Avanir Pharmaceuticals Inc. et al v. Actavis South Atlantic LLC et al
Filing
441
MEMORANDUM OPINION re 371 Rule 12(b)(1) motion to dismiss. Signed by Judge Leonard P. Stark on 10/25/13. (ntl)
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
AVANIR PHARMACEUTICALS, INC.,
AVANIR HOLDING COMPANY, AND
CENTER FOR NEUROLOGIC STUDY,
Plaintiffs,
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v.
ACTAVIS SOUTH ATLANTIC LLC,
ACTAVIS, INC., PAR PHARMACEUTICAL,
INC., PAR PHARMACEUTICAL
COMPANIES, INC., IMP AX
LABORATORIES, INC., WOCKHARDT,
LTD., WOCKHARDT USA, LLC, WATSON
PHARMACEUTICALS, INC., WATSON
LABORATORIES, INC., AND WATSON
PHARMA, INC.,
C.A. No. 11-704-LPS
(CONSOLIDATED)
Defendants.
Jack B. Blumenfeld, Maryellen Noreika, MORRIS, NICHOLS, ARSHT & TUNNELL, LLP,
Wilmington, DE
F. Dominic Cerrito, Eric Stops, Daniel Wiesner, QUINN EMANUEL URQUHART &
SULLIVAN, LLP, New York, NY
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Attorneys for Plaintiffs.
Steven J. Fineman, Jaclyn C. Levy, RICHARDS, LAYTON & FINGER P.A., Wilmington, DE
Richard J. Berman, Janine A. Carlan, Aziz Burgy, Amy E.L. Schoenhard, Timothy W. Bucknell,
Taniel E. Anderson, ARENT FOX LLP, Washington, D.C.
Attorneys for Defendants Par Pharmaceutical, Inc. and Par Pharmaceutical
Companies, Inc.
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John C. Phillips, Jr., Megan C. Haney, PHILLIPS, GOLDMAN & SPENCE, P.A., Wilmington,
DE
Eric H. Weisblatt, Mark A. Pacella, Robert J. Scheffel, WILEY REIN LLP, Washington, D.C.
Attorneys for Defendant Impax Laboratories, Inc.
MEMORANDUM OPINION
October 25, 2013
Wilmington, Delaware.
-c~~' h
STARK, U.S. District Judge:
Pending before the Court is Defendants' Rule 12(b)(1) Motion to Dismiss for Lack of
Subject Matter Jurisdiction Based on the Expiration of Asserted U.S. Patent No. RE38,115. (D.I.
371) For the reasons discussed below, the Court will deny the motion.
I.
PROCEDURAL BACKGROUND
Avanir Pharmaceuticals, Inc., Avanir Holding Company, and Center for Neurologic
Study (collectively, "Avanir" or "Plaintiffs") filed this patent infringement action against Actavis
South Atlantic LLC, Actavis, Inc., Par Pharmaceutical, Inc., Par Pharmaceutical Companies, Inc.,
Impax Laboratories, Inc., Wockhardt, Ltd., Wockhardt USA, LLC, Watson Pharmaceuticals,
Inc., Watson Laboratories, Inc., and Watson Pharma, Inc. (collectively, "Defendants") on August
10,2011. 1 (D.I. 1) There are three patents-in-suit. United States Patent No. RE38,115 (the "'115
patent") relates to formulations containing dextromethorphan ("DM") and quinidine ("Q"), the
active ingredients of Avanir's Nuedexta® product. United States Patent Nos. 7,659,282 (the "'282
patent") and 8,227,484 (the "'484 patent") relate to the use ofDM and Q for the treatment of a
neurological disorder.
On August 5, 2013, Defendants filed a motion to dismiss Plaintiffs' claims arising under
the '115 patent. (D.I. 371) After full briefing, the Court heard argument on this motion during
the pretrial conference on September 3, 2013. A bench trial was then conducted from September
9 to September 13, with an additional day on October 15, 2013. During the September phase of
the trial, both sides presented evidence relating to the motion to dismiss, particularly with respect
1
Several separate but related actions were consolidated on September 26, 2011. (D.I. 21)
The Watson Defendants were added on July 11, 2012. (D.I. 103)
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to the prosecution history of the '115 patent. After hearing that evidence, the Court ordered the
parties to provide supplemental briefing relating to the motion to dismiss, briefing which the
parties completed on September 30, 2013. (See D.I. 419 ~ 6; D.I. 420-26)
II.
PROSECUTION HISTORY
The prosecution history related to the '115 patent involves three interrelated lines of
filings, consisting of (1) a series of original filings, (2) a series of Patent Cooperation Treaty
("PCT") filings, and (3) a reissuance proceeding.
