Leveraging Patent Term Adjustment Strategies to Add Value to Your Company’s Patent Portfolio

When it comes to your patent strategy, every extra day of patent protection can significantly impact a startup’s competitive positioning, future earning potential, and investor interest. For certain industries, like pharmaceuticals, a single day of additional patent protection can mean millions of dollars in revenue. This is where effective strategies to maximize Patent Term Adjustment (PTA) become crucial. PTA can add months—or even years—to the life of a patent, extending its exclusive rights beyond the standard 20-year term.

In this post, I’ll break down what PTA is, why it matters, and strategies you can leverage to maximize PTA and the value of your intellectual property (IP).

What is Patent Term Adjustment (PTA)?

PTA is a mechanism that compensates patent holders for delays caused by the U.S. Patent and Trademark Office (USPTO) during the examination process. The standard term for a U.S. patent is 20 years from the filing date, but this can be extended through PTA if the USPTO fails to meet certain examination deadlines as outlined in 35 U.S.C. § 154(b).

Why Does PTA Matter to Startups and Investors?

“Every extra day of patent life can mean millions in revenue or extended market exclusivity.” In some industries, the standard 20-year patent term is already longer than the useful life of the patent. But in other cases, where there are long development and go-to-market timelines, every day of patent term can add value to the patent portfolio and to the company through:

1. Extended Market Exclusivity: For technologies licensed from research universities, a longer patent term can provide more time for commercialization, resulting in greater market penetration and a stronger competitive position.
2. Increased Valuation: Investors look for startups with strong IP portfolios. A patent with an extended term can increase the perceived value of a startup, making it more attractive to venture capital firms.
3. Negotiation Leverage: Longer patent terms can enhance licensing opportunities and provide more leverage in negotiations with potential partners or acquirers.

How is PTA Calculated?

PTA is calculated based on three types of delays, as well as any applicant-caused delays that offset these periods:

• Type A Delays: When the USPTO fails to meet specific statutory deadlines, such as issuing an initial office action within 14 months of the filing date or responding to an applicant’s reply within four months (37 CFR § 1.702(a)). If these deadlines are not met, the patent term is extended day-for-day for the period of delay. This can be a frequent source of USPTO delay, where current data shows only about a third of applications will receive a first examination within 14 months, with any day beyond 14 months contributing directly to PTA.
• Type B Delays: When the total time from the application filing date to the issuance of a patent exceeds three years (37 CFR § 1.702(b)), that portion of the delay beyond three years is added to the patent term, subject to deductions for applicant delays. This calculation does not include periods of suspension requested by the applicant, appeals, or interferences. PTA is calculated to the exact day, so even short delays can impact the total adjustment.
• Type C Delays: When there are delays due to certain circumstances, including interference proceedings, secrecy orders, or successful appeals (37 CFR § 1.702(c)). These delays may result in substantial extensions if there are significant periods of activity falling within these categories. Each day the delay falls within a Type C category, it adds directly to the PTA calculation.

If there is an overlap between these periods (e.g., Type A and Type B delays occurring simultaneously), only the period that results in the longest extension will be counted. In other words, overlapping days will not be double-counted; they will be calculated in favor of the applicant to maximize the PTA. The sum of the non-overlapping periods of delay determines the total PTA, which is then reduced by any applicant-caused delay (MPEP § 2733).

Strategies for Maximizing PTA

At a basic level, not causing applicant delay that will reduce your PTA is certainly a viable strategy to improve your PTA, but there are even more nuanced approaches and practices that can prolong your PTA extensively when implemented.

“Proactively managing the patent prosecution process can lead to substantial PTA gains.”

