Federal Circuit Finds That Subsequent Applications Must be Filed as a Divisional Applications For 35 U.S.C. §121 Exclusion

In Pfizer, Inc. v. Teva Pharms. USA, Inc., No. 2007-1271 (Fed. Cir. March 7, 2008), Pfizer filed an application for a broad range of non-steroidal anti-inflammatory drugs (NSAIDs) that could selectively inhibit the COX-2 enzyme.  Traditional NSAIDs, such as aspirin, ibuprofen, and naproxen, inhibit the cyclooxygenase (COX) enzyme in the body.  The COX enzyme produces molecules associated with pain and inflammation (COX-2) as well as molecules associated with the gastrointestinal tract (COX-1).  Since the traditional NSAIDs inhibited both enzymes, these drugs tended to have gastrointestinal side effects ranging from minor stomach aches to serious ulcers.  The application contained claims directed to the compounds, compositions using the compounds, and methods of using the compounds.

The patent examiner issued a restriction requirement, identifying the compound claims, the composition claims, and the method claims as directed to patentably distinct subject matter.  The patent examiner also required Pfizer to elect a species.  Pfizer elected to prosecute the generic compound claims as well as the species related to the compound celecoxib.  The elected claims were allowed, and the patent issued as Patent No. 5,466,823 (the ‘823 patent).

Pfizer also filed several continuation application claiming benefit to the ‘823 patent application, of which two were at issue in the case before the Federal Circuit.  One, which issued as Patent No. 5,563,165 (the ‘165 patent), was a divisional and included the restricted composition claims.  The other, which issued as Patent No. 5,760,068 (the ‘068 patent), was a continuation in part (CIP) application and included the restricted method claims.  

Teva, a generic drug manufacturer, filed an Abbreviated New Drug Application (ANDA) with the FDA directed toward celecoxib capsules.  In the ANDA, Teva asserted that the ‘823, ‘165, and ‘068 patents were invalid.  Pfizer responded by filing an infringement suit.  After a bench trial, the District Court found in favor of Pfizer, rejecting Teva’s obviousness, double patenting, best mode, and inequitable conduct defenses.  Teva appealed, arguing that the District Court’s double patenting, best mode, and inequitable conduct rulings were erroneous.

The Federal Circuit reversed the District Court with respect to the double patenting issue, but upheld the best mode and inequitable conduct rulings.  The Federal Circuit’s reasoning with respect to the double patenting revolved around the wording of 35 U.S.C. § 121.  This section grants the PTO the authority to issue restriction requirements in patent applications.  However, the patent application cannot be used against divisional applications arising from the restriction requirement.  Similarly, divisional applications from the same parent cannot be used against one another.

Here, the ‘068 patent was a CIP, not a divisional, of the ‘823 patent. Therefore, the Federal Circuit held that the ‘823 patent could be used as prior art against the ‘068 patent for double patenting. Id. at 15.  The Court noted that, prior to the 1952 Patent Act, the PTO routinely rejected divisional applications that arose out of restriction requirements.  35 U.S.C. § 121 was intended to prevent this practice, and referred exclusively to divisional applications, as opposed to other types of applications.  At the time the 1952 Patent Act was filed, the difference between divisional applications and other types of applications was well known.  Therefore, the Court held that, if Congress had intended other types of applications to benefit from 35 U.S.C. § 121’s safe harbor, Congress would have used different terminology.  Instead, Congress chose to limit the safe harbor in 35 U.S.C. § 121 to divisional applications.  Given the specific use of the term “divisional application” in § 121, the Federal Circuit concluded that the safe harbor is only applicable to divisional applications.  Id. at 14.  Since the ‘068 patent, however, was a CIP, not a divisional, and since 35 U.S.C. § 121 is limited to divisional applications, and the ‘068 application was not a divisional application, the safe harbor of 35 U.S.C. § 121 did not apply.

With the safe harbor of 35 U.S.C. § 121 removed, the ‘068 patent could not survive an obviousness type double patenting rejection.  The ‘068 patent is directed to a method of using the compositions disclosed in the ‘125 patent.  According to Federal Circuit precedent, claims to methods of using a compound are not patentably distinct from claims to the compound itself.  Id. at 15 (citing Geneva Pharms., Inc. v. GlaxoSmithKline PLC, 349 F.3d 1373, 1385-86 (Fed. Cir. 2003)).  Applying precedent, the Federal Circuit held that the ‘068 patent was invalid on the grounds of obviousness-type double patenting over the ‘125 patent.

The Federal Circuit upheld the District Court’s dismissal of Teva’s best mode and inequitable conduct claims.  Id. at 21.  Teva argued that Pfizer failed to disclose that the inventors preferred COX-2 selectivity, and that the COX-2 selectivity could affect the dosage of the compounds and compositions recited in the ‘823 and ‘125 patents.  However, the claims at issue in the ‘823 and ‘125 patents were directed to only one embodiment, which was disclosed in the specification.  Although the preference for COX-2 selectivity could affect the preferred dosage of the compounds/compositions, dosages were disclosed in the specification, and no evidence supported the conclusion that the inventors preferred a non-disclosed dosage.  Without such evidence, the Federal Circuit upheld the District Court’s finding of validity.

Finally, Teva argued that Pfizer was guilty of inequitable conduct for failing to disclose two patent applications filed by Merck.  Id. at 21-24.  These patent applications disclosed compounds having a different heterocyclic core, a significant distinction recognized by the PTO itself.  According to the testimony of one of the inventors of celecoxib, the inventors did not believe that the compounds disclosed in the Merck applications were material, because the Merck applications were directed toward compounds having a different heterocyclic core than celecoxib.  This testimony, together with evidence that the two patent applications were disclosed in several hundred other patent applications filed by Pfizer (including patent applications related to compounds having the same heterocyclic core), provided compelling evidence to support Pfizer’s explanation for the failure to disclose the references.  In light of the testimony, the Federal Circuit concluded that the District Court did not err in dismissing the inequitable conduct claims.

Significance for Patent Applicants

Pfizer presents a clear case of putting form over substance.  In Pfizer, there was no debate as to whether the method claims were restricted and therefore not eligible for inclusion in the original application.  However, the failure to appropriately categorize the subsequent application as a divisional was fatal to Pfizer’s ability to avoid an obviousness-type double patenting rejection.  As such, it is important for applicants to ensure that, where relying on exclusions and exceptions utilizing specific labels such as the exclusions offered by 35 U.S.C. §121, applicants follow both the letter and the spirit of the labels required to provide said protection.


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