Patent Term Adjustment (PTA)

Recent Developments in PTA Practice and Strategies for Maximizing PTA

Presented to NJIPLADecember 9, 2009

Jack BrennanFish & Richardson P.C.

New York

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What Patents are Eligible for PTA?

PTA Eligibility:– Applications filed on or after May 29, 2000

– For US national stage applications, the PCT filing date must be on or after May 29, 2000

Statute Governing PTA :– 35 USC 154(b)

Rules Governing PTA :– 37 C.F.R. §§ 1.702 - 1.705

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PTA Basics

PTA = (Days of PTO Delay) – (Days of Applicant Delay)

[if this number is less than zero, then zero days of PTA are assigned to the patent]

Patentee can have days added to patent term (i.e., PTA), but can never have days subtracted

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PTO Delay

3 broad categories of PTO Delay:

– “A delay” (failure of PTO to respond promptly to applicant submissions)

– “B delay” (failure of PTO issue a patent within three years of filing)

– “C delay” (others)

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“A Delay”

The PTO has:– 14 months to issue 1st action (RR or OA; not NTFMP)– 4 months to respond to a response or appeal– 4 months to issue action after BPAI decision– 4 months to issue patent after issue fee payment

“A Delay” starts accumulating on the day after a deadline date

35 USC 154(b)(1)(A)

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How to Measure the Initial 14 Month Period for A Delay?

Applications filed under 35 USC 111(a)– 14 months should be measured from actual filing date

– PTO follows this in practice

National stage applications filed under 371– 14 months should be measured from completion of missing

requirements

– PTO follows this in practice

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“B Delay”

3-Years-to-Issue:– PTO has 3 years from application filing to issue a patent

– “B Delay” starts accumulating on the day after the application has been pending for 3 years

35 USC 154(b)(1)(B)

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How to Measure 3 Year Pendency for B Delay?Applications filed under 35 USC 111(a)

– 3 year pendency should be measured from actual filing date– PTO follows this in practice

National stage applications filed under 371– 3 year pendency should be measured from when the national stage

“commenced”– PTO does not follow this in practice (instead, measures from

completion of missing requirements)– This is the “Japan Tobacco” error (reviewed in detail on later slides)

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Events that Stop the 3-Year Clock

RCE: Filing an RCE stops the 3-year clock forever– Applicant can get “B Delay” for time after 3 years but before the

RCE filing date– 37 CFR 1.703(b)(1)

Interference: Declaration of interference or suspension of prosecution for possible interference stops the 3-year clock until the interference or suspension is terminated

– this time may be recovered as “C Delay”– 37 CFR 1.703(b)(2)

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Events that Stop the 3-Year Clock

Secrecy Order: Time consumed by imposition of a secrecy order

– this time may be recovered as “C Delay”– 37 CFR 1.703(b)(3)

Notice of Appeal: Filing a Notice of Appeal stops the 3-year clock until:

(i) The last decision by the Board or a Federal court; or(ii) The mailing of a new office action or a notice of allowance (if the appeal did not

result in a decision by the Board)– this time may be recovered as “C Delay” (only if appeal is “successful”)– 37 CFR 1.703(b)(4)– PTO does not follow this in practice (instead, maintains 3-year clock

running after filing of a Notice of Appeal)

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“C Delay”

Delays resulting from:– Interferences

– Secrecy Orders

– Appeals (appeal must result in a final decision by the Board or a Federal court that is in favor of the applicant)

35 USC 154(b)(1)(C)

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Recent PTO Errors in Calculating PTA

Wyeth v. Dudas– How to calculate Overlap of “A” and “B” Delay

– PTO is currently appealing an adverse district court decision

Japan Tobacco (U.S. Patent No. 7,465,444)– How to measure the length of B Delay for 371 national stage filings

– PTO has acknowledged this error and is working to fix it

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How Does the PTO Calculate Overlap of “A” and “B” Delay?The statute prevents double-counting where there is “overlap” in “A Delay” and “B Delay”

According to the PTO’s interpretation, the entire period during which an application is pending is used for determining whether periods of delay overlap (which means that a patentee gets A Delay or B Delay, whichever is larger)

The court in Wyeth v. Dudas, 580 F. Supp. 2d 138 (D.D.C. 2008) overruled the PTO’s interpretation

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Wyeth v. Dudas

Held: Patentee is entitled to the addition of “A Delay” and “B Delay” to the extent that they do not overlap

A and B delays “overlap” only if they occur on the same day (which overlap can only possibly occur after the application has been pending for at least 3 years)

This decision results in increased PTA for most patents that were pending for more than 3 years

PTO appealed to Fed. Cir. on Nov. 28, 2008

Oral arguments on October 7, 2009

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“Japan Tobacco” Issue

How to measure 3 year pendency (for “B Delay”) for 371 national stage filings

PTO: measures from completion of missing requirements

Statute and Rules: measure from when the national stage “commenced” (usually the expiration of the 30 month from priority date time period)

