A federal District Court ruled that a terminal disclaimer does not negate Patent Term Extension. King Pharma v. Teva Pharma, 78 USPQ2d 1237 (D.N.J. 2006). In a patent dispute, Teva argued that Wyeth’s patent on zaleplon drug products had expired because of a terminal disclaimer. Wyeth, and its exclusive licensee King Pharma, argued that patent’s term was ongoing because of a Patent Term Extension due to FDA regulatory review delay.

King Pharma sued Teva Pharma for patent infringement alleging that Teva has infringed one or more claims of U.S. Patent No. 4,626,538, owned by Wyeth, under which King has exclusive license to sell drug products containing zaleplon under the trademark Sonata®, which is used to treat insomnia. Teva has moved to dismiss arguing that the ‘538 Patent expired on June 23, 2003 as a matter of law and therefore no valid and enforceable patent is being asserted. The District Court disagreed.

An FDA publication entitled “Approved Drug Products with Therapeutic Equivalence Evaluation” (the Orange Book) lists the ‘538 Patent as being applicable to King’s Sonata® drug products. The application for what ultimately became the ‘538 Patent was initially rejected on the ground that it claimed the same invention that was claimed in an earlier patent, U.S. Patent No. 4,521,422, and the ‘538 Patent was granted only after the applicant filed a terminal disclaimer under 35 U.S.C. § 253.

This terminal disclaimer disclaimed any term of the ‘538 Patent that would otherwise have extended beyond the ‘422 Patent, which expired on June 23, 2003. The original termination date of the ‘422 Patent was June 3, 2002 (seventeen years from its issue date); however, pursuant to 35 U.S.C. § 154, this date was reset to June 23, 2003 (twenty years from its filing date). The USPTO agreed that the ‘538 Patent’s expiration date should be reset at June 23, 2003 as well since the term of the ‘538 Patent was linked to the term of the ‘422 Patent. Thus, based on the terminal disclaimer, the ‘538 Patent had been scheduled to expire on June 23, 2003.

On June 4, 2003, pursuant to 35 U.S.C. § 156, the PTO extended the term of the ‘538 Patent for a period of 1810 days, running from June 23, 2003, based on the regulatory review of the product Sonata® (zalephon) by the FDA. Based on the Patent Term Extension, the expiration date of the ‘538 Patent became June 6, 2008. The crux of Teva’s argument is that the term of a terminally disclaimed patent may not be extended under 35 U.S.C. § 156 and, therefore, the ‘538 Patent expired on June 23, 2003.

Section 156 provides that:

a) The term of a patent which claims a product, a method of using a product, or a method of manufacturing a product shall be extended in accordance with this section from the original expiration date of the patent, which shall include any patent term adjustment granted under section 154(b), if– (1) the term of the patent has not expired before an application is submitted under subsection (d)(1) for its extension; (2) the term of the patent has never been extended under subsection (e)(1) of this section; (3) an application for extension is submitted by the owner of record of the patent . . . ; (4) the product has been subject to a regulatory review period before its commercial marketing or use; (5)(A) except as provided in subparagraph (B) or (C), the permission for the commercial marketing or use of the product after such regulatory review period is the first permitted commercial marketing or use of the product under the provision of law under which such regulatory review period occurred; . . . .

The District Court held that

Teva has not alleged that the enumerated conditions were not satisfied. Instead, Teva argues that a § 156 patent term extension is not available to a patent subject to a § 253 terminal disclaimer. However, § 156 is plain and unambiguous: a terminally disclaimed patent is not barred from receiving a § 156 extension.

Further, § 156 makes no reference whatsoever to terminal disclaimers. Section 156’s direction that a patent term extension “shall” be granted if the conditions are met contains no exception for patents subject to a § 253 terminal disclaimer. This Court may not read language in or graft meaning on to § 156, and hence may not create an exception for terminally disclaimed patents where Congress did not see fit to do so.

Whereas § 156 provides for a patent term extension for FDA delays in approving a drug for sale, § 154(b) provides for a patent term extension, or adjustment, where a delay has occurred during prosecution of a patent before the PTO. 35 U.S.C. §§ 156, 154(b) (2005). Unlike § 156, § 154(b) expressly refers to terminally disclaimed patents: 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 Court held that it must follow the presumption that Congress acted intentionally and purposely when it included an exception for terminally disclaimed patents in § 154 and omitted any exception for terminally disclaimed patents in § 156. The Court concluded that a terminally disclaimed patent is eligible for extension under 35 U.S.C. § 156.

Note that before June 8, 1995, the terminal disclaimer date was printed on the face of the patent; the date was determined from the expected expiration date of the earlier issued patent based on a seventeen year term measured from grant. When 35 U.S.C. 154 was amended such that all patents (other than design patents) that were in force on June 8, 1995, or that issued on an application that was filed before June 8, 1995, have a term that is the greater of the “twenty year term” or seventeen years from the patent grant, the terminal disclaimer date as printed on many patents became incorrect. If the terminal disclaimer of record in the patent file disclaims the terminal portion of the patent subsequent to the full statutory term of a referenced patent (without identifying a specific date), then the date printed on the face of the patent is incorrect when the full statutory term of the referenced patent is changed as a result of 35 U.S.C. 154(c).

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