Has Ex Parte Sauerberg Gutted the Patent Act’s Safe Harbor Provision?

“While the result in Sauerberg is arguably illogical and inconsistent with the spirit of Section 121, at least one panel at the PTAB believes it is consistent with one plausible reading of the plain text of Section 121.”

https://depositphotos.com/30165819/stock-photo-lighthouse-with-light-beam-at.htmlThis article concerns the impact of Ex Parte Sauerberg, a 2017 Patent Trial and Appeal Board (PTAB) decision, on the safe harbor provision of 35 U.S.C. § 121.  We address whether Sauerberg is consistent with Federal Circuit law and decades of U.S. Patent and Trademark Office (USPTO) practice, and discuss implications for practitioners.

The Safe Harbor

Section 121 is designed to address potential unfairness that may arise from the interplay of two common aspects of patent prosecution practice.

The first aspect is the judicially created doctrine against obviousness-type double patenting (ODP). 35 U.S.C. § 101 “permits only one patent to be obtained for a single invention.” In re Lonardo, 119 F.3d 960, 965 (Fed. Cir. 1997); Boehringer Ingelheim Int’l GMBH v. Mylan Pharma., Inc., 592 F.3d 1340, 1346 (Fed. Cir. 2010) (quoting same). Often, however, applicants seek a second patent claiming subject matter that the USPTO characterizes as patentably indistinct from subject matter claimed in the first patent. Granting a second patent with indistinct claims would effectively extend the life of the first patent, at least in certain circumstances. See Boehringer, 592 F.3d at 1346. “Obviousness-type double patenting is a ‘judicially created doctrine . . . that prevents the extension of the term of a patent . . . by prohibiting the issuance of the claims in a patent not patentably distinct from the claims of the first patent.” Id. (internal citations and punctuation omitted).

The second aspect concerns restriction requirements and divisional applications. An inventor may only claim one “independent and distinct” invention per application. 35 U.S.C. § 101. USPTO issues restriction requirements when claims in a patent application encompass more than one invention. Generally speaking, restriction requirements, if not successfully traversed, require an applicant to select one invention for prosecution in the current application and pursue the different inventions in different applications. MPEP 201.06. Thus, an applicant may pursue the second (or third, or fourth, etc.) groups of distinct claims in one or more divisional applications in compliance with the requirement.

The safe harbor provision of Section 121 was meant to addresses “the unfairness that resulted when the Patent Office required restriction or division between claims in a patent application . . . and then rejected the second application on the basis of the first.” Boehringer, 592 F.3d at 1350. It provides:

If two or more independent and distinct inventions are claimed in one application, the Director may require the application to be restricted to one of the inventions. . . . A patent issuing on an application with respect to which a requirement for restriction under this section has been made, or on an application filed as a result of such a requirement, shall not be used as a reference either in the Patent and Trademark Office or in the courts against a divisional application or against the original application or any patent issued on either of them, if the divisional application is filed before the issuance of the patent on the other application. . . .

A common prosecution scenario involves the following sequence of events:

An applicant a) elects a grouping of claims to pursue in an original application (the “grandparent” application) after receiving a restriction requirement; b) files a first divisional application (the “child” application) to pursue claims falling outside the group elected in the original application; (c) elects a second group of claims to pursue in the first divisional application pursuant to a restriction requirement in the divisional application; and (d) files a second divisional application (the “grandchild” application) to pursue claims not falling within the groups elected in the original and first divisional applications. Because these applications are filed in a series, they are referred to as “serially filed” divisionals. Often the original “grandparent” application issues as a patent prior to the filing date of the “grandchild” application (i.e., the second divisional, which is filed while the first divisional application is still pending).

Most practitioners considered that the safe harbor provision of Section 121 applied to the “grandchild” application, based on decades of USPTO practice where the Office has recognized safe harbor protection for serial divisional applications, as well as Federal Circuit decisions where safe harbor protection from obviousness type double patenting rejections was at issue.

Recently, a PTAB decision examined a fact pattern where a divisional application was filed serially after the filing of two continuation applications, and the original application in which a restriction requirement issued was no longer pending at the time the divisional application was filed. In this case, the PTAB decided the question—whether the safe harbor guards against an ODP rejection—in the negative. In our opinion, this PTAB decision cannot be reconciled with prior Federal Circuit case law, Office practice or the rationale underlying ODP.