On June 9, 1992, Dr. Richard Smith filed U.S. Patent Application Serial No. 07/896,053
(the "'053 application"). (DTX 32 at A V AN-0403490) An examiner with the United States
Patent and Trademark Office ("PTO") issued a final office action for the '053 application on
April28, 1993, which required a response within three months, by July 28, 2013. (DTX 32 at
AVAN-0403617-18) On August 30, 1993, the applicant mailed a petition for a retroactive onemonth extension for the '053 application. (DTX 32 at A V AN-0403620) On that same date, the
applicant also mailed a conditional express abandonmene of the '053 application (DTX 32 at
AVAN-0403619) as well as a continuation-in-part application ("C-I-P") ofthe '053 application
(see id.), which became known as U.S. Patent Application Serial No. 08/114,845 (the "'845
application") (DTX 127 at AVAN-0316787). The PTO granted the one-month extension for the
'053 application up to August 30, 1993. (DTX 32 at AVAN-0403678) No further extensions
were either sought or received. On December 8, 1993, the examiner issued a notice of
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The conditional abandonment stated, "[a]pplicant hereby expressly abandons the aboveidentified ['053] patent application. This abandonment is conditional upon granting of a serial
number and filing date for the enclosed C-I-P application [i.e., what became the '845
application]." (DTX 32 at AVAN-0403619)
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abandonment of the '053 application. (DTX 32 at AVAN-0403621) In the meantime, on
September 3, 1993, the '845 application was filed. (DTX 127 at AVAN-0316787)
On September 22, 1994, Drs. Richard Smith and Jonathan Licht filed PCT International
Application No. PCT/US94/10771 (the "'771 application"). (DTX 638 at AVAN-0207672-710)
Subsequently, on September 19, 1996, Drs. Smith and Licht filed a U.S. national stage
application of the '771 application, known as U.S. Patent Application Serial No. 08/464,792 (the
"'792 application"). (DTX 179 at AVAN-0207665) Neither the '771 application (see DTX 638)
nor the national stage '792 application (see DTX 179 at AVAN-0207667) included priority
claims to either the '053 or '845 applications.
On March 10, 1997, during prosecution of the '792 application, the examiner rejected
claims 1-4 as obvious under 35 U.S.C. § 103(a) over the Zhang 1992 reference. 3 (!d. at AVAN0207773) In response, the applicants did not address the teachings of the Zhang 1992 reference,
but instead attempted to claim priority back to the '053 application, whose filing date pre-dated
the Zhang 1992 reference. (See id. at AVAN-0207864) Specifically, the applicants contended
that the '792 application enjoyed a continuous line of co-pendency back to the '053 application
through (i) the '845 application and (ii) the '771 application. (!d.) On December 19, 1997, the
examiner mailed a notice of allowability of the '792 application; no reason for the allowance was
provided. (See id. at AVAN-0207874-77) On October 7, 1998, the examiner issued an
examiner's amendment removing the '053 and '845 applications from the list of cross-referenced
patent applications in the first paragraph of the specification of the '792 application and replacing
3
Zhang et al., "Dextromethorphan: Enhancing its systemic availability by way of lowdose quinidine-mediated inhibition of cytochrome P4502D6," Clin. Pharmacal. Ther., 51:647-55
(1992) ("Zhang 1992"). (DTX 60 at AVAN-0207762-70)
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them with reference to the '771 application. (!d. at A V AN-0207883-84) The '792 application
issued as U.S. Patent No. 5,863,927 (the "'927 patent") on January 26, 1999, without any priority
claim to the '053 or '845 applications. (DTX 20)
On January 18, 2002, the applicants filed U.S. Patent Application Serial No. 10/052,698
(the "'698 application") for reissuance of the '927 patent. (DTX 180 at AVAN-0209475-77) The
applicants sought to claim priority to the '053 and '845 applications. (/d.) The examiner issued
the '698 application as the '115 patent without a reference to the '053 and '845 applications on the
face of the patent; however, the '053 and '845 applications were listed in the first paragraph of the
'115 patent specification. (DTX 18)
During the present litigation, on March 26, 2013, Plaintiffs filed an ePetition to revive the
'053 application and correct what Defendants allege was a lack of co-pendency with the '845
application. (D.I. 371 Ex. B; see also D.I. 397 at 3) Plaintiffs did not file a terminal disclaimer
with the ePetition. (See D.I. 371 Ex. B) The ePetition was granted on the same date it was filed,
March 26, 2013. (!d. at 4)
III.
LEGAL STANDARDS
Federal Rule of Civil Procedure 12(b)( 1) authorizes dismissal of a complaint for lack of
jurisdiction over the subject matter. As the question of subject matter jurisdiction under Rule
12(b)(1) is not unique to patent law, it is governed by the law of the regional Circuit, here the
Third Circuit. See Toxgon Corp. v. BNFL, Inc., 312 F.3d 1379, 1380 (Fed. Cir. 2002) ("We
review a dismissal for lack of subject matter jurisdiction according to regional circuit law, since
it is a procedural question not unique to patent law.").
Motions brought under Rule 12(b)(1) may present either a facial or factual challenge to
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the Court's subject matter jurisdiction. See Gould Elec., Inc. v. United States, 220 F.3d 169, 176
(3d Cir. 2000). In reviewing a factual challenge to the Court's subject matter jurisdiction, the
Court is not confined to the allegations of the complaint, and the presumption of truthfulness
does not attach to those allegations. See Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d
884, 891 (3d Cir. 1977). Instead, the Court may consider evidence outside the pleadings,
including affidavits, depositions, and testimony, to resolve any factual issues bearing on
jurisdiction. See Gotha v. United States, 115 F.3d 176, 179 (3d Cir. 1997). Once the Court's
subject matter jurisdiction is challenged, the plaintiff bears the burden of proving jurisdiction
exists. See Mortensen, 549 F.2d at 891.
IV.
DISCUSSION
Plaintiffs contend that the '115 patent claims priority to June 9, 1992, the filing date of the
'053 application, through the '845 application. 4 (D.I. 397 at 1-3) This priority claim is predicated
on Plaintiffs' assertion that the '053 and '845 applications were co-pending. See 35 U.S.C. § 120
("No application shall be entitled to the benefit of an earlier filed application under this section
unless an amendment containing the specific reference to the earlier filed application is submitted
at such time during the pendency of the application."). 5 During the instant litigation, however,
4
As discussed above, during prosecution of the '792 application, the applicants also
attempted to claim priority through the '771 application. It is unclear, however, whether
Plaintiffs are advancing this theory. (See D.I. 397, 420; see also Trial Tr. at 988 ("I agree that
they didn't initially claim priority when they filed the PCT ['771] application .... ") (testimony of
Plaintiffs' expert, Mr. Godici))
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In the text of this opinion, the Court quotes and applies the current version of§ 120. An
earlier version of§ 120 was in effect at the time the '845 application was filed, and it provided:
An application for patent for an invention disclosed in the manner
provided by the first paragraph of section 112 of this title [35
5
Defendants advised Plaintiffs that, in Defendants' view, the '053 application was abandoned three
days before the '845 application was filed, creating a gap in co-pendency. (See D.I. 423 at 1; D.I.
