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Novartis Ag v. Ezra Ventures LLC

United States Court of Appeals, Federal Circuit

December 7, 2018

NOVARTIS AG, NOVARTIS PHARMACEUTICALS CORPORATION, MITSUBISHI TANABE PHARMA CORPORATION, MITSUI SUGAR CO. LTD., Plaintiffs-Appellees
v.
EZRA VENTURES LLC, Defendant-Appellant

          Appeal from the United States District Court for the District of Delaware in Nos. 1:15-cv-00150-LPS, 1:15-cv-00975-LPS, Chief Judge Leonard P. Stark.

          Jane M. Love, Gibson, Dunn & Crutcher LLP, New York, NY, argued for all plaintiffs-appellees. Plaintiffs-appellees Novartis AG, Novartis Pharmaceuticals Corporation also represented by Robert Trenchard; Alexander N. Harris, San Francisco, CA; Michael A. Valek, Dallas, TX.

          Joseph M. O'Malley, Jr., Paul Hastings LLP, New York, NY, for plaintiffs-appellees Mitsubishi Tanabe Pharma Corporation, Mitsui Sugar Co. Ltd. Also represented by Eric William Dittmann.

          Shashank Upadhye, Amin Talati Upadhye LLP, Chicago, IL, argued for defendant-appellant. Also represented by Brent Allen Batzer, Joseph Cwik, Jonathan Jacob Krit, Yixin H. Tang.

          Before Moore, Chen, and Hughes, Circuit Judges.

          CHEN, CIRCUIT JUDGE.

         Summary

         This case concerns the interplay between a patent term extension (PTE) granted pursuant to 35 U.S.C. § 156 and the obviousness-type double patenting doctrine. The Delaware District Court concluded that, in accordance with statutory construction principles and as a logical extension of this court's holding in Merck & Co. v. Hi-Tech Pharmacal Co., 482 F.3d 1317 (Fed. Cir. 2007), obviousness-type double patenting does not invalidate an otherwise validly obtained PTE under § 156. We agree and accordingly affirm.

         Background

         Defendant-Appellant Ezra Ventures LLC (Ezra) filed an Abbreviated New Drug Application (ANDA) relating to a generic version of Novartis's branded multiple sclerosis drug Gilenya®. Novartis filed an infringement suit against Ezra in response, asserting claims 9, 10, 35, 36, 46, and 48 of U.S. Patent No. 5, 604, 229.

         The '229 patent claims a large group of compounds, including fingolimod, the active ingredient in Gilenya®. Because the '229 patent was filed before the effective date of the Uruguay Round Agreements Act of 1994 (URAA), its patent term is governed by the law in effect at that time-the rule of 17 years from issuance. Pub. L. No. 103-465, §532, 108 Stat. 4809, 4983-85. The '229 patent thus was set to expire on February 18, 2014, 17 years from its issuance date, but Novartis secured a PTE of five years on the patent pursuant to 35 U.S.C. § 156. Section 156 was part of the Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman Act) and was enacted to restore the value of the patent term that a patent owner loses during the early years of the patent because the product cannot be commercially marketed without approval from a regulatory agency (e.g., Food and Drug Administration approval). Pub. L. No. 98-417, 98 Stat. 1585, 1598. Section 156 allows a term extension of up to five years, equal to the regulatory review period, on a patent covering a product subject to regulatory review. See 35 U.S.C. §§ 156(a), (c), (g)(6). Section 156(a) sets forth the requirements for a patent to qualify for a PTE, the details of which are not relevant here.

         A patent owner often owns multiple patents that cover the same product that has been subject to regulatory review, but only one patent's term can be extended. See 35 U.S.C. § 156(c)(4). The patent owner makes a choice among its qualifying patents. "Congress chose not to limit the availability of a patent term extension to a specific parent or continuation patent but instead chose a flexible approach which gave the patentee the choice." Merck, 482 F.3d at 1323; 130 Cong. Rec. 23765 (1984) ("[O]ne patent on a product, not necessarily the first, can be extended . . . ."); id. at 24444 ("Under this amendment, the patent holder would be allowed to select the patent to be extended. . . . I believe this amendment is acceptable because it gives the patentholder the flexibility to select the most important patent for extension.").

         Here, Novartis owned at least two patents covering Gilenya® that could qualify for PTE under § 156(a): the '229 patent and U.S. Patent No. 6, 004, 565, which claims a method of administering fingolimod. Novartis chose to apply for PTE on the '229 patent. With the PTE granted to the '229 patent, the '229 patent now expires on February 18, 2019. Because the '565 patent issued from a patent application filed after the effective date of the URAA, its term expired on September 23, 2017-20 years from its earliest effective filing date. See Merck & Co. v. Kessler, 80 F.3d 1543, 1547 (Fed. Cir. 1996) (explaining the post-URAA regime, citing § 154(a)(2) and § 154(c)(1)). The '229 patent is thus a pre-URAA patent whereas the '565 patent is a post-URAA patent, governed by different statutory patent term regimes. Below is a timeline of the relevant dates between the two patents.

         (Image Omitted)

         On September 22, 2016, the district court denied Ezra's Federal Rule of Civil Procedure 12(c) motion for judgment on the pleadings, where Ezra argued that the '229 patent should be ruled invalid, or otherwise terminally disclaimed for the patent term past the expiration date of the unasserted '565 patent. Specifically, Ezra argued that the granted extension of the '229 patent's term beyond the life of the '565 patent is impermissible because it: (1) de facto also extends the life of the '565 patent, and thereby violates § 156(c)(4)'s requirement that only "one patent be extended"; (2) violates the "bedrock principle" that the public may practice an expired patent; and (3) renders the ...


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