1. Prepare Your Application Completely: Ensure your application is complete and compliant, including drawings, sequence listings, and other requirements, within 8 months of filing (or entering the national stage). The recent case of Lundbeck A/S v. United States Patent And Trademark Office, C.A. 23-cv-1105-PTG-WEF (E.D. Va.) shows that even a timely response to a notice to file corrected application papers can result in a significant loss of PTA if the USPTO issues the notice after the 8-month date.
2. Respond to USPTO Communications Timely: Most USPTO communications have a 3-month shortened statutory period for response, so taking extensions of time generally results in a reduction of PTA. This doesn’t mean you should respond early, but rather aim to respond within the standard timeframe without an extension to maximize the amount of Type B delays without contributing to applicant delay (see point 4 below for exceptions).
3. File a Complete Response: Review filings carefully to ensure they are complete. Any omissions in a response that require a new filing to correct will result in applicant delay and reduce PTA. This is true even if both the initial and corrected responses are filed within the 3-month period. This rule applies to any notice from the USPTO indicating an omission, such as a petition dismissal for lacking an item or a notice of a non-compliant sequence listing.
4. Use Extensions Strategically: Generally, taking extensions of time will reduce your PTA. However, there are circumstances where an extension can increase your PTA. For example, the USPTO typically issues restriction requirements with a 2-month shortened statutory period. Taking a 1-month extension and filing a complete response by the 3-month date can increase Type B delay without contributing to applicant delay. Similar logic can apply to the filing of an appeal brief, which has an initial deadline of 2 months from the filing of the notice of appeal. Filing at the 3-month date can extend the Type C delay without adding to the applicant delay.
5. File Information Disclosure Statements (IDS) Promptly: Timely filing of IDS is crucial to avoid applicant-caused delays that reduce PTA. How the USPTO handles an IDS will depend on when it was filed, as described in 37 CFR § 1.97. Generally speaking, there are three time periods (i) prior to examination (including prior to a first examination after filing of a request for continued examination), in which case the IDS must be considered by the Office, (ii) after examination has begun but while the application is pending, in which case the IDS will be considered if provided with either a fee or a statement that the references were first known not more than three months prior to the filing of the IDS, and (iii) if filed after allowance but prior to the payment of the issue fee if provided with both the fee and the statement. That being said, event timely filing an IDS can result in significant loss of PTA. There is, however, a safe harbor when an IDS is filed with the statement, so filing an IDS within the three-month time period to make the statement can avoid significant losses of PTA/
6. Leverage Appeals Effectively: If your application faces an unjust rejection, consider appealing. Successful appeals can qualify for additional PTA under Type C delays (MPEP § 2733). The most recent USPTO Appeal and Interference Statistics demonstrate a successful appeal can be expected to add approximately 1 additional year of patent term. Also, consider the timing of your appeal brief (as discussed in point 4) to maximize these PTA benefits.
7. Consider Filing a Continuation-in-Part (CIP): While I rarely recommend filing a CIP application, in life sciences, it is not uncommon to have new data that, while not significant enough to justify a new patent filing is still supportive of the original patent claims and that you might like to have printed in the application. Filing a CIP to incorporate that data can also be advantageous for PTA because of how the USPTO dockets CIP applications.
8. Welcome Telephonic Restriction Requirements: The 14-month-to-first-action guarantee is tolled by the issuance of a restriction or election of species requirement. If an examiner calls with a request to make a telephonic restriction or election, try to respond rather than forcing the examiner to issue a paper requirement. Most examiners will also give a couple of days for the attorney to confer with the client before responding to a telephonic restriction requirement, so don’t hesitate to ask for a couple of days here. But remember to respond and not have the examiner issue a written restriction requirement that will stop the clock on PTA. It is likely that the examiner will take longer to prepare and issue a first action on the merits than to issue a restriction requirement, so more PTA will probably result from a telephone election than from a paper election.
9. Scrutinize Obviousness-Type Double Patenting Rejections Carefully: Instead of automatically filing terminal disclaimers to overcome nonstatutory double patenting rejections in related applications, consider challenging the rejection where appropriate and where the potential PTA loss is significant. While challenging a double patenting rejection may require critiquing the claim scope of your earlier patent or application, the potential PTA gain may justify the effort, despite possible risks like estoppel or prosecution disclaimer.
10. Avoid Filing Most Papers After Allowance: Most papers filed after allowance are considered a failure to engage in reasonable efforts to conclude prosecution because they interfere with preparing the application for issuance. Common after-allowance papers that reduce PTA include amendments under 37 C.F.R. § 1.312, certified copies of priority documents, drawings, supplemental declarations, and status inquiries. Exceptions include timely issue fee payments, comments on an examiner’s statement of reasons for allowance, and changes of small entity status. PTA will be reduced by the lesser of four months or the number of days from the filing of the after-allowance paper to the mailing date of a PTO reply or notice in response to the paper.

What to Do When You Can’t Respond Within 3 Months

Sometimes, you may not have been able to respond within the 3-month period due to unforeseen circumstances. Normally this would contribute to applicant delay that shortens your PTA. However, in certain circumstances where the applicant could not respond, a timely-filed petition can excuse any unavoidable period of delay. As described in MPEP § 2734, Section II, there are certain showings that may establish that you were unable to respond within the three-month period despite all due care:

• (A) The original three-month period was insufficient to obtain necessary test data for an affidavit or declaration under 37 CFR 1.132, which was submitted with a reply filed outside the original three-month period.
• (B) You were unable to reply within the original three-month period due to a natural disaster.
• (C) Testing was required to reply to an Office action, and the testing necessarily took longer than three months.
• (D) The illness or death of a sole practitioner of record responsible for prosecuting the application prevented a timely reply.

The petition to reinstate this lost PTA must be filed prior to the issuance of the patent and is not extendable.

What to Do When the USPTO Gets the PTA Incorrect

If you believe the USPTO has miscalculated your PTA, you have the right to challenge this determination. The first step is to file a petition under 37 CFR § 1.705 to request reconsideration or recalculation of the PTA. This petition must be filed within two months of the patent issuance, though this period may be extendable with sufficient cause.

In the petition, you should clearly explain the errors in the USPTO’s calculation, provide supporting documentation, and cite relevant regulations or case law. If the USPTO denies the petition, you can further appeal the decision to the U.S. District Court within 180 days of the USPTO’s decision on the petition. This appeal process can be complex, and it’s crucial to act promptly and gather strong evidence to support your case.

Conclusion

For startups and investors focused on deep tech and life sciences, understanding and maximizing PTA can increase the portfolio value. Every additional day of exclusivity can boost revenue potential, increase valuation, and enhance competitive advantage.

If you need help navigating the complexities of Patent Term Adjustment or managing your IP strategy, reach out to me today. Your IP assets are too valuable to leave unprotected.