Earlier this month the Federal Circuit released its opinion in Merck Sharp & Dohme B.V. v. Aurobindo Pharma USA, Inc., a patent case that attracted an amicus brief. The issue on appeal in this case was whether patent term extension for a reissued patent “should be calculated based on the issue date of the original patent or the reissued patent.” The Federal Circuit reviewed a district court determination that the U.S. Patent and Trademark Office correctly calculated a reissued patent term extension based on the patent’s original issue date. In an opinion authored by Judge Dyk and joined by Judges Mayer and Reyna, the Federal Circuit affirmed the lower court’s determination. This is our opinion summary.
Judge Dyk’s introduction to his opinion provides the relevant context:
This case concerns patent term extensions (‘PTEs’) for reissued patents under the Hatch-Waxman Act. The Hatch-Waxman Act provides a process for extending patent terms by up to five years to compensate patent owners for time lost during the lengthy regulatory review of new drug applications. See 35 U.S.C. § 156. The formula for calculating PTE is set forth in subsection 156(c), which provides that ‘[t]he term of a patent . . . shall be extended by the time equal to the regulatory review period . . . occur[ring] after the date the patent is issued.’ Id. § 156(c) (emphasis added). The sole issue on appeal is whether PTE for a reissued patent should be calculated based on the issue date of the original patent or the reissued patent; in other words, whether the reference to ‘the patent’ in subsection 156(c) is to the original patent or the reissued patent. Using the issue date of the reissued patent would usually result in shorter PTE because review that occurs before the issue date does not affect PTE.
Judge Dyk then outlined the procedural and factual background of the case:
The material facts of this case are not in dispute. . . . Merck owned the [original] patent, which issued on December 30, 2003. . . . On April 13, 2004, four months after the [original] patent issued, Merck applied to the Food and Drug Administration . . . for approval of [sugammadex]. . . . Sugammadex is the active ingredient in . . . a drug that is administered as an intravenous injection to reverse neuromuscular blockade, a form of paralysis . . . . While regulatory review was pending, Merck filed an application with the PTO to reissue the [original] patent. The reissue application retained the original claims of the [original] patent and included narrower claims directed specifically to sugammadex. On January 28, 2014, the [original] patent was reissued as the [reissued] patent, retaining the [original] patent’s original claims and adding twelve additional, narrower claims relating to sugammadex. . . . The regulatory review process continued until December 15, 2015, when sugammadex was approved. Merck thus could not market sugammadex for nearly twelve years of the [original] patent’s original term, which was set to expire on January 27, 2021. . . . Merck filed a PTE application for the [reissued] patent, seeking the maximum five-year PTE based on the [original] patent’s original issue date. . . . [T]he PTO granted a five-year PTE to the [reissued] patent based on the [original] patent’s original issue date . . . .
From January to March 2020, after the . . . patent reissued and around the time the FDA granted Merck’s PTE application, Defendants-Appellants . . . filed Abbreviated New Drug Applications (‘ANDAs’) with the FDA to obtain approval to sell generic versions of [the drug]. . . . In accordance with the patent statute, 35 U.S.C. § 271(e)(2)(A), Merck treated this filing as an act of infringement and brought suit. At trial, Aurobindo argued that the [reissued] patent was not entitled to a five-year PTE and had therefore expired. It argued that the PTO erred in calculating the [reissued] patent’s PTE based on the [original] patent’s original issue date, urging that the plain text of subsection 156(c) required the PTO to calculate PTE based on the issue date of ‘the patent’ for which PTE was sought: the [reissued] patent. . . . The district court disagreed, finding that Aurobindo’s construction of subsection 156(c) would undermine the purpose of the Hatch-Waxman Act. The district court concluded . . . that ‘the patent’ in subsection 156(c) must refer to the original patent, not the reissued patent. . . . Based on this construction, the district court held that the [reissued] patent was entitled to a five-year PTE. Aurobindo appealed.
After explaining the standard of review–that “[s]tatutory construction is a question of law that is reviewed de novo”–Judge Dyk noted that “[t]he question on appeal is not . . . the meaning of the term ‘issue.'” Instead, he continued, the Federal Circuit was tasked with determining “the meaning of the term ‘the patent'” as used in 35 U.S.C. § 156(c).
Judge Dyk agreed with “Merck that the reference to ‘the patent’ in subsection 156(c) refers to the original patent.” After concluding that “the language of the subsection 156(c) standing alone is ambiguous,” Judge Dyk turned to Supreme Court precedent, which he said “provided important guidance for interpreting another provision of the Hatch-Waxman Act.” There, he explained, the Supreme Court interpreted an ambiguous phrase by “look[ing] to the broader ‘statutory context'” in which the language was used “and the broader context of the statute as a whole.”
After noting that Congress did “not appear to have contemplated the situation presented” here, Judge Dyk explained that the purpose of subsection 156 is “to compensate pharmaceutical companies for the effective truncation of their patent terms while waiting for regulatory approval of new drug applications.” Pursuant to this purpose, he reasoned that, “in the context of reissued patents, the Hatch-Waxman Act contemplates PTE for those patents and only those patents with claims directed to drug products whose period of exclusivity was delayed by FDA review.”
Rejecting Aurobindo’s contention that “‘the patent’ cannot refer to the original patent” because it is “dead” upon reissue, Judge Dyk highlighted that “whether the holder of the reissued patent has an enforceable right in the original patent’s claims is irrelevant.” It is irrelevant, he explained, because “the reissued patent inherits ‘the unexpired term of the original patent.'” Moreover, “[t]he only construction that comports with the purpose of the Hatch-Waxman Act is the one that extends PTE to patent owners who were actually disabled from benefiting from patent protection during the pendency of regulatory review.” As a result, Judge Dyk reasoned, “in the context of reissued patents, ‘the patent’ . . . refers to the original patent.” As a result, he explained, a reissued patent “is entitled to PTE based on the original patent’s issue date where, as here, the original patent included the same claims directed to a drug product subject to FDA review.”
Although “not binding,” Judge Dyk bolstered the panel’s analysis based on the Manual of Patent Examining Procedure, which he said “substantially tracks our analysis as applied” here. In particular, he noted, the manual “comports with the statutory scheme of the Hatch-Waxman Act,” which aims to award PTE only when the patent owner is prevented from enjoying patent protection due to the pendency of regulatory review.
As a result of Judge Dyk’s analysis, the Federal Circuit affirmed the lower court’s judgment that the reissued patent was entitled to a patent term extension based on the original patent’s issue date.