Patent Term Adjustment
What is Patent Term Adjustment?
Patent Term Adjustment (PTA) is additional days of patent term added to a utility patent based on Patent Office delay during the pendency of the application, minus delays by the applicant due to extensions of time and use of other procedural tools. PTA ranges from 0 days, to hundreds of days, to thousands of days of extension and can be very valuable depending upon your particular product and market. The calculations to determine what the appropriate PTA can be easy or complicated based on what happened within your application at the Patent Office. Because of this, they are generally not automatically calculated by your unless you specifically request they do the additional work to figure it out.
The Basic Calculation
For all patent applications filed after June 8, 1995, the utility patent application will naturally expire 20 years from the earliest non-provisional application’s filing date to which the present application claims priority, assuming all maintenance fees are paid. PTA extends that natural expiration date to account for delays caused during patent prosecution. There are essentially five elements to the calculation:
PTA = PTO Delay 1 + PTO Delay 2 + PTO Delay 3 – Overlap – Applicant Delay
PTO Delay 1 = Delay caused by the PTO during patent prosecution
PTO Delay 2 = Delay beyond 3 years of patent prosecution from the date of filing
PTO Delay 3 = Delays caused by interference or derivative proceedings, secrecy orders, and patent appeals within the Patent Office if ruled in favor of the Applicant
Overlap = Delays that fit within more than one PTO Delay category (can’t double dip).
Applicant Delay = Delays attributable to the Applicant such as, filing to respond to an Office Action within the allotted time (requesting extensions of time), Applicant requested suspensions, deferrals of patent issuance, certain petitions, late submissions of certain paperwork, submissions of paperwork missing required things, failure to file required documents, filing a request for continued examination after a notice of allowance, late filing of an Information Disclosure Statement (IDS), and others (15 possible Applicant delays).
PTA is never negative and is awarded as 0 additional days if the calculation is negative.
An exception to Patent Term Adjustment is involved when a Terminal Disclaimer is filed. A Terminal Disclaimer is often filed in response to a Double Patenting Rejection (see Understanding Patent Office Actions). A Terminal Disclaimer is a document filed by an Applicant that agrees that two patents with overlapping claims will be owned by the same company (common ownership) and that the overlapping patents will expire on the same date. When a Terminal Disclaimer is filed in an application, the Applicant agrees that in addition to common ownership, the patent granting from the present application will not extend beyond the expiration date of the previous overlapping patent. The Applicant disclaims that additional patent life. So, if the previous overlapping patent has 0 PTA and the present patent is granted 300 days of PTA, the additional 300 days of PTA are disclaimed and will have no effect on the patent life. Keep in mind, however, that the Patent Office does not take into consideration Terminal Disclaimers when calculating PTA. Thus, although a patent may say it has 300 days of PTA, those 300 days may be ineffective to extending the life of the patent.
Patent Office Calculation
The Patent Office does its calculation of PTA based on its reading of the process in the Patent Office. However, that calculation is occasionally incorrect. From the explanation above, however, the exact calculation is an involved process. An Applicant has up to two (2) months from the patent issue date to challenge the Patent Office’s calculation of PTA or that calculation becomes permanent.
For many industries, the product life of a commercial product is much less than 20 years and a few more days or even a year of additional patent life at the end of 20 years is not worth the investment in doing a detailed calculation of PTA when the patent issues. However, in other industries, for example in the pharmaceutical industry, the end of the 20 year life is the most valuable and an extra few days, or weeks or years can be worth hundreds of millions of dollars in additional sales. If you believe that additional time on the end of your patent is valuable to your company and that the Patent Office calculation of PTA is incorrect, or could be incorrect, discuss this with your attorney who can make a more detailed calculation and file the appropriate forms to challenge the PTA determination for your patent if it is incorrect.
Strategies for Maximizing Patent Term Adjustment
Because there are many ways to cause delays attributable to the Applicant for reducing Patent Term Adjustment, if the end of your patent life is critical to your commercial market, it is important to strategize in advance for maximizing PTA. For example, including claims that trigger a restriction requirement followed by filing a divisional application instead of filing a terminal disclaimer; appealing a final rejection instead of filing a request for continued examination (RCE) if you are sure of the outcome coming in your favor; avoiding filing an RCE before a three (3) year pendency period; and avoiding requesting extensions of time are some examples of efforts an Applicant and its attorney can make to maximize the effect of Patent Term Adjustment.
Patent Term Adjustment can be complicated, but it can also be critical to the duration of your patent. Please contact a qualified patent attorney at Booth Udall Fuller, PLC to discuss the specifics of your PTA and patent strategy questions to help your company achieve its greatest value. Our attorneys are experienced in developing invention protection strategies, Office Action response strategies, and assisting with any of your intellectual property needs.