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IP Alert: Federal Circuit Invalidates USPTO Rule on Patent Term Adjustment

January 23, 2019

Today, in Supernus Pharmaceuticals, Inc. v. Iancu, the Federal Circuit issued a decision invalidating one rule for the calculation of patent term adjustment (PTA) by the U.S. Patent and Trademark Office. The decision is important because it may significantly extend the terms for many U.S. patents and may raise questions regarding other rules affecting PTA.

By way of background, the term of a patent nominally extends from its issue date until the 20-year anniversary of its effective filing date. Because the nominal expiration date of the patent is fixed, any delays during prosecution of the patent can reduce the patent’s term. In 1999, Congress enacted legislation to address delays in prosecution. This legislation provides for adjustment of the term of a patent where the delay is due to processing time at the USPTO. There have been various cases concerning the USPTO’s application of this statute and how the term is to be calculated. The USPTO has also promulgated various regulations concerning how it will calculate any PTA.

In Supernus, the Federal Circuit overturned a USPTO decision reducing the number of days of patent term adjustment for a patent assigned to Supernus. On April 27, 2006, Supernus filed a patent application that eventually matured into U.S. Patent No. 8,747,897. On February 22, 2011, during the prosecution of the application, Supernus filed a request for continued examination (RCE), which removed the finality of a rejection made by the examiner.

Supernus also filed an international application that gave rise to a European patent application filed with the European Patent Organization (EPO). On August 21, 2012, the EPO notified Supernus’s European counsel that an opposition was filed to this parallel European case; the opposition cited 10 documents. On September 11, 2012, Supernus received a letter from its European counsel disclosing the opposition and identifying the documents. On November 29, 2012, Supernus filed an information disclosure statement (IDS) providing the cited documents for consideration to the U.S. examiner. The USPTO issued a first office action on September 10, 2013, Supernus responded on January 10, 2014, and on February 4, 2014, the USPTO allowed the case. On June 10, 2014, the patent issued with a PTA of 1,260 days added to the patent’s 20-year term.

The USPTO initially attributed 2,321 days as the PTA amount available. The USPTO then reduced this amount to the final PTA amount of 1,260 days, in part because of delays it attributed to Supernus. In the reduction amount, 646 days were included for the period between February 22, 2011 (the filing of the RCE) and November 29, 2012 (the filing of the IDS).

Supernus asked the USPTO to reconsider the PTA calculation. The USPTO refused, and Supernus appealed this refusal to the District Court for the Eastern District of Virginia. Among other things, Supernus argued that the USPTO’s PTA regulations were arbitrary and that Supernus was entitled to at least 546 of the 646 days (the period between the filing of the RCE and the EPO notification) because there was nothing it could have done during this time period to further the prosecution of the case. Supernus conceded that it had delayed by 100 days between the date it filed the RCE and the later date on which it filed the IDS, but argued that it should not be charged with the remaining 546 days before the examiner issued the next office action. After the District Court held for the USPTO, Supernus then appealed to the Federal Circuit.

The PTA statute provides that the PTA amount may be reduced “by a period equal to the length of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application.” The Federal Circuit stated that the meaning of this language was clear: If there was no period of time during which the applicant could have engaged in reasonable efforts but failed to do so, there can be no reduction in PTA. Applying this interpretation to the facts of the case, the Federal Circuit agreed with Supernus that there was nothing Supernus could have done during the period of time from the filing of the RCE until the filing of the IDS. Supernus had responded to the office action and there was nothing more for it to do. As a result, Supernus received an additional 546 days of PTA (for the period from February 22, 2011, to August 21, 2012).

The Federal Circuit’s decision raises a number of questions. First, the decision will almost certainly cause the USPTO to adjust its rules to be in accord with the decision, but the exact adjustments made by the USPTO to its rules are yet to be determined or announced. For example, it is presently unclear whether a patent owner will have to petition the USPTO for any adjustment, what form any petition will take, or for what circumstances an adjustment will even be allowed. It is also unclear how many patents have this (or a similar) fact pattern that would allow the PTA to be increased. It is likewise unclear whether the rationale behind the Supernus decision will affect other PTA rules promulgated by the USPTO.

For these reasons, owners of U.S. patents for which the patent term is a serious concern are well advised to contact a Fitch Even attorney, who can assist in considering this decision and monitoring future developments at the USPTO regarding the possibilities for recovering any improperly reduced PTA amount.

For more information, please contact Fitch Even partner Timothy R. Baumann, author of this alert.

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