Karin L. Tyson and Robert W. Bahr
Before June of 1995, 35 U.S.C. § 154 provided that the term of a utility or plant patent ended seventeen years from the date of patent grant. To comply with Article 33 of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement resulting from the Uruguay Round Agreements of the General Agreement on Tariffs and Trade (GATT), the United States was required to establish a minimum term for patent protection ending no earlier than twenty years from the date the application was filed. Thus, the Uruguay Round Agreements Act amended 35 U.S.C. § 154 in June of 1995 to change the term of utility and plant patents from ending seventeen years from the date of patent grant to ending twenty years from the filing date of the application (or twenty years from the earliest filing date claimed under 35 U.S.C. §§ 120, 121, or 365(c)). With this change, 35 U.S.C. § 154 was also amended to provide for patent term extension in the event that issuance of the application as a patent was delayed due to secrecy order, interference or successful appellate review, subject to a five-year cap on any patent term extension under 35 U.S.C. § 154(b).
The American Inventors Protection Act of 1999 amended 35 U.S.C. § 154(b) to expand the list of administrative delays which may give rise to patent term adjustment. Original utility and plant patents issuing from applications filed on or after May 29, 2000 will be eligible for patent term adjustment if issuance of the patent is delayed due to one or more of the listed administrative delays. The USPTO implemented the patent term adjustment provisions of the American Inventors Protection Act of 1999 in a notice of proposed rulemaking published in March of 2000, and a final rule published in September of 2000.
The patent term adjustment provisions of the American Inventors Protection Act of 1999 apply to original ( i.e. , non-reissue) utility and plant applications filed on or after May 29, 2000, which include continuation ( e.g. , a continued prosecution application (CPA)), divisional, or continuation-in-part applications. A request for continued examination (RCE) under 35 U.S.C. § 132(b) and 37 CFR § 1.114 is not a new application and filing an RCE in an application filed before May 29, 2000 will not cause the application to be eligible for patent term adjustment under the American Inventors Protection Act of 1999. The patent term extension provisions of the Uruguay Round Agreements Act (for delays due to secrecy order, interference or successful appellate review) continue to apply to utility and plant applications filed on or after June 7, 1995 and before May 29, 2000.
The "patent term guarantee" set forth in the American Inventors Protection Act of 1999 establishes three main bases for adjusting the term of a utility or plant patent: (1) if the USPTO fails to take certain actions within specified time frames; (2) if the USPTO fails to issue a patent within three years of the actual filing date of the application; or (3) for delays due to interference, secrecy order, or successful appellate review.
The first main basis for patent term adjustment establishes four "time clocks" for certain actions by the USPTO. If the USPTO fails to meet any of the enumerated "time clocks," the term of the patent is (subject to certain conditions discussed below) adjusted one day for each day by which the USPTO misses the time frame.
The first time clock is for the USPTO to initially act on the application within fourteen months of its filing date for application filed under 35 U.S.C. § 111(a), or the date on which an international application fulfilled the requirements of 35 U.S.C. § 371 (the date of entry into the national stage). An "initial action" that meets the fourteen-month time clock would be a notification under 35 U.S.C. § 132 or a notice of allowance under 35 U.S.C. § 151. Each of a written restriction (or election of species) requirement, a first Office action on the merits of an application, an action under Ex parte Quayle , or a notice of allowability (PTOL-37) is a notification under 35 U.S.C. § 132. A notice under 37 CFR § 1.53(f) requiring a missing oath or declaration under 37 CFR § 1.63 or the filing fee, however, is not a notification under 35 U.S.C. § 132 and mailing such a notice would not meet the fourteen-month time clock.
The second time clock is for the USPTO to respond to a reply under 35 U.S.C. § 132 or to an appeal taken under 35 U.S.C. § 134 within four months of the date on which the reply was filed or the appeal was taken. In the final rule, the USPTO indicated that it considers an appeal to have been taken on the date an appeal brief in compliance with 37 CFR § 1.192 is filed.