423-1 Ex. A at 5 (Watson's Invalidity Contentions)) At least in part as a response to Defendants'
contentions, on March 26, 2013 Plaintiffs filed an ePetition to revive the '053 application and
correct any lack of co-pendency. (See DTX 174; see also D.I. 397 at 3) In Defendants' view, the
consequence of Plaintiffs' filing of the ePetition is that the '115 patent retroactively expired on
June 9, 2012- rather than January 26, 2016, which Defendants agree was the '115 patent's preePetition expiration date (D .I. 371 at 2 n.1) - due to the terminal disclaimer Plaintiffs should
have filed (but did not) under 37 C.F.R. § 1.137(d)(2). In other words, Defendants assert that, in
exchange for revival of the abandoned '053 application, which would allow Plaintiffs to get
behind certain prior art, Plaintiffs were required to dedicate the terminal period of their patent
term to the public, via a terminal disclaimer. (D.I. 371 at 1) Plaintiffs' failure to file a terminal
disclaimer should, Defendants continue, lead to dismissal ofPlaintiffs' attempt to enforce the
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U.S.C. § 112] in an application previously filed in the United
States, or as provided by section 363 of this title [35 U.S.C. § 363],
which is filed by an inventor or inventors named in the previously
filed application shall have the same effect, as to such invention, as
though filed on the date of the prior application, if filed before the
patenting or abandonment of or termination of proceedings on the
first application or on an application similarly entitled to the
benefit of the filing date of the first application and if it contains or
is amended to contain a specific reference to the earlier filed
application.
35 U.S.C. § 120 (1993). There is no material difference, for the purposes of the issues before the
Court, between the 1993 version of the statute and the current version. The parties evidently
agree on this point, as they do not address the fact that the statute has been amended. Indeed,
even Plaintiffs acknowledge that§ 120 "requires that an application claiming the benefit of an
earlier filing date be co-pending with the parent application." (D.I. 422 at 8) (emphasis in
original)
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'115 patent, as the Court should "equitably enforce the consequences ofPlaintiffs' actions by
declaring the '115 patent expired and dismissing all related claims." (D.I. 409 at 10; see also D.I.
371 at 9) It follows, as Defendants see it, that the Court lacks subject matter jurisdiction to
resolve issues relating to the infringement or validity of this patent.
Plaintiffs respond on multiple grounds. First, Plaintiffs contend that this Court is the
wrong forum to address Defendants' contentions, as improper revival and prosecution
irregularities are not grounds on which the Court may invalidate a patent. Next, Plaintiffs assert
that there was no gap in co-pendency of the pertinent patent applications and, even if there were,
the ePetition corrected any resulting problems. Plaintiffs further insist that no terminal
disclaimer was required to accompany the ePetition. Finally, Plaintiffs contend that even if they
are incorrect on each of the preceding points, Defendants are entitled to no relief, and especially
not a judicial declaration that the '115 patent is expired.
The Court considers each of these issues below.
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A.
Jurisdiction
As a threshold issue, the Court must determine if this Court is an appropriate forum to
decide the issues Defendants have raised in their motion. Plaintiffs, relying on the Federal
Circuit's decision in Aristocrat Technologies Australia PTY Ltd. v. Int'l Game Tech., 543 F.3d
657 (Fed. Cir. 2008), assert that "any determination of whether a terminal disclaimer was
required is within the exclusive province of the PTO," so Defendants may only litigate their
present contentions via a separate action brought pursuant to the Administrative Procedure Act
("APA"), 5 U.S.C. § 701 et seq., which would have to be filed against the PTO in the Eastern
District of Virginia. (D.I. 420 at 6-7) Plaintiffs argue that "[b ]ecause Aristocrat unequivocally
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foreclosed the ability of a party to assert improper revival as a defense to patent infringement in
the underlying infringement litigation, the only potential claim Defendants might assert to
challenge the grant of the ePetition without a terminal disclaimer is an AP A claim that the PTO's
grant of the petition was arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law." (D.I. 420 at 7) (internal quotation marks omitted)
While Aristocrat holds that "improper revival may not be asserted as a defense in an
action involving the validity or infringement of a patent," 543 F .3d at 663, Aristocrat did not
consider a challenge to a court's subject matter jurisdiction. 6 That is, Aristocrat involved a
validity challenge under Title 35 relying on improper revival as a defense to liability, not, as here,
an issue as to the jurisdiction of a court to resolve disputes over patent priority and patent term,
which is an issue arising under 28 U.S.C. § 1338(a). The fundamental initial question before the
Court is whether this Court has jurisdiction, not (as in Aristocrat) whether the patent-in-suit is
invalid because of "improper revival." Nothing in Aristocrat precludes this Court from deciding
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the jurisdictional question. More fundamentally, nothing in Aristocrat- nor any other authority
to which the parties have cited- trumps the well-settled, general proposition that federal courts
6
The Court recognizes that Aristocrat contains broad statements as to the non-viability of
a defense of "improper revival." See 543 F .3d at 659 ("We conclude that 'improper revival' is not
a cognizable defense in an action involving the validity or infringement of a patent."); id. at 661
("We conclude that 'improper revival' may not be raised as a defense in an action involving the
validity or infringement of a patent."); id. at 663 ("Because the proper revival of an abandoned
application is neither a fact or act made a defense by title 35 nor a ground specified in part II of
title 35 as a condition for patentability, we hold that improper revival may not be asserted as a
defense in an action involving the validity or infringement of a patent."); id. ("[I]mproper revival
is not a defense .... "); id. at 665 ("[W]e have concluded that 'improper revival' is not a
cognizable defense .... "). However, under the very different circumstances presented here, the
implications of Aristocrat for the issues confronting this Court are not straightforward. Hence, it
will be necessary at various points in this opinion to address how Aristocrat does, and does not,
apply.
