Honigman Involved in Federal Ruling Regarding Patent Term Adjustment

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A ruling by the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., involving a client represented by Detroit-based Honigman, will have an impact on future patentees across the country. Last week, the court determined that the U.S Patent and Trademark Office incorrectly interpreted the “B period” section of the patent term adjustment statute.

In the world of intellectual property rights, a patent’s term begins the day the application is filed and continues for 20 years. This term can be extended, using the PTA, in the case that the USPTO does not meet certain requirements during the patent’s application process, such as the “guarantee of no more than three-year application pendency.” However, up until last week, patentees who submitted a request for continued examination — a mechanism to submit changes to a patent after the original is rejected — lost their rights to PTA.

“The patent office came up with this rule that said, “If you file an RCE at any time, we’re not going to give you any more patent term adjustment,” says J. Michael Huget, an attorney at Honigman, which represented Exelixis, a San Francisco-based drug discovery company. “You could file an RCE two years and six months into the application process and you wouldn’t get any more — what we call — ‘B Delay.’ Meaning that your three-year guarantee was gone.”

There were two patents for cancer treatments involved in Exelixis’ case, Huget says, noting that due to delays at the Patent Office, the company lost a total of 152 days on one patent and 98 days for the other.

During an oral hearing before the Federal Circuit in November, Honigman argued that the correct interpretation of the PTA statute is that time consumed by an RCE does not count towards the three-year deadline for patent application pendency. Rather, the “time consumed by continued examination” includes only the time from the filing of the RCE until the Notice of Allowance.

Huget says that the decision will benefit patents in which the value of the invention remains, or is even amplified, towards the end of the patent term. “Pharmaceutical patents may have a lot of value at the end of their (patent term). This wasn’t involving Lipitor, but to use it as an example, if you lost 180 days on a billion-dollar-a-year drug, that’s a lot of money,” he says.

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