In Wyeth and Elan Pharma v. Under Sec. of Commerce for Intellectual Property, a panel of the Court of Appeals for the Federal Circuit ("CAFC") recently affirmed the decision of the District Court for the District of Columbia to grant summary judgment that plaintiffs Wyeth and Elan Pharma ("Wyeth") were entitled to extended patent term adjustments under 35 U.S.C. § 154(b) due to the Patent Office's delay in prosecuting their applications.

The CAFC began its analysis by discussing the history of the patent term adjustments, and why they were added to the statute when the patent term was changed from 17 years from issuance to 20 years from filing. The CAFC went through some particulars of the statute, and outlined the three guarantees regarding timing offered by the PTO, and how they impact the patent term adjustments. The CAFC then focused on the first two guarantees: the A guarantee, which guarantees a prompt response from the PTO, and the B guarantee, which guarantees that a patent will issue within three years from the date of filing. Under the A guarantee, if the PTO fails to respond to the applicant within specified time-frames resulting in a delay of the patent issuing, the patent's term will be extended one day for each day of delay, subject to certain limitations. The B guarantee states that a patent application shall have no more than a three-year pendency, again subject to certain limitations. If the application is pending for more than three years due to the fault of the PTO, the patent's term will be extended one day for each day of pendency over three years. Under both guarantees, the applicant's delays are subtracted from the patent term adjustment.

To avoid double-counting, the statute restricts both the A and B guarantee clauses to the limitation that any periods of delay that overlap are only counted once. However, the PTO and Wyeth differed on how to interpret the terms "periods of delay" and "overlap."

The PTO had established procedures for determining patent term adjustments. These procedures, set out in 37 C.F.R. 1.703(f), stated only that "to the extent that periods of adjustment attributable to the 'guarantees' overlap, the period of adjustment granted under this section shall not exceed the actual number of days the issuance of the patent was delayed". Another paragraph noted the entire pendency period is to be looked at when determining whether the periods of delay overlap. The PTO later changed the term "adjustment" to "delay," claiming this clarified the regulation. Under the PTO's interpretation, the period of adjustment would be the larger of the A delay or the B delay.

Wyeth owns two patents, 7,179,892 (the '892 patent) and 7,189,819 (the '819 patent), both of which were entitled to patent term adjustments. However, there were significant differences between the number of days of patent term adjustments calculated by the PTO and by the plaintiffs. The PTO compared the A delays and the B delays, took the larger number, then subtracted delays caused by Wyeth. This gave adjustments of 462 and 492 days for the '892 and '819 patents respectively. Wyeth said the B delays could not have started until three years after the filing date, which meant that the only possible period of overlap was with A delays that occurred after the three year mark. Under Wyeth's calculations, it should have received adjustments of 756 and 722 days for the '892 and the '819 patents respectively.

Wyeth filed a petition for reconsideration of the adjustments with the PTO, then filed suit asking the CAFC to grant the extended terms. Both sides filed motions for summary judgment, and the PTO asked the CAFC for the public agency deference outlined in Chevron U.S.A v. Natural Resources Defense Council, 467 U.S. 837 (1984). The two-step test under Chevron involves looking at whether a statute is ambiguous and, if so, whether the agency's interpretation is reasonable and permissible. If it is, the CAFC will defer to the agency's judgment. The District Court sided with Wyeth, noting that Chevron deference was not applicable as the Patent Office did not have authority to make substantive rules, but only procedural regulations. The CAFC further said that, even if Chevron deference had been applicable, the PTO's interpretation of the statute was contrary to the statute's plain language, noting that under the PTO's interpretation, the application was delayed under the B guarantee even before the application has been delayed.

The CAFC said the issue was strictly one of statutory interpretation and, as such, the starting point of its analysis should be the language of the statute. According to the CAFC, the language of the statute is not ambiguous. The guarantees say when they will apply, with the B period running from three years after the filing date until the patent issues. The CAFC discounted the PTO's interpretation that B delays can occur any time after filing, saying that this interpretation is contrary to the language of the statute. PTO responded that the A delays cause the B delays, but the CAFC did not find that argument persuasive. A delays result from the PTO missing deadlines for responding, and end when the PTO responds. Therefore, there is no overlap unless the violations occur at the same time (i.e. an A delay which occurs more than three years after filing).

The CAFC acknowledged that there were situations where similarly situated parties would receive varying patent term adjustments based on a difference of a day or two in the timing of the patent's issuance, but noted that it was not the court's duty to re-write bad laws, but rather to enforce the laws that Congress had passed.

The CAFC continued its analysis by looking at the legislative history of the 1990 Patent and Trademark Office Efficiency Act, Pub. L. 106-113 but found that the legislative history supported its interpretation. The CAFC then affirmed the District Court's judgment, granting summary judgment to Wyeth, and allowing it the extended patent term adjustments it had requested.