Source: https://www.pharmapatentsblog.com/2014/01/15/federal-circuit-splits-the-baby-in-patent-term-adjustment-decision/
Timestamp: 2019-04-23 07:55:02+00:00

Document:
The Federal Circuit issued its decision in the pending Patent Term Adjustment (PTA) appeals, resolving the issues raised in Exelixis I, Exelixis II and Novartis, in a precedential decision issued in Novartis AG v. Lee, Nos. 2013-1160, -1179 (Jan. 15, 2014); see also Exelixis v. Lee, Nos. 2013‑1175, -1198 (Jan. 15, 2014) (per curiam). The court interpreted 35 USC § 154(b)(1)(B)(i) as it relates to the impact that a Request for Continued Examination (RCE) has on a PTA award for the USPTO’s failure to grant a patent within three years of its filing date (so-called “B delay” PTA). The court partially upheld and partially reversed the USPTO’s interpretation of the statute, rendering a decision that could mean an additional several months of PTA for impacted patents.
The Federal Circuit adopted a construction of the statute that conforms with that recently rejected by the district court in Abraxis Bioscience, LLC v. Kappos, Civil Action No. 1:11-cv-00730., (D.D.C. Jan. 08, 2014). In particular, the Federal Circuit agreed with the USPTO that “any time consumed by continued examination” should not count towards any B delay award regardless of when the RCE is filed, but did not agree that time after allowance is time “consumed by continued examination” that should be excluded from the B delay calculation.
The Federal Circuit began its analysis by noting that “[t]he correct interpretation of section 154 is an issue of law, which this court decides de novo.” Thus, the court does not appear to have given any deference or preference to the USPTO’s interpretation.
The better reading of the language is that the patent term adjustment time should be calculated by determining the length of the time between application and patent issuance, then subtracting any continued examination time (and other time identified in (i), (ii), and (iii) of (b)(1)(B)) and determining the extent to which the result exceeds three years. Such a reading ensures that applicants recover for any “delay[s] due to the failure of the [PTO],” without allowing the applicant to recover for “any time consumed by continued examination,” as the statute requires.
[T]he correct interpretation of the statute is the PTO’s view that time spent in a continued examination does not deplete the PTO’s allotment of three years for application processing before a resulting patent has its term extended, no matter when the continued examination begins.
The Federal Circuit also addressed and rejected Novartis’ arguments regarding the timeliness of its claims that were brought outside of the statutory period provided in 35 USC § 154(b)(4)(A). (Please see this article for a more in-depth discussion of these arguments.) The court found that the statute at issue applied to the Novartis claims at issue, that Novartis was not entitled to equitable tolling, and that the application of the statutory limitations period did not effect a taking in violation of the Fifth Amendment. Thus, the court upheld the dismissal of a number of Novartis’ PTA claims as untimely.
Patent holders who may have patents impacted by this decision should review their portfolios and identify those cases where additional PTA may be available. Under the current law and regulations that apply to patents granted on or after January 14, 2013, a patentee can seek reconsideration of a PTA award by filing a request for reconsideration (and $200 fee) within 2 months of the patent’s grant date, which period is extendable for up to 5 months under normal extension of time practice. The USPTO has not yet issued any special procedures for obtaining additional PTA under this decision, although it is possible that the USPTO may decide to waive the request for reconsideration fee or the extension of time fees.
Patent holders with pending PTA requests for reconsideration or pending PTA district court proceedings also should be able to benefit from this decision, but may want to consider making a submission to expressly request that PTA be redetermined in accordance with this decision in Novartis v. Lee.

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