Last week the Court of Appeals for the Federal Circuit issued its long-awaited ruling that the U.S. Patent and Trademark Office (“PTO”) has been incorrectly calculating the patent term adjustment (“PTA”) for a large number of patents that issued after 1999. Patent term adjustment is intended to extend the life of a patent to compensate for delays by the Patent Office in processing the application. The ruling should result in longer terms for many patents eligible for PTA that have not yet issued. It remains to be seen how this ruling will affect already-issued patents, since under the current rules a challenge to the PTO’s original PTA calculation must be filed within two months of issuance.

35 U.S.C. § 154(b) provides that the term of a patent can be adjusted based on patent office delays that occur during prosecution of the application. The most common delays include those due to failure of the PTO to respond to certain applicant filings (known as “A Delays”) and delays due to failure of the PTO to issue a patent within three years of filing (known as “B Delays”). Delays can also accrue due to interferences, secrecy orders and appeals. The statute includes a provision that prevents a patentee from receiving both A Delays and B Delays where these delays “overlap” with each other. PTA is thus calculated by summing the A Delay and B Delay and then subtracting the number of days in which these two periods of delay overlap. At issue before the Federal Circuit was the method by which the PTO interpreted the overlap provision.

Before the January 7, 2010, decision in Wyeth v. Kappos,[1] the PTO considered the entire period of pendency of the application (from the time of filing to issue) as the relevant B Delay period for evaluating overlap, reasoning that A Delays during prosecution necessarily affected the amount of time that the application was pending. As a result, any A Delays necessarily overlapped with the B Delay period, and the PTO was giving the patentee the greater of the A Delay or B Delay, but not both.

Wyeth and Elan Pharma (collectively, “Wyeth”), owners of two patents relating to treatments for Alzheimer’s disease (U.S. Patent Nos. 7,179,892 and 7,189,819), challenged the PTO’s interpretation of the overlap provision and sued the PTO in the U.S. District Court for the District of Columbia. The parties alleged that the PTO’s interpretation was contrary to the plain meaning of 35 U.S.C. § 154(b) and as a result they lost 294 days of PTA for the ‘892 patent and 230 days of PTA for the ‘819 patent. The district court agreed with Wyeth on summary judgment. The court held that the problem with the PTO’s interpretation is that “it considers the application delayed under § 154(b)(1)(B) [the B Delay guarantee] during the period before it has been delayed.” Wyeth v. Dudas, 580 F. Supp. 2d 138, 142 (D.D.C. 2008) (emphasis in original). The PTO appealed the district court’s ruling, and the Federal Circuit has now affirmed, finding that “Section 154(b)’s language is clear, unambiguous and intolerant of the PTO’s suggested interpretation.” Wyeth v. Kappos, 2010 WL 27184, at *8.

As a result of this decision, the PTO will need to adjust how it calculates PTA so that it is consistent with the court’s ruling. Although some patents will not be affected by this decision either because they issue within three years of filing or due to activity during prosecution that tolls the B Delay period (such as the filing of a Request for Continued Examination), a great number of patents that are pending for more than three years before issuing will be entitled to more PTA than they would have received prior to Wyeth.

Once the PTO implements the Wyeth decision, likely by revising its internal examination guidelines, PTA for patents that issue going forward should be properly calculated. The PTO has not yet indicated when it will revise its current rules. In the meantime, patentees should consider filing requests for correction of PTA for recently issued patents within the time periods provided for in the rules, which, for requests for correction based on incorrect application of the overlap provision, is the time period within two months after issuance of the patent (see 37 C.F.R. § 1.705(d)). If a recently issued patent is beyond this two month time period, patentees may file suit against the PTO in the U.S. District Court for the District of Columbia within 180 days after issuance of the patent per 35 U.S.C. § 154(b)(4).

For patents that issued more than two months ago, it is currently unclear what recourse, if any, a patentee will have to recapture patent term lost due to the PTO’s pre-Wyeth procedure for calculating PTA. While the two-month window in 37 C.F.R. § 1.705(d) is clear, an equitable argument can certainly be made for the PTO to accept requests to correct PTA in patents issuing outside this time period if the request is based solely on correction of the PTO’s erroneous overlap interpretation. While such a request may ultimately be denied, for many patents the value of the additional patent term to be gained could substantially outweigh the nominal cost for requesting correction.