The Showdown Over AIA Section 37 Looms . . . .

November 14, 2011

By Kurt R. Karst –   

On November 15th, the U.S. Court of Appeals for the Federal Circuit will hear oral argument in Medicines Co. V. Kappos et al., Case No. 2010-1534, perhaps starting (or ending) another chapter in the saga over a Patent Term Extension (“PTE”) for U.S. Patent No. 5,196,404 (“the ‘404 patent”) covering The Medicines Company’s (“MDCO’s”) ANGIOMAX (bivalirudin).

As we previously reported, Section 37 of the Leahy-Smith America Invents Act (“AIA”) (Pub. Law No. 112-029), titled “Calculation of 60-Day Period for Application of Patent Term Extension” and referred to by some as “The Dog Ate My Homework Act” or the “Medco fix,” amended the PTE statute at 35 U.S.C. § 156(d), and was intended to legislatively resolve MDCO’s PTE battle.  Section 37 effectively codify Judge Claude M. Hilton’s August 3, 2010 decision in The Medicines Company v. Kappos, 731 F. Supp. 2d 470 (E.D. Va. 2010), in which Judge Hilton ordered the Patent and Trademark Office (“PTO”) to consider timely filed MDCO’s PTE application for the ‘404 patent under a next business day interpretation of the PTE statute.  (As folks might recall, FDA approved ANGIOMAX at 5:18 PM on Friday, December 15, 2000, and MDCO submitted its PTE application to the PTO on February 14, 2001 – 62 days after NDA approval, including the December 15, 2000 date of approval.)

We previously reported that shortly after the enactment of the AIA, MDCO sent a letter to the U.S. Court of Appeals for the Federal Circuit notifying the Court of the enactment of Section 37 and asserting that it resolves the merits of the ongoing ‘404 patent PTE litigation with ANDA sponsor APP Pharmaceuticals, LLC (“APP”).  APP vigorously disagreed that Section 37 resolved the case, however, and argued that Section 37 cannot constitutionally be applied and that Section 37 does not take effect for one year after the AIA‘s enactment (i.e., September 16, 2012).  The Federal Circuit ordered MDCO and APP to simultaneously file supplemental briefs addressing the effect of Section 37 of the AIA on the disposition of the case.  Those briefs were filed last month – along with the brief from a surprise intervenor – and the arguments they contain will be the focus of the November 15th oral argument.

APP argues in its briefs (here and here) that there are two reasons why AIA Section 37 does not save MDCO’s PTE request for the ‘404 patent, but rather confirms that the PTE application was untimely, and that as such, the Federal Circuit should reverse Judge Hilton’s decision and deem the ‘404 patent to have expired as of March 23, 2010:

(1) Section 37 will not go into effect until [September 16, 2012].  That is what Section 35 – the AIA’s default effective-date provision – plainly provides.  While Section 37 defines the set of PTE applications to which it will apply once it takes effect, nothing in Section 37 alters the September 16, 2012 effective date. Section 37’s silence is in stark contrast to AIA provisions not covered by Section 35’s default provision, all of which expressly indicate that they are changing the effective date.

(2) [R]egardless of when Section 37 takes effect, it could not constitutionally be applied to MDCO’s PTE.  Because MDCO’s PTE request was untimely when made, [the ‘404] patent expired [on March 23, 2010].  Under the Patent Act, any term extension granted by the PTO as a result of MDCO’s untimely request is invalid and void.  Because Congress did not enact the AIA until well over a year after the ’404 patent expired, Section 37 could not revive the patent.  The Constitution’s Copyright and Patent Clause prohibits Congress providing patent protection for subject matter that already has passed into the public domain.

MDCO, of course, has a slightly different take in its briefs (here and here) on the interpretation and applicability of the AIA and Section 37.  MDCO argues that AIA Section 37 codifies Judge Hilton’s next business day interpretation of the PTE statute and confirms that the ‘404 patent PTE application was timely.  “Section 37 expressly directs that it ‘shall apply’ to any PTE application – like MDCO’s – that ‘is pending on’ or ‘as to which a decision regarding the application is subject to judicial review on’ the ‘date of the enactment of this Act.’”  APP’s contention that AIA Section 37 does not govern the case before the Federal Circuit “ignores the provision’s plain text – not to mention its history and purpose – and asks the Court to adopt an interpretation that defies common sense,” says MDCO.  Equally insubstantial, argues MDO, is APP’s constitutional Claim: “APP’s argument turns on the untenable fiction that the [‘404 patent] entered the public domain even though it never expired.  Even if the patent had expired, moreover, APP’s argument would still be foreclosed by Supreme Court precedent” (italics in original).

Although the Government long ago bowed out of the case, it has entered as an intervenor and submitted a brief to defend the constitutionality of AIA Section 37.  First, says the Government, “Section 37’s next-business-day rule for computing the time for extension applications applies to any application that is ‘pending on,’ or as to which ‘a decision regarding the application is subject to judicial review on,’ the date of the AIA’s enactment,” and the PTE application for the ‘404 patent was “pending on” the date of the AIA’s enactment, because the PTO, “having lost in district court, was engaged in calculating the correct length of MDCO’s extension.”  Moreover, says the government “‘a decision regarding the application’ was ‘subject to judicial review” on the date of enactment (and still is).”  “Congress’s explicit direction to apply the next-business-day rule to pending applications, and to decisions subject to judicial review, places section 37 outside the ambit of the general effective-date provision in section 35, which applies ‘[e]xcept as otherwise provided in this Act.’”

With respect to the constitutionality of AIA Section 37, the Government maintains that “[n]othing in the Patent Clause of Article I precludes Congress from making section 37’s next-business-day rule applicable to MDCO’s pending extension request. . . .  [B]y virtue of interim extensions, MDCO’s ’404 patent has never expired, and MDCO’s drug has never entered the public domain.”  Regardless, says the Government, “the application of section 37 to this case does nothing more than give MDCO the same patent term that it would have been entitled to by filing a timely application.” 

While the Government contends that “[t]he existence of general legislative power to extend the term of patents after their expiration is confirmed by Supreme Court precedent and historical practice going back over 200 years,” and that “the constitutionality of section 37 is already clear,” the Government nevertheless suggests that the Federal Circuit may defer resolution of the Patent Clause challenge pending the Supreme Court’s decision in Golan v. Holder, Case No. 10-545, which was argued on October 5, 2011, and which presents a related issue of whether the Copyright Clause of the United States Constitution (Article I, § 8, cl. 8) prohibits Congress from taking works out of the public domain. 

What surprise twist might happen next in a more than decade-long PTE battle that has been full of surprises?  Will there be another attempt to change the PTE law or perhaps prevent the PTO from using funds to implement AIA Section 37?  Stay tuned.