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B Delay Begins 3 Years After “Commencement” of the National StageStart of the 3 year “B Delay” clock for a 371 filing depends upon whether the national stage commences under 35 U.S.C. 371(b) or (f)

35 U.S.C. 371(b) – U.S. national stage commences on the date that is 30 months from the

priority date of a PCT application unless the applicant files an express request for early processing and completes the requirements of 371(c) prior to the 30 month date (see 371(f) below)

35 U.S.C. 371(f) – Commencement can occur before the 30 month date – Must file an express request for early processing and complete the

requirements of 371(c) prior to the 30 month date

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03/04/04Application Complete

03/04/04Application Complete

538 Days

“A” Delay

811 Days

“B” Delay (JT)

27 Day Overlap

653 Days

“B” Delay (PTO)

10/24/061st Office Action

10/24/061st Office Action

5/4/051st Office Action Due

5/4/051st Office Action Due

09/23/03US Specification filed

09/23/03US Specification filed

03/27/01Priority App.

(Japan)

03/27/01Priority App.

(Japan)

12/16/08’444 Patent Issues

12/16/08’444 Patent Issues

03/04/07PTO: End of 3 year period

03/04/07PTO: End of 3 year period

02/18/02PCT App.02/18/02PCT App.

09/27/03JT: National Stage Commences

09/27/03JT: National Stage Commences

09/27/06JT: End of 3 year period

09/27/06JT: End of 3 year period

3 years30 months

3 years

PTA Calculation for U.S. Patent No. 7,465,444

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Timeline of Events in Challenging PTA for U.S. Patent No. 7,465,444Patent granted December 16, 2008

– PTO awarded PTA of 653 days

Request for PTA filed on January 8, 2009 (i.e., within two months after patent grant)

– PTA of 1,322 days requested (Wyeth + JT)

PTO Decision on Petition on June 16, 2009– PTA request granted in part, denied in part– PTA changed to 811 days (JT granted, Wyeth denied)

Renewed petition filed on July 15, 2009– Requesting PTO to either follow Wyeth or hold a final decision in abeyance

until Wyeth appeal decided

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PTO has Recently Acknowledged the “Japan Tobacco” ErrorIn July 2009, Fish and Richardson alerted the patent community to this error and the PTO’s acknowledgement of it for the ‘444 patent

– http://www.fr.com/news/articledetail.cfm?articleid=984

Several IP publications and blogs wrote articles on the topic– http://www.patentdocs.org/2009/07/by-sydney-kokjohn---fish-richardson-

and-its-pharmaceutical-client-japan-tobacco-inc-recently-discovered-another-error-in-t.html

On September 9, 2009, the PTO issued a formal notice acknowledging that they incorrectly calculate three year pendency for 371 filings and they are “in the process” of correcting the problem

– Patentees must file a request for correction within 2 months after patent grant

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Hypothetical Applications of the “Japan Tobacco” Rule

Example of PTO Practice Awarding Too Little PTA– Request for U.S. national stage application filed on or around 30 month

deadline– Declaration filed at a later date (after 30 month period expires)– PTO incorrectly starts 3 year clock late based on completion of 371(c)

Example of PTO Practice Awarding Too Much PTA– Request for U.S. national stage application and all requirements of 371(c)

filed before 30 month deadline– No express request for early processing filed– PTO incorrectly starts 3 year clock early based on completion of 371(c)– Patentee must inform PTO if too much PTA is awarded

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Applicant Delays

Result from failure of applicant to “engage in reasonable efforts to conclude prosecution of the application”

The PTO regulations identify many circumstances that constitute “failure to engage”

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Common Applicant Delays

Filing a reply more than 3 months after action mailing date

– Every day after the 3-month date (weekend, holiday, snow day, etc.) counts as 1 day of applicant delay, EVEN if action says deadline is otherwise (e.g., filing a response on a Monday when the 3 month due date is Saturday will cost 2 days of Applicant Delay)

– Date of receipt at the PTO is what matters for PTA purposes

– The period set by PTO for reply does not matter for purposes of Applicant Delay (e.g., no Applicant Delay if a reply to an action with a 1 month response deadline is filed at the 3 month date with a 2 month extension)

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Common Applicant Delays (ctd.)

Submission of incomplete reply– e.g., non-responsive amendments, non-compliant amendments

Submission of supplemental reply

– IDS after response to Office Action is a “supplemental reply” unless …

• It is filed within 30 days of mailing date of a foreign action in a counterpart foreign application;

• all art was first cited in the foreign action; and

• it is accompanied by a certification under 37 C.F.R. § 1.704(d)

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Effect of Filing a Terminal Disclaimer

A patent that has been disclaimed beyond a specified date cannot be adjusted beyond the date in the disclaimer

– 35 USC 154(b)(2)(b)

Although filing a terminal disclaimer can reduce or eliminate PTA for a patent, the PTO does not actually make a PTA calculation based upon the term of the other patent

– The face of the issued patent states “subject to any disclaimer, the term of this patent is extended or adjusted under 35 U.S.C. 154(b) by x days”

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Strategies for Maximizing Patent Term in View of PTA RulesAvoid accumulating Applicant Delay whenever possible

