Australia: Is the term of your US patent critical? If so, you may want to carefully consider how the US patent is prosecuted in order to maximize Patent Term Adjustment. Here's how…

One of the many differences between Australian patent law and US patent law is the term of a patent. In Australia, the term of a patent runs for a fixed 20 years from the filing date. However, an extension of up to 5 years is available for certain standard patents relating to pharmaceutical substances. Whilst US patent law also provides a Patent Term Extension (PTE) for delays in obtaining FDA approval for a regulated product (known as PTE Type II1 ), that is where the similarities end. Generally speaking, the 20-year term for a US patent may be adjusted for a variety of specific delays caused by the U.S. Patent and Trademark Office (USPTO), but reduced by certain delays caused by the Applicant.

Patent term adjustments (PTA) can be significant to an Applicant because they can serve to extend patent licenses, periods of infringement, and can be a barrier to entry into a market. To maximize the term of a patent, Applicants need to have an understanding of key concepts of PTA and of how different prosecution strategies can positively and negatively affect the accrual of PTA, and thus the term of a patent. This is particularly important since actions by an Applicant can offset a positive term adjustment, even when those actions fully comply with U.S. Patent Laws, PTO rules, and widely-accepted practices and procedures.

Patent Term Adjustment is, of course, particularly relevant for those patents that are likely to be most valuable towards the end of their life, such as pharmaceutical patents or patents for breakthrough technologies. This article will briefly outline some of the more common types of PTA available under US law and suggest some prosecution strategies that can affect the accrual of PTA.

Understanding Patent Term Adjustment

Between 8 June 1995 and 29 May 2000, the 20-year term for US patents could only be extended up to 5 years as a result of certain USPTO Prosecution strategies to maximize PTA, such as a secrecy order, an interference proceeding or a successful appeal2 (known as PTE Type I). However, after 29 May 2000 the PTA provisions were enacted to extend the term of a patent to compensate for these 3 procedures and various other USPTO delays, such as delays in mailing the first office action or in issuing the patent.3

In general, PTA extends the term of the patent by the total of the USPTO delays offset by delays caused by the Applicant. The USPTO delays include what are referred to as 'A delay', 'B delay' and 'C delay'.4

A Delay
Two of the more common types of events encountered during prosecution that result in an A delay are: 1) the USPTO fails to mail an Office Action within 14 months of the filing of the application; and 2) the USPTO fails to mail an Office Action within 4 months after a reply is filed by the Applicant. A delay also may be triggered by other events, albeit less frequently. A delay is the total of all such delays.

B Delay
The B delay results from the USPTO failing to issue a patent within 3 years of the application filing date. Thus, the B delay is generally calculated as the time starting 3 years after the application filing date and ending on the issue date. The B delay, however, has some important exceptions. For example, the filing of an RCE will stop the clock on the accrual of B delay5 ; the B delay will not include time consumed by appellate review (i.e., the Board of Patent Appeals and Interferences, or a Federal Court)6 ; or delays at the request of the Applicant.

C Delay
The C delay compensates for the delay due to successful appellate review excluded from B delay.7

Calculating Patent Term Adjustment

The total PTA is the length of the USPTO delay less the Applicant's delay. The USPTO delay is the sum of the A, B and C delays, not including any overlap.8 The Applicant's delay is the time "during which the Applicant failed to engage in reasonable efforts to conclude prosecution"9 , and is the total time in excess of 3 months it takes the Applicant to reply to a USPTO action10 , or any one or more of the circumstanced defined in the implementing regulations11 . Finally, a terminal disclaimer may limit the effect of PTA12 , in that no matter how much PTA may be accrued, the term will not extend beyond the date designated in the terminal disclaimer.

Prosecution strategies to maximize PTA

There are numerous ways an Applicant can maximize PTA (in case PTA has, or potentially does accrue due to Office delays). For example, one common, practical way is to minimize Applicant delay e.g., by responding to an Office Action within 3 months of its mailing date. Use of the full 3 month period, without exceeding, may increase pendency time without penalizing the Applicant for any delay that will accrue for each day taken of extension. The Applicant should also avoid requesting suspension of prosecution, deferring issuance, filing incomplete/non-compliant replies, or filing supplemental amendments/responses. Other strategies include the following.

Prosecuting by appeal
Instead of filing an RCE, which would terminate the accrual of B Delay, Applicants should consider filing a notice of appeal and an appeal brief. In response, the Examiner could reconsider the case and mail a notice of allowance, which would avoid the appeal going to the Board, or contact the Applicant's representatives to discuss possible amendments with a view to allowing the case.

