By Cheryl Beise, J.D.
The calculation of patent term adjustment under 35 U.S.C. § 154 does not include the period of requested continued examination conducted after termination of an interference proceeding.
The federal district court in Alexandria, Virginia, properly affirmed the USPTO’s calculation of patent term adjustment (PTA) for a patent owned by the Mayo Foundation for Medical Education and Research, a divided panel of the U.S. Court of Appeals for the Federal Circuit has determined. The USPTO correctly interpreted the language "any time consumed by continued examination of the application requested by the applicant under section 132(b)" in 35 U.S.C. § 154(b)(1)(B)(i) to exclude the period of continued examination conducted after termination of an interference proceeding and ending with mailing of the notice of allowance. Circuit Judge Newman filed a dissenting opinion to express her view that the post-interference examination period should have been included in the PTA period because the examination delay was due to USPTO procedures and not the applicant’s conduct (Mayo Foundation for Medical Education & Research v. Iancu, September 16, 2019, Lourie, A.).
PTA delays. In 1999, Congress expanded patent term adjustments, codified at 35 U.S.C. § 154(b), to compensate applicants for three broad classes of prosecution delays. The "A Delay" provides PTA when the USPTO does not meet certain deadlines in the processing of patent applications; the "B Delay" entitles the applicant to PTA for each day the application is pending beyond three years; and the "C Delay" provides PTA for each day the application is pending in an interference proceeding, a secrecy order, or a successful appeal to the PTAB or a federal court.
This appeal concerns Section 154(b)(1)(B), known as the "B Delay." The B Delay’s three-year period is subject to several exclusions, including (i) any time consumed by continued examination of the application requested by the applicant under section 132(b) ("RCE time") ; (ii) any time consumed by a proceeding under section 135(a), any time consumed by the imposition of an order under section 181, or any time consumed by appellate review by the Patent Trial and Appeal Board or by a Federal court; or (iii) any delay in the processing of the application by the United States Patent and Trademark Office requested by the applicant except as permitted by paragraph (3)(C). Section 132(b) regarding RCE time also was enacted as part of the AIPA. Pursuant to 37 C.F.R. § 1.114, filing an RCE "withdraw[s] the finality of any Office action" and allows prosecution to proceed.
Prosecution history. The Mayo Foundation for Medical Education and Research ("Mayo") owns U.S. Patent No. 8,981,063 (the ’063 patent), claiming certain antibodies purportedly useful for treating "disease conditions characterized by immunosuppression," such as cancer and AIDS. The ’063 patent issued from Application 12/421,310 (the ’310 application), filed on April 9, 2009, with an effective filing date of November 30, 1999. The USPTO issued a final rejection of the pending claims on October 14, 2010, as anticipated by U.S. Patent No. 7,635,757 (the ’757 patent). The USPTO also noted in its rejection that Mayo had suggested an interference with the ’757 patent in its previous response, and it invited Mayo to make the requisite priority showing under 37 C.F.R. § 41.202(d)(1).
On September 14, 2011, Mayo filed a request for continued examination (RCE) of the ’310 application, along with an assertion of priority of invention over the ’757 patent and suggestion of an interference. Mayo filed a supplemental amendment shortly afterward cancelling certain claims upon the examiner’s recommendation. In February 2012, Mayo pursued some of the cancelled claims in a separate continuation application, which later issued as U.S. Patent No. 8,460,927 (the ’927 patent).
On February 9, 2012, an interference was declared between all the remaining claims of the ’310 application and all the claims of the ’757 patent. The interference proceeded for two years. On February 19, 2014, the Board awarded priority to Mayo’s ’310 application claims and cancelled all the claims of the ’757 patent. The interference decision became final on April 23, 2014.
Following termination of the interference, the Board returned the ’310 application to the examiner. The examiner conducted a further prior art search, and on June 30, 2014, issued an Office Action rejecting the claims of the ’310 application on the ground of non-statutory obviousness-type double patenting in view of the ’927 patent. Mayo filed a reply on October 24, 2014, arguing on the merits that the claims of the ’310 application were patentably distinct. The examiner then withdrew the rejection and mailed a Notice of Allowance on November 3, 2014. The ’310 application issued as the ’063 patent on March 17, 2015.
Mayo divided the prosecution into three time periods: (1) 148 days between the date the RCE was filed (9/14/11) and date the interference was declared (2/9/12); (2) 805 days between the date the interference was declared and the date the interference expired (4/23/14); and (3) 194 days from the date the interference expired and the notice of allowance (11/3/14). The parties agreed that the first period was RCE time and the second period was not. The dispute concerned the third period.
Upon issuance of the ’063 patent, the USPTO calculated a PTA of 621 days, with no B Delay. Mayo claimed it was due 685 days, because the examiner’s sua sponte reopening of prosecution after termination of the interference was not RCE time. The USPTO disagreed, asserting that RCE time did not end when the interference was declared, but instead when the Notice of Allowance was mailed. Accordingly, the USPTO calculated 342 days of RCE time: the 148 days identified by Mayo and the 194 days between the termination of the interference and mailing of the Notice of Allowance. Because RCE time is deducted from the B Delay calculation under § 154(b)(1)(B)(i), and the USPTO’s calculation of RCE time was greater than Mayo’s, the USPTO concluded that there was no B Delay and, as a result, that Mayo was entitled to less PTA than it sought.
