United States: Make Sure The Chain Is Tight!

Federal Circuit Decision: Natural Alternatives Int'l, Inc. v. Iancu, 2017-1962 and 2017-1963 (Fed. Cir. Oct. 1, 2018) (PROST, Moore, Reyna)

Background: Starting in 1997, NAI filed a series of patent applications. The first was filed Aug. 12, 1997, and eventually issued Oct. 12, 1999. Seven continuing applications were filed. The patents issuing from the seventh and eighth were the subject of this appeal.

The first 3 continuation applications included a priority claim under 35 U.S.C. §120 to the first application. While the fourth application (3^rd continuation) was still pending, NAI filed a provisional application on April 10, 2003, and a fifth application (a CIP) on Nov. 18, 2003. This fifth application claimed priority to the fourth (and therefore the first, second, and third) and the provisional application. A sixth application was filed Aug. 29, 2008, claiming priority to the fifth.

On September 2, 2008, NAI amended the priority claim in the fifth application to delete the benefit claim to the fourth application. The fifth application issued as U.S. Patent No. 7,504,376 on March 17, 2009, claiming the benefit of only the 2003 provisional application's filing date.

The sixth through eighth applications subsequently issued as patents, claiming benefit of the fifth application (and back through the chain to the first application's filing 1997 date) and the provisional application's 2003 filing date.

NAI sued on patents issuing from the seventh and eighth applications, and the defendant, Woodbolt, requested inter partes reexamination. The claims were found unpatentable in view of prior art, including the patent issuing from the first application.

The Board affirmed the rejection.

Issue: Did the NAI break the priority chain between the fourth and fifth applications such that the patent issuing from the eighth application could not claim priority to the first application's filing date?

Outcome: The Federal Circuit affirmed. Under 35 U.S.C. §120, it requires a "specific reference to the earlier filed application." The Federal Circuit cited its decision in Droplets, Inc. v. E*TRADE Bank, 887 F.3d 1309, 1315–16 (Fed. Cir. 2018), to explain what is required for "specific reference": "the application seeking the benefit must state (or be amended to state) that it claims the benefit of the earlier filed application's filing date, identifying each earlier-filed application by number and explaining how the applications are related to one another." The eighth application did not meet the "specific reference" requirement with respect to the filing date of the first application; the eighth application claimed benefit of the first application's priority date via the fifth application, but NAI amended the fifth application to claim priority only to the provisional application. The chain was broken by NAI amending the fifth application's priority claim.

The Federal Circuit pointed out that claiming priority is not the same as showing entitlement to priority. Therefore, priority did not "vest" in the sixth application once the sixth application met all of the criteria of §120. "[C]laims in a patent or patent application are not entitled to priority under §120 at least until the patent owner proves entitlement to the PTO, the Board, or a federal court." At *8. The Court also cited Supreme Court precedent that "under §120, parent and continuing applications 'are to be considered as parts of the same transaction, and both as constituting one continuous application, within the meaning of the law.' Godfrey v. Eames, 68 U.S. 317, 326 (1863)[.]" At *12.

The Federal Circuit emphasized that NAI chose to delete the benefit claim in the fifth application and received a longer patent term as a result. As a CIP application, NAI may have had a reason why it wanted to do that. But a consequence of that decision was that the chain to the sixth through eighth applications was broken and there could no longer be a priority claim to the first through fourth applications. In other words, NAI could not have it both ways: it could not delete a priority claim for longer patent term and still have priority back to the very beginning.

Prosecution Takeaway: A break in the priority chain can have dire consequences, such as in the Natural Alternatives case discussed, by opening the door to prior art Practitioners are reminded to carefully review the priority date claims in their applications and weigh the detriment of deleting priority claims to obtain a longer patent term.

Practitioners are also cautioned about the use of incorporation by reference in the priority claim context. Faulty incorporation by reference may negatively impact a priority date benefit claim under 35 U.S.C. §120, which requires co-pendency and specific reference. See, e.g., Droplets, Inc. v. E*Trade Bank, 887 F.3d 1309 (Fed. Cir. 2018); but see successful incorporation by reference for priority in Paice, LLC v. Ford Motor Co., 881 F.3d 894 (Fed. Cir. 2018).

Priority date disputes may also arise as a point of attack against a patent claim or against an asserted reference in post-grant proceedings. In Butamax^TM Advanced Biofuels LLC v. Gevo, Inc., IPR2013-00539, the Petitioner was able to bring in anticipatory prior art by successfully challenging the patent's priority claim back to the first two provisional applications. Petitioner successfully argued that the claim was not entitled to date benefit of the provisional applications because the provisional applications failed to describe adequately the full scope of the broad claims.

Using an expert declaration, the Petitioner in Butamax broke the chain of priority by establishing that the claim limitations contained in challenged claim 1 of the patent did not have written description support all the way back to the earliest two priority applications. The PTAB did its own written description analysis of the two provisional applications in question and determined that the provisional applications did not disclose a sufficient number of representative species falling within the scope of the claim, let alone "'precise[ly] defin[e]' a species falling within the scope of the claimed genus." The Final Written Decision found all claims unpatentable as anticipated. See also, Baxter Healthcare Corp. v. Millenium Biologix, LLC, IPR2013-00591, Paper 8 (P.T.A.B. March 21, 2014) and IPR2013-00583, Paper 9 (P.T.A.B. March 21, 2014).

A priority date attack may also arise in a post-grant proceeding to establish the PGR-eligibility of the challenged claims. See, e.g., Mylan Pharms. Inc. v. Yeda Research & Development Co. Ltd., 2016-00010, Paper 9 (P.T.A.B. Aug. 16, 2016); Aradigm Corp. v. Insmed Inc., PGR2017-00021, Paper 10 (P.T.A.B. Nov. 15, 2017).

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