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Case Law

In Boehringer Ingelheim Int’l GMBH v. Mylan Pharma., Inc., 592 F.3d 1340, 1346 (Fed. Cir. 2010) (quoting same), an ODP rejection was made in a grandchild application. In particular, an original application was filed, a restriction requirement was made, and the applicant filed a divisional application while the first application was pending. That divisional was further divided into a second divisional application. In Boehringer, the grandchild was filed after a patent had issued from the original application, but while the parent application was still pending.

The question in Boehringer was whether Section 121 provided safe harbor to divisionals of divisionals, and the Federal Circuit found in the affirmative. To reach that conclusion, the Federal Circuit emphasized that Section 121 refers broadly to “a divisional application” and does not state that the divisional must be a direct divisional of the original application. The Federal Circuit concluded that there was “no reason why § 121 would not likewise extend to a divisional of a divisional.” Boehringer, 592 F.3d at 1352.

However, the Federal Circuit did not explicitly interpret the final phrase of § 121 (and the decision did not address whether there was a need for pendency between a grandchild application and the original application in order for the Section 121 safe harbor to apply). Practitioners commonly understood that the safe harbor applied in a line of serial divisionals as long as the relevant divisional was filed before the immediately preceding divisional issued or was abandoned, that claim consonance was maintained, and that there had been no intervening restriction requirements. Federal circuit case law either explicitly or at least implicitly accepted that the safe harbor could apply in serial situations.

This understanding of Boehringer arguably has some support in the plain text of Section 121. “[T]he patent” that cannot be used as a reference against a divisional application arguably refers to any “patent issuing on an application with respect to which a requirement for restriction under this section has been made, or on an application filed as a result of such a requirement.” See 35 U.S.C. § 121.

Indeed, that interpretation comports well with the policy behind the safe harbor provision. If the examiner requires a divisional of a divisional, it arguably makes no sense to permit a patent that issued from an original application to be used as a reference against a “grandchild” divisional application.

The policy behind the safe harbor provision also provides support for the conclusion reached in Amgen v. F. Hoffmann-La Roche, 580 F.3d 1340, 1353-54 (Fed. Cir. 2009). Here, the Federal Circuit concluded that “the § 121 safe harbor protects patents descending from divisional applications, but not from continuation applications exclusively.” Id. The Court noted that this application of the safe harbor was consistent with prior decisions. See id., citing Applied Materials, Inc. v. Advanced Semiconductor Materials Am., Inc., 98 F.3d 1563, 1568 (Fed. Cir. 1996) and Symbol Techs., Inc. v. Opticon, Inc., 935 F.2d 1569, 1580 (Fed. Cir. 1991). The court’s holding was unambiguous —  that “intervening continuation applications do not render a patent ineligible for § 121 protection so long as they descended from a divisional application filed as a result of a restriction requirement.”

However, practitioners’ understandings of these two cases were called into question by the PTAB decision in Ex parte Sauerberg, Appeal 2015-007064 (PTAB Jan. 10, 2017). In Sauerberg, the applicants filed a patent application directed to a genus of small molecule compounds and methods of treatment using those compounds, and the USPTO required restriction between the compounds and the methods of treatment. See id. In response, the applicants elected to prosecute the compound claims, and then filed two subsequent continuation applications directed to additional compound claims. See id. Later, the applicants filed a divisional application from the second continuation application, with claims directed to methods of treatment. The USPTO rejected the divisional application for ODP over each of the earlier patents, and the applicants appealed to the PTAB. See id.

The PTAB found that the safe harbor of Section 121 did not apply under these facts. Unlike the Federal Circuit in Boehringer, the PTAB explicitly addressed the “filed before” provision in Section 121. The PTAB ultimately ruled that, as the reference patent in Sauerberg was issued before the “grandchild” divisional application was filed, “the safe harbor provision does not shield the present application from double patent rejections based on the [grandparent] patent.” Id. at *6.

In doing so, the PTAB rejected the argument that Boehringer required a contrary result. “[T]he Boehringer court did not address the requirement that the divisional be filed before the issuance of the other patent,” and “does not speak to the issue present here: whether the safe harbor provision shields a divisional application from the double patenting effect of a patent that issued before the divisional application was filed.”  Id. at *6. Thus, practitioners interpreting Boehringer to stand for that proposition that the issuance of a patent on a grandparent application would not deprive a serial divisional application of the safe harbor of 121 must be aware of Sauerberg.

Alternatively, the last sentence of Section 121 can be read as simply requiring copendency under 35 USC § 120, as the result in Sauerberg seems to undercut the rationale for ODP, and defies decades of USPTO practice. It seems illogical that the safe harbor would only be available for a serial divisional application threatened with an ODP rejection over its parent application and yet unavailable when threatened with an ODP rejection over its grandparent application.

