On November 1, 2012, the Eastern District of Virginia addressed whether the United States Patent and Trademark Office (PTO) properly calculates “B time” Patent Term Adjustment (PTA) under 35 USC §154 in view of Requests for Continuing Examination (RCEs) filed past the statutory three years. In its findings, the court ruled the PTO method invalid as a consequence of improper statutory interpretation. Consequently, RCEs filed beyond the B time statutory three years may not toll the B time PTA calculation.

PTA Calculations

Historically, patentees expressed apprehension of the relationship between the time of patent examination and the ultimate length of the patent’s enforceability. In response, new PTA calculation procedures were drafted applying three methods of calculating PTA. The first method is administrative delay. So-called “A time” under §154(b)(1)(A) requires PTA credit of one day for each day of delay resulting from administrative delays. Indeed, §154 requires the PTO provide one §132 notice within 14 months after filing and respond to most applicant communications within four months. The second method is a guarantee of issuance within three years of filing. So-called “B time” under §154(b)(1)(B) credits PTA for each day of examination exceeding the three-year deadline until issuance. After calculating applicable PTA, the PTO deducts applicant delays such as those expressed in 37 CFR 1.704.

Since Wyeth, the PTO calculation of PTA is additive of A time and B time – subject to deductions of time resulting from applicant delay.[1] While A time is readily computed in most instances, §154 provides for methods to toll B time, including the filing of an RCE before the three-year deadline. If an RCE is filed after the three-year critical date, the PTO calcucates B time from the critical date through the filing date of the RCE, eliminating any PTA that would have accumulated between the filing date of the RCE and the issuance of the patent. Exelixis challenged this practice as an excess of the PTO’s statutory authority and demanded that B time calculations not be tolled by RCEs filed beyond the three-year critical date.

District Court Synopsis

Exelixis was satisfied with the PTO’s calculation of A time of 344 days. However, it disputed the 85 days of calculated B time. The PTO issued a final notice of rejection of Exelixis’ application two months after the three-year deadline. In response, Exelixis filed an RCE resulting in a notice of allowance three weeks later. Accordingly, the PTO tolled B time PTA upon the filing of the RCE. Exelixis argued the RCE had no effect on PTA because it was filed past the three-year deadline. Consequently, Exelixis calculated the B time PTA as 199 days or the time between the three-year deadline and the date of issuance.

The court interpreted §154 using the plain language meaning of the statute. In doing so, it found the language of §154 was clear and unambiguous. The language allowing for tolling of B time modified the determination of the three-year timeline, not the PTA remedy. Accordingly, any event past the three-year critical date had no impact on the PTA. Further, the court explicitly ruled that filing an RCE only tolls the B time calculation when it is filed before the three-year critical deadline. The plain language of the statute makes it clear that, once the B time can be calculated (i.e. beyond the three-year critical date), PTA is credited regardless of events following the deadline.

Practice Effects

If this district court decision stands, patent term may be extended for a significant number of applicants. Exelixis has not changed the current practice of calculating A time, nor has Exelixis changed the current practice of calculating applicability of B time for RCEs filed prior to three years from the actual filing date of the application. However, applications in which RCEs were filed after the three-year deadline and resulted in tolled B time are affected by this decision. Practitioners should reevaluate recent PTA determinations to ensure maximum patent term is obtained. Additionally, applicants should avoid filing RCEs before the three-year deadline to maximize patent term. Note that while RCEs filed after the three-year deadline cannot toll B time, filing multiple RCEs past the three-year deadline to deliberately extend examination time may be viewed as applicant delay and deemed deleterious to PTA calculations.

Remedies for improperly calculating PTA are available under 37 CFR 1.705 and 35 USC §154(b)(4)(A). Patents issued within the last two months can have PTA corrected via a request for reconsideration under 37 CFR 1.705(d). Patents issued in the last 180 days may have PTA recalculated by filing civil action in the Eastern District of Virginia as specified in 35 USC §154(b)(4)(A).