The CAFC opinion Wyeth v. Kappos has provided a revised method for calculating Patent Term Adjustment (“PTA”) under 35 U.S.C. § 154(b). Patents issued from Tuesday August 4, 2009, through Tuesday February 23, 2010, will be reviewed by the  U.S. Patent and Trademark Office for PTA recalculation, but only if a request to recalculate the patent term adjustment is timely made, by filing a PTO/SB/131 form within 180 days from the date the patent issued. This new form is provided at the USPTO’s web site, here.  The USPTO’s response will be limited to a recalculation in accordance with the holding in the Wyeth case, at no charge to the patentee.    

 It is important to note the date the patent issued.  If the 180-day deadline is missed, the USPTO will not change the record.  However, perhaps a formal declaration of the proper Patent Term Adjustment might be achieved through judicial or legislative means.

 Wyeth v. Kappos, – F.3d. – , 2010 WL 27184 (No. 2009-1120) (Federal Circuit  January 7, 2010)

by Jerome R. Smith, Jr. and Gerry J. Elman

The U.S. Court of Appeals for the Federal Circuit (“CAFC”) opinion Wyeth v. Kappos, – F.3d. – , 2010 WL 27184 (No. 2009-1120) (Fed. Cir. 2010) has provided guidance for calculating patent term adjustments arising under 35 U.S.C. § 154(b).  In a patentee-favorable opinion, affirming the U.S. Federal District Court order in Wyeth v. Dudas, 580 F.Supp. 2d 138 (D. D.C. 2008), the CAFC  interpreted “overlap” between “periods of delay” under 35 U.S.C. § 154(b)(2)(A).  Applying these interpretations, the Court recalculated the patentee’s patent term adjustment (“PTA”), resulting in a patent term greater than what had been originally determined by the United States Patent and Trademark Office (“USPTO”). 

The recalculated patent term accounted for the overlap between the “periods of delay” which occurred during the application’s pendency.  The analysis used to determine the recalculated patent term is now the basis for calculating patent term adjustments.

 Patent term adjustments originated in the American Inventor’s Protection Act of 1999 (Public Law 106-113) (“the Act”). As summarized by the CAFC:

The Act promised patent applicants a full patent term adjustment for any delay during prosecution caused by the USPTO. This promise took the form of three distinct “guarantees” in 35 U.S.C. § 154(b)(1):

 (A) Guarantee of prompt Patent and Trademark Office responses.–Subject to the limitations under paragraph (2), if the issue of an original patent is delayed due to the failure of the Patent and Trademark Office to [meet deadlines specified in clauses (i)-(iv)] . . . the term of the patent shall be extended 1 day for each day after the end of the period specified in clause (i), (ii), (iii), or (iv), as the case may be, until the action described in such clause is taken.

 (B) Guarantee of no more than 3-year application pendency.–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 United States . . . 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.

 (C) Guarantee or adjustments for delays due to interferences, secrecy orders, and appeals.–Subject to the limitations under paragraph (2) . . the term of the patent shall be extended 1 day for each day of the pendency of the proceeding, order, or review, as the case may be.

 In both the lower court and on appeal, the USPTO contended that patent term adjustments in accordance with 35 U.S.C. § 154(b), were based on the longer of periods of delay i) caused by the USPTO’s failure to meet administrative deadlines during the pendency period, known as “A” delay, as defined in 35 U.S.C. § 154(b)(1)(A), or ii) the delay resulting from longer than a three year pendency, known as “B” delay, as defined in 35 U.S.C. § 1.54(b)(1)(B), but not both “A” and “B” delay.  Moreover, the “B” period began on the filing date and ended at the issue date, but was limited to a three-year maximum. The lower court explained that the USPTO’s rationale for this interpretation of the 35 U.S.C. § 154(b)(2)(A) was to prevent double counting of “periods of delay,” whereby the patentee would receive a windfall of an unintended patent term adjustment. 

 Wyeth asserted that the patent term adjustment included both “A” and “B” delay periods.  These periods overlapped only if they occurred on the same calendar day and the “B” delay period began three years after the application’s filing date.  The “overlap” days would be subtracted from the total number of days of “A” and “B” delay.  Wyeth’s position is shown diagrammatically in Example 1 below.      

