Federal Circuit May Have More To Say On Patent Term Adjustment (PTA) As USPTO Appeals Exelixis v. Kappos

Executive Summary: Three years removed from the Federal Circuit’s decision in Wyeth v. Kappos, patentees are seeking additional extensions of patent term based on the recent decision issued in Exelixis v. Kappos, which could lead to millions, if not billions, in additional revenue for patent holders. However, the USPTO has appealed the case, leaving its ultimate outcome uncertain.
In 1999, Congress amended § 154 of the Patent Act to provide that a patent application should issue as a patent no more than three years after its filing date. In order to meet this three-year guarantee, § 154(b)(1)(B) provides that the term of a patent shall be extended one day for each day after the end of that three-year period until the patent is issued. However, § 154(b)(1)(B)(i) denies extension for any time consumed by a request for continued examination (RCE) made by a patent applicant.
At issue in Exelixis v. Kappos was whether § 154(b)(1)(B)(i) should apply when an RCE is filed beyond the three-year guarantee provided by § 154(b)(1)(B). In its November 2012 decision, the U.S. District Court for the Eastern District of Virginia held that it should not because the plain and unambiguous language of § 154(b)(1)(B) requires that the time devoted to an RCE tolls the running of the three year “clock”, but only if the RCE is filed within the three-year period. This same rationale was subsequently adopted by the U.S. District Court for the District of Columbia in Novartis A.G. v. Kappos(D.D.C. 2012).
The Exelixis decision has certainly not gone unnoticed. In the two months since its issuance at least fifty suits have been filed against outgoing U.S. Patent & Trademark Office (“USPTO”) Director Kappos, seeking extensions of patent term on the same basis. However, the USPTO has appealed the decision in Exelixis, leaving its ultimate resolution in doubt.
The USPTO’s appeal comes just shy of the third anniversary of the Federal Circuit’s decision in Wyeth v. Kappos, in which the court held that patentees were entitled to extensions of patent term under both § 154(b)(1)(A) and § 154(b)(1)(B) of the Patent Act to the extent that the periods of extension granted by these subsections did not overlap. Based upon that decision, the average PTA calculation appears to have gone up considerably. See, e.g., this article.
In view of events that followed the Wyeth decision, it is reasonable to contemplate whether the USPTO will respond similarly to a Federal Circuit decision upholding Exelixis. In response to Wyeth, the USPTO amended its regulations and instituted an interim procedure to provide patentees an opportunity to request recalculation of PTA, but only if the request was filed within 180 days of the grant of the patent or within two months of a request for reconsideration of PTA determination under 37 C.F.R § 1.705(d).
Irrespective of whether Exelixis follows Wyeth’s path, patentees should re-examine the PTA calculations of any recently issued and impending patents to elucidate whether that patent might be entitled to an Exelixis-type extension. If so, they should consider early on whether the PTA to be gained is worth the hassle and expense of filing a suit against the USPTO within 180 days of the grant of the patent. Although administrative remedies for correcting PTA are available and should be pursued, one can expect the USPTO to reject any submission for an Exelixis-type extension until the case is finally disposed of.
Patentees are further cautioned that the foregoing 180-day limit is provided for by statute and is not extendible. While there are at least two decisions that indicate this statute of limitations may be tolled by timely pursuing the aforementioned administrative remedies, these decisions were rendered by the U.S. District Court for the District of Columbia. See Bristol-Myers Squibb Co. v. Kappos (D.D.C. 2012) and Novartis A.G. v. Kappos. However the America Invents Act provides that as of September 16, 2011, the U.S. District Court for the Eastern District of Virginia has exclusive venue over lawsuits filed under § 154, and that court has arrived at a contrary conclusion with respect to tolling of the 180-day period. See Janssen Pharmaceutica, N.V. v. Kappos (E.D.VA 2012).
If you have any questions about the issues raised in this client alert, please contact Womble Carlyle patent attorneys Russell Timm, Thomas Cawley and Julie Meigs, or the Womble Carlyle attorney with whom you usually work.