Federal Circuit Decision Affects Patent Term Adjustment

In its recent decision of Novartis v. Lee, the Federal Circuit increased the patent term for many granted patents in which there had been a request for continued examination. The law of patent term adjustment arose after the American system began determining patent term from the filing date, rather than the issue date. Prior to 1995 a patent term was for 17 years upon issuance. Subsequently, the United States law transitioned to a system in which the patent term was for 20 years from the earliest filing date. Under the new system, delays caused by the patent office during the application pendency cut into the enforceable term of the patent. One provision implemented to remedy this problem is 35 U.S.C. § 154(b)(1)(B) which provides that any delay attributable to the patent office that causes an application to be pending for greater than three years will be added to the back end of the patent term. This is known as “B Delay.”

However, the statute also provides that when an applicant requests continued examination the associated period of delay is not attributable to the USPTO because it is an extension of the pendency requested by the applicant. Therefore, time spent in a continued examination will not be added to the patent term as “B Delay.” The court in Novartis clarified this point of law by laying out the following general principle for calculating “B Delay” patent term adjustment:

[T]he patent term adjustment time should be calculated by determining the length of the time between application and patent issuance, then subtracting any continued examination time (and other time identified in (i), (ii), and (iii) of (b)(1)(B)) and determining the extent to which the result exceeds three years. Such a reading ensures that applicants recover for any delays due to the failure of the PTO, without allowing the applicant to recover for any time consumed by continued examination as the statute requires.

Slip Opinion at 14.

Still at issue, however, is the matter of what counts as “time consumed by continued examination.”

According to the patentee, Novartis, this time should exclude the period from notice of allowance to issuance, a period that generally lasts several months.

The USPTO disagreed and asserted its longstanding policy of considering the period from allowance to issuance as time consumed by continued examination and therefore excluded from patent term adjustment.

The court sided with Novartis:

We reject the PTO’s view that the time after allowance, until issuance, is time consumed by continued examination and so is excluded from adjustments given to the patentee. Such time from allowance to issuance undisputedly would count toward the PTO’s three-year allotment in a case not involving a continued examination. There is no basis for distinguishing a continued-examination case.

Slip Opinion at 15.

As a result the USPTO will have to change its formula for “B Delay” patent term adjustment to include this period between allowance and issuance.

Going forward, patentees may want to confirm their patent term calculation to ensure compliance with this recent Federal Circuit decision.

For a patent already issued, the patentee may file a petition to the patent office requesting recalculation of the patent term. See 37 C.F.R. § 1.705. The patentee has up to seven months from the issue date to file this petition. If the patentee is dissatisfied with the decision resulting from the petition, then the patentee may, within 180 days from the final decision on the petition, file a civil action in the District Court for the Eastern District of Virginia to seek a correction of the patent term adjustment. See 35 U.S.C. § 154(b)(4).