The standard term of a patent is 20 years from the date the application is filed. Under the Patent Act, US patents are subject to adjustment to compensate for US Patent and Trademark Office (USPTO) delays. The basic statutory scheme is based on an expected patent application pendency of no more than three years. If a patent is issued more than three years from its filing date, then its term is extended one day for each day beyond three years, less any delay attributed to the Applicant. Extension is also available for other USPTO delays during the pendency of the patent application. These extensions are referred to as Patent Term Adjustments (PTA). An award of PTA by the USPTO extends the life of a patent and can be important to the value of issued US patents.
Recent court decisions have clarified the way that the USPTO should award PTA and can result in a longer patent term, often for a significant and valuable time period. Because the USPTO has yet to implement these court decisions into their automatic calculation of PTA, patent holders will need to request a recalculation of the PTA provided by the USPTO in order to receive the benefit of these decisions. This article summarizes the recent cases and provides recommendations on how patent holders can best take advantage of them.
Continued Examination and Appeals After Three Years No Longer Affect PTA
The USPTO has treated the filing of a Request for Continued Examination (RCE) anytime during prosecution as terminating the guarantee of three-year patent pendency. Thus, once an RCE was filed, any further delays (whether or not caused by the USPTO) would not result in a longer PTA.
Recently, in Exelixis, Inc. v. Kappos,6 the US District Court for the Eastern District of Virginia held this practice does not comport with the plain meaning of 35 USC §154(b)(1)(B).7 The court reasoned that filing an RCE only terminates the guarantee of three-year patent pendency if the request is filed within three years from the filing date. According to the court, Section 154(b)(1)(B) “start[s] a three year clock on the date the application is filed, toll[s] the running of this clock if, within the three year period, any of three events occur, including an RCE filing, and add[s] a day for day PTA to the patent term for any delay in the issuance of the patent after the three year clock, less any tolling, runs out.”
Significantly, Exelixis holds the filing of an RCE after three years from the filing date has no impact on the guarantee of three year patent pendency and will not reduce the amount of PTA due.
Although not stated explicitly by the court, we believe the interpretation of Section 154(b)(1)(B) in Exelixis also applies to the filing of an appeal to the Board of Patent Appeals and Interferences (BPAI), because an appeal is one of the “events” listed in Section 154(b)(1)(B). The other “events” listed in Section 154(b)(1)(B) are the imposition of a secrecy order, an interference proceeding, and delay requested by the applicant. Thus, under the reasoning of Exelixis, the filing of a Notice of Appeal after three years from the filing date should have no impact on the guarantee of three year patent pendency and should not reduce the amount of PTA due.
The ruling in Exelixis may significantly adjust the term of US patents where there has been an RCE or appeal filed. In pending examinations, applicants should carefully consider the timing of the filing of any RCEs or Notices of Appeal in light of this ruling. In some cases, it may be wise to delay such filings until after three years from application filing in order to take advantage of the three year pendency guarantee, even if extension fees are required to do so.
It appears the USPTO will appeal the District Court decision in Exelixis to the Court of Appeals for the Federal Circuit. USPTO, therefore, has yet to adjust their automatic PTA calculation to account for the Exelixis decision. In order for applicants to receive the additional patent term due under this decision, a Request for Reconsideration of Patent Term Adjustment must be filed with the USPTO within two months of patent issuance.
Three Year Pendency Guarantee No Longer Affected by Timely Filed Responses
The USPTO currently treats any response to an Office Action submitted more than three months after the USPTO mailed the Office Action as applicant delay and reduces the PTA accordingly. Under current practice, if a response to Office Action is due on a weekend or holiday, the response can be timely filed on the next business day.8However, an applicant would lose PTA for an otherwise timely filing on the next business day. Thus, for example, if a deadline for response falls on a Saturday, and a response is filed the following Monday, the response would be timely filed, but the USPTO would deduct two days of applicant delay from the PTA ordinarily afforded.
In ArQule, Inc. v. Kappos,9 the US District Court for the District of Columbia found this practice incorrect under a plain reading of 35 USC §154(b)(2)(C)(ii)10 and 35 USC §21(b)11. Because Section 21(b) provides a grace period for responses due on a weekend or federal holiday, the court reasoned the same grace period applies to the application of applicant delay under Section 154(b)(2)(C)(ii). In short, Applicants cannot be penalized under Section 154(b)(2)(C)(ii) by a reduction in PTA for taking advantage of the grace period under Section 21(b).
As with the Exelixis decision, the USPTO has yet to adjust their automatic PTA calculation to account for the ArQule decision. In order for Applicants to receive the additional patent term due under this decision, an Application for Patent Term Adjustment must be filed with the USPTO by payment of the Issue Fee.
Deadlines for Requesting Reconsideration of USPTO PTA Calculation
Applicants can request reconsideration of the PTA determination provided by the USPTO by filing an Application for PTA or a Request for Reconsideration of PTA with the USPTO, or by appealing the PTA determination to the District Court of Eastern Virginia.
To request review of the PTA calculation provided with a Notice of Allowance, applicants must file an Application for PTA no later than the payment of the Issue Fee. To request review of the PTA calculation provided with an Issue Notification, patent holders must file a Request for Reconsideration of PTA within two months of the patent issuance date. Under USPTO regulations,12 any issues that were raised, or could have been raised, in a pre-issuance Application for PTA shall be dismissed as untimely as to those issues if raised in a postissuance Request for Reconsideration of PTA.
An appeal of a PTA determination provided by the USPTO must be filed within 180 days of the patent issue date. This appeal must be filed in the US District Court for the Eastern District of Virginia. Pursuant to a recent Court decision13 an appeal would also be timely filed within 180 days after denial by the USPTO of a Request for reconsideration of PTA. According to the US District Court for the District of Columbia, filing a Request for reconsideration of PTA tolls the 180 day deadline.
Recommendations
We recommend applicants carefully review the timing of filing of an RCE or a Notice of Appeal in view of the Exelixis decision. If possible, applicants should consider delaying such filings until after three years from application filing in order to take advantage of the three year pendency guarantee, even if extension fees are required to do so.
Additionally, given the potentially significant amount of additional patent term available under these new decisions, we recommend applicants review every USPTO PTA calculation before payment of an Issue Fee and again within two months after issuance of a patent. Applicants and patent holders should file a Request for reconsideration of PTA or appeal the PTA determination when appropriate.