10 Oct
2019

Patent term adjustments in the US are readjusted, again

In theory, patent term adjustment calculations should be simple; in practice they rarely are. That makes two recent CAFC decisions in this area important to know about, writes Jeff Hovden of Robins Kaplan LLC

As we reported on IAM back in February, the statutory patent term adjustment (PTA) - extending the life of a patent for delays charged to the US Patent and Trademark Office (USPTO) - can add up to $50 million per day to the value of a patent for a top-selling pharmaceutical. So, it’s no surprise that PTA determinations can attract a lot of litigation.

Conceptually, the PTA is simple. As of 1994, the patent-lifetime clock (essentially 20 years from filing) has run during prosecution of the patent, not from grant of the patent. The concern is how to account for prosecution hold-ups that would unfairly delay grant of the patent, thus shortening the term of enforceability and robbing the applicant of value.

To deal with this problem, the American Inventors Protection Act 1999 states that dalliances on the part of the USPTO should be reflected in a longer patent term. However, dalliances on the part of the applicant should reduce the term of the PTA, including possibly driving it down to zero days. To spell out examples of PTO and applicant delay 35 USC § 154(b) was amended.

In the case we reported on in February, the USPTO had applied a per se rule that any information disclosure statement (IDS) submitted after the filing of a response to an election or restriction requirement was subject to a PTA reduction. This per se rule was rejected in Supernus Pharms Inc v Iancu.

Now there are two more PTA cases that test the warp and woof of the statute. In Mayo Fdn for Med Educ & Res v Iancu, the applicant of the ’310 application relied on the so-called B Delay by the USPTO - PTA for each day the application is pending beyond three years.

But such PTA was subject to statutory delays by the applicant, eg “any time consumed by continued examination of the application requested by the applicant under section 132(b) [ie a request for continued examination (RCE)].” The applicant had filed an RCE on 14th September 2011. A previous case had determined that the RCE exception that lessened the PTA would end on the date of the notice of allowance “because absent resumption of examination [thereafter] . . .  ’allowance-to-issuance time [is] plainly attributable to the PTO,’ regardless ‘whether there is a continued examination in a prosecution.’”  Thus the PTO modified its RCE-period rule to run from the filing of the RCE to the notice of allowance.

But here’s the rub: in addition to an RCE, the applicant here had filed priority papers for an interference (an obsolescent procedure in which two patent documents fight each other head to head for priority, one invalidating the other). Time for interferences - a so-called C Delay - was already part of the PTA calculation. After a two-year battle, Mayo was awarded priority. Thereafter (30th June 2014) the examiner issued an official action finding all claims invalid for obviousness-type double patenting over a related granted patent. A notice of allowance issued on 3rd November 2014. Here’s the lie of the land:

Initially the USPTO calculated the RCE period as going from 14th September 2011 to the 3rd November 2014 notice of allowance, giving a C Delay (interference) PTA of 621 days, with no B Delay (consumed by the RCE). Mayo, in contrast, said it was due 685 days, because the RCE time was only 148 days: from filing of the RCE to the declaration of the interference.

How so? On appeal Mayo asserted that a declaration of interference terminates the RCE period, because the RCE clock stops

once the claims are “deemed allowable,” not necessarily the date of mailing of the Notice of Allowance, and since the PTO’s regulations require an application “otherwise be in condition for allowance” before an interference is declared, the declaration is tantamount to a Notice of Allowance.

The applicant also argued it had not affirmatively requested the additional examination after the award of the interference and thus such events were attributable to the USPTO, not the applicant. The Federal Circuit dismissed these arguments, agreeing with the trial court: a declaration of interference is not an RCE-period-ending event, because a notice of allowance presumptively ends prosecution, taking it out of the hands of the applicant; a declaration of interference does not. And had not Mayo requested the RCE, the examiner the USPTO would not have conducted the interference or examined the issue of double patenting.

Two days later another CAFC PTA decision issued: Intra-Cellular Therapies Inc v Iancu,. Here the issue was more straightforward:

an applicant shall be deemed to have filed to engage in reasonable efforts to conclude processing or examination for the cumulative total of any periods of time in excess of 3 months that are taken to respond to a notice from the [Patent] Office making any rejection, objection, argument or other request, measuring such 3-month period from the date the notice was given or mailed to the applicant.” § 154(b)(2)(C)(ii).

The applicant filed on the three-month date a response to a final rejection, but the response was infirm: it improperly included a continued dispute of “the 103 rejection using the same arguments that were previously found unpersuasive”; amended claims for other rejections and added a new claim. Applying a Chevron analysis, the court upheld - as a permissible construction - the PTO regulations finding an infirm response to a final rejection to be a: “Fail[ure] to engage in reasonable efforts to conclude prosecution. It took the applicant 21 days to file a proper response, and 21 days thus counted against the PTA.”

These decisions combined deliver three key takeaways:

  • ensure your responses after final rejection are formally proper
  • always be mindful of the PTA calculations - what counts for and against
  • if challenging a PTA patent, consider errors in calculations

Jeff Hovden

Partner | Robins Kaplan

New York