Federal Circuit Affirms that USPTO Miscalculates Patent Term Adjustment
In its opinion in Wyeth v. Kappos, No. 2009-1120 (Fed. Cir. Jan. 7, 2010), the Court of Appeals for the Federal Circuit affirmed that the U.S. Patent and Trademark Office (USPTO) misapplies a portion of the statute for determining Patent Term Adjustment (PTA). As a result, a large proportion of PTA-eligible patents (i.e., those issued from applications filed on or after May 29, 2000) are entitled to longer terms than have been awarded by the USPTO.The statute provides that a patentee shall be awarded extra days of patent term to compensate for, among other things, (i) delay resulting from the USPTO’s failure to issue actions within specified time frames (“A Delay”) and (ii) delay resulting from application pendency that exceeds three years (“B Delay”). To prevent double counting, the statute states that these periods shall be added in a PTA calculation only to the extent they do not “overlap.” The USPTO’s interpretation of the statute has been that these two periods always overlap and that a patentee is therefore awarded either A Delay or B Delay (whichever is greater), but never a combination of the two. In finding that the USPTO’s “strained” interpretation “cannot be reconciled with the language of the statute,” the Federal Circuit panel held unanimously that a patentee is entitled to PTA that includes the addition of periods of A Delay and B Delay to the extent that they do not occur on the same calendar day(s).
Implications of Decision for Recently Granted Patents
Subsequent to the Wyeth district court decision in September 2008, many patentees filed requests with the USPTO to have their patents’ PTA corrected according to the rule in that case. To date, the USPTO has generally responded to those requests by issuing decisions that reject the requests and refuse to apply the Wyeth rule. Patentees replying to those decisions may now cite the Federal Circuit decision as clear authority that must be followed. However, until the USPTO puts in place a procedure consistent with the law, patentees must continue to be vigilant in checking PTA calculations and:
file an application to correct PTA within two months after patent grant; and
file a complaint in the United States District Court for the District of Columbia against the USPTO if PTA has not been corrected within 180 days after patent grant.
Implications of Decision for Pending PTA Litigations
Fish & Richardson has filed complaints for many of its clients to have their patents’ PTA corrected according to the rule in Wyeth. We intend to confer with the Department of Justice to determine whether they will appeal the decision or take steps to comply with it. In the absence of a petition for rehearing, the deadline for the Department of Justice to appeal the Wyeth decision to the U.S. Supreme Court is April 7, 2010.
Until the USPTO clearly agrees that it will follow the Federal Circuit’s decision, the filing of an application for PTA within two months after patent grant and then a complaint within 180 days after patent grant continues to be the only way for a patentee to ensure that it will preserve its rights. We expect that new lawsuits will eventually become unnecessary when the USPTO puts procedures in place that calculate PTA for all newly issued patents in a manner that is consistent with the Wyeth decision.
Implications of Decision for Patents with a “Japan Tobacco” Error
Distinct from the Wyeth error, Fish & Richardson recently handled, on behalf of its pharmaceutical client Japan Tobacco Inc., a successful challenge to the way B Delay is calculated for patents resulting from national stage filings under 35 U.S.C. 371. In response to that case, the USPTO issued a formal Notice on September 9, 2009, acknowledging a systemic error in the way PTA is calculated for certain patents. Application of the Japan Tobacco rule results in many patents based on 371 national stage filings having longer periods of B Delay. When the Japan Tobacco rule is applied in conjunction with the Wyeth rule, as now affirmed by the Federal Circuit, the two rules often have a combined beneficial effect on patent term. The Japan Tobacco rule often increases the total period of B Delay and the Wyeth rule allows for the addition of periods of A Delay an B Delay.
Click here for the USPTO Notice of September 9, 2009, addressing the Japan Tobacco error.
Implications of Decision for “Old” Patents
Many patents have issued since 2003 with patent terms shorter than would have resulted if the Wyeth and Japan Tobacco rules had been applied. For most of those patents, the two month period post-issuance for challenging the PTA calculation has expired. The Wyeth and Japan Tobacco errors constitute two important misapplications of the PTA statute that the USPTO could address by providing all patentees a limited time period to apply to have PTA corrected in a manner consistent with the decisions. A limited retroactive remedy of this type would not be unprecedented. In 2004, the USPTO provided a two month period for retroactive correction of PTA for all patentees (including those whose patents had issued more than two months earlier) following an amendment to the rules governing how PTA is awarded in appeals that result in a remand from the Board of Patent Appeals and Interferences.
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