The U.S. Court of Appeals for the Federal Circuit recently affirmed a district court decision finding that the U.S. Patent and Trademark Office (USPTO) has misinterpreted the statute 35 U.S.C. § 154(b), which provides for patent term adjustment (PTA) for certain USPTO delays. Wyeth and Elan Pharma International Limited v. David J. Kappos, Case No. 09-1120 (Fed. Cir. January 7, 2010) (Rader J.).

In 1999, 35 U.S.C. § 154(b) was amended to provide adjusted patent term for administrative delays caused by the USPTO. This decision addresses the interplay between two of the three patent term guarantee provisions, namely § 154(b)(1)(A) and § 154(b)(1)(B), also referred to as A and B delays, periods or guarantees, respectively.

The two provisions at issue provide a one-day extension of patent term for every day that issuance of a patent is delayed by a failure of the USPTO to comply with various enumerated statutory deadlines (A delay) and a one-day extension of patent term for every day greater than three years after the filing date that it takes a patent to issue (B delay). The statute further provides that to the extent that the A and B delays overlap, “the period of any adjustment shall not exceed the actual number of days the issuance of the patent was delayed.”

The issue in this case stems from the USPTO’s calculation of PTA for two U.S. patents co-owned by Wyeth and Elan Pharma. For each patent, the A and B periods overlap. In 2004, the USPTO had amended its interpretation of “overlap” as the period of time between the A and B periods arising and beginning during the pendency of the patent application. Thus, in its PTA calculations, the USPTO used the greater of the A or B period to calculate PTA and did not combine the periods. Wyeth and Elan Pharma sued the USPTO because they disputed the USPTO’s calculations. According to Wyeth, the B period could not have started until three years after the application’s filing date, such that the A and B periods could only overlap for any A period delay occurring three years after filing of the application.

By Wyeth’s calculation, for each of its patents the amount of PTA was greater than the amount calculated by the USPTO. For each patent, the PTO calculated the PTA as the greater of the A or B period minus the days caused by applicant delay. Wyeth calculated the PTA to be the sum of the A and B delays and then subtracted the days of A delay after three years of pendency (i.e., in the B delay period) and the days caused by applicant delay. The Federal Circuit, affirming the district court ruling, agreed with Wyeth’s calculations and stated that the statute “language is clear, unambiguous, and intolerant of the PTO’s suggested interpretation” and “gives no deference to the greater-of-A-or-B rubric.”

The USPTO announced that it will not seek further court review and it “is in the process of changing the manner [in which] it will calculate patent term adjustments.

Practice Note: Going forward, patentees should carefully review the USPTO’s calculated PTA, including those for patents that issued recently and are still within the time period permitted by statute to request a recalculation, i.e., within 180 days after grant of the patent, 35 U.S.C. § 154(b)(4)(A), or within two months of issuance of the patent, 37 C.F.R. § 1.705. Furthermore, in allowed applications, patentees should consider requesting reconsideration of the USPTO’s calculated PTA based on the Wyeth decision prior to paying the issue fee, 37 C.F.R. § 1.705(b).