Patent Term Adjustments Affected by Court’s Decision on USPTO’s Term Adjustment Calculations

On January 7, 2010, the Court of Appeals for the Federal Circuit issued a decision interpreting the calculation of patent term adjustment under 35 USC § 154(b)(2)(A). Wyeth v. Kappos, Appeal No. 2009-1120 (Fed. Cir. Jan. 7, 2010). The court's decision rejects the methodology by which the U.S. Patent and Trademark Office has been calculating such adjustments. In view of the court’s decision, many patents and applications pending for more than three years may be entitled to additional patent term adjustment, and in some cases, that additional adjustment may be significant.

Section 154(b) of the patent statute promises patent applicants a full patent term adjustment for any delay during prosecution caused by the Patent Office. This promise is embodied in a number of guarantees. One of these guarantees is that the Patent Office will issue prompt responses by extending the term of the patent one day for each day the Patent Office does not meet certain examination deadlines such as, for example, issuing a first substantive response to a filed patent application within fourteen months of its U.S. filing date (period "A"). Another guarantee is that the Patent Office will extend the term of the patent one day for each day issuance is delayed due to the Patent Office's failure to issue a patent within three years after the application's actual (not effective) U.S. filing date (period "B"). These guarantees are subject to a limitation that restricts the length of adjustment when any these periods of delay overlap.

The Patent Office was authorized by law to establish procedures for the application and determination of patent term adjustment. Under that authority, the Patent Office issued and administered a rule whereby it would limit the patent term adjustment to the actual number of days the issuance of the patent was delayed where the "A" and "B" periods overlap. For example, if a patent entitled to 20 days of period "A" adjustments issues 20 days after the three-year mark, then it is only entitled to a total of 20 days of adjustment (and not 40 days of adjustment). In other words, the entire period "A" delay "overlaps" with the entire period "B" delay. Under its rule and administration, the Patent Office used either the greater of the period "A" delay or period "B" delay to determine the appropriate adjustment; but, it would never combine the two.

A private party ("Wyeth") challenged the Patent Office's rule and administration as being contrary to the statute. One of that party's patents was subjected to 610 days period "A" delay during prosecution, and 345 days period "B" delay. There were 51 days of delay that overlapped with both periods "A" and "B," and there were 148 days of delay solely attributable to the party/applicant. The Patent Office calculated the total patent term adjustment at 462 days—i.e., 610 (the greater of A or B) - 148 (applicant delay). According to Wyeth, however, the "period of delay" for purposes of period "B" could not have started until three years after the application’s filing date. For that reason, the only possible "overlap" was any period "A" delay occurring after the three-year mark. Because only 51 days of period "A" delay occurred after the three year mark for the patent, the adjustment, according to Wyeth, should have been 756 days—i.e., 610 (A delay) + 345 (B delay) - 51 ("overlap") - 148 (applicant delay). After unsuccessfully petitioning the Patent Office to accept its calculation, Wyeth sued the Patent Office in a U.S. district court requesting judgment and a court order directing the Patent Office to grant an adjustment consistent with Wyeth's calculation methodology. On September 30, 2008, the district court issued the requested judgment and order, and the Federal Circuit, on January 7, 2010, affirmed the district court's actions.

In view of the Federal Circuit's decision, many patents and applications pending for more than three years may be entitled to additional patent term adjustment, and in some cases, that additional adjustment may be significant. Patent applicants and patentees, however, have limited opportunities to seek this additional adjustment.

• First, applicants may seek this additional adjustment by petitioning the Patent Office after an application has been allowed but no later than payment of the issue fee.
• Second, patentees may seek this additional adjustment by petitioning the Patent Office within two months of the patent's issuance, or by filing an action in the U.S. District Court for the District of Columbia within 180 days of the patent's issuance.

Accordingly, patent applicants and patentees should quickly review recently allowed applications and recently issued patents in view of their business concerns to determine whether an additional patent term adjustment should be sought and, if so, seek timely correction of the adjustment.

Sandip H. Patel is a partner in the intellectual property law firm of Marshall, Gerstein & Borun LLP in Chicago. Mr. Patel can be reached at [email protected] or at 312.474.9562.