The third time clock is for the USPTO to act on an application within four months of the date of a decision by the Board of Patent Appeals and Interferences under 35 U.S.C. § 134 or 135, or a decision by a Federal court under 35 U.S.C. §§ 141, 145 or 146, in an application in which allowable claims remain. Allowable claims are considered to remain in an application when there are claims indicated as allowable or there are claims with no outstanding objection or rejection ( e.g. , all of the rejections of at least one claim were reversed as a result of the appeal). A dependent claim which has been indicated prior to an appeal as objected to but allowable if rewritten into independent form is not an allowable claim.
A fourth time clock is that the USPTO must issue a patent within four months after the date on which the issue fee was paid and all outstanding formal requirements are met. Thus, if the notice of allowability requires submission of formal drawings, this fourth time clock does not begin until the date the issue fee is paid or the date the formal drawings are filed, whichever date is later.
The second main basis provides for term adjustment if the USPTO does not issue a patent within three years of the "actual filing date" of the application. The USPTO indicated in the final rule that (for purposes of 35 U.S.C. § 154(b)(1)(B)) it considers the "actual filing date" of an international application to be the date of commencement of the national stage as to the United States under 35 U.S.C. 371(b) or (f). In addition, the three-year period begins with the "actual filing date" of the application, not any earlier-filed application for which a benefit is claimed under 35 U.S.C. §§ 120, 121, or 365(c). Thus, if an application is filed on May 29, 2000, and a continuation of that application is filed on June 5, 2002, the three-year period is measured from June 5, 2002, and not May 29, 2000.
Certain periods of time during processing or examination of an application do not count against this three-year period. For example, any time consumed by continued examination under 35 U.S.C. § 132(b) (37 CFR § 1.114), imposition of a secrecy order, declaration of an interference, appellate review, or applicant-requested delays does not count against the three-year period. Although filing a request for continued examination (RCE) under 35 U.S.C. § 132(b) and 37 CFR § 1.114 cuts off any additional patent term adjustment due to failure of the USPTO to issue a patent within three years, an applicant may continue to accrue patent term adjustment for events after the filing of the RCE. For example, if an application was filed on June 1, 2000, an RCE is filed on August 1, 2003, during the processing of the RCE the USPTO fails to meet one of the "time clock" periods by one month ( e.g. , acting on a reply within four months of the filing date of the reply), and the application issues as a patent on August 1, 2004, the applicant (assuming there are no other events relevant to patent term adjustment) will be entitled to patent term adjustment of three months (two months for the time from the three-year anniversary date to the filing date of the RCE plus one month for missing the four-month reply period).
The third main basis for patent term adjustment is similar to the patent term extension provisions which apply to applications filed on or after June 8, 1995 and before May 29, 2000, in that is provides for patent term adjustment due to for delays caused by an interference proceeding (35 U.S.C. § 135(a)), imposition of a secrecy order (35 U.S.C. § 181), or a successful appellate review. Unlike the provisions applying to applications filed before May 29, 2000, however, there is no five-year cap, no preclusion from patent term adjustment for a successful appellate review if the patent is subject to an obviousness-type double patenting terminal disclaimer, or provision for a minimum pendency of three years before patent term adjustment may accrue for a successful appellate review.
In calculating patent term adjustment, any overlapping delays are counted only once. Accordingly, if the USPTO misses a "time clock" event by one month ( e.g. , the patent is not issued until five months after payment of the issue fee and compliance with all formal requirements) and the patent is issued thirty-seven months after the actual filing date of the application, these two one-month periods are overlapping and (assuming there are no other events relevant to patent term adjustment) the applicant is entitled to patent term adjustment of only one month. In addition, if there is a terminal disclaimer in the application, the term of the patent may not be extended beyond the terminal disclaimer date.
