Fed Circuit Watch: Patent Prosecution 101 – Don’t Mess with Your Priority!

A recent case decided by the Court of Appeals for the Federal Circuit, Natural Alternatives Int’l, Inc. v. Iancu,[1] on October 1, 2018, highlights one of the pitfalls of patent prosecution that is sometimes overlooked or left to non-practitioner patent staff to handle but carries a major risk of losing patent term or patent priority.  The facts are as follows.

Natural Alternatives (NAI) owns U.S. Patent No. 8,067,381 (‘381), directed to methods and compositions for increasing anaerobic capacity in muscle tissues.  NAI and a competitor, Woodbolt Distributors, LLC, were on opposing ends of a whirlwind of patent litigation involving the ‘381 patent in the last decade.  On December 21, 2011, Woodbolt sued NAI for declaratory judgment and non-infringement and invalidity of the ‘381 patent in the District of Delaware.[2]  Later that same day, NAI sued Woodbolt for patent infringement of the ‘381 patent in the Southern District of Texas.[3]  Woodbolt also requested an inter partes reexamination, requesting reexamination of the ‘381 patent before the USPTO.  The PTAB issued a final determination affirming the Examiner’s rejection of the ‘381 claims were anticipated or obvious, for which NAI appeals.  Because the litigation between NAI and Woodbolt was settled before the appeal commenced, the Director of the USPTO intervened to defend the PTAB’s actions.

The ‘381 patent is the eighth patent in a series of patents which began with the filing date of the first application on August 12, 1997, which issued as U.S. Patent No. 5,965,596 (‘596).  In each successive child continuation application, NAI filed an appropriate claim of benefit of priority under 35 U.S.C. §120.  This continued for four more applications, successfully.  On April 10, 2003, NAI filed a provisional application (MPEP 201.04).  The fifth application was then filed, claiming benefit of priority of the first through fourth applications, as well as the provisional under 35 U.S.C. §119(e), and filed as a continuation-in-part (MPEP 201.08).  The sixth application was filed on August 29, 2008, with proper claims of priority to the previous applications.  On September 2, 2008, NAI filed an amendment to the claim of priority, deleting the priority claims to the first through fourth applications, and claiming only priority to the provisional application.  When the fifth application issued as U.S. Patent No. 7,504,376 (‘376), it only claimed benefit of priority to the 2003 provisional filing date.

The PTAB determined that when NAI filed the ‘381 application, the fifth application, or the CIP  ‘376 application, did not have a proper claim of priority to the fourth application because that claim of priority was deleted during prosecution of the fifth application.  As such, the ‘381 patent did not have a valid claim of priority to the first application, or August 12, 1997, or written another way, could only claim priority to the provisional application of April 10, 2003.  NAI appealed.

§120 states:

An application for patent for an invention disclosed in the manner provided by section 112(a) (other than the requirement to disclose the best mode) in an application previously filed in the United States, or as provided by section 363 or 385, which names an inventor or joint inventor in the previously filed application shall have the same effect, as to such invention, as though filed on the date of the prior application, if filed before the patenting or abandonment of or termination of proceedings on the first application or on an application similarly entitled to the benefit of the filing date of the first application and if it contains or is amended to contain a specific reference to the earlier filed application. No application shall be entitled to the benefit of an earlier filed application under this section unless an amendment containing the specific reference to the earlier filed application is submitted at such time during the pendency of the application as required by the Director. The Director may consider the failure to submit such an amendment within that time period as a waiver of any benefit under this section.

The standard of review for claims of priority is a legal analysis based on underlying facts.  Where underlying facts are undisputed, the analysis is purely legal.[4]  The Fed Circuit panel was composed of Chief Judge Prost, and Judges Moore and Reyna, with Chief Judge Prost writing for the court.  She noted that §120’s “specific reference” language requires applicants who claim benefit of priority to include specific information about the earlier-filed application by number and show the relationship between the application claiming the benefit of priority and the earlier-filed application.  NAI tried to argue that priority was “vested” in the later applications and a full demonstration of priority was essentially not required.  However, Chief Judge Prost found this argument lacking because patent examiners cannot be expected to “scrutinize the prosecution history of an application” to ascertain its §120 requirements.  She noted the very recent Fed Circuit opinion in In re Janssen Biotech,[5] in which the patentee sought to delete a claim of priority during reexamination.  Amending priority to an earlier-filed parent application would have downstream consequences on the child applications.  (Interestingly, Chief Judge Prost also wrote the opinion in Janssen Biotech; Judge Reyna was also a member of that panel.)

Because the ‘376 application did not claim priority back to the ‘576 patent’s filing date, the ‘381 patent also cannot properly claim priority to the ‘576 filing date, either.  As such, the PTAB did not err when it determined the ‘381 patent was not entitled to a priority benefit to the ‘576 patent.  Chief Judge Prost noted that the MPEP specifies that the intentional cancellation of a benefit claim can affect another application’s entitlement to a priority claim benefit (MPEP 211.02(a)).

She further seemed to call out NAI’s strategy for cancelling the ‘576 patent’s priority in order to gain patent term under 35 U.S.C. §154(a):

An uncommon but permissible way for patent applicants to avoid losing term on claims that recite new matter is to disclaim the benefit of earlier filing dates.  []Thus, by deleting the benefit claim in a CIP application, the twenty-year patent term of the patent issuing from that CIP application would extend from the CIP application’s filing date instead of the parent application’s earlier filing date.  Of course, once the CIP application adopts the later filing date, the CIP application and its children become vulnerable to rejections based on a larger pool of prior art – including former parent applications in some cases.

Under NAI’s theory of priority, however, NAI could gain patent term on its fifth application while simultaneously shielding its child applications (including the eighth application [i.e., the ‘381 patent]) from their former parents.  For the reasons discussed herein, NAI cannot have it both ways.

This case is a very straight-forward analysis of claims of priority under §120 (or §119(e)), and the pitfalls one may encounter.  The lesson here is to be careful and wary of how you structure your benefit of priority claim in successive applications.  The PTAB’s decision was affirmed.

 

[1] ___F.3d___ (Fed. Cir. 2018) (slip op.).

[2] Woodbolt Dist., LLC v. Natural Alternatives Int’l, Inc., Case No. 11-1266 GMS (D. Del. Dec. 21, 2011).

[3] Natural Alternatives, Inc. v. Woodbolt Dist., LLC, Case No. 4:11-cv-04511-LNH (S.D. Tex. Dec. 21, 2011).

[4] See In re Owens, 710 F.3d 1362, 1366 (Fed. Cir. 2013); Medtronic CoreValue v. Edwards Lifescience Corp., 741 F.3d 1359, 1363 (Fed. Cir. 2014).

[5] 880 F.3d 1315 (Fed. Cir. 2018).