Mayo appealed to the federal district court in Alexandria. Mayo argued that a declaration of an interference terminates RCE time for the purposes of calculating B Delay. Mayo asserted that Novartis AG v. Lee, 740 F.3d 593 (Fed. Cir. 2014) stands for the proposition that continued examination ends once the claims are "deemed allowable," not necessarily on the date of mailing of the Notice of Allowance, and since the USPTO’s regulations require an application "otherwise be in condition for allowance" before an interference is declared, the declaration was tantamount to a Notice of Allowance. In Novartis, the Federal Circuit held that this RCE-time exception stops at the mailing of the notice-of-allowance. In the alternative, Mayo contended that the examiner’s reopening of examination after remand from the Board was time attributable to the USPTO, not the applicant, because Mayo never requested examination after remand.
The district court rejected Mayo’s interpretations of both Section 154(b)(1)(B)(i) and Novartis. In its view, Novartis established that RCE time "presumptively ends" upon mailing of the Notice of Allowance. The court also found that the declaration of an interference is not analogous to resumption of examination after the Notice of Allowance—the only "exceptional" circumstance identified by this court in Novartis, as possibly giving rise to a departure from the "general rule" that examination ends upon mailing of the Notice of Allowance. It also concluded that the examination after remand was RCE time "attributable to Mayo, and not to the USPTO," because "[h]ad Mayo not requested a continued examination, the USPTO would not have conducted the interference proceedings ...[or] examined the issue of double patenting." Mayo appealed.
Standard of review. The Federal Circuit noted that patent term adjustments are reviewed in accordance with the Administrative Procedure Act (APA) and may be set aside if the decision is arbitrary, capricious, or an abuse of discretion. The court also noted that the only question in this appeal was one of statutory interpretation, as neither party identified any disputed issue of fact.
Mayo contended that 37 C.F.R. § 1.703(b)(1) reflects a misinterpretation of RCE time as defined in 35 U.S.C. § 154(b)(1)(B)(i). It argued that it never "requested" any examination after the Board’s remand and that, under USPTO regulations, an interference cannot be declared unless at least some claims are deemed allowable but for the outcome of the interference. In addition, Mayo contended that under Novartis, RCE time ends "once the [USPTO] takes an official action indicating that all the pending claims are allowable and closes prosecution," or the claims are "deemed allowable." While this date is "presumptively" upon the mailing of the Notice of Allowance, Mayo argued that under USPTO regulations a declaration of an interference comprises such an indication of allowability. The USPTO responded that a declaration of an interference does not close prosecution on the merits, and the USPTO’s operating procedures, as well as the previous version of 35 U.S.C. § 135(a) (governing interferences), contemplate that examination may continue afterward.
The Federal Circuit agreed with the USPTO. While the USPTO’s regulations indicate that at least one claim in an application should be in condition for allowance before an interference is declared, the court observed that the regulations also explicitly contemplate that the Board may recommend further action by the examiner, including issuing a rejection. "Thus, the USPTO’s regulations as a whole do not indicate that a declaration of an interference is tantamount to a Notice of Allowance," the court said.
Novartis also did not help Mayo. The Novartis court held that the time between the date of mailing of the Notice of Allowance and issuance is not RCE time, absent special circumstances where examination is reopened after allowance, because examination on the merits closes upon allowance in the great majority of case. This case was not an exception. Upon remand, the examiner updated her search in accordance with M.P.E.P. § 2308, and, finding Mayo’s continuation application had issued as the ’927 patent, issued a rejection for obviousness-type double patenting. Mayo argued against that rejection, succeeded in persuading the examiner that the claims were patentably distinct, and secured an allowance. But examination clearly did not end until the date the Notice of Allowance was mailed, the court said. Thus, Mayo’s interpretation of Novartis was incorrect in the court’s view.
Moreover, nothing in Section 132(b) implies that an RCE entitles the applicant to a special form of examination, where the claims must be allowed once the grounds of rejection presented in the final rejection are resolved; nor does the statute imply that continued examination is no longer requested by the applicant once the USPTO issues a new ground of rejection. "Mayo requested continued examination, and that is what it received, both before and after the interference proceeding," the Federal Circuit said.
The court held that, where an RCE has previously been filed, the time between termination of an interference and the date of mailing of the Notice of Allowance is "time consumed by continued examination of the application requested by the applicant under section 132(b)" pursuant to 35 U.S.C. § 154(b)(1)(B)(i). Because the USPTO correctly determined that there was no B Delay, the decision of the district court was affirmed.
Dissenting opinion. Circuit Judge Pauline Newman filed a dissenting opinion to express her view that Mayo was correct that the calculation of PTA includes the period of examination after termination of the interference. "The panel majority holds that this post-interference examination period is not included in the patent term adjustment, although it plainly is examination delay due to USPTO procedures," Judge Newman said. Judge Newman also did not find Novartis to be controlling. She pointed out that "Novartis did not relate to ongoing or continuing prosecution or any activity before mailing of the notice of allowance. Novartis was concerned only with the ‘time from allowance to issuance.’"
The case is No. 2018-2031.
Attorneys: Ahmed Jamal Davis (Fish & Richardson PC) for Mayo Foundation for Medical Education and Research. R. Trent McCotter, U.S. Patent and Trademark Office, for Andrei Iancu.
Companies: Mayo Foundation for Medical Education and Research
MainStory: TopStory Patent FedCirNews
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