Shining light on the workings of patent term extension, the Federal Circuit issued a decision in Novartis AG v. Ezra Ventures LLC on Friday, upholding the lifetime of Novartis’s patent until February 18, 2019. For those inventing new drugs, biologics, medical devices, or other FDA-regulated products, the case underscores the importance of good patent life cycle strategy.

Patent term extension (PTE) provides patent holders with up to five years of additional patent term to compensate for regulatory review. As an example: if a pharmaceutical company obtains a granted patent covering a product, then has to wait longer to market the product due to delays in approval of a New Drug Application at the FDA, then the patent may be eligible for PTE. PTE is different from patent term adjustment (PTA), separately awarded for delays at the U.S. Patent and Trademark Office.

In this case, Novartis accused Ezra of infringing Novartis’s Patent No. 5,604,229, drawn to a compound. This patent originally had a term extending to February 18, 2014. Novartis also had a later-filed and later-issued Patent No. 6,004,565, claiming a method of administering one of the same compounds. Because any given product can only serve as the basis for PTE for one patent, Novartis had to choose between PTE for the ‘229 patent and PTE for the ‘565 patent. Novartis applied for and obtained five years of PTE for the ‘229 patent.

In the decision here, the Federal Circuit provided a helpful diagram, reproduced here (“URAA” refers to the Uruguay Round Agreements Act, which affected how U.S. patent terms are calculated):

Any given product can only serve as the basis for PTE for one patent, as mentioned above. Ezra attempted to argue that the PTE for the ‘229 patent improperly effectively extended the term of the ‘565 patent, too. Along the same lines, they also argued that the extended term would place the ‘229 patent in the crosshairs of obviousness-type double patenting, requiring a terminal disclaimer that would end the term of the ‘229 patent along with the earlier September 2017 expiration of the ‘565 patent.

However, the Federal Circuit had earlier ruled that Congress gives patentees a flexible approach, letting the patentee choose which patent term to extend for a given product. The court therefore found that Novartis indeed had the ability to choose to apply for extension to the term of the ‘229 patent. Further contrasting the law for PTA, which shortens PTA for a terminal disclaimer, against the law for PTE, which does not shorten PTE for terminal disclaimers, the Federal Circuit found that the ‘229 PTE validly extends even beyond the expiration of the ‘565 patent.

The Federal Circuit also noted the earlier decision in Gilead Sciences, Inc. v. Natco Pharma Limited, distinguishing it from this case. The court noted that, here, Novartis’s patent prosecution strategy presented “no potential gamesmanship issue.”

A patent owner’s ability to choose one patent per product for PTE leaves the patent owner with important decision-making responsibilities. Strategy for choosing a patent for PTE from within a portfolio can involve considerations about regulatory timeline, claim scope, patent term, and even level of vulnerability to validity challenges from competitors. In solidifying patent owner’s ability to choose a patent for PTE, the Federal Circuit has shown that it will allow the patent owner to benefit from this choice.