On January 7th, the Court of Appeals for the Federal Circuit held that the U.S. Patent and Trademark Office's (PTO’s) method for calculating patent term adjustment (PTA) is not in compliance with the patent statute. Wyeth v. Kappos, slip no. 2009-1120 (Fed. Cir. Jan. 7, 2010). PTA extends the twenty year term granted to U.S. patents. The PTA statute was enacted a decade ago to compensate patent applicants for administrative delays caused by the PTO. A challenge by a patentee to the PTO’s PTA determination must be brought within 180 days of the grant of the patent. 35 U.S.C. §156(b)(4)(A).
The PTA statute (35 U.S.C. 154(b)) requires the PTO to calculate three delay periods, often referred to as the “A”, “B”, and “C” periods. The “A” period includes all days during which the PTO was tardy in (i) issuing an Office Action or a Notice of Allowance, (ii) acting on an application after an appeal in which allowable claims remain in the application, or (iii) issuing a patent after payment of an issue fee1 The “B” period includes the days during which the patent application is pending after 3 years from its filing date. The “C” period includes delays due to interferences, secrecy orders, and appeals. PTA is determined by totaling these periods and subtracting periods during which a patent applicant failed to engage in reasonable efforts to conclude prosecution of the application.
The PTA statute further provides that days in the “A”, “B”, and “C” periods which "overlap" are to be counted as a single day (not double or triple counted). 35 U.S.C. 154(b)(2)(A). The PTO previously interpreted this provision to mean that the PTA is the greater of the “A” period and the “B” period (assuming there is no “C” period delay). In Wyeth, the Court held that “no 'overlap' happens unless the violations occur at the same time.” Wyeth at *8. Therefore, PTA is not limited to the greater of the “A” and “B” periods, but can be a sum of both periods. In Wyeth, one of the two patents involved (U.S. Patent No. 7,179,892) had an “A” period of 610 days and a “B” period of 345 days. Of the days counted in the “A” and “B” periods, 51 of them overlapped (i.e., 51 days in the “A” period were also in the "B" period). Furthermore, the applicant’s delays prosecuting the application totaled 148 days. The Court concluded that Wyeth was entitled to a PTA of 756 days -- i.e., 610 days (“A” period) + 345 days (“B” period) - 51 days (overlapping days) - 148 days (applicant’s delay). In contrast, the PTO had originally granted Wyeth a PTA of 462 days (610 days (the greater of “A” or “B”) – 148 days (applicant delay). The calculation of PTA under the Wyeth court's rule is illustrated below.
The Court’s ruling potentially impacts PTA calculations for any application that incurred delay during the “B” period, during which a patent application was pending after 3 years from its filing date. Patentees should carefully review the PTA determinations for all patents issued within the last six months, and those in the future.
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1 In particular, the “A” period includes delays beyond (i) 14 months for a first substantive Office Action or a Notice of Allowance, (ii) 4 months for responding to a patent applicant’s substantive response, (iii) 4 months for acting on a decision by the Board of Patent Appeals and Interferences or a Federal court, in which allowable claims remain in the application, and (iv) 4 months to issue a patent after payment of the issue fee.
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