On January 23, 2019, the Court of Appeals for the Federal Circuit significantly altered the rules concerning the possible amount of Patent Term Adjustment (PTA) available to patentees. In Supernus Pharmaceuticals, Inc. v. Iancu, WL 286925 (Fed. Cir, 2019), the Federal Circuit held that the United States Patent and Trademark Office (USPTO) exceeded its rulemaking authority by assessing a PTA reduction that exceeded the statutory limitations. PTA is calculated by adding delay in prosecution attributable to the USPTO and subtracting delay attributed to the applicant. The net number of days is awarded as PTA to the granted patent.

Supernus Pharmaceuticals, Inc. (“Supernus”) is the owner of US Patent No. 8747897 (“the ‘897 patent”) claiming oral osmotic pharmaceutical dosage forms of treprostinil.  When the ‘897 patent granted, the USPTO awarded 1,260 days of PTA to the patent which included a reduction of 646 days due to Applicant delay.  Supernus filed a Request for Reconsideration of PTA which was rejected by the USPTO. Supernus appealed to the U.S. District Court for the Eastern District of Virginia and filed a motion for summary judgment on the grounds that 37 C.F.R. § 1.704(c)(8) is arbitrary, capricious, and contrary to the PTA statute. In the appeal, Supernus conceded that it was responsible for 100 days of delay but was not responsible for the remaining 546 days of delay. The district court granted judgment in favor of the USPTO. Supernus timely appealed to the Federal Circuit.

At issue in the calculation of the PTA is whether Applicant’s delay during prosecution in filing an Information Disclosure Statement containing references cited in a counterpart European application was the result of the Supernus’s failure to undertake reasonable efforts under the terms of 35 U.S.C. § 154(b)(2)(C)(i). This section of the statute requires that the period of adjustment of the term of a patent shall be reduced by a period equal to the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application. During prosecution of the ‘897 patent, Supernus filed a request for continued examination, and 546 days later, the European Patent Organization issued a Notice of Opposition citing additional references which Supernus cited in a supplemental information disclosure statement 100 days after receiving the Notice of Opposition.  The total of 646 days was attributed to Supernus’s delay by the USPTO.

The Federal Circuit agreed with Supernus that there were no efforts that it could have taken in the period of time during the preceding 546 days because the Opposition did not exist during the 546-day period.  Accordingly, the Federal Circuit held that USPTO’s interpretation of the PTA statute applied in these circumstances exceeds the statutory limitations for PTA reduction.  Therefore, the Court held that the USPTO exceeded its statutory authority and reversed the district court and remanded for further proceedings.

In view of Supernus, patentees should routinely check the calculation of any PTA awarded by the USPTO. In the case of patents directed to pharmaceuticals, even the smallest reduction in PTA by the USPTO can be extremely costly