Double Patenting and Corporate Structure

35 U.S.C. Section 101 states that an inventor “may obtain a patent” which means an inventor is entitled to protection of their invention by only one patent.  Double patenting is prohibited and occurs when the claims of two “commonly owned” patents possess an overlap in subject matter. How can we structure our IP portfolio to avoid the double patenting issue?

Double patenting can affect your patent rights by shortening the period of protection to less than the statutory period of 20 years from the earliest filing date. Therefore, you should take care to carefully plan the assignment of patent assignment rights taking into consideration your corporate structure.

Double patenting exists: 1) “between an issued patent and an application filed by the same inventive entity, a different inventive entity having a common inventor, a common applicant, and/or a common owner/assignee,” or 2) “where the inventions claimed . . . were made as a result of activities undertaken within the scope of a joint research agreement . . . .”  The Manual of Patent Examining Procedure (“MPEP”) defines “common ownership” as being “entirely or wholly owned by the same person(s) or organization(s).”

There are two types of double patenting rejections an United States Patent and Trademark Office (“USPTO”) Examiner can make. The first is the “same invention” type (i.e. statutory), which prevents an inventor from having two patents with an identical or near-identical claim(s).  The second is the “obviousness” type (i.e. nonstatutory), which prevents an inventor from having two patents where one patent has a claim(s) that is obvious over the inventor’s other patent’s claim(s).

An applicant can overcome a double patenting rejection by: 1) “showing that the claims subject to the rejection are patentably distinct,” 2) “filing of a terminal disclaimer” (i.e. giving up part of the patent term), or 3) by proving that the patents/patent applications are not “commonly owned,” rendering the double patenting rejection moot.

Here we review decisions of the Patent Trials and Appeals Board (“PTAB”) and Districts Courts addressing the issue of whether two patents are “commonly owned” under the USPTO MPEP definition. For example, if patent #1 is owned by company A, and patent #2 is owned by company B, and both company A and B are wholly-owned subsidiaries of company C, are patents #1 and #2 “commonly owned?” Generally, the answer is no, they are not “commonly owned,” unless 1) there are common inventors or 2) there is an agreement indicating grant of legal rights to IP owned by the subsidiary companies to the parent company.

“Complete” identity of ownership or inventive entities between two patents is not a prerequisite to receiving a nonstatutory double patenting rejection. For example, when two patents have inventors in common, but entirely different inventive entities, owners, and assignees, the patents were still considered “commonly owned.”  See In re Hubbell, 709 F.3d 1140, 1146-47, (Fed. Cir. 2013). Many of the decisions relating to the meaning of “commonly owned” are based on the fairly well-established legal premise that “[a] corporate parent which owns the shares of a subsidiary does not, for that reason alone, own or have legal title to the assets [i.e. the patents] of the subsidiary” absent an agreement transferring title.

The below consists of “routine opinions”  of the PTAB and several United States District Court decisions. Routine opinions of the PTAB and the District Court decisions are merely persuasive, not binding on the PTAB. Vice versa, the routine opinions of the PTAB are not binding on the courts.

Currently, there are no Court of Appeals (CAFC) decisions that are controlling on this issue. However, Ex parte Bayer CropScience NV. 2020 Pat. App. LEXIS 10258 (P.T.A.B. September 30, 2020) is a recent, uncontradicted, PTAB routine opinion on the issue of the meaning of “commonly owned.” Bayer dealt with two sets of patents: 1) the ‘236 Leemans patent and 2) the ‘894 and ‘268 Strauch patents. The Leemans patent was co-assigned to Bayer CropScience NV and Biogen Idec NA Inc., and the Strauch patents were assigned to Bayer CropScience AG. All three of these companies were wholly-owned subsidiaries of Bayer.  The subject matter of the Leemans and Strauch patents overlapped, however, they had no common inventors. The PTAB ultimately held “although Bayer AG owns 100% of the shares of its subsidiaries Bayer CropScience NV and Bayer CropScience AG, Bayer AG does not own the [patents] of either company.” Therefore, the patents were not “commonly owned.” The PTAB noted even though Bayer AG (the parent company) allegedly benefits from this corporate structure concerning the patents, this alone is insufficient to render the patents “commonly owned.” The PTAB, was careful to distinguish Goss Int’l Americas, Inc. v. MAN Roland, Inc., which asked “‘whether a patent owned by a parent company and a patent owned by a wholly owned subsidiary are ‘commonly owned’ . . . .’” “The court in Goss . . . did not address whether a parent company is considered a “common owner” of patents assigned to two wholly-owned subsidiaries of the parent company . . . .” Further, Goss was a District Court of New Hampshire case, thus the decision is only binding on that particular District court level.

Hoffmann & Baron, LLP can help you navigate these complex, double patenting issues.

Hoffmann & Baron, LLP is a full-service law firm specializing in all areas of intellectual property, both domestically and internationally, since 1984. We safeguard intellectual property assets through procurement, litigation, counseling, opinions and licensing. What sets us apart is our personalized attention and ability to customize our services to fit the requirements of each client. Hoffmann & Baron, LLP has offices in New York, New Jersey and Washington D.C.