Avoid stopping the 3 year clock

Avoid filing unnecessary terminal disclaimers

File complete national stage applications

Be aware of circumstances that can result in accumulation of PTO Delay

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Avoid Accumulating Applicant Delay Whenever PossibleFile all responses on or before the three month date (and don’t use weekend or holiday carry-overs)

Avoid supplemental responses (unless expressly requested by the Examiner)

Avoid incomplete or non-compliant replies

Always file documents with the PTO electronically or by express mail

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Avoid Accumulating Applicant Delay Whenever Possible (ctd.)IDS’s should be filed:

– before receipt of a first action;

– with a reply to a non-final action; or

– Within 30 days of mailing date of foreign action (with certification under 37 C.F.R. § 1.704(d))

An IDS filed after a response to Office Action or Restriction

Requirement and without a certification under 37 C.F.R. § 1.704(d) will be treated as a “supplemental reply”

– Every day after filing of response until filing of IDS will be Applicant Delay (e.g., response to office action filed at 2 month date and IDS at 3 month date = 1 month Applicant Delay)

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Avoid Stopping the 3 Year Clock

Avoid filing RCEs (doing so permanently stops the 3 year clock)

Consider after-final strategies that result in either a Notice of Allowance or the issuance of a non-final office action

Consider an appeal or a petition to have finality withdrawn (if appropriate)

Note: RCEs filed on or after Nov. 15, 2009 are placed on examiner’s special new application docket (if Examiner takes more than 4 months to act, then “A Delay” will accrue)

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Avoid Filing Unnecessary Terminal Disclaimers

Filing a terminal disclaimer can limit PTA (term cannot extend beyond that of the earlier patent)

Also, maximize PTA while prosecuting all applications, because even if Patent A is not commercially important, it could nonetheless limit the term of Patent B if a terminal disclaimer must later be filed over Patent A (so the longer the term of Patent A the better)

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File Complete National Stage Applications

Results in the 14-month clock starting immediately with application filing (can result in greater accumulation of “A Delay”)

Eliminates any potential clash with the PTO systemic error of starting the 3-year clock (for purposes of “B Delay”) only upon completion of missing requirements

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Circumstances that can Result in Accumulation of PTO “A Delay”

Generally, Applicant’s actions do not affect PTO’s reply time

However, filing some petitions/requests may cause the PTO to exceed their time requirements (e.g., requests to correct PTA filed after allowance often delay patent issuance beyond 4 months)

Under new PTO docketing procedures, RCEs may trigger “A Delay” in some cases

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Circumstances that Can Result in Accumulation of PTO “B Delay”

Application pendency time is mostly within the control of the PTO

However, Applicant’s use of the full 3 month response periods (even for NTFMP and RR, with extensions of time) may have an effect on pendency time for some applications (without triggering Applicant Delay)

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What are the Deadlines for Correcting PTA?

At Allowance… – Requests covering any pre-allowance PTA error must be filed no later than

payment of issue fee

At Issuance… – Requests may only cover PTA errors that could not have been corrected at

allowance – Requests must be filed within 2 months after issue date

Letters re PTA… – Duty to notify PTO if too much PTA awarded– No deadline except “due course”

Note: Requests to Correct PTA do not trigger Applicant Delay, even if unsuccessful

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How to Handle PTO’s Rejection of Wyeth-Based Applications for PTA?

Administrative Process:

1st, patentee files Application for PTA within 2 months after patent grant

2nd, PTO issues a decision rejecting Application for PTA

3rd, patentee files response to decision, requesting PTO to follow Wyeth or hold final decision in abeyance until completion of Wyeth appeal

4th, PTO issues a final decision (content of final decision TBD, based on outcome of Wyeth appeal)

District Court:

file suit no later than 180 days after patent grant

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Filing Suit in District Court to Correct PTA

Must file application for PTA with PTO before going to court

Must file suit in district court by 180 days after patent grant even if no response to application for PTA filed with PTO

Failure to file suit could result in inability to have PTA corrected

To minimize litigation costs, can file a few PTA suits per year with multiple patents

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Will the PTO Provide a Retroactive Remedy?

If Wyeth upheld on appeal?

To address the Japan Tobacco issue?

From a PTO denial of a petition to accept a “late” request for PTA

– “upon ultimate resolution of the interpretation of 37 CFR 1.702, justice requires that the Office determine consistent with relevant law and practice, and appropriate Court or legislative guidance, the applicability of any changes as to all affected patentees who failed to timely seek administrative remedy, and thus, could not seek judicial review”

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Precedent for a Retroactive PTA Remedy

PTO amended PTA rules to reverse its position that a remand from the Board of Patent Appeals and Interferences could not be a “decision”

– PTO provided a two month period (beginning on the date of publication of a notice in Federal Register) in which patentees whose patent term would have been calculated differently could file a request for reconsideration under the revised rule

– Revision of Patent Term Extension and Patent Term Adjustment Provisions” published on April 22, 2004 at 69 Fed. Reg. 21704-11

The End

Thank you!