The patent term adjustment provisions of the American Inventors Protection Act of 1999 also provide that patent term adjustment is reduced by a period equal to the period during which an applicant failed to engage in reasonable efforts to conclude prosecution of the application. 35 U.S.C. § 154(b) expressly provides that with respect to patent term adjustment under 35 U.S.C. § 154(b)(1)(B), an applicant is deemed to have failed to engage in reasonable efforts to conclude processing or examination of the application for the cumulative total of any period in excess of three months taken to respond to any Office action or notice.
35 U.S.C. § 154(b) also directs and authorizes the USPTO to prescribe regulations establishing the circumstances that constitute a failure of the applicant to engage in reasonable efforts to conclude processing or examination of an application. The USPTO first prescribed by regulation that, with respect to any ground for patent term adjustment, applicant is deemed to have failed to engage in reasonable efforts to conclude processing or examination of the application for the cumulative total of any period in excess of three months taken to respond to any Office action or notice.
The USPTO then prescribed eleven other circumstances which are also considered a failure to engage in reasonable efforts to conclude prosecution. Examples of the other circumstances considered a failure to engage in reasonable efforts to conclude prosecution of an application are: (1) suspension of action or deferral of issuance of a patent at an applicant's request; (2) abandonment of an application or delay in the filing of a petition to withdraw the holding of abandonment; (3) conversion of a provisional application into a nonprovisional application; and (4) submission of most papers (including formal drawings) after allowance. Since the submission of papers after allowance will result in a reduction of any patent term adjustment, applicants should consider filing formal drawings prior to allowance (rather than waiting until an application is allowed to prepare formal drawings) and seeking correction of errors in the notice of allowance or notice of allowability by telephone (rather than a paper request submitted by mail) to avoid a reduction to the patent term adjustment. An information disclosure statement filed within thirty days of receipt of the information by a party required to disclose the prior art, however, will not be considered a failure to engage in reasonable efforts to conclude prosecution.
The USPTO has indicated that patent term adjustment will be reduced by any period during which the applicant failed to engage in reasonable efforts to conclude processing or examination of the application (as defined in 37 CFR § 1.704(b) and (c)), even if the failure to engage in reasonable efforts to conclude processing or examination of the application did not cause or contribute to any patent term adjustment. For example, if an applicant is entitled to a patent term adjustment due to successful appellate review but took longer than three months to reply to an Office action, the patent term adjustment resulting from the successful appellate review will be reduced by the period in excess of three months taken to reply to the Office action even when there is no causal relationship between the applicant's taking longer than three months to reply to the Office action and the length of the period of appellate review.
The USPTO has also indicated that it is the actual filing date of papers (and fees), and not the date indicated on a certificate of mailing under 37 CFR § 1.8, that will be used in the patent term adjustment calculations. This provision has two edges, in that the actual filing date of a reply by applicant (and not the date indicated on any certificate of mailing under 37 CFR § 1.8) is the date: (1) from which the four-month period for action by the USPTO is measured; and (2) that measures the end of the three-month period for reply by applicant. Thus, applicants desiring to maximize patent term adjustment may wish to consider filing replies to Offices actions: (1) under the "Express Mail" provisions of 37 CFR § 1.10; (2) by facsimile; (3) by hand-delivery; or (4) with sufficient time remaining in the three-month period to account to Postal Service delivery time.
The USPTO will make an initial determination of the patent term adjustment with the notice of allowance. The USPTO's initial determination will be made by a computer program that uses the information recorded in its automated patent application information (Patent Application Location and Monitoring or PALM) system. Because this initial determination is made before all of the events giving rise to patent term adjustment have occurred, this initial determination (prediction) will state, for example, that:
The patent term adjustment to date is 857 days. If the issue fee is paid on the date that is three months after the mailing date of this notice and the patent issues on the Tuesday before the date that is 28 weeks (six and a half months) after the mailing date of this notice, the term adjustment will be 1058 days.
