On November 1, 2012, the U.S. District Court for the Eastern District of Virginia held that the U.S. Patent and Trademark Office (“USPTO”) has been incorrectly calculating patent term adjustments for patent applications in which a Request for Continued Examination (“RCE”) was filed more than three years after the initial filing date of the application. (Exelixis, Inc. v. Kappos, No. 1:12cv96 (E.D. Va. Nov. 1, 2012) (reported at 2012 U.S. Dist. LEXIS 157762).) Although the USPTO will likely appeal the Exelixis decision, this holding warrants important and immediate consideration for patentees owning patents issued within the past 180 days and patent applicants currently contemplating whether to file an RCE.
The following provides a brief summary of patent term adjustment and the Exelixis decision, and a few suggested practice tips that patent owners should consider in view of this decision.
Patent Term Adjustment
35 U.S.C. § 154 establishes that the term of a U.S. patent expires 20 years from the earliest effective non-provisional filing date of the parent application. To compensate for USPTO delays during prosecution of the application, this statute also provides what is known as a patent term adjustment (“PTA”) that is calculated by the USPTO when a Notice of Allowance is issued[1]. While the PTA calculation is somewhat complicated, the patentee is entitled to a one-day extension for every day the application is pending more than three years, subtracting various delays caused by the applicant (e.g., applicant requested extensions of time).
Since the inception of this provision, the USPTO has taken the position that the filing of an RCE at any time tolls the PTA time clock. That is, any USPTO delays incurred after the RCE is filed are not included in the PTA calculation.
Exelixis v. Kappos
The patent at issue in Exelixis v. Kappos was originally filed on January 15, 2008[2]. The USPTO issued a final rejection on March 9, 2011, and the applicant filed an RCE on April 11, 2011-more than three years after the application filing date[3]. After the patent application was allowed, the USPTO determined the PTA by reducing the total term adjustment by the number of days between the RCE filing date and the issue date[4]. The question considered by the court was “whether [35 U.S.C.] § 154(b)(1)(B) requires that . . . any PTA be reduced by time attributable to an RCE, where . . . the RCE is filed after the expiration of the three-year guarantee period specified in that statute.”[5]
Ultimately, the Eastern District of Virginia agreed with the patentee’s challenge to the USPTO’s calculation of the PTA[6], holding that the filing of an RCE after the three-year time period does not toll the calculation of the PTA. Importantly, the court also confirmed that an RCE filed before the three-year time period does toll the PTA time clock[7].
Impact of the Exelixis Decision
If the Exelixis decision is not reversed on appeal, it could significantly extend the patent term for many U.S. patents. In view of the Exelixis decision, we recommend that patent owners and patent applicants should consider the following practice tips:
(1) For any patents issued within the past 180 days[8], patent owners should immediately evaluate those patents to determine if the underlying application involved an RCE filed after the three-year time period in order to determine whether they should seek a PTA; and (2) Patent applicants should, if possible, wait to file an RCE until three years after the application filing date. An RCE filed before the three-year time period will preclude the applicant from obtaining additional PTA.
(1) For any patents issued within the past 180 days[8], patent owners should immediately evaluate those patents to determine if the underlying application involved an RCE filed after the three-year time period in order to determine whether they should seek a PTA; and
(2) Patent applicants should, if possible, wait to file an RCE until three years after the application filing date. An RCE filed before the three-year time period will preclude the applicant from obtaining additional PTA.
If you have any questions about the Exelixis decision or these issues, please contact Steven I. Weisburd at .
[1] See 35 U.S.C. § 154(b). [2] 2012 U.S. Dist. LEXIS 157762, at *3. [3] Id. at *4 [4] Id. at *5-6. [5] Id. at *7. [6] Id. at *26. [7] Id. [8] In general, there are two procedures to request a PTA correction: administratively before the USPTO and in the district court. Until the Federal Circuit rules on the appeal, the USPTO will likely continue to apply the pre-Exelixis rule. Accordingly, a patent owner will presumably have better success with this issue before a district court. An action with the district court must be filed within 180 days of issuance of the patent.