Maximizing Patent Term Adjustment Under Exelixis

A number of Patent Term Adjustment (PTA) cases have been filed in the U.S. District Court for the Eastern District of Virginia since the November 1, 2012 decision in Exelixis, Inc. v. Kappos. While most have presented straight-forward fact patterns, one complaint caught my attention because it brings to mind how applicants could manipulate the patent prosecution process to ensure that they fall under Exelixis. The USPTO is likely to use examples like these in support of its Federal Circuit appeal.

The Exelixis Decision

As I explained in this article, the Exelixis decision relates to the interpretation of 35 USC § 154(b)(1)(B)(i) and the calculation of PTA when the USPTO took more than three years to grant the patent, and a Request for Continued Examination was filed during prosecution (i.e., the “RCE carve-out” of the “B delay” award). Under the district court’s interpretation of the statute, the carve-out only comes into play if a Request for Continued Examination (RCE) is filed within the three-year period from the application’s filing date. Otherwise, as stated by the court, “RCE’s have no impact on PTA if filed after the three year deadline has passed.”

The Hypermed Imaging Complaint

Hypermed Imaging, Inc. filed the Exelixis-based PTA case that caught my eye. According to the complaint, the patent application at issue was filed in March of 2007, the first RCE was filed in June 2010 (more than three years after the filing date), and the patent was issued in July of 2012 (more than five years after the filing date).

What makes this case interesting is that the application was “unintentionally abandoned” between April 2009 and July 2010. Indeed, the first RCE was filed with the Petition to Revive. If the application had not been unintentionally abandoned, it is likely that the first RCE would have been filed before the application had been pending for three years. Under those circumstances, the RCE would have impacted the B delay PTA calculation, even under Exelixis.

While the unintentional abandonment might permit Hypermed Imaging to accrue B delay under Exelixis, it also negatively impacts the total PTA award for the patent. This is because periods of unintentional abandonment constitute “Applicant delay” that is subtracted from USPTO delay when calculating the final PTA award. According to Hypermed Imaging’s complaint, the total days of USPTO delay exceeded the total days of Applicant delay, even with 452 days of Applicant delay during the period of abandonment.

Manipulating Patent Prosecution to Maximize PTA

Prosecution of the applications at issue in the cases being filed now were not manipulated to benefit from Exelixis, because they were prosecuted under the USPTO’s interpretation of 35 USC § 154(b)(1)(B)(i), under which the USPTO did not award any PTA for B delay once an RCE was filed. But the fact pattern in this case and others filed in the wake of the Exelixis decision bring to mind how patent prosecution could be manipulated to increase the likelihood that a first RCE will not be filed until after the application has been pending for at least three years, to ensure that the patent can accrue B delay under Exelixis.

Of course, an applicant could not purposefully “unintentionally abandon” an application in order to extend the time to a first RCE, but applicants can extend response periods to prolong prosecution. Any such strategies could backfire, however, if the total number of days of B delay is not greater than the total number of days of Applicant delay required to prolong the filing of the first RCE. Still, for an application that is not close to allowance and/or where the RCE is likely to languish on the USPTO examiner’s docket, the delay tally may be more likely to end up in the applicant’s favor. (Please see this article for a discussion of the USPTO’s latest efforts to address RCE backlog problem.)