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always possess the authority and obligation to examine their own jurisdiction over disputes
brought before them. See, e.g., Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006) ("[C]ourts ...
have an independent obligation to determine whether subject-matter jurisdiction exists, even in
the absence of a challenge from any party.").
Therefore, the Court will proceed to the next steps of the analysis.
B.
Co-pendency
The Court must determine whether there was a lack of co-pendency between the '053
application and the '845 application. Having considered the evidence of record as well as the
parties' arguments, including the trial testimony and extensive briefing, the Court finds that there
was a three-day gap between the abandonment of the '053 application and the filing of the '845
application. Specifically, the '053 application was abandoned on August 30, 1993, but the '845
application was not filed until September 2, 1993. (D.I. 127 at AVAN-0316787; see also D.I.
397 Ex. Bat Par Pharma DEX 0014576) 7
Plaintiffs' own expert, Nicholas Godici, acknowledges the gap that occurred between the
'053 application's abandonment and the '845 application's filing. (D.I. 409 Ex. A at 89 (stating
that nothing in file history indicates that '053 application had extension beyond August 30); id. at
81 (noting that '845 application has September 2 filing date); Trial Tr. at 1006 (agreeing that '845
application's filing date was September 2); id. at 1007 (agreeing generally that there would have
7
As noted earlier, the PTO issued the final office action on the '053 application on April
28, 1993, requiring a response within three months. (DTX 32 at AVAN-0403617-18) On
August 30, 1993, the applicant filed a petition for a one-month extension (DTX 32 at AVAN0403620), which the PTO granted, keeping the the '053 application alive until August 30, 1993
(DTX 32 at AVAN-0403678). No additional extensions were sought or received. The '845
application was filed three days later, on September 2, 1993. (DTX 127 at AVAN-0316787)
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been no need to file petition to revive '053 application if it had been co-pending with '845
application))
Plaintiffs offer several, unconvincing arguments for the purported existence of copendency. Plaintiffs contend that the "'053 application's abandonment was conditional upon the
granting of the filing date for the '845 application." (D.I. 420 at 3; see also D.I. 397 Ex. A at
ParPharma DEX 0014480) While it seems clear from the prosecution history that the applicant
intended that the '053 application not be abandoned until after the '845 application was filed, it is
nonetheless the case that this is not what actually occurred. The undisputed evidence shows that,
instead, the applicant prosecuted the '053 application only until August 30, 1993. (DTX 32 at
AVAN-0403678) Under these circumstances, the result is mandated by statute: "Upon failure of
the applicant to prosecute the application ... the application shall be regarded as abandoned." 35
U.S.C. § 133.
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Plaintiffs next argue that "even if the conditional abandonment of the '053 application
was ineffective to initially establish co-pendency, the evidence shows that the PTO exercised its
discretion to establish co-pendency and grant the '845 application ... priority to the '053
application." (D .I. 420 at 3; see also D .I. 422-1 Ex. K at A VAN -031683 8 (examiner writing that
'053 and '845 applications were co-pending)) Essentially, Plaintiffs contend that because the
PTO considered the '053 and '845 applications to be co-pending during prosecution (before the
ePetition was filed), it is improper for the Court even to question the PTO's decision on this
point. In making this argument, Plaintiffs rely again on Aristocrat, as well as Magnivision, Inc.
v. Bonneau Co., 115 F.3d 956 (Fed. Cir. 1997), for the proposition that "[a]bsent proof of
inequitable conduct, the examiner's or the applicant's absolute compliance with the internal rules
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of patent examination becomes irrelevant after the patent has issued." Aristocrat, 543 F .3d at
663 (citing Magnivision, 115 F .3d at 960).
Again, however, Plaintiffs read too much into these decisions, which are predicated on
the principle that "[t]here is good reason not to permit procedural irregularities during
prosecution, such as the one at issue here, to provide a basis for invalidity." Aristocrat, 543 F.3d
at 663 (emphasis added). The issue before this Court, however, is whether, even ifthe PTO did
treat the '053 and '845 applications as co-pending, did co-pendency actually exist? This inquiry
is statutorily demanded in determining the correct priority date; for any patent application
claiming priority to an earlier application, co-pendency is required under§ 120. Aristocrat did
not concern co-pending applications, and it did not address§ 120. In the Court's view,
Aristocrat does not prohibit a factual inquiry into the existence of statutorily required copendency.
