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Circuit Split re: Patent Term Adjustment

35 U.S.C. § 154(b) allows for extension of patent term for design and utility patents filed after May 29, 2000. The statute provides for patent term adjustment for delays caused by the USPTO. “A Term” adjustments result from untimely responses from the USPTO, e.g. 14 month deadline for a first Office Action, and 4 month deadline for subsequent actions. “B Term” adjustments result from applications pending for more than 3 years. “C Term” adjustments result from delays due to interferences, secrecy orders, and appeals. The statute provides for one day of patent term adjustment for each day of delay caused by the USPTO, any delay caused by the applicant or overlap in terms is subtracted from the final term adjustment.

Recently, a split has arisen within the District Court for the Eastern District of Virginia regarding the calculation of B Term adjustment when a request for continued examination (RCE) has been filed. 35 U.S.C. § 154(b)(1)(B) guarantees no more than 3-year application pendency, providing for patent term adjustment in cases where prosecution extends beyond 3-years. However, the statute includes some limitations, including “any time consumed by continued examination of the application requested by the applicant under section 132(b).” The USPTO has interpreted the statute to require that patent term should not be extended, under B-term, for additional time spent during prosecution after filing of an RCE.

In Excelixis I, Exelixis, Inc. v. Mr. David Kappos , (E.D. Va. November 1, 2012), Judge Ellis found that when an RCE is filed after the 3-year period, the RCE should not have any effect on calculating B-Term adjustment. Following Excelixis I an application will accrue B Term adjustment every day following the 3-year anniversary of filing.

In Excelixis II, Exelixis v. Kappos (E.D. Va. 2013) Judge Brinkema found that “any time consumed by continued examination of the application requested by the applicant under section 132(b) (via the filing of an RCE) does not count toward that three-year period.” Following Excelixis II, an application will accrue B Term only during the period between the 3-year anniversary of filing and the date on which an RCE is filed.

The USPTO has appealed Excelixis I, the case is pending before the Court of Appeals for the Federal Circuit.