CPLRG™ 0023 - Wyeth v. Kappos - Jan. 7, 2010

Wyeth v. Kappos, 591 F.3d 136 (Fed. Cir. 2010) (RADER, Plager & Moore)


MAJOR ISSUES: Patent term adjustment; term extension because of PTO failure to meet deadlines (“A delay”) and to issue patent within 3 years of filing (“B delay”); elimination of “overlap”; overlap commencing only after three-year mark; PTO’s erroneous interpretation as greater of A or B

Statute: Textof35USC154

CROSS-REFERENCE: On patent term computation, see Chisum on Patents 16.04[6].

1. In this decision, the Federal Circuit overturned the PTO’s restrictive interpretation of the 1999 statute providing for extension of patent term for periods of delays by the PTO.

2. SUMMARY. The statutory provision on patent term provides for extensions in case of PTO delay in meeting examination deadlines (“A” delays) and in PTO failure to issue a patent within three years of filing (“B” delays”). The statute restricts extensions in case the types of delay “overlap.” The PTO interpreted the overlap restriction as meaning that the “B” delay begins with filing and that an overlap can occur before the three-year mark. The result was that “the PTO use[d] either the greater of the A delay or B delay to determine the appropriate adjustment but never combine[d] the two.”

In this decision, the Federal Circuit held that the PTO’s interpretation was contrary to the plain meaning of the statute. The “B” “period of delay” begins only at the three-year-from-filing mark, and there is an overlap only if an “A” delay occurs during that “B” period of delay.

3. 1994: TWENTY-YEAR TERM. A 1994 statute changed a patent’s term from (1) 17 years from the grant date, to (2) twenty years from the application filing date.

4. 1999 AMERICAN INVENTORS PROTECTION ACT. A 1999 statute, the American Inventors Protection Act (AIPA), provided for extensions of patent term to compensate for delays in issuance of a patent. 35 U.S.C. § 154(b)(1).

     a. THREE “GUARANTEES”; TYPES OF DELAYS (A, B, C). The statute provided “guarantees” of compensating extension for three types of delay.

           i. PTO FAILURE TO MEET DEADLINES. “A” delays arise from the PTO’s failure to meet examination deadlines. An example is PTO failure to provide a first response to an application within 14 months. 35 U.S.C. § 154(b)(1)(A).

           ii. PTO FAILURE TO ISSUE PATENT WITHIN THREE YEARS OF ACTUAL FILING. “B” delays arise from the PTO’s failure to issue a patent within three years of the actual application filing date. 35 U.S.C. § 154(b)(1)(B).

           iii. INTERFERENCES, APPEALS, SECRECY ORDERS. “C” delays arise from interferences, appeals, and secrecy orders. 35 U.S.C. § 154(b)(1)(C).

     b. DAY-FOR-A-DAY. For each delay, the statute provides a day-for-a-day extension.

          i. For an “A” delay, the statute states that “the term of the patent shall be extended 1 day for each day after the end of the period specified … until the action described in such clause is taken.”

          ii. For a “B” delay, the statute states that “the term of the patent shall be extended 1 day for each day after the end of that 3-year period until the patent is issued.”

          iii. “OVERLAP“; ADJUSTMENT NOT EXCEEDING “ACTUAL NUMBER OF DAYS THE ISSUANCE OF THE PATENT WAS DELAYED.” The statute imposes a restriction when the delay periods “overlap,” as follows:

“To the extent that periods of delay attributable to grounds specified in paragraph (1) overlap, the period of any adjustment granted under this subsection shall not exceed the actual number of days the issuance of the patent was delayed.”

35 U.S.C. § 154(b)(2)(A).

     d. REDUCTION: APPLICANT FAILURE TO ENGAGE IN REASONABLE EFFORTS TO CONCLUDE PROSECUTION. The statute provides for a reduction in the extension (adjustment) provide for the time “during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application.” 35 U.S.C. § 154(b)(2)(A).

5. TERM ADJUSTMENTS FOR TWO PATENTS Applying its interpretation, the PTO adjusted the term for two patents.

     a. For U.S. Pat. No. 7,179,892, see U.S.Pat.No.7179892 there were 610 days of “A” delay, 51 of which were after the three year mark. There were 345 days of “B” delay (post-three year). There was a reduction of 148 days because of the applicant’s delay (that is, lack of reasonable effort).

          i. The PTO adjusted term by 462 days, to wit, the greater of the A or B delay (610) less the 148 day reduction.

          ii. The patent owner argued that the “overlap” was only the 51 days of “A” delay after the three year mark. That interpretation yielded a 756 day adjustment, to wit, 610 (A delay) plus 345 (B delay) less 51 (overlap) less 148 (reduction).

     b. For U.S. Pat. No. 7,189,819, see U.S.Pat.No.7189819 , there were 336 days of A delay (106 after the three-year mark), 827 days of B delay, and 335 days applicant delay reduction.

          i. The PTO adjusted the term by 492 days, to wit, the greater of A or B delay (827) less the 335 day reduction.

          ii. The patent owner argued that the “overlap” was only the 106 days, yielding a 722 day adjustment, to wit, 336 plus 827 less 106 less 335.

6. DISTRICT COURT SUIT. In a review action a district court granted summary judgment in favor of the patent owner.

7. STATUTE: CLEAR AND CONTRARY TO PTO INTERPRETATION; NO DEFERENCE. The district court correctly construed the statute and properly refused to give deference to the PTO’s greater-of-A-or-B rubric because it was contrary to the clear and unambiguous language of Section 154(b).

     a. The limitation applies only when “periods of delay” overlap, which means that “the violations occur at the same time.”

     b. The “period of delay” for the B guarantee begins to run from the three-year mark.

     c. Therefore, there is an overlap for A delays and B delays only when the A delays actually occur after the three-year mark when B delay begins.

     d. LEGISLATIVE HISTORY. The statute’s legislative history supported rather than contradicted the statute’s language.

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