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Patent Term Adjustment Docked Only For Actual Applicant Delay

This week, U.S. patent holders won the ability to keep Patent Term Adjustment (PTA) added to the end of their base patent term, without losing it for circumstances beyond their control. Still, with proper strategy during prosecution, the patent owners in the case at issue could have retained even more PTA and avoided the appeal altogether.

The Decision On Appeal This Week

The switch in PTA approach comes from the Federal Circuit’s opinion released on Wednesday in Supernus Pharmaceuticals v. Iancu. There, patent owner Supernus and their licensee United Therapeutics challenged a USPTO decision reducing the added time on the term of their patent by 886 days due to applicant-side delays.

Among the delays, 646 days pertained to the filing of one information disclosure statement (IDS). After filing a request for continued examination (RCE) with a response to a final office action, Supernus received a letter from the European Patent Office (EPO), stating that an Opposition was filed in a corresponding European patent. Between the RCE filing and the EPO letter, 546 days elapsed. The Opposition contained prior art references, triggering a duty for Supernus to disclose them in an IDS. Supernus filed this IDS 100 days after the EPO mailed its letter.

With their U.S. patent, Supernus received substantial PTA for the USPTO’s prosecution delays. However, they lost 646 days for the entire period between the RCE and the IDS, under the idea that Supernus delayed prosecution for this time period. Supernus disagreed; for the first 546 days before the EPO letter, they were not doing anything to cause a delay.

The Court of Appeals for the Federal Circuit agreed with Supernus. The Federal Circuit first distinguished this case from their ruling in Gilead Sciences, Inc. v. Lee. Gilead knew about the items in their IDS all along, and could have disclosed them earlier—a very different situation than that faced by Supernus. Gilead’s challenge also questioned a different aspect of the PTA status quo, the court noted. Then, the court looked to the PTA statute, which says that PTA “shall be reduced by a period equal to the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution.” Using the Chevron framework, the court explained that the USPTO unambiguously does not have the power to reduce PTA for more time, when the applicant’s actions were not delaying prosecution.

The USPTO provides PTA determinations when sending notice of the issuance of a new patent. However, they do not currently appear to have way to calculate PTA as the Federal Circuit now requires. In cases like Supernus, they do not typically collect a date that would allow them to distinguish between periods when the applicant did nothing wrong (for example, after Supernus’s RCE but before the EPO letter) and periods of actual applicant delay (for example, between the EPO letter and the IDS).

Patent applicants and owners concerned with the length of their patent term should note any change in USPTO procedures to account for the Federal Circuit decision in Supernus. They should also consider challenging PTA in issued patents based on this decision if the USPTO does not adjust their calculations appropriately.

A Closer Strategic Look

When filing their IDS, Supernus could have avoided all related loss of PTA by filing the IDS sooner. The Federal Circuit decision itself briefly mentions that PTA is exempt from reduction for any IDS received at the USPTO within 30 days of the applicant receiving the information from a foreign patent office. However, Supernus submitted the IDS too late to take advantage of this provision.

Applicants with portfolios in multiple countries who want to maximize U.S. patent term should take note: one small ill-timed IDS can have a big impact on PTA.

Ultimately, Supernus filed the IDS later, they had to mount a PTA challenge at the USPTO, then challenge the USPTO’s decision there at the district court, and then appeal to the Federal Circuit. All the while, Supernus still admitted that the IDS timing properly reduced their PTA by 100 days. The 546 days that Supernus will gain as a result of their efforts in the courts plus their additional 100 days could have lengthened their patent term much more easily if they had simply submitted the IDS within 30 days.

Eric Myers