Plaintiffs have cited no authority for the proposition that the PTO has "discretionary
authority" to treat two applications as co-pending when, as a matter of fact, they were not copending. 8 Section 120 is written in absolute terms- "No application shall be entitled to the
benefit of an earlier filed application under this section unless an amendment containing the
8
To the extent that Plaintiffs suggest the prosecution ofthe '792 application cured any
lack of co-pendency between the '053 and '845 applications (see, e.g., D.I. 397 at 8-9), this is
incorrect, for reasons including that the '792 application could not claim priority to the '053 or
'845 applications. (See Trial Tr. at 954-55 (testimony of Defendant's expert, Mr. Carmichael))
MPEP § 1893.03(c) states that for "a national stage application (of international application 'X')
to obtain benefit under 35 U.S.C. 120 of a prior U.S. national application, the international
application ('X') must include an appropriate reference in the Request to the prior U.S. national
application." MPEP § 1893.03(c) (6th ed., Rev. 3, July 1997). The '771 application- the
international parent of the national stage '792 application- made no reference to the '053 or '845
applications. (DTX 638) Ultimately, the '792 application issued as the '927 patent with no
priority claim. (Id. at 953-54)
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specific reference to the earlier filed application is submitted at such time during the pendency
of the application."- which does not suggest the PTO has such discretion. Even if the PTO has
such discretion and exercises it, Plaintiffs have cited no authority for the proposition that a Court
faced with determining the proper priority date of a patent-in-suit cannot, nonetheless, consider
what may be the actual facts with respect to the non-existence of co-pendency of two
applications.
Plaintiffs contend that the issuance of the '115 reissue patent, in which Plaintiffs
successfully added the '053 and '845 applications to the language of the specification under
"Related Applications" (D.I. 422 ExEat 1), is dispositive of co-pendency. 9 (D.I. 422 at 8) But
Plaintiffs point to no authority for the proposition that a patent applicant or the PTO can cure a
lack of co-pendency through prosecution of a reissue. 10 During reissue proceedings, the statutory
9
As a factual matter, it is unclear whether the PTO analyzed either co-pendency or
priority during the '115 reissuance proceedings. In their reissue application, the applicants sought
to amend the specification to add language about the '053 and '845 applications and allow a
priority claim to them. (See DTX 180; Trial Tr. at 955) The PTO accepted the change to the
specification's language; however, the PTO appears never to have conducted any review of the
'053 and '845 applications which formed the basis for the applicants' change in priority. Indeed,
the examiner did not check the box indicating acknowledgment of the priority claim (DTX 180 at
AVAN-0209537); the Bib Data Sheet for cross-checking of continuity data shows no priority
claims to these applications (id. at AVAN-0209507); and there is no priority claim to the '053 or
'845 applications on the face ofthe '115 patent (D.I. 426-1). Consequently, the statement added
to the specification lists prosecution history but does not necessarily stake out a position on
priority date. (See Trial Tr. at 955-57)
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Plaintiffs cite 37 C.F.R. § 178(a)(2)(iii) (2002, as amended Dec. 28, 2001) (D.I. 422 at
8), which states that "[i]fthe later-filed application is a nonprovisional application, the reference
required by this paragraph must be included in an application data sheet(§ 1. 76), or the
specification must contain or be amended to contain such reference in the first sentence
following the title." While such a reference is necessary to establish priority, nothing in this
section suggests that compliance with this single provision is itself sufficient to cure a lack of copendency or to establish priority.
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requirement of§ 120 remains- and, here, it was not satisfied.
Hence, the Court finds, based on the evidence, most of which is undisputed, that there
was a lack of co-pendency ofthe '053 and '845 applications.
C.
Terminal Disclaimer
Because there was a lack of co-pendency, and the '053 application was abandoned, the
Court must next consider Plaintiffs' attempt to revive that application. Plaintiffs filed a petition
to revive; however, Plaintiffs did not include a terminal disclaimer with their petition. The Court
agrees with Defendants that, under the circumstances here, a grantable petition to revive would
have to be accompanied by a terminal disclaimer.
On March 26, 2013, Plaintiffs filed an ePetition, which sought to claim priority for the
'115 patent back to a revived '053 application. (D.I. 371 Ex. Bat 3) To determine whether this
ePetition required a terminal disclaimer, the Court must apply 37 C.F.R. § 1.137(d)(1) & (2), 11
which provides (with emphasis added):
Terminal disclaimer. (1) Any petition to revive pursuant
to this section in either a utility or plant application filed
before June 8, 1995, must be accompanied by a terminal
disclaimer and fee as set forth in § 1.321 dedicating to the
public a terminal part of the term of any patent granted
thereon equivalent to the lesser of: (i) The period of
abandonment of the application; or (ii) The period
extending beyond twenty years from the date on which the
application for the patent was filed in the United States ...
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(2) Any terminal disclaimer pursuant to paragraph (d)(l)
of this section must also apply to any patent granted on a
continuing utility or plant application filed before June 8,
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Plaintiffs filed their ePetition pursuant to 37 C.F.R. § 1.137(b), which states that a
"grantable petition pursuant to this paragraph must be accompanied by ... any terminal
disclaimer ... required pursuant to paragraph (d) of this section."
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1995, or a continuing design application, that contains a
specific reference under 35 U.S. C. 120, 121, or 365(c) to
the application for which revival is sought.
Section 1.137(d)(1) & (2) required a terminal disclaimer to be filed with the ePetition.
