A recent district court decision in the matter of Exelixis, Inc. v. Kappos1 opens the door for patent owners to extend the lives of their patents. The decision will be especially important for select pharmaceutical, biotech, medical device, and licensed patents where extending patent life can result in significant additional revenue.
The U.S. Patent and Trademark Office (USPTO) legally is required to increase a patent’s lifetime to compensate for undue delays in the patent application examination and grant processes. This increase in patent lifetime is termed “patent term adjustment” (PTA). A 2011 survey2 indicates that approximately 80 percent of recent patents were given PTA, and the average PTA was roughly 600 days (over a year and a half). Even so, the USPTO has been shortchanging the PTA of some patent owners.
By law and with provisos, a patent's term must be extended—on a day-per-day basis—for every day beyond three years after a patent application's actual filing date until the patent issues.3 The USPTO historically has taken the position that requesting continued examination (RCE) of a patent application after three years from the patent application's actual filing date tolls the day-per-day increase in patent lifetime.
In Exelixis, the court determined that the USPTO has been incorrectly applying the law. Exelixis held that requesting continued examination of a patent application after three years from the application's actual filing date does not toll the day-per-day increase in patent lifetime. In the wake of Exelixis, the USPTO's PTA grants are likely too short for many patents. The hypothetical figure below illustrates this point:
This decision may yet be appealed by the USPTO. Recommended actions, subject to the review of each individual case, include the following:
If a patent application is pending, it may be advisable to wait to submit an RCE until after three years from the application's actual filing date in order to maximize PTA.
For patents that were recently issued, or that will issue in the near term, patent owners should consider filing a petition requesting reconsideration of the PTA calculated by the USPTO to appropriately extend their patent term.
For Wilson Sonsini Goodrich & Rosati clients, our calculations have been adjusted to include additional PTA conveyed by Exelixis. Quick action is required to preserve the right to increased PTA; otherwise, increased PTA could be lost.
For additional information or assistance in evaluating and pursuing enhanced PTA, please contact Vern Norviel, Jeff Guise, Peter Munson, James Heslin, Samir Elamrani, U.P. Peter Eng, Michael Hostetler, Michael Rosato, Karen Wong, or Esther Kepplinger.