David J. Zelner

October 2009

McHale Slavin Newsetter

Tips for Optimizing the Term of Your Patent

by David J. Zelner
Registered Patent Attorney

The adoption of just a few basic strategies will help to increase the term of your patent. During the term of the patent, the patent owner has the right to exclude others from making, using or selling the patented invention. It therefore follows that the longer the term of the patent the greater its potential value. By law, the standard term for a patent will be extended by the United States Patent & Trademark Office (USPTO) to compensate for certain delays in the examination and issuance of the patent. However, this extension of term will be reduced by the USPTO for any period during which the Applicant "failed to engage in reasonable efforts to conclude prosecution of the application" (referred to as Applicant delay). The following practices, relating to patent application prosecution, provide a simple and straightforward approach to maximizing the term of your patent.

Patent Term Adjustment (PTA)

Patent Term Adjustment (PTA) is a process of providing the patentee adjustment to the 20 year term in response to prosecution delays (35 U.S.C. § 154). The following are four common strategies which should help an Applicant optimize the amount of PTA awarded:

1. Minimize delays in filing a reply to a notice/action by the USPTO regarding a rejection, objection, argument, or other request. To ensure timely filing, it is imperative that the Applicant review the notice/action sent to them and discuss response strategies with their attorney as soon possible. While responding after 3 months may be timely by payment of extensions of time, delay in response could be harmful to the Applicant if it results in PTA reduction.

2. Minimize filing supplemental responses or preliminary amendments. Submission of a supplemental reply other than a supplemental reply requested by the examiner after a reply has been filed is considered an Applicant failure.

3. Eliminate filing Information Disclosure Statements (IDS) after first office action. Applicants must ensure that attorneys are aware of all relevant prior art known to the Applicant. For prior art other than U.S. patents or publications, providing the attorney with hard copies during the drafting process will ensure that the completed IDS is filed prior to the first office action.

4. Eliminate submission of an amendment or other paper after a notice of allowance has been given or mailed. Certain papers such as formal drawings, letters related to biological deposits, or oaths/declarations which are submitted after notice of allowance are considered a failure by the Applicant.

Prior to the current 20 year patent term, U.S. Patent Law provided a patent term of 17 years from the date of issue. The ability of the patentee to enforce their rights for the duration of the patent term would not be in jeopardy as a result of prosecution delays because the term was as measured from the date the patent issued. In order to comply with international treaties, the Patent Laws were amended to provide a 20 year patent term measured from the date on which the application was first filed. Concerned that prosecution related delays would be disadvantageous to patentees, Congress provided day-for-day credits, or adjustments, to the 20 year term as a result of USPTO prosecution-related delays. For some industries, the full 20 year patent term may not be important as the technology is so dynamic that patentees obtain most of the financial benefits early in the life of the patent term. For those patents that provide market dominance or for technologies which obtain financial benefits deeper into the 20 year patent term, extending the competitive advantage for longer than the 20 year patent term would be beneficial.

While the USPTO is under an obligation to act within a timely manner, any PTA awarded is subject to reduction by a period equal to the period of time during which the applicant delays. What constitutes Applicant delay? There is no exhaustive list and according to USPTO there exists a "myriad of actions or inactions that occur infrequently" which could result in prosecution delay. In practice, however, there are a range of actions during prosecution which have been clearly defined as Applicant delay. Avoiding these actions should ensure maximum PTA allowed.

PTA is calculated by subtracting Applicant delays from USPTO related delays known as "A-delays," "B-delays," and "C-delays." Negative PTA is not allowed. Therefore, if there are no USPTO delays or more delays than USPTO related delays, PTA cannot be utilized by the USPTO to take away any portion of the 20 year statutory patent term. Under "A-Delay," PTA is granted to Applicants based on USPTO failure to act in certain situations, known as the "14-4-4-4" rule. The USPTO must provide notification, i.e. office action, within fourteen months after the date on which the application is filed. Once the Applicant responds to a notice, the Office must respond within four months from the reply date. The USPTO must act on an application within four months after a decision from the USPTO Board of Appeals or Federal Court where at least one allowable claim remains in the application. Finally, the USPTO must issue a patent within four months after the date on which the issue fee was paid and all outstanding requirements were satisfied.

Under B-Delays, applications pending more than three years after the actual filing date of the U.S. application or entry into the U.S. national stage of an international application are entitled to one day for each day PTA until the patent issues. Any time associated with interference proceedings, secrecy orders, or successful appeals that result in the application remaining pending past the three year time period is not counted under the B-Delay. However, such time could be recovered by the Applicant under "C-delay" counting.

Congress, wary of windfall extensions as a result of counting A-Delays, B-Delays, and C-delays that overlap, provided the limitation that to the extent periods of A-Delays, B-Delays, and C-delays overlap, PTA cannot exceed the actual number of days the issuance was delayed. The manner in which the USPTO determines "overlap" is currently being challenged in the Federal Courts, Wyeth v Dudas (580 F. Supp. 2d 138), as the plaintiffs challenged USPTO interpretations of the law. Under the USPTO determination of overlap, if the application is pending after three years from the filing date, the time period for stating the B-delay is the application's filing date rather than the date that occurs three years after the filing date. Any A-Delay that occurred during the first three years would therefore necessarily overlap, resulting in the USPTO awarding "A-Delay" or "B-Delay," but never any "A-delay" plus "B-delay." In Wyeth, Plaintiffs argued that the correct B-delay should start the day after the three year date passes and not the Applicants filing date. Under such a scenario, true overlap would occur only if the A-delay and a B-delay occurred on an actual calendar day, thus providing the Applicant the benefit of A-delay plus B-delay PTA.

The USPTO recently changed the way it awards PTA to Applicants that enter the U.S. Patent System through national stage applications filed from international PCT applications. This change may provide the Applicant another opportunity to extend the patent term. For international applications, the USPTO must issue a notification within 14 months from the date on which an international application fulfills its formal national stage requirements. Prior to the change, the USPTO used the same date in calculating the B-Delay period. However, the USPTO now calculates the three year period for national stage applications from the date the national stage begins, which is 30 months from the earliest priority date of the PCT application. The Applicant can, however, use an earlier date if the application expressly requests early processing and completes the formal filing requirements prior to the 30 month deadline.

Conclusion

It is difficult to predict the value of a patent in the later years of its term particularly during the early stages of product research and development, when the patent application is usually being examined. The pace of technological innovation and other factors will affect that patents economic viability over the years. These basic practices are relatively simple and easy to implement and may extend the patent’s period of enforceability and potential value.

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