Patent ruling flags up pendency problems

In a ruling that highlights the pressing issue of delays at the United States Patent and Trademark Office (USPTO), an appeals court has found that pharmaceutical firm Wyeth is eligible for patent term extensions under the US Patent Act. The case centred on the USPTO's interpretation of how much extra time it should grant to a patent's term if it was late in processing the original application.

The ruling by the Court of Appeals for the Federal Circuit (CAFC) was written and delivered by Federal Judge Rader, who - as patent watchers will recall - was the dissenting judge in the CAFC stage of Tafas v Doll: the long-running case relating to the USPTO's introduction of so-called 'Final Rules' on patent claims and continuations. Following a backlash over the CAFC ruling, which found for the USPTO, the rules were dropped in October.

Rader and the CAFC were required to affirm or reject a ruling of 30 September 2008 by the US District Court for the District of Columbia, which held that Wyeth was entitled to appropriate patent term extensions due to USPTO delays. 'Because section 154(b) expressly permits this legal relief,' Rader said on 7 January, this court affirms [the District Court's decision].'

At the heart of the case was a debate over the relationship between two provisions enshrined in the Patent Act to safeguard the full terms of patents that have been hit by processing delays. One, known as the 'A-delay' clause, provides applicants with an extra day on their patent terms for every day the USPTO fails to meet statutory deadlines. The second, known as the 'B-delay' clause, provides an extra day for every day longer than three years that the USPTO takes to grant a patent.

Wyeth had sought term adjustments in line with its view that, during pendency, key patents in its portfolio had experienced overlaps between A-delays and B-delays. As such, argued the firm, it was entitled to longer extensions on the terms of its patents than the USPTO was prepared to grant.

Echoing his dissent from the Tafas ruling, Judge Rader's opinion assessed the matter of law represented by section 154's wording against the matter of procedure represented by the USPTO's interpretation. In his view, the USPTO 'uses either the greater of the A-delay or B-delay to determine the appropriate adjustment but never combines the two'.

In an announcement on its website, the USPTO said: 'The Federal Circuit's decision rejects the USPTO's interpretation of the "overlap" limitation in Section 154(b). The Solicitor General will determine whether to seek further review of this decision. Pending that determination, the USPTO is in the process of changing the manner [in which] it will calculate patent term adjustments under Section 154(b) [in order] to conform with the Federal Circuit's decision.'

Ken Sheets, group IP manager and in-house patent counsel at leading intellectual property and legal services provider CPA Global, told IP Review Online: 'This much-anticipated ruling by the Federal Circuit provides patent owners with a tool to extend the life of their patents in order to compensate for the USPTO's processing delays. The decision is of extreme importance to pharmaceutical companies because it allows them to extend patent terms for blockbuster drugs, which may help to increase profits at no extra cost.

'It will now be possible to petition for, and obtain, extended patent terms for patents whose term adjustments were calculated by the USPTO using incorrect interpretations. It will be interesting to see whether the USPTO will automatically re-calculate all of the existing patent terms, or leave it up to patent owners to pursue the matter - and whether dead patents will be brought back to life.'

By the end of last year, several corporations had prepared advance legal briefs to capitalise on the Wyeth ruling. According to a November report by the Legal Times, Washington DC law firm Finnegan, Henderson, Farabow, Garrett & Dunner had lined up 13 relevant cases for pharmaceutical clients including Amgen Inc and Bayer Bioscience. Other cases are expected to build up following the Federal Circuit decision.