The notice will also state that applicants may be able to obtain more information through the Patent Application Information Retrieval (PAIR) system. PAIR is a system that permits access to the USPTO's computer (PALM) records for patents and applications via the Internet. Information related to patents and published applications will be available to the public through PAIR. An applicant, however, will need a customer number and Public Key Infrastructure (PKI) software to obtain the information for an application that has not been published
After receiving the initial determination of the patent term adjustment, applicants have one opportunity to request reconsideration of the determination. Any request for reconsideration (an application for patent term adjustment) must be filed with or before payment of the issue fee. A request for reconsideration must be by way of an application for patent term adjustment and be accompanied by the required fee (currently $200). The application for patent term adjustment must state what the correct patent term adjustment should be, the relevant dates giving rise to patent term adjustment, whether the patent is subject to any terminal disclaimer, and either state any circumstances that may constitute a failure to engage in reasonable efforts to conclude prosecution, or state that there were no such circumstances. Accordingly, applicants should regularly check PALM records, either by use of PAIR or by calling the USPTO, to verify that papers have been accorded the proper date and avoid having to address a date error issue in a request for reconsideration ( e.g. , if a paper is not received by the USPTO and a petition to withdraw the holding of abandonment is filed with a duplicate of the paper, applicants should verify that the paper is recorded in USPTO computer records with the date the paper was originally filed in the USPTO). If an error in the PALM records is noted, applicant should contact the Technology center and have the error corrected before the application is allowed. Otherwise, the error may result in an erroneous patent term adjustment determination in the notice of allowance, which must then be corrected by a request for reconsideration of the patent term adjustment determination.
In addition, the patent term adjustment provisions of the American Inventors Protection Act of 1999 provide that the USPTO shall reinstate all or part of the period of a reduction for failure to reply to an Office action or notice within three months, if the applicant makes a showing that, in spite of all due care, the applicant was unable to reply within the three-month period. If an applicant requests reinstatement of all or part of the period of adjustment reduced for failure to reply within three months of the date of mailing of the Office action or notice, the application must include an additional fee of $400 (for a total of $600) and a showing that in spite of all due care the applicant was unable to reply within three months. The USPTO has set forth a number of exemplary circumstances that do not meet the "in spite of all due care" standard, and a few that may meet the "in spite of all due care" standard. Based upon the exemplary circumstances indicated as meeting and as failing to meet the "in spite of all due care" standard, few applicants are expected to be able to satisfactorily demonstrate that a delay was "in spite of all due care."
About two weeks before the patent is issued, a final PALM calculation will be made and printed on the Issue Notification. This final calculation will be made when the issue date of the patent is known ( i.e. , when it is known whether the patent is issued within four months of issue fee payment or within three years of the actual filing date of the application). The patent will also include the USPTO's final adjustment determination, and applicants will have thirty days after the date of patent grant to request reconsideration of the patent term adjustment due to the patent being issued on a date other than the issue date projected with the mailing of the notice of allowance. This short time period is necessary because 35 U.S.C. § 154(b)(4) provides that any applicant dissatisfied with the patent term adjustment determination may file a civil action in the United States District Court for the District of Columbia within 180 days after the grant of the patent. If requests for reconsideration were not required to be filed promptly after patent grant, the USPTO would not have time to evaluate the request and send applicant a decision and allow applicant a suitable amount of time to seek judicial review. Third parties may not challenge or appeal the patent term adjustment determination before the USPTO.
As a result of these new provisions, applicants will be faced with new options and choices that will have an impact on any patent term adjustment, such as: (1) whether to extend the period for reply to an Office action or notice and reply later than three months from the date of such action or notice; (2) whether to submit a preliminary or supplemental amendment; (3) whether to submit replies by facsimile, Express Mail, or hand-delivery; and (4) whether to have formal drawings made before the application is allowed. To minimize misunderstandings and avoid surprises, patent practitioners should consider including discussions as to the patent term consequences of patent prosecution decisions in any client engagement letter and in other correspondence with their clients.