With regard to the conditions set out in paragraph (d)(1), (i) Plaintiffs submitted a petition to
revive pursuant to§ 1.137 (D.I. 371 Ex. B) and (ii) the utility application being revived, the '053
application, was filed on June 9, 1992, predating June 8, 1995. Accordingly, to be grantable, the
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petition to revive the '053 application required a terminal disclaimer. (See 37 C.F.R. § 1.137(b);
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see also Trial Tr. at 958-60) 12 With regard to the conditions set out in paragraph (d)(2), (i) the
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'115 patent was a patent granted from a continuing utility application; (ii) the '115 patent was
filed on September 22, 1994, 13 predating June 8, 1995; and (iii) the '115 patent contains a specific
reference under 35 U.S.C. § 120 to the '053 application, which is the application for which
revival is sought. (D.I. 371 Ex. Fat ParPharma DEX 0016590-91) It follows that in order for
the petition to revive the '053 application to be grantable, the terminal disclaimer required
pursuant to (d)(1) "must also apply" pursuant to (d)(2) to the '115 patent. (See 37 C.F.R. §
12
Section 1.137(d)(3) provides, "The provisions of paragraph (d)(1) of this section do not
apply to applications for which revival is sought solely for purposes of co-pendency with a utility
or plant application filed on or after June 8, 1995, to lapsed patents, to reissue applications, or to
reexamination proceedings." None ofthese exceptions applies here: the '053 application was
filed before June 8, 1995 and is not a reissue application, and no lapsed patents or reexamination
proceedings are involved here.
13
The filing date of the '115 patent is the filing date of the international PCT parent
application (the '771 application), which is September 22, 1994. See 35 U.S.C. § 252 (resissue is
continuation of original patent); D.l. 371 Ex. A at ParPharma DEX 0014599; D.l. 409 Ex. Cat~~
15-16 (stating that application leading to '927 patent- and, ultimately, '115 patent- has filing
date of September 22, 1994)
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1.37(b); see also Trial Tr. at 960-63) 14
Plaintiffs' arguments against this conclusion are unavailing. Plaintiffs contend that the
'115 patent does not come within the scope of§ 1.137(d)(2) because it is a reissue application
and the reissue application's actual filing date is after June 8, 1995. (D.I. 422 at 5) However, the
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statute provides that "every reissue patent shall have the same effect and operation in law" as the
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original patent and, further, "shall constitute a continuation thereof and have effect continuously
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the logical conclusion from this statutory language that a resissue application is, indeed, a
from the date of the original patent." 35 U.S.C. § 252. Plaintiffs cite no authority to contradict
"continuing ... application" within the meaning of§ 1.137(d)(2). Hence, the '115 resissue patent
is, for these purposes, a continuation of the '927 patent, which is traced back to the '771
application, which was filed before June 8, 1995, on September 22, 1994. It follows that
Plaintiffs' contention that the applicable application date is January 18, 2002 (D.I. 422 at 5)- the
filing date of the '698 reissue application- is incorrect. 15
14
Plaintiffs argue that no patent ever issued from the '053 application, so there is no
patent term to disclaim under paragraph (d)(1), and therefore no terminal disclaimer is required
under paragraph (d)(2) with respect to the '115 patent. (See D.I. 397 at 10) This is not
convincing. Because the conditions of (d)(1) are satisfied- even though no term of the '053
application, which is only an application, can be disclaimed - (d)(2) requires a further
examination to identify any other patents to which the same terminal disclaimer "must also
apply." Here, that includes the '115 patent.
15
Plaintiffs further argue that "the relevant filing date for purposes of 3 7 CFR
§ 1.137(d)(2) is the actual filing date, rather than the effective date." (D.I. 422 at 5) However,
Plaintiffs' argument again presupposes that the relevant date is calculated from the reissue
application, rather than from the original patent. As explained above, given the statutory
relationship between the original patent and its reissue, the filing date of the '115 reissue
application is irrelevant to the analysis. It is the original patent's critical date that governs.
Whether the actual filing date of the original '927 patent is used (September 22, 1994) or that
patent's effective date (alleged by Plaintiffs to be June 9, 1992) is immaterial here, as both are
before June 8, 1995.
15
Plaintiffs argue no terminal disclaimer was required because the '053 application never
issued as a patent and, therefore, the rationale behind terminal disclaimers does not apply,
because there is no improper extension of the '053 patent term. (D.I. 397 at 11) As an initial
matter, Plaintiffs cite no authority for what they purport to be the rationale for the terminal
disclaimer requirement. 16 Further, Plaintiffs' contention is inapposite: the term at issue is the
term of the '115 patent, as affected by paragraph (d)(2), not the term of any patent that issued
from the '053 application (which would be the subject of paragraph (d)(1)). In any event, to the
extent Plaintiffs are correct that "the purpose of a terminal disclaimer is to prevent a patentee
from improperly extending its monopoly over patented subject matter" (id. ), here that rationale
favors requiring a terminal disclaimer, as without a disclaimer the '115 patent would enjoy a
priority date stretching back to June 1992 yet would still retain its full term until January 2016.
Plaintiffs also suggest that if a terminal disclaimer were required, the PTO would have
rejected their ePetition, so the PTO's acceptance of the ePetition indicates that no terminal
disclaimer was necessary. (See id. at 5) This contention overlooks the undisputed evidence that
the PTO's automated system automatically granted the ePetition based on Plaintiffs' checking a
box indicating Plaintiffs' position that a "[t]erminal disclaimer and fee are not required" (DTX
32 at AVAN-0403496), without any independent evaluation of the merits of that position by
16
The Court has found little discussion of the rationale for a terminal disclaimer, and
none arising in circumstances similar to those presented here. For instance, there are decisions
addressing terminal disclaimers under 35 U.S.C. § 253, in the context of obvious-type doublepatenting. See, e.g., Merck & Co., Inc. v. Hi-Tech Pharmacal Co., Inc., 482 F.3d 1317, 1323
(Fed. Cir. 2007) ("The purpose of the terminal disclaimer [is] to prevent extension of [the] patent
term for subject matter that would have been obvious over an earlier filed patent.").
16
anyone (or even by any computer) (see DTX 592; D.I. 409 Ex.
