January 27, 2010

Wyeth v. Kappos: The USPTO may be Shortchanging the Term of Your Patent

4 min

On January 7, 2010, the U.S. Court of Appeals for the Federal Circuit decided Wyeth v. Kappos, ____ F.3d ___(Fed. Cir. 2010), which clarified how the U.S. Patent and Trademark Office (“USPTO”) should calculate adjustments to patent term. The term of a newly issued U.S. patent is twenty years from the earliest effective U.S. filing date of the application from which the patent issues. In some cases, a patent is credited additional days of term, called “Patent Term Adjustment” (“PTA”) to compensate for delays during examination of the application at the USPTO. For example, in the case of a patent receiving 100 days of PTA, the term of the patent would end twenty years plus 100 days from the patent’s filing date.

The Wyeth case revolves around two main types of delay set forth in the PTA rules. “A” delays, which are set forth in subsection A of 35 U.S.C. § 154(b)(1), provide an applicant with one day of PTA for each day the USPTO fails to take certain actions within specified time periods, for example, for failing to issue a first office action within fourteen months from the application’s filing date. “B” delays, which are set forth in subsection B of the rule, provide the applicant with one day of PTA for each day over three years from filing that the USPTO takes to issue the patent. In cases where the periods of A delay and B delay overlap, 35 U.S.C. § 154(b)(2) limits the period of PTA to “the actual number of days the issuance of the patent was delayed.” The issue in Wyeth was when periods of A delay and B delay are considered to “overlap.”

When performing the PTA calculation upon issuance of a patent, the USPTO previously granted the applicant the greater of the A delays and the B delays. The USPTO reasoned that, for patents that take longer than three years to issue, the B delays ran all the way from the filing date of the application to the issue date of the patent. Therefore, any A delays during examination of the application would necessarily overlap with the B delays.

Wyeth took the position that B delays begin three years after the application’s filing date and run until the patent’s issue date. Therefore, Wyeth reasoned that only those A delays that occurred after the first three years of examination could overlap with the B delays. Thus, Wyeth argued that the USPTO shortchanged the PTA for two of its recently-issued Alzheimer drug patents in the amount 220 and 294 days, respectively.

Wyeth filed petitions in the USPTO challenging the PTA calculation for the two patents, but the petitions were denied. Then, Wyeth filed an action in the U.S. District Court for the District of Columbia challenging the PTA calculation, and prevailed on summary judgment. The USPTO appealed the district court ruling to the Federal Circuit.

On appeal, the Federal Circuit sided with Wyeth, and affirmed the district court ruling. The Federal Circuit found there was “no ambiguity” in the statute, which clearly defines when periods of A delay and B delay occur, and when they overlap. Because the plain meaning of the statute controls, the Federal Circuit refused to afford Chevron deference to the USPTO’s “strained interpretation” of the statute. Although the Federal Circuit acknowledged the statute has the potential “to produce slightly different consequences for applicants in similar situations,” the Federal Circuit refused to substitute its, or the USPTO’s, interpretation for the plain meaning of the statutory language, stating, “In the end, the law has put a policy in effect that this court must enforce, not criticize or correct.” Accordingly, under Wyeth, an application is now entitled to both A delays and B delays, minus any overlap between them.

The USPTO and the Department of Justice have decided not to seek further review of Wyeth, stating:

… The USPTO is preparing guidance for expediting requests for recalculation of patent term adjustment by the USPTO in light of the Wyeth decision. This guidance will be issued as soon as possible.

Applicants and Patent Owners dissatisfied with a patent term adjustment determination by the agency are reminded of the requirement to seek review of that determination within 180 days of patent issuance and the time periods set in the implementing regulations. See 35 U.S.C. sec. 154(b)(4) and 37 CFR 1.705.

See http://www.uspto.gov/patents/announce/wyeth_v_kappos.jsp

Thus, patent applicants who believe their PTA was calculated in error, in light of the clarification provided by Wyeth, should request a recalculation by the USPTO. The due date for requesting recalculation by the USPTO is currently two months from the patent’s issue date. For patents that issued more than two months ago, applicants may still challenge the PTA calculation by filing an action in the U.S. District Court for the District of Columbia within 180 days of the issue date. Seeking additional PTA may be particularly important for patents in key technology areas, like Wyeth’s, where each additional day of exclusivity may be worth a large sum of money.