USPTO's Patent Term Adjustment Policies Reigned in Yet Again

January 28, 2019 – Article

Since the Federal Circuit’s decision in Wyeth v. Kappos, 591 F.3d 1364, 93 U.S.P.Q. 2d 1257 (Fed. Cir. 2010), aff’g, Wyeth v. Dudas, 580 F. Supp. 2d 138, 88 U.S.P.Q.2d 1538 (D.D.C. 2008), which held that the USPTO was improperly reducing patent term adjustment (PTA) by improperly calculating “overlapping” days of agency delay under 35 U.S.C. §154, the courts have been asked on numerous occasions to look at how the USPTO is calculating PTA. Not every case has been decided in favor of the challenger, but a fair amount has. In addition, the USPTO has identified several internal errors including not accounting for the IDS safe harbor under 37 C.F.R. §1.704(d). As such, patentees should be very mindful of this evolving and important provision of law.

The latest in the line of changes to the application and calculation of PTA was handed down by the Federal Circuit on January 23, 2019, in its decision in Supernus Pharmaceuticals, Inc. v. Iancu (Fed. Cir. 2019). The question posed to the Court in Supernus was “whether the USPTO may reduce PTA by a period that exceeds the ‘time during which the applicant failed to engage in reasonable efforts to conclude prosecution.’” 

In Supernus, an IDS was filed after an RCE without the applicable safe harbor statement, which would constitute “delay” under 37 C.F.R. §1.704(c)(8) (i.e., supplemental reply). The IDS was filed 646 days after the RCE and, applying the provisions of 37 C.F.R. §1.704(c)(8), the USPTO reduced the final PTA by this number of days. However, the event triggering the obligation to disclose material information (i.e., EP opposition filing) occurred only 100 days prior to the actual filing of the IDS. In other words, Supernus could not have failed to engage in reasonable efforts to conclude prosecution during the 546-day period from RCE filing to the date the EP opposition was filed as there were no efforts in which the applicant could have engaged to conclude prosecution of the patent during this time. 

The U.S. District Court for the Eastern District of Virginia sided with the USPTO in Supernus applying Gilead Sciences, Inc. v. Lee, 778 F.3d 1341 (Fed. Cir. 2015). In Gilead, the Court confronted the question of whether a ‘failure to engage in reasonable efforts’ requires conduct that actually causes delay. The Court found that the failure to engage in reasonable efforts includes conduct or behavior that results in actual delay, as well as those that have the potential to result in delay irrespective of whether such delay actually occurred. See id. at 1349-1350. 

However, the Federal Circuit overturned the EDVA’s decision and specifically distinguished Supernus from Gilead because Gilead involved different facts and a different legal question. In Supernus, the Court specifically held “On the basis of the plain language of the statute, we hold 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.” Slip op. at 14.  In other words, since the EP opposition which was filed 546 days after the filing of the RCE is the event that necessitated the filing of the IDS by triggering a duty to disclose, it would not be possible for Supernus to have taken any action relevant to this event to conclude prosecution of the patent before that event actually occurred. As such, the USPTO improperly reduced Supernus’ PTA for this 546-day period. 

Although Supernus focused on an IDS that was filed after an RCE, this decision should apply equally to all “supplemental replies” falling under 37 C.F.R. §1.704(c)(8) regardless of whether the prior “response” was an RCE, a response to an Office action, or a response to a restriction requirement. Thus, for any patent that is still within the time-period for requesting reconsideration of the final PTA, patentees should carefully review the PTA calculation to see if Supernus applies.

As a final note, Supernus only addressed “delays” under 37 C.F.R. §1.704(c)(8); however, this decision should not be limited to this sub-section. For example, 37 C.F.R. §1.704(c)(9) deals with the submission of an amendment or other paper after a decision by the Patent Trial and Appeal Board less than one month before the mailing of an Office action or notice of allowance that requires the mailing of a supplemental Office action or supplemental notice of allowance. As with the case of 37 C.F.R. §1.704(c)(8), and IDS would fall within the scope of “other paper” for 37 C.F.R. §1.704(c)(9). Under 37 C.F.R. §1.704(c)(9), the reduction is measured from the day after the original Office action or notice of allowance and ends on the mailing date of the supplemental Office action or notice of allowance. However, as in Supernus, it would be improper for the USPTO to 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. This same rationale should apply to “delays” under 37 C.F.R. §1.704(c)(6) and 37 C.F.R. §1.704(c)(10) as well.