra’s policy arguments. Id. at 1374-75. As the Court explained, this case does not present the concerns for potential gamesmanship during prosecution that drove earlier decisions regarding obviousness-type double patenting. Id. (citing Gilead Sciences, Inc. v. Natco Pharma Ltd., 753 F.3d 1208 (Fed. Cir. 2014) and Abbvie Inc. v. Mathilda & Terence Kennedy Institute of Rheumatology Trust., 764 F.3d 1366 (Fed. Cir. 2014)). Further, the Court explained that obviousness-type double patenting is a “judge-made doctrine” that is intended to prevent extension of a patent beyond a “statutory time limit.” Id. at 1375. Here, the Court found that agreeing with Ezra would mean that a judge-made doctrine would cut off a statutorily-authorized time extension, which the Court declined to do. Id.