Alternatively, the Examiner could re-open prosecution and mail a non-final office action, which would restart the accrual of B delay (assuming it is more than 3 years since the application filing date). If the examiner files an answer, then the appeal will likely go to the board, and C Delay will accrue.

In overview, avoiding RCEs maximizes total PTA by accruing C delay for successful appeals and allows B delay to continue accruing when prosecution reopens and the appeal process ends.

Avoiding terminal disclaimers
One way to overcome an obviousness-type double patenting rejection (in view of a related patent) is to file a terminal disclaimer, in which the Applicant voluntarily disclaims a portion of the patent term. Applicants should therefore consider addressing such a rejection in a way that avoids a terminal disclaimer. The options are essentially 3-fold: a.) overcome the rejection via argument, b.) cancel the rejected claims for a continuation application in order to obtain the full PTA for the parent application, and file a terminal disclaimer in the continuation as appropriate, or c.) appeal the rejection. As discussed above, the time required for a successful appeal constitutes a C Delay, and therefore contributes to PTA.

Agree to restriction requirements
When the examiner issues a restriction requirement, the Applicant could either traverse or not traverse the requirement. Successfully traversing a restriction requirement means that all the relevant claims remain in the application. However, in the event that the claims from one of the groups are allowed and the claims from another group are rejected, and the Applicant chooses to pursue the rejected claims in a continuation application, the Applicant may also end up with an obviousness-type double patenting rejection in the continuation that can only be overcome with a terminal disclaimer, possibly giving up significant term. Alternatively, not traversing the restriction requirement would mean that a divisional application could be filed to pursue the rejected claims, in which case an obviousness-type double patenting rejection on the restricted claims would not be appropriate.

Timely file Information Disclosure Statements (IDS)
The filing of an IDS can result in a reduction of the PTA when an IDS is filed: a.) less than one month before the mailing of an office action or notice of allowance that requires the mailing of a supplemental office action/notice of allowance; b.) after a response to an office action has been filed; c.) after a decision by the Board of Patent Appeals and Interferences or Federal Court; and d.) after a notice of allowance has been mailed.

These reductions in PTA can be avoided, however, by filing a statement13 that each item of information contained in the IDS was first cited in any communication from a foreign patent office in a counterpart application, and that this communication was not received by any individual associated with the filing or prosecution of the US patent application more than 30 days prior to the filing of the IDS. Thus, as a best practice, reference(s) cited in a non-US Office Action/examination report should be forwarded to US counsel without delay for potential submission in an IDS, that should be filed no later than 30 days from the mailing date of the Office Action/examination report.

Closing comments

Knowledge of the term of a patent is particularly important, especially for a patent where the final portion of its life is the most valuable. Accordingly, how the patent is prosecuted is equally important, as decisions made during prosecution can positively and negatively affect the accrual of PTA, and thus the patent's term.

On the surface, it may seem like the calculation of PTA is relatively simple. However, this is a complex area of US law, and US patent law firms typically have in-house expertise in calculating PTA.

The attorneys at Shelston IP keep abreast of this complex area of US patent law, and work closely with Shelston IP's extensive network of US Agents to tailor the prosecution of each US Patent Application with a view to maximising PTA. If you have any questions relating to PTA and/or your US Patent Application, you are invited to make contact with your Shelston IP patent attorney.


1 PTE Type II delays have been available under US patent law since 8 June 1995, but will not be covered in this article.

2 35 U.S.C. § 154(b)(1)(C)

3 37 C.F.R. §§ 1.702–1.705

4 37 C.F.R. § 1.702(a), (b), (c). There are also D and E delays (37 C.F.R. § 1.702(d), (e)).

5 37 C.F.R. § 1.702(b)(1)

6 37 C.F.R. § 1.702(b)(4)

7 37 C.F.R. § 1.702(e). An appellate review is successful when the rejection of at least one claim is reversed.

8 Such an overlap would result in a single day being counted multiple times.

9 37 C.F.R. § 1.704(a)

10 37 C.F.R. § 1.704(b)

11 37 C.F.R. § 1.704(c)(1)-(12)

12 35 U.S.C. § 154(c)(1)

13 under 37 C.F.R. § 1.704(d)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Shelston IP ranked one of Australia's leading Intellectual Property firms in 2015.

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Michael Zammit
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