 The CAFC agreed with Wyeth, finding that the USPTO misconstrued application of “overlap” of “periods of delay”of  35 U.S.C. § 154(b)(2)(A).  The Court held that overlap between delay periods and the designated delay period for a three year application pendency, began three years after the application’s filing date and had to occur on the same calendar days.  With this interpretation of “overlap,” the CAFC recalculated the patentee’s patent term adjustment, resulting in a patent term adjustment greater than that granted by the USPTO.  The CAFC’s recalculation is now the basis for calculating patent term adjustments, which should be performed as follows:

 PTA = A Delay  + B Delay + C Delay – (Overlap between any or all of A, B, and C Delays) – (Applicant-Initiated Delay)

with “B” delay beginning three years after the filing date.

The court initially classified the “periods of delay” for patent term adjustment as “A,” “B,” and “C” delays.  These delays correspond to the periods prescribed by statute in 35 U.S.C. § 154(b)(1), paragraphs (A), (B) and (C), respectively, that were summarized above. 

The “A” delay was designed for the USPTO to meet examination deadlines.  Such “A” delays occurred:  i) fourteen months after the filing date should an office action on the merits or a notice of allowance not have issued, ii) four months after the applicant submitted a reply to an office action or an appeal was filed, iii)  four months after a decision by the USPTO Board of Appeals and Interferences or a Federal Court in a case in which allowable claims remain in the application, and, iv) four months after the date on which the issue fee for the application was paid, provided the applicant has satisfied all outstanding issuance requirements.

The “B” delay is based on a three-year pendency.  It occurs when the “USPTO fails to issue a patent three years after the actual filing date of the application in the United States.”  This three-year period is the difference in the pre-1994 patent term being seventeen years from the date the patent issued, and the current patent term of twenty years from the date the patent application was filed.  Accordingly, the “B” delay “runs from the three-year mark after the application’s filing date until the patent application issues.”

 “C” delays result from interferences, secrecy orders, and appeals.  Their calculation is similar to that for the “A” and “B” delays, but were not addressed in this opinion, as they were not present. 

 All of the aforementioned delays are subject to limitations, where days of patent term may be lost.  35 U.S.C. § 154(b)(2).  These limitations include periods attributable to the applicant’s own delay, and overlap between the “A,” “B,” and “C” delay periods.  Periods attributable to the applicant’s own delay include the applicant’s response time beyond three months after a notice was mailed from the USPTO making any “rejection, objection, argument, or other request.”  Overlap can occur only if the days of the “A” and “B” delay (and “C” delay if there is “C” delay) are the same calendar day.  The court also noted that before the three-year mark, there can not be overlap between the “A” and “B” delay, since the “B” has not begun.      

 While not specifically addressed in the opinion, it appears well within the statute that appeals, interferences, and requests for continued examination (“RCEs”) would also stop the “B” delay until the issue fee is paid.   However, it is an open question as to whether there would be additional “A” delay should there be more than four months between payment of the issue fee and the issue date, resulting from the appeal, interference or RCE (and the applicant has satisfied all outstanding issuance requirements).  This further “A” delay is based on the fact that once the issue fee has been paid, the USPTO regains control of the application, and the USPTO’s processing from the issue fee payment date is outside of the applicant’s control.  This additional “A” delay is presently being asserted in, The General Hospital Corporation v. Dudas, Case 1:09-cv-00109-RMU, filed January 16, 2009 (D. D.C.).

 Another issue with the “B” delay calculations involves determining the “actual filing date” of applications based on international applications, for example, a national stage filing under 35 U.S.C. § 371 from a Patent Cooperation Treaty (PCT) application or other direct U.S. national filing.  The three-year “B” delay calculations are based on the “actual filing date.”  However, since the USPTO issued the PTO/SB/131 form, the “actual filing date” is either:  i) the 35 U.S.C. § 371(b) 30-month date from the priority date, or ii)  the 35 U.S.C. § 371(f) date, where the applicant files an express request for processing requirements, prior to the aforementioned 30-month date, provided that applicant has fulfilled the requirements of 35 U.S.C. § 371(c) to qualify for the requisite filing date. 

In summary, “A” and “B” delays should be calculated from a single filing date, which is the § 371(b) or (f) date, if the application is based on an International application, depending on its date of U.S. National Phase entry, and all § 371(c) requirements having been fulfilled.  If there is overlap between the “A,” “B,” and “C” delays, the overlapping days should be subtracted from the patent term adjustment.  Finally, note that “A” delay based on USPTO issue processing, after an appeal, interference, or RCE, should be included in the term adjustment.

Two examples, each with an accompanying time-line diagram and calculation, are listed below to show patent term adjustment calculations we believe to be in accordance with the CAFC’s opinion.

