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USPTO Patent Term Adjustment Calculations Challenged: Honigman Secures Additional “B Period” PTA for Patentees

November 8, 2012

On November 1, 2012, the Eastern District of Virginia ruled in favor of a Honigman Miller Schwartz and Cohn LLP client regarding the United States Patent and Trademark Office’s (USPTO) calculation of Patent Term Adjustment (PTA). This is the first court decision made on this issue. This victory, if upheld, will have a significant impact on the calculation of PTA in cases where the applicant filed a Request for Continued Examination (RCE) more than 3 years after the filing date or commencement of the national phase application in the United States. It will benefit clients with patents in which the value of the invention remains, or is even amplified, towards the end of the patent term. In particular, companies in the pharmaceutical and biotechnology industries are likely to benefit, as the regulatory approval process often results in the product being introduced into the market late in the term of the patent. It is uncertain whether the USPTO will appeal the decision.

Honigman’s suit focused on the USPTO’s application of the statutory provisions that provide for an increase in the patent term to compensate patentees for undue delay by the USPTO when prosecuting and issuing patents. During the examination of the patent application at issue, an RCE had been filed in an effort to receive a Notice of Allowance of the claims. However, once the patent issued, the USPTO took a position that resulted in a severe penalty for Honigman’s client with respect to PTA. Honigman argued that the USPTO incorrectly interpreted the “B period” section of the PTA statute (35 U.S.C. § 154), specifically, the section that relates to the 3 year guarantee and the effect of filing an RCE.

Honigman attorneys, J. Michael Huget (Intellectual Property Litigation Group Chair) and Noel E. Day, Ph.D. were the first to argue the USPTO’s calculation of PTA. Judge T.S. Ellis III found in Honigman's favor, stating in his Opinion that “[i]n sum, the plain and unambiguous language of subparagraph (B) requires that the time devoted to an RCE tolls the running of the three year clock if the RCE is filed within the three year period. And, put simply, RCE’s have no impact on PTA if filed after the three year deadline has passed.”

What is PTA?

PTA is the period of adjustment of the patent term due to examination delay. The USPTO is obligated to meet certain requirements related to timing during the examination of an application for a patent, such as the “guarantee of no more than 3-year application pendency.” When these requirements are not met, the patentee is given PTA as a remedy. The result is that the patent is enforceable beyond the base expiration date, by however many days of PTA to which the patent was determined to be entitled.

What is RCE?

An RCE is a mechanism to continue prosecution of an application after prosecution on the merits has ended. An RCE is a tool that is available to applicants and is often used to help conclude or even expedite prosecution when the examiner has indicated that additional examination is necessary to determine whether amended claims are allowable.

Why this is Important?

While the USPTO may appeal the decision, the ultimate outcome will determine how PTA is interpreted for all patentees. As a result of the favorable decision, many patentees in cases where an RCE was filed after 3 years from the filing date or commencement of the national phase will be entitled to more PTA than they have been given by the USPTO. However, as there are deadlines to request recalculation of PTA, it is possible that the USPTO will find that a patentee has lost their right to petition for recalculation if they do not file a request, and possibly even a civil suit, before the applicable deadlines. Additionally, before filing an RCE in a currently pending application, the impact of such filings on PTA should be carefully reviewed. For these reasons, we recommend that patentees and patent applicants consult a patent attorney to determine whether they might benefit from the decision. In many cases, it will be prudent to take action in order to preserve their rights. 

The Honigman team involved in this matter included partners Jonathan P. O’Brien, Ph.D. (Intellectual Property Department Chair), Noel E. Day, Ph.D., J. Michael Huget, Heidi Berven, Ph.D., Emily Zelenock Tait and Bea Swedlow. Feel free to contact Honigman with questions you may have about this issue.