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Calculation of Patent Term Extensions under the U.S. Patent Term Guarantee Act Following the Federal Circuit’s Decision in Wyeth v. Kappos

On January 7, 2010 in its decision in Wyeth and Elan Pharma International Limited v. Kappos, the Court of Appeals for the Federal Circuit held that the United States Patent and Trademark Office (USPTO) had in some cases been miscalculating the proper term of a patent whose term had been extended as a result of delays caused by the USPTO during prosecution of the application. The USPTO has estimated that 200,000 to 300,000 patents are affected by the decision.

When the United States implemented the provisions of TRIPs it changed the duration of a utility or plant patent from a period of seventeen years from grant to one of twenty years from the original filing date of the application or the filing date of the earliest non-provisional U.S. application from which priority was claimed. This change caused concerns that delays in the USPTO during prosecution of applications would result in a shortening of the effective life of patents granted after the change. The Patent Term Guarantee Act was enacted in 1999 to address this and ensure that the effective term of any patent granted for a period of twenty years from filing as adopted in accordance with TRIPS should not provide for less than seventeen years effective protection if delays caused by the USPTO would otherwise have reduced the period of effective protection to less than seventeen years.

The Patent Term Guarantee Act applies to any utility or plant patent application filed on or after May 29, 2000. Three types of delay are addressed:

A) failure of PTO to issue the first official action within fourteen months of filing or completion of national phase entry in the case of an application proceeding under the PCT and to act on applicant’s responses to official actions, act on appeal decisions and issue patents all within four months of the applicant’s acts triggering such action by the USPTO (the so-called 14-4-4-4 rule – hereinafter referred to as “A periods”);

B) failure to grant the patent within three years of filing the application giving rise to the patent or entry into the national phase of a PCT application, subject to exclusions for delays caused by requesting continued examination, interferences or secrecy orders (hereinafter referred to as “B periods”); and

C) delays due to secrecy orders, interferences, and successful appeals.

To avoid double counting of days, the statute states:

To the extent that the periods of delay attributable to [the above noted] grounds … overlap, the period of any adjustment granted under this section shall not exceed the actual number of days the issuance of the patent was delayed.

The provisions are aimed at ensuring that, except where the patent is subject to a terminal disclaimer, the term is extended for one day for each day that prosecution has been delayed as a result of delays caused by the PTO. However, this extension is reduced by delays requested by the applicant, including obtaining extensions of term for response to official actions, unless the applicant “in spite of all due care” was unable to respond within the three month period.

Any anticipated extension is notified to the applicant on the notice of allowance, although this assumes that there will be no delay by the USPTO in issuing the patent after this point. Any challenge to the anticipated extension term so notified must be filed prior to payment of the issue fee. The applicant has a further opportunity to challenge the term of an extension within a two month period after the grant of the patent, but any such challenge should be confined to issues that could not have been raised earlier. This in effect means that determinations of terms of extension based solely on the PTO having taken more than fourteen months to issue the first action or four months to act in response to the applicant’s reply to an official action or act on an appeal decision must be challenged before grant, but if the overall delay is more than three years from the relevant filing date or date of national phase entry, the USPTO’s determination of the appropriate extension can be challenged within two months after grant of the patent. There is a petition fee associated with making either of such challenges. If, after challenging the USPTO’s initial determination of an extension term the patentee still disagrees with the determination made by the PTO, the patentee has 180 days from the grant of the patent to appeal to United States District Court for the District of Columbia.

In its decision in Wyeth v. Kappos, the Federal Circuit decided that the USPTO had been misapplying the provision in the law preventing double counting of days of possible extension noted above. The USPTO had read this provision as meaning that an applicant obtained an extension for the longer of the “A” and “B” periods. The Federal Circuit held that both periods had to be counted but that “A days” should be uncounted if they occurred after the end of the three year period. That is that the same specific calender day should not be counted twice.

In the patent under consideration in Wyeth v. Kappos, the USPTO had calculated that there were 610 days of “A” delay caused by the USPTO (51 of which occurred more than three years after the application was filed), 148 days of delay caused by the applicant and 345 days of “B” delay. Applying its rule of granting an extension for the longer of the “A” or “B” delays reduced by the number of days of delay caused by the applicant, the USPTO calculated an extension of 462 days (610-148). Under the calculation as it should have been carried out according to the Federal Circuit’s judgment, the correct term for the extension was 756 days, this being calculated as 610 (“A” days) + 345 (“B” days) – 148 (delay caused by applicant) – 51 (“A” days occurring more than three years after filing).

On January 21, 2010 the USPTO announced that it would not seek review of the Court’s decision and on January 28, 2010 issued a notice providing some interim relief for those whose patent terms have been miscalculated and who take action within 180 days of the grant of the patent, but not for those whose patents issued earlier. A further notice may issue later relating to correction of terms for such patents.

In the notice of January 28, the USPTO advised that it expected that its computers would be reprogrammed to calculate terms correctly by March 2, 2010. Consequently the interim relief noted above will apply only to patents issued before March 2.

The January 28 notice also provides an alternative to the general requirements for requesting reconsideration noted above. For patents that qualify for this alternative, it will be possible to request recalculation of the Patent Term Guarantee extension by simple filing of a request without payment of a fee. To qualify for this alternative, the patent must have issued before March 2, 2010, the request for recalculation of the term must be filed within 180 days of the grant and the request for recalculation be based solely on the USPTO’s having used the method for calculating the extension that was held to be incorrect by the court in Wyeth v Kappos.

In addition to the errors noted in Wyeth v. Kappos, the PTO has acknowledged that it has also been miscalculating the term of national phase entry PCT applications by using the start date for the “three year element” of patent term adjustment as the date of completion of national phase entry requirements when it should have been the actual date of national phase entry (which cannot be later than thirty months from priority). This means that some term extensions have been calculated to produce a number which is too low (where US national phase entry was effected around thirty months from priority but other papers filed later in response to a “missing parts” letter) but other extensions that have been calculated have been too long (because all papers were filed well ahead of the thirty months date but no request made for early national phase entry). If a patent has been granted for too long a term, it may be necessary to draw the PTO’s attention to this to avoid allegations of inequitable conduct.

In a notice of September 9, 2009 (following the revelation of the situation noted above with respect to using the wrong start date for calculating the three year period for PCT cases) the USPTO issued a notice that there was no need to seek correction of calculation of “three year&rduqo; issues at the time of payment of the issue fee because the date of the patent was not known at that point and that requests for correction of “three year” issues should be filed within two months of grant. Requests for reconsideration of extension terms thought to have been miscalculated on this basis require submission of a petition within two months of grant and payment of a fee under the general procedure.

For older patents, to which the January 28, 2010 notice does not apply, unless the PTO effects a rule change to address the situation (and there are some suggestions that the USPTO may effect a rule change to allow belated requests for reconsideration of the extensions previously granted) the options are limited.

One possibility is to file a request for correction of extension as noted above together with petition for suspension of the rules relating to the period within which such a request must be filed on the basis that the situation is extraordinary and suspension of the time periods is required in the interests of justice. There are, however, fees associated with this since in addition to the $200 fee required for seeking correction, a further $400 fee is required for seeking suspension of the rules.

Other possibilities include simply petitioning the Director of the USPTO to use his general supervisory power to issue a correction (an action which does not require a fee) or to seek a certificate of correction on the ground that the USPTO made a mistake.

We will be happy to discuss particular options with clients who wish to seek correction of terms for patents that have already been granted.

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