IP Alerts

IP Alert
IP Alert: USPTO Issues Final Rule Changing Patent Term Adjustment Calculations in View of Novartis

January 14, 2015

On January 9, 2015, the U.S. Patent and Trademark Office (USPTO) issued a Final Rule relating to the calculation of patent term adjustment (PTA) in view of the decision by the U.S. Court of Appeals for the Federal Circuit in Novartis AG v. Lee, as discussed in a previous IP alert.

The patent statute nominally guarantees that a patent will issue within three years of filing. If the USPTO delays in issuing the patent, the patentee will be awarded PTA of one day for each day of USPTO delay. This rule is subject to several qualifications and exclusions. One of the exclusions is “time consumed by continued examination of the application.” This seemingly simple clause in the statute has been the subject of much litigation, as we earlier reported.

In Novartis, the Federal Circuit disagreed with the USPTO and concluded that the “time consumed by continued examination” does not include the time after mailing of a notice of allowance, unless examination on the merits resumes. This created a logistical problem for the USPTO, which had programmed its software to exclude all of the time after the filing of a request for continued examination from the available PTA. Also, the USPTO’s rules of practice were inconsistent with the Novartis decision.

The USPTO has now amended its Rules 703 and 704 to implement the Novartis decision:

•  Rule 703 now specifies that PTA excludes the period that begins on the date of filing of an RCE and ends on the date of mailing of a notice of allowance. PTA may, however, be available for the period between the dates of allowance and issue. This is consistent with the holding in Novartis.

•  Significantly, Rule 704 specifies that the filing of an RCE after a notice of allowance in most cases qualifies as “failure to engage in reasonable efforts to conclude prosecution.” As such, filing of the RCE will not only lead to a delay in the issuance of the patent, but may also lead to a reduction of the overall patent term.

•  Rule 704 contains an exception to the above when the RCE is accompanied solely by an Information Disclosure Statement (IDS). More specifically, if the RCE is filed solely to submit an IDS, and if the submission is accompanied by a statement that each item of information in the IDS was first cited or issued by a foreign patent office not more than 30 days prior to filing of the IDS, the RCE will not reduce available PTA. This exception applies if the IDS is the only document accompanying the RCE. If the applicant additionally files an amendment or submission, this exception will not apply and the applicant will incur a loss of available PTA.

•  In accompanying commentary, the USPTO states that submission of certain types of documents of a clerical nature after a notice of allowance will no longer reduce PTA. Previously, the submission of a status inquiry, request for refund, or the inventor’s declaration after a notice of allowance would reduce available PTA. Other types of documents that may now be submitted without a cost in patent term include a power of attorney, power to inspect, and several other types of documents.
It appears that an applicant who wants to submit an amendment in light of newly cited prior art can minimize the loss of PTA by filing the amendment one day after filing the RCE and IDS. The applicant in this case will separately incur a loss of PTA of one day, but apparently will not incur a loss of PTA for the (likely longer) period between the notice of allowance and the filing of the RCE.

The changes made to Rule 703 in this final rule are effective on January 9, 2015, and the changes to Rule 704 are effective on March 10, 2015.

For more information, please contact Fitch Even attorney Jonathan H. Urbanek, the author of this alert.

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