On September 30, 2008, the US District Court for the District of Columbia overturned the interpretation of 35 USC § 154 (the statute that prescribes patent terms) by the United States Patent and Trademark Office (PTO).  See Wyeth v. Dudas, No. 07-1492 (D.D.C. September 30, 2008).

Section 154(a)(2) establishes a term of 20 years from the day on which a successful patent application is first filed. Because the clock begins to run on this filing date, and not on the day the patent is actually granted, the statute grants extensions of patent terms for (a) certain specified kinds of PTO delay, and (b) whenever the patent prosecution takes more than three years — regardless of the reason.

However, Congress says you can’t double-dip: “To the extent that periods of delay attributable to grounds specified in paragraph (1) overlap, the period of any adjustment granted under this subsection shall not exceed the actual number of days the issuance of the patent was delayed.”

In the present case, Wyeth complained that the PTO has miscounted and deprived them of a portion of the extended term.

Section 154(b) provides three guarantees of patent term:

  1. The first is found in subsection (b)(1)(A), the “[g]uarantee of prompt Patent and Trademark Office response.” It provides a one- day extension of patent term for every day that issuance of a patent is delayed by a failure of the PTO to comply with various enumerated statutory deadlines: fourteen months for a first office action; four months to respond to a reply; four months to issue a patent after the fee is paid; and the like. Periods of delay that fit under this provision are called “A delays” or “A periods.”
  2. The second provision is the “[g]uarantee of no more than 3-year application pendency.” Under this provision, a one-day term extension is granted for every day greater than three years after the filing date that it takes for the patent to issue, regardless of whether the delay is the fault of the PTO. The period that begins after the three-year window has closed is referred to as the “B delay” or the “B period”.
  3. The third type of delay, “C delays,” are delays resulting from interferences, secrecy orders, and appeals.

Note that you don’t get an extension for your own delay!

In its own bizarre world, the PTO issued final rules and an “explanation” of the rules with its construction of the double-counting provision. Under 69 Fed. Reg. 34238, the PTO “explained” that:

the Office has consistently taken the position that if an application is entitled to an adjustment under the three-year pendency provision of 35 U.S.C. § 154(b)(1)(B), the entire period during which the application was pending before the Office (except for periods excluded under 35 U.S.C. § 154(b)(1)(B) (i)-(iii)), and not just the period beginning three years after the actual filing date of the application, is the relevant period under 35 U.S.C. § 154(b)(1)(B) in determining whether periods of delay “overlap” under 35 U.S.C. 154(b)(2)(A).

In short, the PTO’s view is that any administrative delay under § 154(b)(1)(A) overlaps any 3-year maximum pendency delay under § 154(b)(1)(B).  Therefore, the applicant gets credit for “A delay” or for “B delay,” whichever is larger, but never A + B.

Wyeth argued that the “A period” and “B period” overlap only if they occur on the same calendar day or days:

A patent application is filed on 1/1/02. The patent issues on 1/1/08, six years later. In that six-year period are two “A periods,” each one year long: (1) the 14-month deadline for first office action is 3/1/03, but the first office action does not occur until 3/1/04, one year late; (2) the 4-month deadline for patent issuance after payment of the issuance fee is 1/1/07, but the patent does not issue until 1/1/08, another year of delay attributable to the PTO.

According to Wyeth, the “B period” begins running on 1/1/05, three years after the patent application was filed, and ends three years later, with the issuance of the patent on 1/1/08. In this example, then, the first “A period” does not overlap the “B period,” because it occurs in 2003-04, not in 2005-07. The second “A period,” which covers 365 of the same days covered by the “B period,” does overlap. Thus, this patent holder is entitled to four years of adjustment (one year of “A period” delay + three years of “B period” delay).

But in the PTO’s view, since “the entire period during which the application was pending before the office” is considered to be “B period” for purposes of identifying “overlap,” the patent holder gets only three years of adjustment.

Judge Robertson agreed with Wyeth:

The operative question is whether “periods of delay attributable to grounds specified in paragraph (1) overlap.” The only way that periods of time can “overlap” is if they occur on the same day. If an “A delay” occurs on one calendar day and a “B delay” occurs on another, they do not overlap, and § 154(b)(2)(A) does not limit the extension to one day. Recognizing this, the PTO defends its interpretation as essentially running the “period of delay” under subsection (B) from the filing date of the patent application, such that a period of “B delay” always overlaps with any periods of “A delay” for the purposes of applying § 154(b)(2)(A).

The problem with the PTO’s construction is that it considers the application delayed under § 154(b)(1)(B) during the period before it has been delayed. That construction cannot be squared with the language of § 154(b)(1)(B), which applies “if the issue of an original patent is delayed due to the failure of the United States Patent and Trademark Office to issue a patent within 3 years.” (Emphasis added.) “B delay” begins when the PTO has failed to issue a patent within three years, not before.

What does this mean for you?

Many patents that had been pending for more than three years before issuance will now be entitled to additional time under the PTA. For some patents, the increase in extra days will be huge.  Check those terms and check them now!

But, like the latest Ronco offer, you must act now.  Rule 1.705(d) limits the time an applicant may challenge the final USPTO-calculated PTA of an issued patent to within two months of the issue date.  Thus, applicants still eligible to petition should immediately review the USPTO-calculated PTA under Wyeth.

Note, the initial PTA determination that is received with the notice of allowance must be challenged before issue fee payment.  The final PTA determination, which is printed on the face of the patent, must be challenged within two months of the issue date. The second petition, however, cannot raise issues that were raised, or could have been raised, in a first petition.

For one service that helps keep track of extensions, see Professor Kayton’s PatentTerm Online.

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