{"id":1429,"date":"2013-02-01T17:49:57","date_gmt":"2013-02-01T17:49:57","guid":{"rendered":"http:\/\/ncjolt.org\/?p=1429"},"modified":"2020-06-04T20:54:03","modified_gmt":"2020-06-04T20:54:03","slug":"patent-term-adjustment-a-technical-dispute-with-great-financial-implications","status":"publish","type":"post","link":"https:\/\/journals.law.unc.edu\/ncjolt\/blogs\/patent-term-adjustment-a-technical-dispute-with-great-financial-implications\/","title":{"rendered":"Patent Term Adjustment: A Technical Dispute with Great Financial Implications"},"content":{"rendered":"

Friday, February 1, 2013, by Seiko Okada
\nIn 1994, the patent term was changed from \u201cseventeen years from issuance\u201d to \u201ctwenty years from filing\u201d under the Uruguay Round Agreements Act<\/a>.\u00a0 In 1999, the patent term adjustment (\u201cPTA\u201d) was created<\/a> under the American Inventors Protection Act<\/a> to help maintain a minimum of 17 years of the actual patent term even if the Patent Office is slow in prosecution. 35 U.S.C. \u00a7 154(b)(1)(B)<\/a> requires that the term of a certain patent be extended one day for each day of delay until the patent is issued when, among other things, the Patent Office fails to issue the patent within three years from filing.\u00a0 The Patent Office, however, has interpreted the statute to mean that the filing of a request for continued examination (\u201cRCE\u201d) cuts off any subsequent accrual of patent issuance delays that can be claimed for PTA.\u00a0 (When prosecution in a certain patent application is \u201cclosed<\/a>,\u201d an applicant may file an RCE<\/a> for further consideration of the application.\u00a0 An application is \u201cclosed\u201d when it is under appeal at the Federal Circuit, or when the Patent Office issued a final action<\/a>, a notice of allowance<\/a>, or an action that otherwise closes prosecution in the application.)
\nLast year, Exelixis challenged the Patent Office\u2019s interpretation of a PTA cut-off by an RCE in one of Exelixis\u2019 cancer drug patents entitled \u201cPhosphatidylinositol 3-Kinase Inhibitors and Methods of their Use.\u201d On November 1, 2012, in Exelixis v, Kappos (<\/em>Exelixis I<\/em><\/a>)<\/em>, the United States District Court for the Eastern District of Virginia held that the Patent Office has been improperly calculating PTA in cases where an RCE is filed more than three years after the patent application was submitted.\u00a0 The court held that \u201cthe plain and unambiguous language of [35 U.S.C. \u00a7 154(b)(1)](B) requires that . . . RCE\u2019s have no impact on PTA if filed after the three year deadline has passed.\u201d\u00a0 Under this holding, Exelixis is entitled<\/a> to a patent term that is 114 days longer than the term calculated by the Patent Office.\u00a0 Considering that successful innovative (name-brand) drugs may make some several million dollar sales a day, Exelixis I<\/em> seems like a victory for Exelixis and other similarly-situated innovator companies.
\nThe story does not end here.\u00a0 On January 28, 2013, the same court dealt with the same issue in another cancer drug patent of the same party, entitled \u201cC-Met Modulators and Methods of Use\u201d and reached a completely opposite holding (Exelixis II<\/em><\/a>).\u00a0 The judge who was assigned to Exelixis II<\/em> \u201cpart[ed] ways with the reasoning in Exelixis I<\/em>\u201d and declined to find that the statute expressed \u201cplain and unambiguous\u201d congressional intent on the issue whether an RCE filed after the three-year period cuts off the accrual of patent issuance delays.\u00a0 The court held that \u201cCongress gave the [Patent Office] broad discretion to regulate how PTA is determined and RCEs are processed,\u201d and that the Patent Office\u2019s regulation \u201cdeserves Skidmore deference.\u201d
\nThe Patent Office appealed<\/a> Exelixis I<\/em> to the Federal Circuit on December 31, 2012. \u00a0Exelixis is also likely to appeal<\/a> Exelixis II<\/em> to the Federal Circuit to resolve the split in the opinions.\u00a0 The ultimate resolution remains uncertain.\u00a0 The Patent Office is likely to continue to reject<\/a> any Exelixis-type recalculation of PTA unless and until the final disposition of the cases is reached in favor of Exelixis.<\/p>\n

Every extra day of a blockbuster product\u2019s patent term may equal some million dollars for the innovator company<\/em><\/p><\/blockquote>\n

The PTA dispute raises huge business and financial implications. \u00a0Several extra days of a blockbuster product\u2019s patent term may mean millions of dollars of revenue, strategy changes in product marketing, licensing, or patent infringement litigation, and impacts on other important business decisions.
\nFor now, patent holders should re-examine<\/a> the PTA calculations of patents to see whether the patent is entitled to an Exelixis<\/em> extension.\u00a0 If so, they should file a request for PTA recalculation with the Patent Office within two months<\/a> of the patent grant to reserve the right to appeal.\u00a0 Of note, H.R. 6621<\/a>, signed into law<\/a> on January 14, 2013, eliminates the option of challenging a PTA calculation directly in a district court. \u00a0Only if a patent holder timely files a request for PTA recalculation, the patent holder may appeal the Patent Office\u2019s decision to that request, exclusively<\/a> by bringing a civil action against the Patent Office in the United States District Court for the Eastern District of Virginia within 180 days of the Office\u2019s decision.\u00a0 Patent applicants are also advised to continue to take steps to maximize PTA by strategic prosecution<\/a> and by minimizing delays on applicants\u2019 side, for example, by filing applications electronically instead of using snail mail.
\nThe author thanks <\/em>Dr. <\/em>Jeff Childers<\/em><\/a>\u00a0 for his insightful guidance.\u00a0<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Friday, February 1, 2013, by Seiko Okada In 1994, the patent term was changed from \u201cseventeen years from issuance\u201d to \u201ctwenty years from filing\u201d under the Uruguay Round Agreements Act.\u00a0 In 1999, the patent term adjustment (\u201cPTA\u201d) was created under the American Inventors Protection Act to help maintain a minimum of 17 years of the …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[51],"tags":[],"_links":{"self":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/1429"}],"collection":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/comments?post=1429"}],"version-history":[{"count":1,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/1429\/revisions"}],"predecessor-version":[{"id":7634,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/1429\/revisions\/7634"}],"wp:attachment":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/media?parent=1429"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/categories?post=1429"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/tags?post=1429"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}