On January 7, 2010, the U.S. Court of Appeals for the Federal Circuit affirmed the decision of the U.S. District Court for the District of Columbia that requires the USPTO to calculate patent term adjustment (PTA) under 35 U.S.C. § 154 in a manner that could result in additional patent term for many U.S. patents. Wyeth v. Kappos, No. 2009-1120 (Fed. Cir. Jan. 7, 2010). The patent term statute (§ 154) establishes that a U.S. patent's term runs for 20 years from the earliest effective non-provisional U.S. filing date of the patent application. Recognizing that delays during prosecution operate to shorten patent term, Congress enacted § 154(b)(1) to provide PTA to account for USPTO delays under certain circumstances. The statute provides “guarantees” against three different types of delay:
“A” delay, when the USPTO fails to act in accordance with set timeframes (such as issuing a first office action within 14 months, issuing a second action or allowance within four months of a response, and issuing a patent within four months of the issue fee payment). 35 U.S.C. § 154(b)(1)(A).
“B” delay, when the USPTO fails to issue a patent within three years of the actual filing date of the patent application. 35 U.S.C. § 154(b)(1)(B).
“C” delay, when the application is involved in an interference or appeal, or is subject to a secrecy order. 35 U.S.C. § 154(b)(1)(C).
The statute also provides that “[t]o the extent that periods of delay … overlap, the period of adjustment … shall not exceed the actual number of days the issuance of the patent was delayed.” 35 U.S.C. § 154(b)(2)(A). The issue in Wyeth surrounded the interplay between A delay and B delay, and how double counting of those types of delay is to be avoided.
Since at least 2004, the USPTO has taken the position that any A delay contributes to B delay, and thus “overlaps” with B delay. 69 Fed. Reg. 21706 (2004). Under this interpretation, the USPTO effectively awards PTA for only the greater of A delay or B delay, not both.
Wyeth challenged this interpretation, arguing that A delay and B delay only “overlap” if the delay occurs on the same calendar day. Thus, only A delay that occurs more than three years after the filing date of the application could overlap with B delay. The District Court agreed with Wyeth, and the Federal Circuit now has affirmed that decision.
The Federal Circuit found that there was “no ambiguity” in the relevant terms of the statute, and so no deference was due to the USPTO's interpretation, which the Court found to be “strained.” The Court determined that the clear and unambiguous statutory language provides that “no ‘overlap' happens unless the violations occur at the same time.” The Court emphasized that “[b]efore the three-year mark, no ‘overlap' can transpire between the A delay and the B delay” and that “[i]f an A delay occurs on one day and a B delay occurs on a different day, those two days do not ‘overlap'” under the statute.
The Court acknowledged that operation of the statute might result in “some type of windfall adjustment” under certain circumstances, and that applicants situated similarly with regard to total application pendency time (time from filing to grant) may receive different PTA awards, but concluded that “the statute requires as much” and emphasized that the USPTO's interpretation also can result in “potential perverse results” and “imbalanced treatment of similarly-situated patentees.”
Although it is possible that the USPTO will request rehearing of this decision or seek review by the U.S. Supreme Court, patentees should consider taking immediate relevant action regarding PTA. The USPTO has not been applying the PTA statute in accordance with the 2008 Wyeth district court decision and has not held PTA determinations in abeyance pending the outcome of the Federal Circuit appeal. For patents granted within the past two months, patentees can file a request for reconsideration of a final PTA determination under 37 C.F.R. § 1.705. Once the Federal Circuit decision becomes final, the USPTO should apply it to pending PTA determinations; nevertheless, patentees with a pending request for reconsideration should consider a supplemental submission citing the Federal Circuit decision. For patents beyond these periods of USPTO review, but granted within the last 180 days, patentees can file a civil action in the U.S. District Court for the District of Columbia under 35 U.S.C. § 154(b)(4)(A) to obtain a PTA award based on the new Federal Circuit decision. At the moment, it is not clear whether any avenue exists to obtain additional PTA for patents that are not within either of these windows. Patentees who might benefit from significant PTA under Wyeth should contact counsel to explore all options.