Cat~
12 (stating PTO
automatically grants ePetition "[o]nce all of the items are correctly filled out," without
undertaking review on the merits); Trial Tr. at 963-64).
In sum, in order to be properly granted, Plaintiffs' ePetition was required to include a
terminal disclaimer, which would have dedicated to the public any portion of the '115 patent's
term extending beyond June 9, 2012. 17 It is undisputed that Plaintiffs failed to include such a
terminal disclaimer with their March 2013 ePetition.
D.
Remedy
Having determined that Plaintiffs' ePetition was required to be accompanied by a terminal
disclaimer, which would have resulted in the '115 patent's expiration, and it being undisputed that
Plaintiffs did not file a terminal disclaimer, the Court next confronts the difficult matter of
discerning the appropriate consequences. Defendants request that the Court either require
Plaintiffs to return to the PTO and file a petition accompanied by the necessary terminal
disclaimer or, alternatively, simply find that the '115 patent is expired. (D.I. 421 at 8-9)
17
Pursuant to 37 C.F.R. § 1.137(d)(1)(i) & (ii), the terminal disclaimer
dedi cat[ es] to the public a terminal part of the term of any patent
granted thereon equivalent to the lesser of: (i) The period of
abandonment of the application; or (ii) The period extending
beyond twenty years from the date on which the application for the
patent was filed in the United States or, if the application contains
a specific reference to an earlier filed application(s) under 35
U.S.C. 120, 121, or 365(c), from the date on which the earliest
such application was filed.
The '053 application was abandoned for more than nineteen years; hence, the period of the
required disclaimer is determined pursuant to (d)( 1)(ii), and is equal to any patent term beyond
twenty years from the '053 application's filing date, i.e., the time between June 9, 2012 and
January 26, 2016.
17
Plaintiffs, understandably, oppose both of these proposed remedies. Plaintiffs observe that, had
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the PTO determined that the March 2013 ePetition required a terminal disclaimer, the PTO's
response would have been to dismiss the petition and provide Plaintiffs the option to refile. (D.I.
397 at 1; see also Trial Tr. at 994 (testimony of Plaintiffs' expert, Mr. Godici)) Defendants
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appear to agree that this is what would have occurred.
It follows, in the Court's view, that Plaintiffs should not be left with something less than
they would have had if the PTO had reviewed the ePetition on its merits and determined that a
terminal disclaimer was required. Defendants cite no authority for the proposition that the Court
is obligated to order Plaintiffs to refile their petition with a terminal disclaimer or to declare the
'115 patent expired. Nor do Defendants make a convincing case for the Court exercising
whatever equitable discretion it has to accomplish such a result.
Unfortunately, Plaintiffs' proposed "remedy" is untenable as well. Plaintiffs ask the Court
to do nothing, allowing them to retain the '115 patent's term until January 26, 2016 while also
obtaining a priority date back to June 9, 1992. (See D.I. 422 at 10) For this conclusion, Plaintiffs
rely again on Aristocrat, but again their position is unavailing. In Aristocrat, the defendants
sought to invalidate the '215 patent, contending the original '215 application was abandoned by
an improperly granted petition to revive and that this, alone, was sufficient grounds for a defense
of invalidity. See 543 F.3d at 660. 18 Indeed, since the '215 patent relied on only a single
18
The Aristocrat defendants argued, "Plaintiffs abandoned their '215 Application by:
(1) failing to timely file the national fee that was due on January 10, 2000 under 35 U.S.C. § 371;
(2) failing to timely file a response to the PTO's June 5, 2001 notice reaffirming abandonment
under 35 U.S.C. § 133; and (3) failing to make an adequate 'showing' in their Petition to Revive
that their delays were 'unavoidable,' as specifically required under Sections 133 and 371."
Aristocrat Technologies Australia PTY Ltd. v. Int'l Game Tech., 491 F. Supp. 2d 916, 923 (N.D.
Cal. 2007) rev'd, 543 F.3d 657 (Fed. Cir. 2008).
18
application, the defendants' improper revival argument, if accepted, would have eliminated the
only basis for the '215 patent's existence. See id. Here, by contrast, the Court's finding of
abandonment of the '053 application simply affects the priority date; it does not itself directly
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form the grounds for "a defense that the patent is invalid." The prosecution history here is far
more complicated than the history in Aristocrat and, here, there are several other applications to
which Plaintiffs can claim priority. 19
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Aristocrat is further distinguishable on other grounds as well. In reaching its holding in
Aristocrat, the Federal Circuit observed that improper revival is not a defense that is found either
in § 282 or elsewhere in the Patent Act. The Court further reasoned that it could reject
recognition of the proposed improper revival defense because it did not, in Aristocrat, confront a
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situation in which the "failure to impose invalidity for violation of the statute would encourage
noncompliance." 543 F.3d at 664. The Court could "discern no legitimate incentive for a patent
applicant to intentionally abandon its application, much less to attempt to persuade the PTO to
improperly revive it." !d. Specifically, the Court concluded that because "patents filed after
enactment of the Uruguay Round Agreements Act ["GATT"20}, like the patents at issue here,
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19
A finding that the priority date of the '115 patent is after the Zhang 1992 reference does
not automatically invalidate any claim of the '115 patent. Plaintiffs have had an opportunity at
trial to present evidence as to the non-obviousness of the patent claims. The Court has not yet
made any findings as to the validity of the '115 patent and will not do so until after receiving and
reviewing the parties' post-trial briefs.
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The General Agreement on Tariffs and Trade ("GATT") is the basis for the June 8,
1995 date called out in§ 1.137(d). Patents that issued from applications filed after June 8, 1995
receive a 20-year term from the date of filing of the application. See 35 U.S.C. § 154(a)(2).
