'Cellect': why patent term adjustment is ripe for review

Following the Federal Circuit decision on In re Cellect—a dispute centred on Cellect’s allegations against Samsung Electronics for patent infringement—I wrote about why this outcome cannot be ignored.

In that article, I explained the basis for the decision and its practical impact, and posed a number of steps that patent owners and third ­parties should take with In re Cellect in mind.

Now, I’d like to explore what future twists may lie ahead.

En banc review

Following the Federal Circuit’s decision on August 28, 2023, Cellect was granted an extension until November 13, 2023 to file a Petition for Rehearing En Banc.

Cellect’s counsel has been quoted in numerous sources as saying that Cellect will seek review by the en banc Federal Circuit and the US Supreme Court, if necessary.

This case is as good a bet as any for the Federal Circuit to grant en banc review, but are there grounds to reverse the panel decision?

Patent term adjustment

In reaching its decision, the Federal Circuit relied heavily upon the language in 35 U.S.C. § 154(b)(2)(B): “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.”

The Federal Circuit took the position that this language makes clear that any terminal disclaimer should be applied after any patent term adjustment (PTA) is granted; or, in other words, that a PTA cannot adjust a term beyond the disclaimed date in any terminal disclaimer (Merck & Co. v Hi-Tech Pharmacal, 2007).

Both the US Patent and Trademark Office (USPTO) and the Federal Circuit referenced in numerous places in their respective decisions that the differences in language in § 154 and § 156 evince a “clear congressional intent” that “when a terminal disclaimer has been entered in a patent subject to PTA, no patent (or claim) may be extended beyond the disclaimed expiration date.”

But is this a fair reading?

Terminal disclaimer

As noted above, the Federal Circuit relied heavily upon differences in words between § 154 and § 156 as demonstrating that the intent of Congress was for there to be two different frameworks.

However, in so doing, the decision adds the word “terminal” into § 154(b)(2)(B), which does not exist in the statute. The Federal Circuit posited that what was intended in § 154(b)(2)(B) was a “terminal disclaimer”—but that is not what the statute says.

In fact, in contrast to § 154(b)(2)(B), § 154(c)(1) expressly states “subject to any terminal disclaimers”, showing that when Congress intended the statute to refer to a “terminal disclaimer”, it said so.

It could be argued that the disclaimer referred to in § 154(b)(2)(B) is a statutory disclaimer that was filed under § 253, and not a “terminal disclaimer”, which is an instrument designed by the USPTO to address a judicially created doctrine.

Thus, the argument may be that the Federal Circuit’s comparison between § 154 and § 156 was misplaced and led to the incorrect result. Instead, it may have been more appropriate for the Federal Circuit to look within the text of § 154 to decipher the congressional meaning of “disclaimer” as being something other than a terminal disclaimer.

Congressional intent

The Federal Circuit’s entire analysis of congressional intent could be argued as being misplaced, as the doctrine that the court states was intended by Congress is a judicially created doctrine, and not found within the statute.

If Congress intended to codify the ‘obviousness double patenting’ (ODP) doctrine, they could have elected to do so. That they did not potentially undercuts the basis of the Federal Circuit’s decision.

It can also be argued that ODP is a judicially created equitable doctrine, which was created when each patent was given a term of 17 years from patent grant.

The time-based focus of the ODP doctrine at that time was to avoid an unjust timewise extension arising from gamesmanship. However, PTA is the antithesis of gamesmanship and is meant to give back to patentees the effective enforceable patent term that was lost due to administrative delays by the USPTO.

This has led many to question the enduring relevance of the ODP doctrine following the patent term transition from one being 17 years from patent grant, to one that is 20 years from the earliest effective filing date scheme.

Hobson’s choice

In other words, based on Cellect, during the examination of a first patent in a family, the patentee may do everything right and be the proper recipient of a statutory adjustment of patent term due to the USPTO’s failure to act in a timely manner.

However, now a judicially created doctrine trumps the statutory guarantee leading to a Hobson’s choice—choosing between the statutorily guaranteed patent term, or pursuing the full scope to which you are entitled.

As such, it could be argued that it is time for the courts to revisit the broad applicability and even propriety of the ODP doctrine itself.

Although en banc review by the Federal Circuit is uncommon and the US Supreme Court stepping in on a patent matter is quite rare, this is an issue that is ripe for some additional clarity and oversight.

Indeed, there are questions of statutory interpretation and congressional intent, but there is also a broader question of whether a judicial doctrine can trump statute.

With so much at stake, the patent bar can hope that the courts, or even Congress, can draw this issue to a definitive conclusion one way or the other.

Vincent Shier is a partner in the intellectual property practice group at Haynes Boone in Washington, DC. He can be contacted at:  Vincent.Shier@haynesboone.com