By Ian S. Mullet and Nicole A. Palmer
On January 9, 2015, the USPTO announced final rules implementing “Changes to Patent Term Adjustment in view of the Federal Circuit Decision in Novartis v. Lee.” As a result, many patents that were subject to a request for continued examination during prosecution are eligible for additional patent term adjustment. These final rules are in line with the corresponding proposed rules issued by the Office last June.
As a refresher on patent term adjustment, a patent will generally expire twenty years from the date of its filing, or that of a priority application, regardless of when the patent ultimately issues. However, if the USPTO unduly delays prosecution relative to the applicant, then certain delay attributable to the Office can be added to the life of a resulting patent, thereby extending its term. This provision of the law is known as patent term adjustment.
Each time a patent issues, the USPTO calculates whether the patent term should be modified and to what extent. The agency’s calculation, however, is sometimes in error, either because of a misinterpretation of the law governing the process, as demonstrated by the Novartis decision, or simply through an error in the software that makes the determination. It is, therefore, generally in the best interest of a patentee to validate the Office’s calculation so as to confirm the actual patent term, even if previously unappreciated applicant delay is ultimately identified. Fortunately, a patentee who finds an error in patent term adjustment can petition the Office for review and redetermination within an allotted period of time.
The most recent rule change was prompted by the Federal Circuit’s decision in Novartis which sided against the Office’s interpretation of a statutory provision, thereby resulting in greater patent term for many patents. The decision changed the formula for calculating patent term adjustment in applications where the pendency was over three years and a request for continued examination had been filed. The Federal Circuit stated that the period between allowance and issuance should not be counted as being consumed by continued examination and thus counts toward the agency’s three-year pendency allotment.
Requests for continued examination are typically associated with a reduction in patent term adjustment as noted above. Effective March 10, 2015, an exception is made for requests for continued examination filed solely to submit information cited in a patent office communication in a counterpart application that is submitted to the Office within thirty days of receipt of the patent office communication. Additionally, the Office has clarified what papers may be submitted after allowance without the applicant being considered to have failed to engage in reasonable efforts to conclude processing or examination of an application.
While Novartis, as well as earlier decisions including Wyeth and ArQule, demonstrate that errors in the calculation of patent term adjustment can result from misinterpretation of the law, another recent development demonstrated that these errors may also result from the Office’s failure to update software in a timely manner. To comply with a provision of the AIA Technical Corrections Act, the Office modified its rules regarding the date by which a first action must be issued in connection with U.S. national phase applications for purposes of patent term adjustment. However, as acknowledged in a notice issued by the Office last May, a significant delay in modifying the relevant computer program to implement this change resulted in many eligible patents not receiving the benefit of the revision. Patentees who caught this error were able to petition the agency to correct the discrepancy.
Resources permitting, a close review of patent term adjustment calculations should be considered a best practice, particularly in connection with patents directed to technologies for which significant value may be associated with the end portion of a patent’s term.