Practice Tips

While the result in Sauerberg is arguably illogical and inconsistent with the spirit of Section 121, at least one panel at the PTAB believes it is consistent with one plausible reading of the plain text of Section 121. “The safe harbor provision expressly states that it applies only ‘if the divisional application is filed before the issuance of the patent on the other application.’” Sauerberg, 2017 WL 150016, at *4 (quoting 35 U.S.C. § 121). In context, “the patent on the other application” must refer to the reference patent issued on the original application from which the divisional application was divided. Absent Federal Circuit guidance on Section 121, a court could plausibly endorse the PTAB’s interpretation of Section 121 in an analogous case.

A mindful practitioner therefore must consider how to avoid a potential Sauerberg trap. For example:

  • Until a reviewing court decides otherwise, one should be aware of the risk that the USPTO or an accused infringer will argue that the safe harbor of Section 121 applies only if the divisional application at issue was filed before the reference patent issued. One may reasonably expect ODP rejections citing Sauerberg in the meantime. The risk-averse practitioner should consider drafting original claims that can be cleanly divided and designed to trigger a restriction requirement, and perhaps filing the first divisional application with claims to multiple inventions. The most cautious approach is to file all potential divisional applications at the same time, and while the original application is pending.
  • If confronted with an ODP rejection over an issued original application in the family being prosecuted, and if the facts allow, argue that the holding in Sauerberg does not apply. For example, this practitioner overcame such a rejection by arguing that “[t]he Office cannot extrapolate the Sauerberg holding to reach a result that contradicts the Federal Circuit’s holding in Boehringer, a case that aligns much closer to the present facts than does Sauerberg.” Alternatively one could consider arguing that the Sauerberg panel reached the wrong conclusion, and that the decision should not be followed or overruled at the PTAB, or preserve the argument for appeal at the Federal Circuit.
  • If presented with the Sauerberg “trap,” one should keep in mind that the safe harbor is only necessary if the reference patent truly is patentably indistinct. An argument that the inventions are patentably distinct, which potentially renders the safe harbor unnecessary, may be a practitioner’s best option under the circumstances.
  • Finally, one could consider filing a terminal disclaimer after thoroughly weighing whether the TD will do any harm – in terms of patent term loss or the requirement to maintain common ownership of the linked patents.

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The Author

Shoshana Marvin

Shoshana Marvin is an associate in Sterne Kessler’s Biotechnology & Chemical Practice Group. Shoshana’s practice focuses on the preparation and prosecution of U.S. and foreign patent applications, as well as the preparation of opinions of counsel. She has drafted numerous invalidity, noninfringement, freedom-to-operate, and patentability opinions for pharmaceutical patents, including patents that claim active pharmaceutical ingredients, polymorphs, chemical synthesis, pharmaceutical formulations, and methods of treatment. Shoshana has also prepared and prosecuted patents relating to a wide variety of technologies including molecular biology, cancer biology, therapeutic antibodies, virology, and vaccines.

Shoshana Marvin

Eric K. Steffe is a director in Sterne Kessler’s Biotechnology & Chemical Practice Group. Eric’s practice involves providing strategic counsel to his clients in various areas of patent law, with special emphasis on therapeutic antibodies, gene therapies, CRISPR, vaccines, diagnostics, antisense technologies, personalized medicine, and cell culturing/bioprocessing methods.

Shoshana Marvin

John Covert is a director in Sterne Kessler’s Biotechnology & Chemical Practice Group. His practice is focused on technologies that involve organic chemistry, such as pharmaceuticals, coatings, fuels, lubricants and pesticides. John is experienced in a number of interdisciplinary areas, including computer-aided drug design, combinatorial chemistry and medical devices. He provides counseling with regard to patent portfolio strategy and management with issues that range from licensing, collaborations and technology acquisitions, to patent validity, infringement and design around strategies.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 2 Comments comments. Join the discussion.

  1. Anon August 2, 2021 9:03 am

    Two words:

    Transitive property.

  2. ipguy August 2, 2021 5:38 pm

    “The most cautious approach is to file all potential divisional applications at the same time, and while the original application is pending.”

    This is practical advice if your client has an endless supply of money. From the risk management point of view, it could be a good idea to advise the client to file the divisional applications at the same time, but expect your client to respond with whether you believe they are made out of money.

    Has the PTO deemed Ex Parte Sauerberg to be an informational decision or binding precedent?Ex Parte Sauerberg, pre

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