Thought Leadership

Patent Term Adjustment Update - Novartis v. Lee

January 21, 2014 Advisory

A recent ruling by the Federal Circuit in Novartis AG v. Lee resolved the issues raised in the Exelixis I, Exelixis II and Novartis decisions regarding the effect of a Request for Continued Examination (RCE) on patent term adjustment (PTA). The Federal Circuit’s ruling states that although an RCE filed more than three years after an application’s filing date will continue to have an impact on PTA, the time period after allowance until issuance should not necessarily be precluded from any B-term delay calculation. The ruling could significantly add to the terms of impacted U.S. patents. 

Statute 35 U.S.C. 154(b)(1)(B) guarantees adjustment of a patent term if the patent is not issued within three years after the filing date of the application (i.e., “B-term delay”). If the patent takes longer than three years from the application filing date to grant, the life of the patent is extended one day for each day after the end of the three-year period until the patent has issued. This three-year guarantee is subject to the limitation of “any time consumed by continued examination of the application requested by the applicant.” Prior to this decision, the United States Patent and Trademark Office (USPTO) interpreted the statute to read that the filing of any RCE would preclude any additional B-term delay. Thus, once an RCE was filed, an application would no longer be eligible for any B-term adjustment. 

At issue in the Novartis case was whether or not PTA should be reduced by the time attributable to an RCE when the RCE is filed after expiration of the three-year date from filing. The Court partially upheld and partially reversed the USPTO’s interpretation of the statute. The Court agreed with the USPTO that no adjustment of time is available for any time consumed by continued examination, even if the continued examination was initiated more than three years after the application’s filing date. Thus, even if the first RCE for an application is filed more than three years after the application’s filing date, no PTA is available under B-delay during the time consumed by continued examination. 

The Court, however, rejected the USPTO’s argument that the time between allowance and issuance is considered “time consumed by continued examination” and therefore would be excluded from PTA. The Court ruled that an “examination” presumptively ends at allowance because prosecution is closed and there is normally no further examination on the merits. Thus, the Court ruled that unless examination on the merits resumes, the time period from the notice of allowance until the application issues is eligible for consideration under B-term delay. 

Accordingly, the effect of the Court’s decision on an RCE is that instead of an RCE terminating the B-delay “clock,” an RCE merely tolls the B-delay clock from the time an RCE was filed until the application is allowed. The takeaway is that a recently issued patent that failed to issue within three years of the filing date of the application may benefit from a review by patent counsel. 

Contact Us
  • Worldwide
  • Chicago, IL
  • Denver, CO
  • Edwardsville, IL
  • Jefferson City, MO
  • Kansas City, MO
  • Las Vegas, NV
  • Miami, FL
  • New York, NY
  • Orange County, CA
  • Philadelphia, PA
  • St. Louis, MO
  • Washington, D.C.
  • Wilmington, DE
Worldwide
abstract image of world map
Chicago, IL
100 North Riverside Plaza
Suite 1500
Chicago, IL 60606-1520
Google Maps
Chicago, Illinois
Denver, CO
4643 S. Ulster St.
Suite 800
Denver, CO 80237
Google Maps
Denver, Colorado
Edwardsville, IL
115 N. Second St.
Edwardsville, IL 62025
Google Maps
Edwardsville, Illinois
Jefferson City, MO
101 E. High St.
First Floor
Jefferson City, MO 65101
Google Maps
Jefferson City, Missouri
Kansas City, MO
2345 Grand Blvd.
Suite 1500
Kansas City, MO 64108
Google Maps
Kansas City, Missouri
Las Vegas, NV
7160 Rafael Rivera Way
Suite 320
Las Vegas, NV 89113
Google Maps
Las Vegas, Nevada
Miami, FL
355 Alhambra Circle
Suite 1200
Coral Gables, FL 33134
Google Maps
Photo of Miami, Florida
New York, NY
7 Times Square, 44th Floor
New York, NY 10036
Google Maps
New York City skyline
Orange County, CA
19800 MacArthur Boulevard
Suite 300
Irvine, CA 92612
Google Maps
Philadelphia, PA
2005 Market Street
29th Floor, One Commerce Square
Philadelphia, PA 19103
Google Maps
Philadelphia, Pennsylvania
St. Louis, MO
7700 Forsyth Blvd.
Suite 1800
St. Louis, MO 63105
Google Maps
St. Louis, Missouri
Washington, D.C.
1717 Pennsylvania Avenue NW
Suite 400
Washington, DC 20006
Google Maps
Photo of Washington, D.C. with the Capitol in the foreground and Washington Monument in the background.
Wilmington, DE
1007 North Market Street
Wilmington, DE 19801
Google Maps
Wilmington, Delaware