PTO incorrectly calculated patent term adjustments in situations of overlapping PTO delays

Judges: Rader (author), Plager, Moore

[Appealed from D.D.C., Judge Robertson]

In Wyeth v. Kappos, No. 09-1120 (Fed. Cir. Jan. 7, 2010), the Federal Circuit affirmed the district court’s determination that Wyeth and Elan Pharma International Limited (collectively “Wyeth”) were entitled to extended patent term adjustments (“PTA”) under 35 U.S.C. § 154(b) due to the PTO’s delay in prosecuting their patent applications.

Congress passed the American Inventors Protection Act (“AIPA”) in 1999, promising patent applicants a full PTA for any delay during prosecution caused by the PTO. The promise included two guarantees to patentees. Paragraph A of 35 U.S.C. § 154(b)(1) (the “A guarantee” or the “A clause”) promises prompt PTO responses by extending the term of the patent one day for each day the PTO does not meet certain examination deadlines, including a fourteen-month deadline to issue a first response to a filed application. Paragraph B of § 154(b)(1) (the “B guarantee” or “B clause”) extends the term of the patent one day for each day issuance is delayed due to the PTO’s failure to issue a patent within three years after the actual filing date of the application. The A and B clauses are expressly subject to the general limitation that restrict the period of adjustment when any of the “periods of delay” overlap. 35 U.S.C. § 154(b)(2)(A). Under the PTO’s definition, the “period of delay” caused the B guarantee to start with the filing of the application and not three years later. Under that interpretation, “overlap” between A adjustments and B adjustments could arise and begin during the pendency of the patent application. Thus, the PTO used either the greater of the A delay or the B delay to determine the appropriate adjustment but never combined the two.

Wyeth owns U.S. Patent Nos. 7,179,892 (“the ’892 patent”) and 7,189,819 (“the ’819 patent”) for inventions that treat Alzheimer’s disease. During prosecution of these patents, the PTO undisputedly caused delays in issuing the patents that entitled Wyeth to both A and B guarantees.

The PTO calculated 462 days of PTA for the ’892 patent and 492 days of PTA for the ’819 patent, using the greater-of-A-or-B rubric. Wyeth contended that § 154(b) entitled it to PTAs of 756 days and 722 days, respectively, because the “period of delay” for purposes of the B clause could not have started until three years after the application’s filing date. Wyeth first sought reconsideration of the PTA determination with the PTO. Upon denial of reconsideration, Wyeth challenged the PTA determination by filing suit in the U.S. District Court for the District of Columbia under 35 U.S.C. § 154(b)(4)(A). Both parties filed motions for SJ. The district court granted Wyeth’s motion, finding that, even if Chevron deference was applicable, the PTO’s interpretation is contrary to the plain language of the statute.

On appeal, the Federal Circuit began with statutory construction. The Court detected no ambiguity in the terms “periods of delay” and “overlap” in the context of § 154(b). The Court found that the “period of delay” for the A clause runs from the date the PTO misses the specified deadline to the date of response to the underlying action. The Court also found that the “period of delay” under the express language of the B clause runs from the three-year mark after filing until the application issues. The Court therefore held that no “overlap” can transpire between the A delay and the B delay before the three-year mark because the B delay has yet to begin or take effect.

“Of course, it is elementary that ‘no deference is due to agency interpretations at odds with the plain language of the statute itself.’” Slip op. at 13 (quoting Smith v. City of Jackson, Miss., 544 U.S. 228, 267 (2005)).

The PTO argued that the B delay could occur anytime after the application is filed. The Court rejected this interpretation as contrary to the language of the statute. In response, the PTO argued that it would be double counting if A and B delays were both used for PTA because A delays “cause” B delays. Slip op. at 9. The Court, however, noted that the statute requires as much.

The Court also examined the legislative history of the AIPA but found nothing to support the PTO’s arguments. The Court noted that, from the legislative history, it was apparent that the statutory language should provide a minimum seventeen-year term for most patents. The PTO also argued that because the B guarantee was added to the draft sections of § 154(b) after the A delay, Congress did not intend to give patentees already eligible for A adjustments additional compensation during the first three years of prosecution. The Court rejected this argument, finding it did not amount to an extraordinary showing of contrary intentions, as required when the language of the statute is clear.

Finally, the Court rejected the PTO’s claim to deference under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). The Court held that because the language of the statute was unambiguous, there was no reason to afford special deference to the PTO’s interpretation. Accordingly, the Court affirmed the judgment of the district court.