Third-Party Oppositions to PTA Calculations?

Section 154(b) of the Patent Act includes an odd provision indicating that a "third party" may not appeal or challenge the USPTO's patent term adjustment determination prior to the patent issues:

35 U.S.C. 154(b)(4)(B): The determination of a patent term adjustment [PTA] under this subsection shall not be subject to appeal or challenge by a third party prior to the grant of the patent.

Although not a necessary conclusion, this provision prompts a negative implication that a the PTA may be subject to challenge by a third party after the grant of patent.  Of course, the statute does not explicitly create that right. 

As it stands, third party challenges to patent rights come in three forms: (1) interference proceedings; (2) inter partes and ex parte reexaminations; and (3) patent infringement litigation (including declaratory judgment actions). However, allegations of an improper PTA calculation do not create grounds for starting either an interference or reexamination. As discussed, improper PTA calculation could be the proper subject of a declaratory judgment challenge. However, by statute, it appears that that challenge is limited to instances when potentially infringing actions are occurring during the extension portion of the term.

All this leaves me confused as to why the provision is law.  

22 thoughts on “Third-Party Oppositions to PTA Calculations?

  1. 22

    Another interesting question (I have done no research–I don’t do ANDA cases) — I wonder whether term adjustment calculation would support ANDA jurisdiction? If a generic manufacturer can get a judgment that term adjustment is off by 180 days or more…

  2. 21

    No need for esoteric concerns for declaratory judgment.

    Patent term adjustment of an issued patent is a classical “agency action” under the Admininstrative Procedure Act, 5 U.S.C. § 551(13). Any contention that adjustment is contrary to law or in excess of authority is reviewable under § 706(2)(A) or (C).

    APA standing is determined under the classical “individuated injury” and “injury in fact” tests you learned in first year law school. The issue would be how far into the future a court would be willing to look, and assume that all maintenance fees will be paid, to find that injury is not speculative. Recall that standing existed to challenge the NRC’s limitation on liability for a nuclear accident that we all hope will never occur, in Duke Powre Co. v. Carolina Environmental Study Gp, 438 U.S. 59 (1978).

  3. 20

    Seems like a bit of buiness analysis should be used in the DJ decision.

    Why did you send the letter?

    If you send a letter that is going to force a company to do an analysis (or risk treble damages) of whether they infringe or not, then you created a contraversy and they should have the right to deal with you in court.

  4. 19

    Regarding jurisdiction before the patent issues, remember that the applicant can in principle get reasonable royalty damages back to the date of publication.

    That’s a good point. Still, the right to collect that royalty doesn’t exist until the patent issues, and it very much depends on which claims finally issue.

    I guess the sticking point for me is the existence of a legal dispute between the parties when one party clearly doesn’t have everything it needs to enforce its right.

    On top of that, if we’re still talking about challenging PTA, a successful challenge shouldn’t affect your liability for a reasonable royalty, so I’d confidently guess that you wouldn’t have standing to challenge the PTA based on notice.

  5. 18

    IANAE, DC: Regarding jurisdiction before the patent issues, remember that the applicant can in principle get reasonable royalty damages back to the date of publication. So if some of the published claims are allowed, and the applicant notifies others of that fact, maybe that’s enough to create jurisdiction under Medimmune.

  6. 17

    I tend to agree with IANAE for questions of pure patent law. When you have a contract involved, though, things certainly can get muddled. In the normal course, I wouldn’t expect there to be standing under MedImmune until at least the patent has issued. However, I could imagine a situation where the patentee has entered into a licensing agreement based off of the application. If the license is granted “for the life of the patent,” and the patentee insists on a longer PTA than that granted by the PTO, it seems to me that you arguably have a “case or controversy” based on the terms of the contract.

  7. 16

    As an adverse party to a demand letter who is potentially making the infringing product during pendency, if you wait until the patent issues to do anything, there may be equitable doctrines, including willfulness, that work against you.

    If you begin licensing negotiations before the patent issues, then it becomes a little harder in my opinion to later request DJ, since the negotiations themselves would indicate that you voluntarily acquiesced to the demand letter (were not coerced vis a vis Medimmune) and thus cannot easily claim apprehension of litigation on a Medimmune-style hair trigger.

  8. 15

    What about a situation where the patent applicant has paid the issue fee and has also threatened a company (and its customers) with a lawsuit once the patent issues?

    When it gets to that point it’s probably a judgment call for the courts, and the patent would likely have issued by the time they can pronounce on jurisdiction.

