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Patent Term Adjustment – Is Equitable Tolling Available For Wyeth Problems?

Posted in Patent Term Adjustment

Although it has been over a year since the Federal Circuit decision in Wyeth v. Kappos, Wyeth-related Patent Term Adjustment (PTA) problems continue. One issue raised in several pending district court cases is whether a patentee can invoke the doctrine of equitable tolling to bring a civil action more than 180 days after the patent was granted. Schering v. Kappos raises this issue in the starkest terms, because Schering never sought reconsideration of the PTA award at issue. It will be interesting to see how the court resolves this case, and whether it opens the door for other patent holders to obtain the full patent term due under the statute.

A Wyeth Refresher

The PTA statute (35 U.S.C. § 154(b)(1)) extends the term of a patent beyond its base 20-year term (which is measured from its earliest U.S. priority date) to compensates for USPTO delays during prosecution. The statute provides “guarantees” against three different types of PTO delay:

A Delay: when the USPTO fails to act in accordance with set timeframes (such as issuing a first office action within 14 months, issuing a second action or allowance within 4 months of a response, and issuing a patent within 4 months of the Issue Fee payment).

B Delay: when the USPTO fails to issue a patent within three years of the actual filing date of the patent application.

C Delay: when the application is involved in an interference or appeal, or is subject to a secrecy order.

The provision of the statute at issue in Wyeth provides that “[t]o the extent that periods of delay . . . overlap, the period of adjustment . . . shall not exceed the actual number of days the issuance of the patent was delayed.” 35 USC § 154(b)(2)(A).

Since at least 2004, the USPTO’s interpretation led to PTA awards for only the longer of its A delay or its B delay, not both. This is because the USPTO took the position that any A delay contributes to B delay, and thus “overlaps” with B delay.

In Wyeth, both the district court and the Federal Circuit determined that the clear and unambiguous statutory language provides that “no ‘overlap’ happens unless the violations occur at the same time.” This means that A delay and B delay only “overlap” if the delay occurs on the same calendar day.

Of course, not all patents that take a long time to issue are awarded PTA. Any award due to USPTO delays is subject to reduction to account for applicant delays, such as taking longer than three months to respond to an Office Action. 

Lingering Wyeth Problems

Because the USPTO persisted in its interpretation of the “overlap” terms of the statute while the Wyeth litigation was pending, a number of patents of relatively recent vintage may not have been awarded the full amount of PTA due under the statute. The statute provides a right to obtain review of a PTA award by bringing a civil action in the U.S. District Court for the District of Columbia, but indicates that such an action should be brought “within 180 days after the grant of the patent.” 35 USC § 154(b)(4)(A). Patent holders who find themselves outside of this time period are bringing actions under the Administrative Procedures Act (5 USC §§ 701-708) and seeking “equitable tolling” of the 180 day period.

Schering v. Kappos

A recent example is Schering v. Kappos, filed March 1, 2011. Schering’s patent (US 7,304,078) was issued December 4, 2007, and was awarded 358 days PTA. Now Schering is seeking a PTA award of 687 days, based on the Wyeth decision.

(I couldn’t determine whether this patent relates to an approved drug, but it does relate to pharmaceutical products: heterocyclic-substituted tricyclic compounds, which, according to the complaint, are “useful in the treatment of disease states afflicting the cardiovascular system,” such as “thrombosis, atherosclerosis, restenosis, hypertension, angina pectoris, arrhythmia, and heart failure.”)

Schering alleges that the patent accrued 564 days of A-type USPTO delay, including:

  • 436 days for failing to issue the first Office Action witihn 14 months of the filing date
  • 104 days for failing to issue an Office Action within 4 months of Schering’s response to a Restriction Requirement
  • 24 days for failing to issue the patent within 4 months of the issue fee payment

Schering alleges that the patent accrued 359 days of B-type USPTO delay.

Schering acknowledges 206 days of applicant delay.

After deducting the applicant delay from the USPTO delay and accounting for periods of overlapping delay in accordance with Wyeth, Schering determines that the patent is entitled to a total of 687 days PTA.

(If you like math puzzles or enjoy doing your taxes, you might enjoy manually calculating PTA!)

Equitable Tolling

Schering never challenged the USPTO’s interpretation or application of the “overlap” terms of the statute at the USPTO or in a civil action brought within 180 days of the patent’s grant date. (Indeed, the Wyeth decision did not become final until more than 2 years after Schering’s patent was granted.)

In it’s complaint, Schering alleges:

On information and belief, prior to the issuance of the Federal Circuit’s decision in Wyeth, the Director refused to calculate the patent term adjustment figure in the manner set forth above in this Complaint. Over a period of years, the PTO steadfastly adhered to its erroneous interpretation that applicants were only entitled under the statute to the longer of either an A Delay or a B Delay period. Schering was induced by the PTO’s conduct and pronouncements into believing that the law did not permit it to obtain additional patent term for both an A Delay and a B Delay, and relied to its detriment on the PTO’s representations that any attempt at further recalculation would be futile.

Schering cites the Federal Circuit’s Wyeth decision as “a recent change of law” that “constitutes an extraordinary circumstance triggering the application of the doctrine of equitable tolling to the filing of this Complaint.

Schering also alleges that “[n]o public harm arises from the timing of the filing of this Complaint,” because the additional period [of patent term] sought will not take effect until the end of the existing term of the ’078 Patent which is currently over 12 years from now.”

Is The Wyeth Door Still Open?

It will be interesting to see how the court decides the equitable tolling issue in this case. I imagine that there are a number of other patents granted before the Wyeth Federal Circuit decision that would be entitled to significantly more PTA under the court’s interpretation of the statute’s “overlap” provisions. While equitable tolling issues usually are resolved on a case-by-case basis, so that a decision in favor of Schering here would not necessarily swing the door wide open for all patentees, a ruling that lets Schering’s case proceed likely would encourage other patent holders to take a closer look at their PTA awards, and consider bringing their own PTA actions.