Reassessing the Right to Copy and Use a Product or Process of an Expired U.S. Patent in View of Allergan

John D. Vandenberg

In 1997, I stated in measured tones to a panel of the Federal Circuit that U.S. patent law creates a right to copy and use designs described but not claimed in a U.S. utility patent, quoting the Supreme Court[1]. Judge Rich responded in unmeasured tones: “I wrote the patent laws, and they have no right to copy!” We were both right, but only Judge Rich, naturally, wrote the opinion.[2]

This article concerns a related—and almost universally overlooked—patent-law right to copy and use. Our assertion that this right exists is based on a 1945 Supreme Court decision which the Supreme Court recently stated is “good law.”

But a recent “obviousness double patenting” decision of the Federal Circuit may suggest that the Federal Circuit will not apply this right in the context of patent families.

Scott Paper:

The Supreme Court decision most emphatically establishing the right to copy and use a product or process of an expired U.S. patent is Scott Paper[3]. In the trial and appeals courts, the Scott Paper dispute turned on the scope of assignor estoppel and whether it shielded an assignor-defendant from a patent infringement charge where the defendant had copied and used a design in a third-party prior art (and expired) patent. The Supreme Court, however, decided the dispute on a different ground, expressly bypassing the assignor estoppel issue.

The Court held that any defendant has a complete defense to an action for infringement where the accused device is that of an expired patent. While the expired patent before the Court was a prior art reference, the Court’s decision did not turn on that fact, and its reasoning did not depend on the prior art status of the expired patent. The following statements of the Court explain its reasoning:

• “The nature and extent of the legal consequences of the expiration of a patent are federal questions, the answers to which are to be derived from the patent laws and the policies which they adopt.”
• “The aim of the patent laws is not only that members of the public shall be free to manufacture the product or employ the process disclosed by the expired patent, but also that the consuming public at large shall receive the benefits of the unrestricted exploitation, by others, of its disclosures.”
• “The public has invested in such free use by the grant of a monopoly to the patentee for a limited time. Hence any attempted reservation or continuation in the patentee or those claiming under him of the patent monopoly, after the patent expires, whatever the legal device employed, runs counter to the policy and purpose of the patent laws.”
• “By the force of the patent laws not only is the invention of a patent dedicated to the public upon its expiration, but the public thereby becomes entitled to share in the goodwill which the patentee has built up in the patented article or product through the enjoyment of his patent monopoly.”
• “It is thus apparent that the patent laws preclude the patentee of an expired patent and all others including petitioner from recapturing any part of the former patent monopoly; for those laws dedicate to all the public the ideas and inventions embodied in an expired patent.”[4]

From the above quotations we see that this defense extends to (1) any product or method disclosed in the expired patent; (2) any claimed product or method of the expired patent’s owner even if not described in the patent; and (3) (perhaps) any product or method within the expired patent’s claimed “invention”.

Further, given that “the public has paid by the grant of a limited monopoly” for “the benefits of the free use of the invention,” it seems likely that this right to copy and use arises upon patent expiration regardless of the cause of that expiration, such as failure to pay maintenance fees.

The Supreme Court has referenced Scott Paper twice in the past ten years and said it is still “good law.[5]

Will the Federal Circuit Apply This Right Where the Expired Patent is Plaintiff’s Own Related Patent?

On their face, the above-quoted statements of the Scott Paper Court apply with equal force to an earlier-expired patent in the same family as, or otherwise related to, the plaintiff’s asserted patent. But would the Federal Circuit apply this right in that circumstance? Two Federal Circuit “obviousness double patenting” decisions suggest two different answers to this question.

In Gilead[6], the asserted patent issued earlier but expired later than another patent of the patent owner, because it was part of a separate chain of applications by the same inventors. The Court held that obviousness double patenting applied in this circumstance: the principle that a patent’s expiration allows the public to practice the invention “is violated when a patent expires and the public is nevertheless barred from practicing obvious modifications of the invention claimed in that patent because the inventor holds another later-expiring patent with claims for obvious modifications of the invention.” The Court cited the “bedrock principle of our patent system that when a patent expires, the public is free to use not only the same invention claimed in the expired patent but also obvious or patentably indistinct modifications of that invention.”

Ten years later, however, the Federal Circuit declined to extend Gilead to patents of a patent family sharing the same priority date: “A first-filed, first-issued, later-expiring claim cannot be invalidated by a later-filed, later-issued, earlier-expiring reference claim having a common priority date,” in view of “the purpose of the ODP doctrine, which is to prevent patentees from obtaining a second patent on a patentably indistinct invention to effectively extend the life of a first patent to that subject matter,” and because ruling otherwise would “effectively abrogate the benefit Congress intended to bestow on patentees when codifying PTA.”[7]

Neither decision addressed Scott Paper.

Scott Paper and Gilead viewed matters from the perspective of the public who had invested in the expired patent’s invention by granting the patent monopoly. From that perspective, the defendant in Allergan would seem to have a defense. But the Allergan Court instead viewed matters from the patent owner’s perspective, who did nothing to obtain a second patent extending the life of its first patent. The open question is which perspective will govern when a defendant presents this Scott Paper defense to the Federal Circuit.

Lessons for Patent-Infringement Defendants:

1. Look for expired U.S. patents that described and/or claimed a product or method patentably indistinct from the claimed subject matter.
2. Look for products and methods of the expired patent’s owner(s) that practiced the expired patent.
3. Assert such expired patents, products, and methods both as a complete defense to infringement and as evidence of technology whose value the patent owner’s damages theory must apportion out.