    I’m still tempted to say that a patent isn’t issued till it’s issued, even after the fee is paid, and the parties should probably wait those last few weeks to make sure before suing each other.

    What if you threatened to sue someone for trespassing on land that you don’t own yet? How close to owning the land do you have to be before it’s a legitimate threat? To my mind there’s still a difference between putting someone on notice that you are about to acquire enforceable rights, and having an actual justiciable dispute.

    I think your position is defensible, though. Wouldn’t surprise me if some judge decided to go your way.

  9. 14

    IANAE: What about a situation where the patent applicant has paid the issue fee and has also threatened a company (and its customers) with a lawsuit once the patent issues?

  10. 13

    In that case the Supreme Court held that declaratory judgment (DJ) jurisdiction does can exist without this sort of reciprocity of litigation potential.

    I don’t think MedImmune is broad enough to cover pending applications. In MedImmune there was an issued patent, a license under that patent, and the parties were within one missed payment of litigation anyway. The court simply held that the patent could be challenged without engaging in a formality that exposed the petitioner to huge liability. The question of “do we have to keep paying for this?” was properly before the court.

    IMO there’s no actual controversy, justiciable issue, or adverse legal interests between the parties, as long as the patentee has no rights to assert and the claims are still subject to examination and amendment, unless someone can point me to caselaw suggesting otherwise.

  11. 12

    IANAE: You asked “Is it even possible to state a cause of action relating to a patent that has not yet issued?”

    Under MedImmune, that question is largely moot. In that case the Supreme Court held that declaratory judgment (DJ) jurisdiction does can exist without this sort of reciprocity of litigation potential.

  12. 11

    Under MedImmune, it is possible for a court to have declaratory judgment jurisdiction in a case filed before patent issuance?

    Is it even possible to state a cause of action relating to a patent that has not yet issued?

  13. 10

    RE Certificate of Correction. I had forgotten that a certificate of correction could prompted by a third party filing. Thanks

    However, I don’t think that this explains the purpose of the statute since a certificate of correction is used to correct a “patent” and therefore cannot be filed before issuance.

  14. 9

    Relative Newbie: I think you raise an interesting question: Under MedImmune, it is possible for a court to have declaratory judgment jurisdiction in a case filed before patent issuance?

  15. 8

    Third parties are permitted to Request a Certificate of Correction for mistakes of the PTO (although the PTO is not obligated to act on them). See MPEP §1480, “Certificates of Correction – Office Mistake” at link to uspto.gov . Perhaps this might be one approach for a third party’s correction of PTA.

  16. 7

    Dennis, I think you may be overlooking the licensing aspects of it. As we all know, a license cannot extend beyond the terms of the patent. As such, a licensee of the patent may have standing to challenge the patent term well before the expiration of the patent’s statutory life (and maybe even before the patent issues). I don’t see how the statute would prevent a potential or actual patentee from challenging the patent term immediately upon grant, as long as they can satisfy the case or controversy standard.

  17. 6

    I suppose a third party who becomes aware of the application number through publication can monitor the prosecution and then see the NOA.

    So much for the merits of publication… Let’s go back to confidential prosecution.

  18. 5

    Or maybe the reason for this section is because Congress wants to be sure the same troglodytes who don’t know how to rotate a TIFF image, and ask people re-send faxes received as upside down TIFF images, should be the only ones who are allowed to make these determinations.

  19. 4

    All this leaves me confused as to why the provision is law.

    Probably because they don’t want third parties meddling in the patent grant system. Sure, if you’re the first inventor that’s important (though curiously, not anywhere else in the world), but if you think there ought to be something different about the patent you have to wait your turn and let the PTO finish, then start your own PTO examination or take it up with a judge. But by then you need to state a good reason.

  20. 3

    Perhaps absent this provision, third parties could sue the Director in district court if they learned of the PTA calculation.

  21. 2

    At least in theory, too much PTA can be raised before the term extension in conjunction with an unenforceability defense. The USPTO believes applicants have an ethical duty to disclose where too much PTA has been granted. See 65 FR 56366, 56387 (Sept. 18, 2000); MPEP 2733.

  22. 1

    Perhaps this forecloses the possibility of a protest against the PTA calculation. Protests by definition must be filed before the application is published (which makes them a fairly useless tool for third parties); in the unlikely event that someone found out about a PTA before the issuance of the patent, 154(b) would prevent them from filing a protest.

Comments are closed.