Wyeth v. Kappos Is Final . . . What Now?
January 20, 2010
The U.S. Department of Justice and the U.S. Patent and Trademark Office announced today (January 20th) that they will not seek further review of the Federal Circuit’s ruling in Wyeth and Elan Pharma v. Kappos, No. 2009-1120 (Jan. 7, 2010). The Wyeth decision rejected the Patent Office’s long-standing method of calculating patent term adjustments (PTAs) under 35 U.S.C. §154(b). The PTA provision of the patent statute allows patentees to extend a patent’s life for certain delays caused by the Patent Office during the examination process.
This is significant news for the pharmaceutical and life sciences industries. Like Wyeth and Elan, many companies in the drug and biotech fields, including clients of this firm, had filed suits seeking to reverse the Patent Office’s erroneous calculation of the length of their PTAs. Most, if not all, of these cases were stayed pending the outcome of the Wyeth appeal.
Now that the Federal Circuit’s decision is final, the patent community will soon learn how the Patent Office will proceed under Wyeth. The January 20th announcement stated that the Patent Office will issue a “guidance” in the coming days for expediting requests for recalculation of PTAs. Presumably, the Patent Office will revisit any timely-filed petitions and lawsuits where PTA calculations are at issue. Unanswered questions remain, however, for those patentees who did not file timely challenges (within the 180-day statutory time frame). At least for now, the Wyeth decision has not been deemed to apply retroactively.
The Dispute
At the heart of the Wyeth dispute was the Patent Office’s interpretation of when “periods of delay” could “overlap,” as recited in the PTA provision of the patent statute. Section 154(b)(1)(A) guarantees patentees one extra day of patent coverage for every day the Patent Office does not meet certain examination deadlines (called “A delays”). Section 154(b)(1)(B) guarantees patentees one extra day of patent coverage for every day their application is pending longer than three years (called “B delays”). When the periods of A and B delay “overlap,” section 154(b)(2) provides a limitation that restricts the period of adjustment to the actual number of days the patent grant was delayed.
In interpreting the “overlap” provision, the Patent Office took the position that the period of B delay begins to run once the application is filed, not three years later. With that underlying premise, the Patent Office asserted that the period of A delay always overlaps with the period of B delay, and thus, calculated PTA using the greater of either A delay or B delay. Wyeth and Elan, on the other hand, contended that only periods of A delay occurring after the three-year mark should be used to calculate overlap. And because periods of A and B delay only overlap after the three-year mark, Wyeth and Elan argued that PTA should be calculated using the sum of A delay plus B delay, less any overlap after the three year mark. The District Court sided with Wyeth and Elan.
The Federal Circuit Decision
The Federal Circuit affirmed the District Court. Authoring the Federal Circuit’s opinion, Judge Rader detected no ambiguity in the statute’s language: “Section 154(b)’s language is clear, unambiguous and intolerant of the PTO’s suggested interpretation.” The court explained that the first paragraph of 154(b) defines each “period of delay” as having “its own discrete time span.” And the second paragraph, according to Judge Rader, “makes it clear” that these discrete periods only “overlap” if “the violations occur at the same time.” “Before the three-year mark,” Judge Rader wrote, “no ‘overlap’ can transpire between the A delay and the B delay because the B delay has yet to begin or take any effect.” In the end, the Federal Circuit accorded no “Chevron deference” to the Patent Office’s “strained” interpretation because it was “at odds with plain language of the statute itself.”
Link to the decision: Wyeth and Elan Pharma v. Kappos, No. 2009-1120
What Now?
Patentees should review their portfolios for recently-issued patents that may be entitled to a greater PTA in view of the Wyeth decision. In its January 20th notice, the Patent Office “reminded” patentees of the 180-day statutory deadline (from the date the patent issues) for appealing PTA determinations. Patentees who are well within that time frame, and believe their PTA was incorrectly decided, should immediately file a request with the Patent Office for recalculation of their PTA. As for patentees up against the 180-day deadline, they should promptly file an action in the District Court for the District of Columbia seeking an order directing the Patent Office to recalculate their PTA to conform with Wyeth.
But is there recourse for patentees who let the statutory deadline pass and did not file a timely challenge to a PTA determination? Unless Wyeth is deemed to apply retroactively, aggrieved patentees may be left with only an equitable argument. Patentees who might benefit significantly from an extended patent term should certainly explore that option. At least one party, General Hospital Corp. of Boston, Mass., has already asked that it be entitled to suspension of the 180-day deadline under the doctrine of equitable tolling. No action has been taken in that case, filed earlier this year, and it remains to be seen whether the statutory deadline is absolute, or under the circumstances, should be tolled.
For More Information
Please contact:
Carl M. DeFranco at cdefranco@lahive.com or 617.994.0853
William A. Scofield at wscofield@lahive.com or 617.994.0755
