Federal Circuit Clarifies Calculation Of Patent Term Adjustment For Applications With Continued Examination Requests

In a recent ruling, the Federal Circuit clarified the scope of available Patent Term Adjustment (PTA) resulting from the U.S. Patent and Trademark Office's (PTO) failure to issue a patent within three years from the date the application was filed, for applications in which a request for continued examination (RCE) was made. Novartis AG v. Lee, 2013-1160, 2013-1179 (Fed. Cir. Jan. 15, 2014). Under the decision, PTA is not available for the period of prosecuting the RCE to allowance, but is available for the period from allowance to issuance.

Background on PTA and Recent Challenges to the PTO's Interpretation of B Delay

The term of a U.S. utility patent is 20 years measured from the filing date of the application. However, in practical terms, the patent application provides no benefit to the patentee until the day it issues as a patent from the PTO. Consequently, excessive delays at the PTO would significantly reduce the "effective" term of the patent. To avoid this result, Congress established a system of patent term adjustment that adds time to the end of a patent's life to offset certain kinds of delays encountered at the PTO.

Under this system, a patent is entitled to PTA based on delays attributable to the PTO. Specifically, the patent statute provides for PTA for three categories of patent office delays:

"A delays" for failure of the PTO to act promptly, including its failure to issue a first Office Action within fourteen months from the filing date, or to respond to any applicant action within four months; "B delays" for failure of the PTO to issue a patent within three years of the filing date of the application (or entry of an international application into the National Stage); and "C delays" which accrue when an application is delayed due to a secrecy order, interference, derivation proceeding or appeal. Notably, the statute provides certain exceptions to what would otherwise fall within B delay. For example, B delay does not include "any time consumed by continued examination of the application requested by the applicant." According to the PTO's rules, "time consumed by continued examination" is the period beginning when an RCE is filed and ending on the issue date of the patent.

Many patent owners have challenged the PTO's interpretation of what constitutes B delay in the situation where an RCE was filed more than three years after the application filing date. Exelixis, Inc. v. Kappos, 906 F. Supp. 2d 474 (E.D. Va. 2012) (Exelixis...