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Federal Circuit Limits Reduction of Patent Term Extension for Applicant Delay, Opens Door for Longer Patent Terms

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In January 2019, the United States Court of Appeals for the Federal Circuit determined that the US Patent and Trademark Office (USPTO) improperly reduced Patent Term Adjustment (PTA) for certain applicant delay.  Supernus Pharms., Inc., v. Iancu, No. 2017-1357 (Fed. Cir. Jan. 23, 2019).  In particular, the court held that the USPTO “may not count as applicant delay a period of time during which there was no action that the applicant could take to conclude prosecution of the patent.” Id. at 14 (emphasis added).

35 U.S.C. 154(b)(2)(C) of the Patent Act governs the measurement of reduction in PTA for applicant delay, as emphasized by the court:

(i) The period of adjustment of the term of a patent under paragraph (1) 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.

Supernus had filed a request for continued examination (RCE), and 646 days later, filed a supplemental IDS with no USPTO action having been taken in the interim.  The IDS contained information regarding an opposition to a related European Patent, for which the applicant received notice 100 days prior to filing the IDS.  The USPTO reduced the PTA for applicant delay, including the full 646 days between the filing of Supernus’s RCE and the supplemental IDS.  Supernus conceded the 100 days following notice of the EP opposition but argued that it was improper to reduce PTA for the 546 days between RCE filing and the EP notice, as no reasonable efforts could have advanced prosecution during that period.  The USPTO argued that the PTA reduction was appropriate under Gilead and 37 C.F.R. § 1.704(c)(8).  See Gilead Scis., Inc. v. Lee, 778 F.3d 1341 (Fed. Cir. 2015).

The Federal Circuit distinguished Gilead as addressing the USPTO’s authority to determine what constitutes “reasonable efforts,” and held that “PTA cannot be reduced by a period of time during which there is no identifiable effort in which the applicant could have engaged to conclude prosecution because such time would not be “equal to” and would instead exceed the time during which an applicant failed to engage in reasonable efforts.” Supernus at 15.  The court found that 35 U.S.C. 154(b)(2)(C)(i) requires both a period of time during which an applicant failed to engage in reasonable efforts, and a PTA reduction be equal to such time period.  The court thus concluded that the 546 days were in excess of the USPTO’s statutory authority—and reversed the summary decision of the district court.

The USPTO has not yet issued a statement addressing the decision or indicating a change in practice for calculating PTA.  Baker Botts will continue to monitor this important area of the law, including whether the USPTO appeals Federal Circuit’s decision, and will provide future reports as the law continues to develop.

*Ryan Dowell, a Baker Botts law clerk, assisted in the preparation of this article.

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