Patents claiming priority to applications filed before June 8, 1995, however, have a patent term
which is the greater of 20 years from the date of the filing of the application or 17 years from the
date of the grant of the patent, subject to any terminal disclaimers. See id. § 154(c)(l).
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generally have a term that runs twenty years from the filing date (instead of seventeen years from
issue) ... abandoning the application would only serve to shorten the applicant's right to
exclude." Id. (emphasis added).
Here, by contrast, the '115 patent relates to a pre-GATT filing, giving rise to a situation in
which the disincentives present in Aristocrat do not exist. Instead, under the circumstance here,
an applicant receives a term of 17 years from issuance. Because the patent term is not governed
by the filing date, the patent term "clock" does not start "ticking" during prosecution, which
provides an opportunity for an applicant to abandon the application and stretch out prosecution
without consequences for the patent term. In tum, the automated ePetition process provides an
opportunity for the applicant to revive the application to obtain an earlier priority date from an
abandoned application and simply check the "terminal disclaimer not required" box to avoid
dedicating a terminal part of the patent term to the public. The result is, as the present case
illustrates, that an applicant may stretch back the priority date to avoid prior art while keeping a
full patent term. Thus, unlike the post-GATT filings involved in Aristocrat, abandonment of a
pre-GATT filing in no way "shorten[s] the applicant's right to exclude"- unless a terminal
disclaimer is required. Hence, under the circumstances here, a failure to enforce the terminal
disclaimer requirement would encourage noncompliance with prosecution procedures.
Additionally, here, unlike what was attempted by the defendants in Aristocrat, the Court
is not permitting Defendants to argue that improper revival, or any other prosecution irregularity,
invalidates the '115 patent. Instead, under the circumstances here, the Court is faced with issues
relating to the determination of a priority date, and the Court's resolution of the parties' dispute
does not mandate invalidation of the patent. Therefore, the Court is not permitting "procedural
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irregularities ... to provide a basis for invalidity," Aristocrat, 543 F.3d at 663; instead, the Court
is considering the entirety of the prosecution history for purposes of determining the correct
priority date for a patent-in-suit. 21
Having rejected both parties' positions with respect to an appropriate remedy, the Court
must determine what to do. The resolution to this question begins from the premise that had the
PTO dismissed the ePetition, while the '115 patent would not expire until January 26, 2016, the
'115 patent also would not claim priority to the '053 application filing date; rather, the '115 patent
could only claim priority to the '845 application, which was filed on September 2, 1993 and was
not abandoned. Under the circumstances, the Court concludes that the '115 patent may either
(i) claim priority back to June 9, 1992- the '053 application's filing date- and then its terminal
period must be disclaimed, pursuant to § 1.137(d)(2), meaning the '115 patent would have
expired on June 9, 2012; or (ii) claim priority to September 2, 1993- the '845 application's filing
date - and would not expire until the end of its full term, on January 26, 2016. 22 Plaintiffs, then,
have options, and the Court sees no reason to foreclose Plaintiffs from making an election to
21
Plaintiffs cite to Promega Corp. v. Applied Biosystems, LLC, No. 12-3333, D.I. 274 at
14 (N.D. Ill. Apr. 4, 2013) (see D.I. 420 at 4-5), in which Judge Posner, citing Aristocrat, stated
that "[t]he fate of protection for intellectual property ... should not be allowed to tum on a slip
of scheduling of a single day, over twenty years ago." There, Judge Posner would have rejected a
defense argument relating to priority date that was based on an alleged one-day break in copendency in the chain of patent applications that occurred back in February 1991. See id. The
Promega court's statement was dicta, as the court found both that there was no break in copendency and that defendants' argument to the contrary had been waived. See id. In any event,
notwithstanding Promega, this Court concludes that, in the circumstances presented by the
instant case, the prosecution history here does impact the priority date (although no finding has
yet been made with respect to validity).
22
Pursuant to 35 U.S.C. § 154(c)(l), the '115 reissue patent's term is calculated from the
issuance date of the original '927 patent, which is January 26, 1999 (DTX 20)~
21
pursue whichever is their preferred option.
Accordingly, the Court concludes that Plaintiffs' ePetition to revive the abandoned '053
application was inoperative,23 due to Plaintiffs' failure to comply with the terminal disclaimer
requirements of37 C.F.R. § 1.137(d)(1) & (2). In tum, the '053 application remains abandoned
and, pursuant to 35 U.S.C. § 120, Plaintiffs cannot claim its priority date. At present, the '115
patent can only claim priority back to the '845 application's filing date, which is September 2,
1993. Alternatively, Plaintiffs may seek to refile their petition to revive the '053 application,
accompanied this time by the required terminal disclaimer, which would result in an earlier
priority date as well as an earlier expiration date.
At this point, the '115 patent continues to enjoy a presumption of validity, see 35 U.S.C.
§ 282; Cardinal Chern. Co. v. Morton lnt'l, Inc., 508 U.S. 83, 93 n.15 (1993), and has not been
determined by either the PTO or this Court to have expired. It follows that the Court continues
to have subject matter jurisdiction over the parties' disputes relating to the '115 patent.
Accordingly, the Court will deny Defendants' motion to dismiss.
V.
CONCLUSION
For the foregoing reasons, the Court will deny Defendants' Rule 12(b)(l) motion to
dismiss. An appropriate Order follows.
23
Plaintiffs agree that if a terminal disclaimer was required, "the remedy would be, at
most, that the ePetition is inoperative." (D.I. 422 at 6)
22
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