Recently, in Novartis v. Lee (2013-1160, Fed. Cir., Jan. 15, 2014), the United States Court of Appeals for the Federal Circuit revised the method by which the United States Patent and Trademark Office (USPTO) calculates patent term adjustment (PTA) for certain issued patents. The USPTO has not yet issued guidance on when it will change its procedure for calculating PTA to comply with the court's decision and so we are reviewing the patent files our firm is handling to ensure that the correct amount of PTA is awarded to patents covered by Novartis. We recommend that other patentees verify that the correct amount of PTA is awarded to their patents until the USPTO implements procedures to account for this change.

In the Novartis case, the court held that the USPTO must account for the interval between allowance of applications and their corresponding issue date when calculating PTA for patent applications issuing more than three years after filing where a request for continued examination (RCE) was filed during prosecution. Thus, additional PTA may be available for patents where the period from filing to issuance, exclusive of the period devoted to continued examination, is greater than three years.

Previously, the USPTO did not account for the time from allowance of such applications to their issue date in determining PTA, even though the relevant language of 35 U.S.C. § 154(b)(1)(B)(i) provides an exclusion only for "time consumed by continued examination of the application requested by the applicant under section 132(b)...." (Emphasis added). Instead, the USPTO considered the entire period following an RCE to be excluded from its PTA calculus. Novartis challenged this practice arguing that the time from allowance to issuance is not excluded by the statute because at the point of allowance "examination" is closed. The court agreed with Novartis for instances in which examination remains closed after an application is allowed, and in doing so, changed the way PTA should be calculated for many patents. (Novartis at p. 15-16.) It is also worth noting that the court simultaneously vacated a related decision on PTA in favor of its ruling in Novartis. (Exelixis, Inc. v. Lee 2013-1175, Fed. Cir., Jan. 15, 2014, vacating, Exelixis, Inc. v. Kappos (906 F. Supp. 2d 474 (ED Va. 2012))).

Given the frequency of continued examination and issuance of patents more than three years after filing, the court's holding is likely relevant to numerous recently issued patents and allowed patent applications. For recently issued patents, a patentee has seven months from the date of issuance to request reconsideration of PTA (37 C.F.R. § 1.705(d)); therefore, it may be possible to obtain additional term for patents issuing within the last seven months where an RCE was filed during prosecution and the period from filing to issuance, exclusive of the period devoted to continued examination, is greater than three years. Furthermore, patent applications that have been allowed after an RCE was filed and have accrued more than three years of pendency, exclusive of continued examination, may be awarded increased patent term by paying the required issue fee on the last day possible.