Thanks to the Federal Circuit, longer patent terms are available for thousands of patents that have undergone prolonged examinations.

An extended term is of particular value in the pharmaceutical and biotechnology industries.  Because of the high regulatory hurdles that new therapeutic molecules have to overcome, and because of the time that it takes to gain market acceptance for some new drugs, patents in these fields tend to be most valuable towards the end of their effective terms.  Even a few extra days of patent term can translate into millions of dollars in sales for a blockbuster drug.

Novartis AG v. Lee centers on the interpretation of 35 U.S.C. § 154, the federal statute that awards patent applicants a day-for-day adjustment to their patent term for several kinds of USPTO-caused delays in the prosecution of their patent application.  In particular, the statute guarantees applicants “no more than 3-year application pendency” but excludes “any time consumed by continued examination of the application requested by the applicant,” through a request for continued examination (RCE) (emphasis added).

The purpose of an RCE is to re-open and continue prosecution before the USPTO without having to file a new patent application.  This may happen when all of an applicant’s claims have been rejected by the USPTO in a Final Office Action and the applicant wants another opportunity to amend its claims or offer evidence of their patentability.  It may also happen when the applicant wishes to submit new prior art that pertains to the invention.

Prior to the Federal Circuit’s recent Novartis decision, the USPTO’s policy dictated that an RCE filing at any point during the pendency of a patent application would stop the USPTO’s three-year clock from running.

When this policy was applied to Novartis in 2010, it argued that once a Notice of Allowance was mailed to it, prosecution of the case was closed and thus the subsequent time up until the issue date of the patent was not time consumed by the RCE, but was instead time consumed by the USPTO.

In January 2014, the Federal Circuit agreed with Novartis on this point: “We reject the PTO’s view that the time after allowance, until issuance, is ‘time consumed by continued examination’ and so is excluded from adjustments given to the patentee.  Such time from allowance to issuance undisputedly would count towards the PTO’s three-year allotment in a case not involving continued examination.  This is no basis for distinguishing a continued examination case.”

To help readers understand the results of this important case, the graphic below illustrates the additional patent term adjustment (PTA) that Novartis should soon be awarded for one of its patents.  The red brackets indicate the time that the USPTO sought to exclude from the PTA calculation as delay caused by Novartis due to its filing of an RCE.  The purple brackets indicate the nearly three months of additional PTA that Novartis should receive, which run from the Second Notice of Allowance on July 14, 2010, to the patent issue date of October 5, 2010.

Click here to view image.

Given the frequency with which RCE’s are used, and the fact that many patents take longer than three years to issue, the Federal Circuit’s holding in Novartis is highly relevant to thousands of recently issued patents.

Under current regulations, applicants have a total of seven months from the date of patent issuance to request reconsideration of a patent term adjustment award. Therefore, it may be possible to obtain additional patent term where an RCE was filed during prosecution and where the period from filing to issuance, exclusive of the period devoted to continued examination, is greater than three years.

Those with recently issued or soon-to-be-issued patents in which an RCE was filed should review the information provided above and contact their legal counsel immediately to make sure they have obtained all of the patent term adjustment they are legally entitled to receive.  Any owner of an invention that enjoys commercial success should welcome a chance to extend the patent’s term and, with it, the financial reward.