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Is the USPTO under-calculating patent term adjustments?

The way in which the USPTO calculates patent term adjustments has been challenged in several recent court cases.

In one key case, Exelixis v Rea, a decision expected early next year may extend the terms of US patents held by applicants who have filed a request for continued examination (RCE) with the USPTO.

Oral arguments in the case were heard on appeal last month by the Federal Circuit. The dispute concerns the way the USPTO calculates patent term adjustments under the provisions of the 1999 American Inventors Protection Act (AIPA).

If the court rules in favour of patent holder Exelixis, it may add months or even years to the life of many patents. This would particularly benefit the owners of patents that retain or increase in value as their expiration date draws closer, such as those covering pharmaceutical and biotechnology inventions.

Under 35 U.S.C. § 154(b)(1)(B), if the USPTO takes longer than three years past the filing date or commencement of the national phase application to issue a patent, it must extend the term of the patent by the length of the delay to compensate.

The dispute revolves around the USPTO’s interpretation of the statute. At present, the agency does not count so-called “B delay” when an applicant responds to a final rejection with a request for continued examination (RCE).

Exelixis argues that the USPTO incorrectly interpreted the statute in relation to its US Patent No. 7,989,622 covering small molecule inhibitors of phosphatidylinositol 3-kinase (PI3K). Compounds of PI3K can be used to treat or prevent various diseases including several types of cancer. The USPTO maintains that its long-standing interpretation of the provision is correct.

“Prior to filing an RCE, the applicant will have already had opportunities to amend its application,” said the USPTO in its reply brief to the Federal Circuit. “Filing an RCE allows an applicant to continue to benefit from its earlier patent application filing date while significantly revising its application even after a final notice of rejection or notice of allowance is issued.”

Mike Huget, head of the IP Litigation practice at Honigman Miller Schwartz & Cohn, which is representing Exelixis in the case, said: “We have been a little bit disappointed that they have been so adversarial. Really, the only issue here is Congressional intent. It’s not about us versus them.”

The dispute started when Honigman attorney Noel Day discovered discrepancies between the firm’s internal calculations of what the PTA should be and the calculations sent by the USPTO.

“I think they lose a little bit of face when they have to give a lot of additional days,” said Day. “It brings to light that there were delays in the patent examination.”

The case is the consolidation of three cases: Exelixis v Kappos, which was decided in favor of Exelixis by the Eastern District of Virginiain November 2012; a second case by the same name, in which the same court found in favor of the USPTO in January 2013; and Novartis v Rea, in which the US District Court for the District of Columbia ruled in favor of the USPTO in November 2012.

In another recent case concerning patent term adjustments, Daiichi Sankyo v Rea, patent holder Daiichi Sankyo failed to convince the US District Court for the District of Columbia that its claims for additional patent term adjustment should be granted because of the equitable tolling principle under Wyeth.

In its ruling, earlier this month, district court ruled that Daiichi Sankyohad not demonstrated the required extraordinary circumstances. The court reached its conclusion under the reasoning applied in Novartis v Kappos, which is on appeal at the Federal Circuit.

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