Example 1

The first example was provided by Wyeth in Wyeth v. Dudas, 580 F.Supp. 2d 138 (D. D.C. 2008), the lower court decision of this case. This example is as follows:

A patent application is filed on 1/1/2002. The patent issues on 1/1/2008, six years later. In that six-year period are two “A” periods, each one year long: (1) the 14-month deadline for first office action is 3/1/2003, but the first office action does not occur until 3/1/2004, one year late; (2) the 4-month deadline for patent issuance after payment of the issuance fee is 1/1/2007, but the patent does not issue until 1/1/2008, another year of delay attributable to the USPTO.  The “B” period begins running on 1/1/2005, three years after the patent application was filed, and ends three years later, with the issuance of the patent on 1/1/2008. In this example, then, the first “A” period does not overlap the “B” period, because it occurs in 2003-04, not in 2005-07. The second “A” period, which covers 365 of the same days covered by the “B” period, does overlap.

Accordingly, the patentee is entitled to four years of adjustment (one year of “A” period delay + three years of “B” period delay), or 366 days (A₁) (2004 was a leap year) + A₂ (365 days) + 1055 days (B) – 365 days (O _A-B) = 1421 days.  The time line and calculation is as follows:

Example 2

A patent application is filed on 1/15/2004.  The patent issues on 12/30/2009.  The first office action is not mailed until 3/15/2007, two years after the 14 month “A” date of 3/15/2005.  The applicant files his response to this first office action on 7/20/2007, resulting in 35 days of applicant-initiated delay (AID), as the applicant’s response was due without delay on 6/15/2007.  The USPTO issues a final office action on 12/20/2007, causing another “A” delay of one month, as the final office action was due from the USPTO on 11/20/2007, a four-month statutory date.  The applicant files an RCE on 3/15/2008.  The USPTO issues a Notice of Allowance 4/30/2009.  The issue fee is paid 5/30/2009, and the patent issues on 12/30/2009, three months past the “A” date of 9/30/2009 (four months issuance processing after the issue fee was paid).  The “B” period begins on 1/15/2007, the three year mark past the filing date, but stops on 3/15/2008 with the RCE filing.

 There is “A” delay of 730 days (14 months from the filing date to 3/15/2007) plus 30 days (USPTO delay in responding to office action response from 11/20/2007 to 12/20/2007) plus 91 days (USPTO delay in Issuance from 9/30/2009 to 12/20/2009).  There is “B” delay of 425 days (from the three year mark 1/15/2007 to 3/15/2008 including one day for the leap year of 2008).  There are “A-B” delay overlap periods of i) 59 days (the three year mark 1/15/2007 to 3/15/2007, the mailing date of the first office action), and ii) 61 days (“A” delay for the PTO’s failure to issue the final office by the four month date of 10/20/2007).  There is an applicant-initiated delay (AID) of 35 days (response to first office action was due 6/15/2007 but was made on 7/20/2007).  Accordingly, the patent term adjustment is 730 + 30 + 91 + 425 – 59 – 30 – 35 = 1152 days.     The time line and calculation is as follows.

As a result of Wyeth v. Kappos, many patentees will be entitled to recalculated patent term adjustments, which may add significant term.  Accordingly, such adjustments should not be overlooked.  Patentees of newly issued patents less than 180 days old and of any patents issued from today (February 2) through February 23, 2010, may file a Request for Recalculation of Patent Term Adjustment in View of Wyeth, form PTO/SB/131, in the USPTO.

The USPTO says that its computers will be reprogrammed by March 2, 2010, to calculate PTA in accordance with the Wyeth decision for patents issuing thereafter, so that it shouldn’t be necessary to use the form PTO/SB/131 after the end of February 2010.

Other remedies available to dissatisfied patentees to correct patent term adjustment include petitioning the USPTO:  i) before the issue fee is paid, or ii) not more than two months after the patent issues, as per 37 C.F.R. §§ 1.705(b) and (d).  Should either of the aforementioned dates be missed, the patentee could appeal the adjusted patent term by filing a civil action against the Director of the USPTO in the Federal District Court for the District of Columbia, but must file it no later than 180 days after the patent is granted (the issue date).  35 U.S.C. § 154(b)(4)(A).

The USPTO has so far been silent as to the effect of Wyeth v. Kappos on patents issued more than 180 days ago regardless of whether the patentee had petitioned the USPTO to recalculate the PTA pursuant to 37 C.F.R. §§ 1.705(b) and (d).   It’s likely that some of those patentees will find it appropriate to seek judicial or legislative redress for the perceived inequity, now that the CAFC has determined that the formula that the USPTO has been using for years  for calculating PTA doesn’t fulfill the “promises” that Congress wrote into the law enacted in 1999 and expressly made applicable to patents arising from applications filed from May 29, 2000 on.