The Supreme Court and Federal Circuit continue to be active in the early stages of 2019 with respect to patents. This post takes a brief look at two recently decided cases regarding on-sale bar and patent term adjustment, respectively.
Helsinn Healthcare v. Teva Pharmaceuticals (decided on January 22, 2019)
This case required the Supreme Court to decide whether the sale of an invention to a third party who is contractually obligated to keep the invention confidential places the invention “on sale” within the meaning of 35 U.S.C. § 102(a)(1).
While developing a treatment for chemotherapy-induced nausea and vomiting, Helsinn entered into two agreements with another company granting that company the right to distribute, promote, market, and sell a 0.25 mg dose of the anti-nausea drug in the United States. The agreements required the company to keep any proprietary information received under the agreements confidential. The agreements were announced in a joint press release, but the 0.25 mg dose was not publicly disclosed. Nearly two years later, Helsinn filed a provisional patent application covering the 0.25 mg dose of the drug. Helsinn eventually was issued U.S. Patent No. 8,598,219 (the ‘219 patent) covering the same.
After issuance of the ‘219 patent, Teva sought approval from the FDA to market a generic product containing the 0.25 mg dosage. In defense of an infringement suit brought by Helsinn, Teva asserted that the ‘219 patent was invalid because the 0.25 dose was “on sale” more than one year before Helsinn filed the provisional patent application.
Under the America Invents Act (AIA), a person is precluded from obtaining a patent on an invention that was “…in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” 35 U.S.C. § 102(a)(1). The AIA retained the on-sale bar of prior patent statutes and added the catchall phrase “or otherwise available to the public.” Id.
The District Court held that the “on sale” provision did not apply because the companies’ public disclosure of the agreements did not disclose the 0.25 mg dose. However, the Federal Circuit reversed this decision concluding that “if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of the sale” to fall within the AIA’s on-sale bar. 855 F.3d 1356, 1360 (2017).
In deciding the case, the Supreme Court noted that every patent statute since 1836 has included an on-sale bar and the AIA’s addition of the catchall phrase did not alter the meaning of the on-sale bar. The Court further noted that the Federal Circuit has long held that “secret sales” can invalidate a patent, and that the phrase “on sale” had acquired a well-settled meaning when the AIA was enacted. Therefore, in light of the settled pre-AIA precedent on the meaning of “on sale,” the Court presumed that when Congress reenacted the same language in the AIA, it adopted the earlier judicial construction of that phrase. Accordingly, the Court held that a commercial sale to a third party who is required to keep the invention confidential may place the invention “on sale” under the AIA.
The decision can be found here.
Supernus Pharm. v. Andrei Iancu (decided on January 23, 2019)
In this case, the Federal Circuit, in reversing a ruling by the District Court for the Eastern District of Virginia, held that when making a patent term adjustment (PTA) calculation, the USPTO cannot count as applicant delay any period of time during which there was no possible action that the applicant could take to reasonably conclude prosecution.
The USPTO issued U.S. Patent No. 8,747,897 (the ‘897 patent) on July 10, 2014 to Supernus, reflecting a PTA of 1,260 days. In calculating the PTA, the USPTO attributed 2,321 days to USPTO delay (Type A and B delays) which was reduced by 175 days for overlap of Type A and B delays and 886 days for applicant delays. Relevant in this case, of the 886 days attributed to applicant delay, 646 days were assessed for the time between the filing of a Request for Continued Examination (RCE) on February 22, 2011 and the submission of a supplemental Information Disclosure Statement (IDS) on November 29, 2012.
On August 21, 2012, 546 days after Supernus filed the RCE, Supernus was notified by the European Patent Office (EPO) that a Notice of Opposition was filed against a corresponding European patent, which triggered the submission of the supplemental IDS. Supernus argued it was entitled to at least 546 of the 646 days because there was nothing they could have done to conclude prosecution between the period of filing the RCE and when they were notified about the European opposition.
In 1999, Congress passed the PTA statute in an effort to discourage delay in the patent application process. The PTA statute, 35 U.S.C. § 154(b)(2)(C)(i), provides in pertinent part:
“The period of adjustment of the term of a patent under paragraph (1) shall be reduced by a period equal to the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application”
The Federal Circuit held that, on the basis of the plain language of the PTA statute, the USPTO may not count as applicant delay a period of time during which there was no action that the applicant could take to conclude prosecution of the patent because doing so would exceed the time during which the applicant failed to engage in reasonable efforts.
PTA reduction must be the same number of days as the period of the applicant’s failure to engage in reasonable efforts to conclude prosecution. PTA cannot be reduced by a period of time during which there is no identifiable effort in which the applicant could have engaged to conclude prosecution because such time would not be “equal to” and would instead exceed the time during which an applicant failed to engage in reasonable efforts.
In view of the foregoing, the Court found that there was no action that Supernus could have taken to advance prosecution of the patent during the 546-day period between the RCE and when Supernus received the notice of the opposition from the EPO. Particularly, because the EPO notice of opposition did not exist yet. Accordingly, the Court held that the assessment of an additional 546 days of applicant delay is contrary to the plain meaning of the statute because the 646-day total reduction is not equal to a period of time during which Supernus failed to engage in reasonable efforts to conclude prosecution of the ‘897 patent.
The decision can be found here.