Kevin Repper, Patent Attorney, Dunlap Bennett & Ludwig

The Eastern District of Virginia has determined that the United States Patent and Trademark Office (PTO) has been incorrectly calculating patent term adjustment.  Patent term adjustment is when the PTO extends the length of a patent term due to delays that occur during the processing of the application.

Patent term adjustment is calculated based on delays caused by the PTO.  For example, §154(b)(1)(A) requires the PTO to provide at least one notice no later than 14 months after the application is filed, and to extent the PTO misses this 14 month deadline, the applicant receives a day for day credit toward the patent term adjustment.   Further, §154(b)(1)(B) states that if the issue of an original patent is delayed due to the failure of the USPTO to issue a patent within 3 years after the actual filing date of the application, the term of the patent shall be extended one day for each day after the end of the three year period until the patent is issued.

In Exelixis, Inc. v. Kappos, No. 1:12cv96 (E.D. Va. Nov. 1, 2012), Exelixis was granted Patent No. 7,989,622 on August 2, 2011.  The patent was filed on January 15, 2008.  Exelixis received the first correspondence, a restriction requirement, 28 months after the filing date.  Exelixis did not receive the Final Office Action until 38 months after the application filing date.  Exelixis filed a request for continued examination (RCE) a month later and the PTO responded to the RCE by mailing to Exelixis a Notice of Allowance & Fees Due.  Exelixis paid the fee shortly thereafter; however, the PTO did not send an Issue Notification until July 17, 2011.

The Issue Notification included the PTO’s final patent term adjustment calculation, totaling 368 days, consisting of (i) 344 days attributable to the PTO’s failure to file a notification within 14 months of the patent application date, (ii) 85 days of patent term adjustment attributable to the PTO for the failure of a patent to issue within 3 years of the application date, and (iii) a 61 day patent term adjustment reduction attributable to a delay by Elexisis.

The parties’ dispute focuses on the 85 days of patent term adjustment attributable to the PTO for the failure of a patent to issue within 3 years of the application date.  The PTO arrived at 85 days by subtracting 114 days (amount of days attributed to the RCE) from 199 days (the number of days from the expiration of the three year period to the issuance of the patent).  As mentioned about, Exelixis did not receive the Final Office Action and file the RCE until after the three years allotted.  The parties dispute whether 154(b)(1)(B) requires that any patent term adjustment be reduced by time attributable to an RCE when the RCE is filed after the expiration of the three year guarantee period specified by statute.

The plain language of the statute states: “Subject to the limitations under paragraph (2), if the issue of an original patent is delayed due to the failure of the United States Patent and Trademark Office to issue a patent within 3 years after the actual filing date of the application in the Unite States, not including:

(i) any time consumed by continue examination of the application requested by the applicant under section 132(b),

the term of the patent shall be extended 1 day for each day after the end of that 3-year period until the patent is issued.”

The PTO argued that any time consumed by an RCE has been and should be subtracted from the patent term adjustment, regardless of when the RCE is filed.  However, the court sided with Exelixis and ultimately concluded that the unambiguous language of the statute states that an RCE serves to toll the running of the three year clock if the RCE is filed within the three year period.  Further, the court notes that the statute fails to mention any consequence of an RCE filed after the three year period.  Therefore, since the RCE in the present case was filed after the three year period, the amount of days attributed to the RCE should not be considered for the patent term adjustment.

As a result of the ruling, it would be in the best interest of the inventor for practitioners to file an RCE three years after the filing date of a patent application.  This would prevent the reduction of patent term adjustment due to any delay caused by the RCE.

Posted in: Intellectual Property - Patents