Gilead Sciences, Inc. v. Natco Pharma Ltd. (Fed. Cir.)

Case Name: Gilead Sciences, Inc. v. Natco Pharma Ltd., 2013-1418, 2014 U.S. App. LEXIS 7494 (Fed. Cir. Apr. 22, 2014) (Circuit Judges Rader, Prost, and Chen presiding; Opinion by Chen, J.; Dissent by Rader, C.J.) (appeal from D.N.J., Wigenton, J.)

Drug Product and Patent(s)-in-Suit: Tamiflu® (oseltamivir phosphate); U.S. Pats. Nos. 5,763,483 (“the ’483 patent”) and 5,952,375 (“the ’375 patent”)

Nature of the Case and Issue(s) Presented: Gilead owns the patents-in-suit, which claim antiviral compounds and methods for their use. Specifically, the patents cover the active ingredient oseltamivir phosphate, which is marketed and sold by Gilead under the brand name Tamiflu. Both patents identify the same inventors, and the written descriptions are similar. But the patents do not claim priority to a common patent application and have different expiration dates.

On February 2, 2011 Natco notified Gilead that Natco had filed an ANDA with the FDA seeking approval to market a generic oseltamivir phosphate. That ANDA included a paragraph IV certification against the ‘483 patent. On March 15, 2011, Gilead filed a claim for patent infringement against Natco. During discovery, Natco alleged that the asserted claims of the ‘483 patent were invalid due to obviousness-type double patenting.  In December of 2012, the district court granted summary judgment in favor of Gilead on Natco’s double patenting defense.  The district court concluded that “a later-issued but earlier-expiring patent” cannot “serve as a double-patenting reference against an earlier-issued but later-expiring patent.” Thereafter, Natco conditionally stipulated to infringement of the asserted claims of the ‘483 patent, and the court certified its summary-judgment ruling. Natco appealed to the Federal Circuit, which vacated and remanded the judgment.

Why Natco Prevailed:  The Federal Circuit first noted that it is a bedrock principle of the patent system that when a patent expires, the public is free to use not only the same invention claimed in the expired patent, but also obvious or patentably indistinct modifications of that invention. That very important principle is violated when a patent expires and the public is barred from practicing such obvious modifications of the invention claimed in that patent because the inventor holds another later-expiring patent with claims for obvious modifications of the invention. The ’375 patent, the Court noted, expires on February 27, 2015, which means that as of February 28, 2015, the public should have all rights to the claimed invention. But because the ’483 patent does not expire until December 27, 2016, the public will be denied this right. The Federal Circuit found this to constitute an improper 22-month extension of the ’375 patent’s term.

Gilead argued that the ’375 patent did not extend the term of the ’483 patent, and that the focus should be the potential term extension for the ’483 patent instead of the ’375 patent because the ’483 patent actually issued first. The Federal Circuit disagreed because for double-patenting inquiries, looking to patent issue dates had previously served to identify the date that really mattered—namely, the date of patent expiration. However, this inquiry was no longer effective for patents that were filed after the passage of the Uruguay Round Agreements Act (“URAA”), which resulted in a scenario in which a patent that issues first does not necessarily expire first. Accordingly, the Federal Circuit determined that the comparison of Gilead’s patent expiration dates should control, not the patents’ respective issue dates. The Federal Circuit reasoned that by relying solely on issue dates, patent terms could be subject to gamesmanship by applicants. Such gamesmanship could involve filing serial applications on obvious modifications, claiming priority to different applications in each, and then arranging for the application claiming the latest filing date to issue first. Additionally, the Federal Circuit was concerned that relying on the date of issuance could result in an anomalous situation where the difference of one day with respect to the issue date could result in a potential term extension of 22 months of exclusivity. Instead, the Federal Circuit found that looking to the earliest expiration date of all the patents an inventor has on his invention and its obvious variants was the course of action that best served the purpose of the doctrine of double patenting, with respect to patents subject to the URAA.

Accordingly, the Federal Circuit concluded that an earlier-expiring patent can qualify as an obviousness-type double patenting reference for a later-expiring patent under the circumstances encountered in this case. The district court therefore erred in concluding that the ’483 patent could not be invalid for double patenting because the ’375 patent could not qualify as obviousness-type double-patenting reference.

In his dissent, Judge Rader took issue with the majority’s reasoning. He pointed out that if the ’375 patent had never issued, the ’483 patent would have been entitled to its full term. Judge Rader instead framed the issue as whether an earlier-issued patent’s term could be cut short by a later grant of an earlier-filed application. Judge Rader also noted that Gilead had conformed to the statutory regime regarding priority and did not claim priority in the later-filed ’483 patent to the related disclosure of the earlier-filed ’375 patent. By proceeding in this manner, Gilead forfeited its earlier claim to priority and subjected any new patent to intervening prior art. In addition to criticizing the majority for failing to adhere to restraint in extending a judicially created patent doctrine, Judge Rader also noted the potential for unintended consequences in relation to the First Inventor to File provisions of the America Invents Act.