A patent gives the patent holder the right to exclude others from making, using, selling, offering to sell, or importing an invention covered by the patent. However, the right only lasts for a limited period of time and will disappear upon the expiration of the patent. After the patent expires, the invention will fall into the public domain.
For a patent holder, as well as its partners and competitors, understanding how long a patent’s life lasts is important for developing business strategies. In an investment or M&A deal, the remaining term of patents in a portfolio can be critical in determining a company’s value. So when does a patent expire? In order to precisely answer this seemingly simple question, various factors need to be taken into account. This article reviews the general rules of patent term calculation and the factors that may affect a patent’s life.
In general, the standard term of a utility patent (e.g., patents protecting compositions, devices, machines, methods, etc.) depends on when the patent is filed or issued.
- For patents filed on or after June 8, 1995, the patent term is 20 years from the filing date of the earliest U.S. non-provisional or PCT application to which priority is claimed.
- For patents that were pending on and still in force on June 8, 1995, the patent term is the longer of: (1) 17 years from the issue date or (2) 20 years from the filing date of the earliest U.S. non-provisional or PCT application to which priority is claimed.
Since the 20-year window starts from the earliest U.S. non-provisional or PCT application, U.S. provisional applications and foreign priority applications outside the U.S. are not considered in patent term calculation.
If a continuing application (e.g., a continuation, divisional, or continuation-in-part application) is granted, the 20-year window for patent term determination is from the filing date of the earliest U.S. non-provisional or PCT application in the family. Note that this rule applies to the term of a patent granted from a continuation-in-part application, regardless of whether the claims have new matter that is not in the parent application.
As for other types of patents, the standard term for plant patents is the same as utility patents. Design patents have different patent terms. A design patent has a term of 14 years (if filed before May 13, 2015) or 15 years (if filed on or after May 13, 2015) from the issue date.
Factors affecting patent terms
The actual term of a utility patent may be different from the standard term. Below are some important factors to consider when determining a utility patent’s expiration date.
In the process of patent application, one or more “terminal disclaimers” may be filed by the applicant to overcome a non-statutory double patenting rejection. In this type of rejection, an examiner rejects the pending claims in an application because they are directed to an obvious variation of the invention claimed in a reference patent. By filing a terminal disclaimer, the applicant gives up the portion of the potential patent term (if the application is granted) beyond the term of the reference patent. Often, a terminal disclaimer may cause a patent’s term to be shorter than the standard term and may nullify any Patent Term Adjustment that the patent may otherwise be entitled to. However, the filing of a terminal disclaimer does not affect Patent Term Extension of a patent. In large patent portfolios, a complex web of terminal disclaimers may propagate and crossover between different families of patents. As such, one must perform a careful analysis of the interplay between standard terms, terminal disclaimers, including the relative filing dates of the terminal disclaimers, and patent term adjustments, in order to determine the expiration dates for the patents in such portfolios.
Even in the absence of a double patenting rejection, a patentee may decide to disclaim or dedicate to the public the entire term, or any terminal part of the term, of a granted patent using a terminal disclaimer.
Patent Term Adjustment (PTA)
For patents granted from applications filed on or after June 8, 1995, their standard term may be extended by “Patent Term Adjustment (PTA).” The rationale behind PTA is that if the patent office fails to examine an application in a timely manner, the patent term may be extended beyond the standard term to compensate for the patent office’s delays. However, the extension due to patent office’s delays may be reduced or eliminated by applicant’s delays in the application process. Thus, PTA extension equals the number of days resulting from the patent office’s delays subtracted by the number of days due to applicant’s delays. The PTA extension is awarded by the patent office automatically when a patent is granted.
There are 3 types of patent office’s delays (i.e., A-, B-, and C-delays) that need be taken into account in calculating PTA.
Important deadlines relevant to A-delays include:
- Issuing the first office action, e.g., a restriction requirement, non-final office action, or a notice of allowance within 14 months after an application is filed or enters U. S. national stage from a PCT application;
- Responding to an applicant’s reply, e.g., a reply brief or reply to an office action, within 4 months; and
- Issuing a patent within 4 months after the payment of issue fee.
B-delay accrues when the patent office fails to issue a patent within 3 years after an application is filed or enters U. S. national stage from a PCT application.
C-delay, which is not as common as A- and B- delays, includes adjustment of patent term for interferences, secrecy orders, and appeals.
Two or more types of the patent office’s delays may have overlaps. For example, a time duration may be counted for A-delay because the patent office fails to respond to a reply and also for B-delay because the examination time has been more than 3 years from the filing date. Such overlap duration cannot be counted more than once. Thus, the total patent office delays equals: A-delay + B-delay + C-delay – overlaps.
Applicant’s delays during the application process can reduce the PTA resulting from patent office delays. There are a variety of situations that are considered applicant’s delays. One of the most common applicant delays is failure to respond to an office action or patent office’s request within 3 months. Filing a Request for Continued Examination (RCE) can accrue applicant’s delays as well. For example, the time duration from the filing of an RCE to the issuance of Notice of Allowance is not counted when calculating patent office’s B-delay. Filing an Information Disclosure Statement (IDS) may also accrue applicant’s delays. For example, when an IDS is filed after the filing of an office action response, the time duration from filing of the response and the IDS may be counted as applicant’s delays.
Awards of PTA can be very valuable for products that require long development time and/or regulatory approval process, e.g., pharmaceuticals and medical devices. Thus, it would be important for applicants of such patents to make the effort to avoid any unnecessary applicant’s delays that can reduce potential PTA.
Patent Term Extension (PTE)
For patents related to products that require regulatory approval before entering into market, e.g., pharmaceuticals and medical devices, the standard patent term may also be extended by “Patent Term Extension (PTE),” which aims to compensate time in a patent’s term lost during the Food & Drug Administration (FDA)’s regulatory approval process.
There are some limitations on PTE. Patents eligible for PTE must have claims directed to the regulated product, a method of using the product, or a method of manufacturing the product. Also, PTE is only available for one patent per approved product, and is only applicable to the claims relevant to that product.
The length of PTE is also subject to limitations. For example, the maximum PTE that a patent can get is limited to 5 years. After a product is approved, the total remaining term of a patent relevant to the product cannot exceed 14 years.
As discussed above, determining the term of a patent may not be an easy task. The calculation should start with the standard term, and it is also important to understand the impact that PTA, PTE, and terminal disclaimers have on a patent’s life.
Disclaimer: The information contained in this posting does not, and is not intended to, constitute legal advice or express any opinion to be relied up legally, for investment purposes or otherwise. If you would like to obtain legal advice relating to the subject matter addressed in this posting, please consult with us or your attorney. The information in this post is also based upon publicly available information, presents opinions, and does not represent in any way whatsoever the opinions or official positions of the entities or individuals referenced herein.