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8 March 20247 minute read

Challenging the USPTO’s Patent Term Adjustment calculation: An uphill battle

Synthesis: developments in life sciences law and intellectual property

The America Invents Act includes a provision that the term of a United States patent may be extended past the 20-year statutory term if there have been administrative delays during prosecution before the United States Patent and Trademark Office (USPTO) unless the applicant “failed to engage in reasonable efforts to conclude prosecution.” See 35 U.S.C. § 154.

Generally, a patent may be entitled to a patent term adjustment (PTA) if the USPTO:

  1. fails to issue a first Office Action or Notice of Allowance within 14 months of the application filing date or commencement of the US national phase of a PCT application
  2. fails to issue a responsive Office Action within 4 months of an applicant’s complete reply to an Office Action or
  3. fails to issue the patent within 4 months of the applicant paying the issue fee.

See 35 U.S.C. § 154(b)(1).

The term of the patent is granted a one-day extension for each day after the end of the period specified, until the described action is taken. However, any accrued PTA can be reduced on a day-by-day basis if the applicant “failed to engage in reasonable efforts to conclude prosecution of the application.” See id. at § 154(b)(2)(C). The authority to promulgate regulations defining what constitutes “reasonable efforts” resides with the Director of the USPTO, who has enumerated a number of broad delay types in 37 CFR § 1.704. Even with this broad discretion, the USPTO cannot count as an applicant’s delay any period of time during which the applicant could not have engaged in any efforts to advance or conclude prosecution of the patent.

Because of USPTO’s wide discretion in defining what constitutes applicant delay, coupled with the inherent ambiguity in characterizing whether an applicant could genuinely have made efforts to advance or conclude prosecution, disputes between the patentee and the USPTO often arise when calculating the PTA of an issued patent. A patentee dissatisfied with the USPTO’s PTA calculation may request reconsideration after the patent issues, which typically resolves any differences between the patentee’s and USPTO’s calculations. See 35 U.S.C. § 154(b)(3)(B)(ii).

A patentee dissatisfied with the USPTO’s reconsideration decision also has the exclusive remedy of filing a civil action in the US District Court for the Eastern District of Virigina within 180 days of the USPTO’s reconsideration decision. Id. at § 154(b)(4). This remedy, which is not commonly used, requires the patentee to meet the high burden of proving that the USPTO’s actions are “in excess of statutory jurisdiction, authority, or limitations,” or are otherwise “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” See 5 U.S.C. § 706(2)(A).

H. Lundbeck A/S v. USPTO

For many life science and pharmaceutical companies, each day of a patent term can translate into millions of dollars. Challenging the USPTO’s PTA calculation thus may be critical because the value attributable to a patent can be extended beyond the 20-year statutory period.

Danish drugmaker H. Lundbeck A/S recently signaled its disapproval of the USPTO’s PTA calculation procedures, challenging the USPTO’s 0-day PTA calculation in a civil action filed in August 2023 against USPTO Director Kathi Vidal in the Eastern District of Virgina. See H. Lundbeck A/S v. United States Patent And Trademark Office, C.A. 23-cv-1105-PTG-WEF (E.D. Va.). Lundbeck seeks a judgment that the PTA for its US Patent No. 11,059,822 (the ’822 patent), directed to MAGL inhibitors, be changed from 0 days to 91 days, arguing that the USPTO was “arbitrary, capricious, and unlawful” when it impermissibly shortened its PTA calculation, in violation of the Administrative Procedure Act and the Fifth Amendment to the US Constitution.

The ’822 patent, titled “MAGL inhibitors,” entered the US national stage on May 10, 2019. However, Lundbeck contends that the USPTO failed to issue a first Office Action or Notice of Allowance within 14 months, ie, by July 16, 2020, which constitutes USPTO – not applicant – delay. Indeed, the first Office Action arrived 134 days later, on November 27, 2020, so every day after the 14-month period should count as an additional day when calculating the PTA for the ’822 patent (less those days attributable to applicant delay). Thus, Lundbeck asserts that it is entitled to 134 days of USPTO delay minus 43 days of applicant delay, for a total of 91 days of PTA for the ’822 patent.

Lundbeck argues that the USPTO impermissibly and unfairly attributed the USPTO’s own delays in reviewing the formalities of the application for 10 months. That is, only after 10 months from the time the application that ultimately issued as the ’822 patent entered the US national stage – and, notably, beyond the 8-month period applicants have to provide an application in condition for examination – did the USPTO notify Lundbeck of its noncompliance with certain shading requirements for tables in its application. See 37 C.F.R. § 1.52. Accordingly, Lundbeck claims that it is inherently unfair to attribute the delays in reviewing the formalities of the application to itself, rather than the USPTO, when it “did not even have the opportunity to address any perceived deficiencies” within the prescribed 8-month period.

In response to Lundbeck’s allegations, USPTO Director Vidal filed a motion for summary judgment that its 0-day PTA determination for the ’822 patent was correct, calling this “a straightforward case involving the USPTO’s patent term adjustment.” Specifically, Director Vidal argues that when the application entered the US national stage on May 10, 2019, the application was not in proper condition for examination because it included impermissible gray-shaded tables in violation of the USPTO’s reproducibility requirements under 37 C.F.R. § 1.52. Nor did Lundbeck submit a corrected application removing the shaded tables until after the 8-month period expired; this constituted a failure to engage in “reasonable efforts to conclude processing or examination of an application,” in violation of 37 C.F.R. § 1.704(c)(13).

Accordingly, because the responsibility to timely ensure that an application is in condition for examination falls on the applicant – and, indeed, is an express requirement in determining the reasonable efforts of the applicant when determining applicant delay, see 37 C.F.R. § 1.704(c)(13) – “the USPTO appropriately counted every day, following the eight-month grace period, that [Lundbeck] did not file a corrected specification as applicant delay.”

Final thoughts

Although briefing on Director Vidal’s motion for summary judgment is not yet complete, there is anticipation that this case will be resolved at the summary judgment stage.

Even though the USPTO has broad discretion in defining what constitutes applicant delay, the district court’s decision is nevertheless expected to clarify the considerations governing whether an applicant could genuinely have made efforts to advance or conclude prosecution. This is particularly relevant to situations where a delay can be fairly attributed to either the USPTO’s conduct or the applicant’s conduct.

In the meantime, patent applicants, especially life science applicants, should ensure that their applications meet the requirements for being in a condition for examination at the time of filing, paying particular attention to both formatting requirements and deadlines for ensuring compliance. Applicants should also continuously track all delays attributed to both themselves and the USPTO to verify the USPTO’s PTA calculation.

Because patent term adjustments are especially critical for life science applicants, we will continue to monitor the effects of any ruling in this case. Additionally, we will keep a close eye on how the USPTO addresses inconsistencies in notifying an applicant that a follow-on application is not in condition for examination when that applicant was previously notified that the priority application was in condition for examination and how this factors into the PTA calculation. Find out more by contacting any of us.