Optinose AS v. Currax Pharmaceuticals, LLC
48, 2021
| Del. | Nov 2, 2021Background
- OptiNose developed a bi-directional Exhalation Delivery System (EDS) and licensed a powder-EDS + sumatriptan product (ONZETRA® XSAIL®) to Currax under a 2019 License Agreement. Currax received the right to sell the Product in the U.S., Canada, and Mexico and the “first right” to prosecute Product Patents in the Territory; OptiNose retained broader global rights.
- The Agreement defines “Device” as the tangible device or components that incorporate OptiNose patents/intellectual property and gives OptiNose a prior-approval right for patent filings “relating to or characterizing the Device component of the Product or other OptiNose intellectual property.”
- Currax prosecuted U.S. Patent Application No. 15/879,009 (the ’009 Application). The USPTO issued a nonstatutory obviousness-type double-patenting rejection over U.S. Patent No. 8,899,229 (the ’229 Patent), requiring a terminal disclaimer to overcome the rejection.
- A terminal disclaimer must be filed by the patent owner or by an attorney of record with power of attorney; OptiNose (the owner) refused to execute a power of attorney enabling Currax to file the terminal disclaimer.
- Currax sued for specific performance to obtain the power of attorney; the Court of Chancery ordered OptiNose to provide it and held a terminal disclaimer did not trigger OptiNose’s prior-approval right because the court read “Device component” as limited to the tangible object. On appeal, the Delaware Supreme Court affirmed the POA ruling but reversed the Chancery Court’s narrow reading of the approval right: a terminal disclaimer can relate to/characterize the Device because it relates to the IP incorporated in the Device, so OptiNose’s prior approval is required (not to be unreasonably withheld).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the License Agreement requires OptiNose to execute a power of attorney so Currax can file a terminal disclaimer while prosecuting the ’009 Application | Currax: its "first right" to prosecute Product Patents and the covenant to "execute any forms required to effect such transfer" includes executing a POA necessary to file a terminal disclaimer | OptiNose: Agreement contains only express rights; no implied duty to provide a POA | Court: Affirmed Chancery — Agreement requires OptiNose, in principle, to provide a POA when needed for prosecution (e.g., to file a terminal disclaimer) |
| Whether filing a terminal disclaimer "relate[s] to or characterize[s] the Device component of the Product" and thus requires OptiNose’s prior approval | Currax: terminal disclaimer concerns pure patent prosecution/IP and does not relate to the tangible Device; no approval required | OptiNose: terminal disclaimer concedes lack of patentable distinctness in device-related claims and thus relates to/characterizes the Device; approval required | Court: Reversed Chancery — terminal disclaimer can relate to/characterize the tangible Device because it characterizes the IP incorporated in the Device; OptiNose’s prior approval is required (not to be unreasonably withheld) |
| Whether a terminal disclaimer constitutes "abandonment" under the Agreement, allowing OptiNose to assume prosecution | OptiNose: terminal disclaimer effectively abandons patent term and triggers OptiNose’s right to take over prosecution | Currax: terminal disclaimer does not constitute abandonment; it allows the application to continue | Court: Affirmed Chancery — terminal disclaimer is not abandonment under the Agreement; Currax did not abandon the application |
| Proper scope of the phrase "relating to" / whether "Device" includes the intellectual property that the tangible device incorporates | Currax: "Device component" should be read narrowly as the tangible object; approval right must be limited to filings about the physical device | OptiNose: "Device" includes the IP incorporated in the device and "relating to" should be read expansively to cover filings that affect that IP | Court: "Relating to" is expansive; "Device" includes the IP incorporated in the tangible device, so filings like a terminal disclaimer can trigger approval |
Key Cases Cited
- Desert Equities, Inc. v. Morgan Stanley Leveraged Equity Fund, II, L.P., 624 A.2d 1199 (Del. 1993) (standard of review for judgment on the pleadings is de novo)
- Chicago Bridge & Iron Co. N.V. v. Westinghouse Elec. Co. LLC, 166 A.3d 912 (Del. 2017) (contract interpretation requires reading provisions in the context of overall agreement and business relationship)
- GMG Capital Investments, LLC v. Athenian Venture Partners I, L.P., 36 A.3d 776 (Del. 2012) (contract language must be read in light of the agreement’s overall scheme)
- In re Van Ornum, 686 F.2d 937 (C.C.P.A. 1982) (double patenting doctrine and rationale)
- Japanese Found. for Cancer Research v. Lee, 773 F.3d 1300 (Fed. Cir. 2014) (only patent owner or attorney of record with power of attorney may file a terminal disclaimer)
- Quad Envtl. Techs. Corp. v. Union Sanitary Dist., 946 F.2d 870 (Fed. Cir. 1991) (terminal disclaimer as remedy to overcome obviousness-type double patenting rejection)
- SimpleAir, Inc. v. Google LLC, 884 F.3d 1160 (Fed. Cir. 2018) (terminal disclaimer is a strong indication that continuation claims lack patentable distinction from parent)
- Teva Pharm. USA, Inc. v. Sandoz, Inc., 789 F.3d 1335 (Fed. Cir. 2015) (statements during prosecution of related patents may inform claim construction)
- Kuhn Constr., Inc. v. Diamond State Port Corp., 990 A.2d 393 (Del. 2010) (contracts should be interpreted to give effect to each provision and avoid surplusage)