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Terminal Disclaimer Extended Along with Patent Term

August 14, 2002

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Last Month at the Federal Circuit - September 2002

Judges: Rader (author), Gajarsa, and Prost

In Bayer AG v. Carlsbad Technology, Inc., No. 02- 1077 (Fed. Cir. Aug. 14, 2002), the Federal Circuit affirmed the district court’s ruling that a terminal disclaimer tied to the expiration date of an earlier patent would automatically extend to a later date pursuant to the Uruguay Round Agreements Act (“URAA”), even though the terminal disclaimer specified an earlier date of expiration.

Bayer AG (“Bayer”) owns three patents relating to the antibiotic ciprofloxacin sold under the brand name CIPRO® : U.S. Patent Nos. 4,544,658 (“the Peterson ‘658 patent”); 4,556,658 (“the Grohe ‘658 patent”); and 4,670,444 (“the ‘444 patent”).

In December 1991, Bayer filed suit against Barr Laboratories, Inc. (“Barr”) for filing an ANDA for ciprofloxacin. Barr alleged that the ‘444 patent was invalid for, inter alia, obviousness-type double patenting in light of the Peterson and Grohe ‘658 patents. To counter Barr’s double-patenting claim, Bayer filed a terminal disclaimer with the PTO that disclaimed the terminal part of the ‘444 patent that extends beyond October 1, 2002, the earlier of the expiration dates of the Peterson and Grohe patents. The April 21, 1992, issue of the PTO’s Official Gazette carried a notice stating that the term of this patent subsequent to October 1, 2002, has been disclaimed.

In 1994, the URAA was passed to harmonize certain provisions of U.S. patent law with that of its leading trading partners. The URAA took effect on June 8, 1995, changing the enforceable term of a patent from seventeen years from the date of issuance to twenty years from the date of filing the patent application. 35 U.S.C. § 154(a)(2). In addition, § 154(c)(1) provides that the enforceable term of a patent issued on an application filed prior to June 8, 1995, shall be “the greater of the 20-year term as provided in subsection (a), or 17 years from grant, subject to any terminal disclaimers.”

As a result of the URAA, the expiration date of the Peterson ‘658 patent was changed from October 1, 2002 (seventeen years from grant) to December 9, 2003 (twenty years from filing). Seeking to similarly extend the enforceable term of the ‘444 patent, Bayer submitted an amended terminal disclaimer for the ‘444 patent to provide wording that would disclaim the terminal part extending beyond the earlier of the expiration dates of the full statutory term of the Peterson and Grohe ‘658 patents. The PTO responded that its rules do not permit amendment of a terminal disclaimer for an issued patent, but instead it treated Bayer’s request as a petition under its discretionary authority. The PTO found that the URAA created an ambiguity in the terminal disclaimer Bayer had filed in 1992, because it now contained two different dates: the specific date of October 1, 2002, and the referenced expiration date of the Peterson ‘658 patent. Because the terminal disclaimer was clearly intended to disclaim any term extending beyond the expiration of the Peterson ‘658 patent, the PTO held that the office records would be changed to indicate that the ‘444 patent was disclaimed subsequent to December 9, 2003.

In May 2001, Bayer filed suit against Carlsbad Technology, Inc. (“CTI”) based upon CTI’s filing of an ANDA for ciprofloxacin. CTI counterclaimed that the ‘444 patent should expire on October 1, 2002, and asked the district court to reverse the holding of the PTO. The district court granted SJ in favor of Bayer, and CTI appealed. The Federal Circuit held that the district court had properly accorded deference to the PTO’s interpretive decision.

CTI’s primary argument was that the public should be entitled to rely upon the clear and unambiguous statement in the terminal disclaimer that the ‘444 patent would expire on October 1, 2002, and any ambiguity in the terminal disclaimer should be resolved in favor of the public. CTI also noted that the PTO had published the specific terminal date of October 1, 2002, in its Official Gazette.

The Federal Circuit was not persuaded by CTI’s arguments. Bayer clearly intended to tie the terminal disclaimer of the ‘444 patent to the earlier expiration date of the Peterson ‘658 and Grohe ‘658 patents. Bayer only included the October 1, 2002, date in the terminal disclaimer because when the disclaimer was filed in 1992, that was the statutory date of expiration of the Peterson ‘658 patent. Bayer could not have foreseen the pending change in the patent law that would emerge in 1994. In response to CTI’s concerns about public notice, the Court observed that Bayer had acted promptly to rectify the ambiguity created by the URAA amendments, filing its petition in July 1995. The PTO’s decision on Bayer’s petition became a matter of public record on January 31, 1996, more than five years before CTI filed its ANDA and was subsequently sued by Bayer for patent infringement.

Because Bayer clearly intended to tie its terminal disclaimer to the Peterson ‘658 and Grohe ‘658 patents, the date of the terminal disclaimer was extended along with the automatic extension of the earlier patents’ enforceable terms pursuant to the URAA.