USPTO Improperly Shortening Some Patent Terms

Intellectual Property Update

Date: December 20, 2012

Overview

On November 1, 2012, Judge Ellis of the Eastern District of Virginia issued a decision that affects the period of enforceability of thousands of United States patents. Judge Ellis held that, in certain instances, the U.S. Patent and Trademark Office has improperly calculated the terms of patents it issues. Since the owner of a U.S. patent generally has 180 days from the patent issue date to contest the calculation of the patent term, if you own recently issued patents we suggest that you contact patent counsel immediately to determine whether corrective action is necessary.

Background

In 1994, Congress enacted the Uruguay Round Agreements Act, which pushed the start date of the term of a patent from the patent issue date back to the application date. The Act also extended the term of enforceability of a patent from 17 years to 20 years. In order to compensate for delays in processing a patent application, the Act also created a patent term adjustment (PTA) that extends the patent term beyond 20 years if certain delays occurred during the processing of the application.

Facts

Exelixis, Inc. obtained a patent covering certain molecules that may be useful in the treatment and prevention of some cancers. In the course of prosecuting its application for this patent, Exelixis had to file a request for continued examination (RCE). In calculating the PTA, the USPTO deducted the time during which the RCE was pending.

Exelixis sued the USPTO to properly apply the PTA, now codified in Section 154(b) of the Patent Act, contending the statute provided no authority for shortening the patent term by the pendency of an RCE filed after a three-year delay by the USPTO in issuing the patent. The court agreed, holding that the USPTO was reading into Section 154(b) language that simply was not present. On November 15, 2012, Judge Ellen Segal Huvelle of the District of Columbia came to the same conclusion in another case, holding that the USPTO wrongly calculated the PTA by deducting the pendency of the RCE.

One commentator recently opined that for patent applications with a first RCE filed more than three years after the actual filing date, the USPTO has, under this ruling, shortened the average patent term adjustment by approximately 500 days. With such valuable patent terms at stake, we recommend consulting with experienced patent counsel to determine whether you should request a correction in U.S. District Court or petition the USPTO for patent term recalculation.

Please note that these decisions are U.S. District Court decisions, and either or both might be overturned on appeal. At this writing, the USPTO has not filed a notice of appeal in either case.