USPTO Changes Post-Notice of Appeal Patent Term Adjustment Rules

20 August 2012 PharmaPatents Blog

In an August 16, 2012 Federal Register Notice, the USPTO announced final rules that change the way that Patent Term Adjustment (PTA) will be calculated after a Notice of Appeal has been filed. The final rules generally follow the rules that were proposed in December of 2011 and treat “appellate review” for PTA purposes as commencing when jurisdiction over a patent application passes to the Board. According to the Federal Register Notice, new PTA deductions will apply to patent applications in which a Notice of Appeal is filed on or after September 17, 2012, and the new PTA calculations will be applied to patent applications in which a Notice of Allowance is issued on or after September 17, 2012.  Other patentees may be able to benefit from the rule changes if they can file timely requests for reconsideration of the PTA awarded to their patents under the current rules.

The Patent Term Adjustment Statute

The PTA statute (35 USC § 154(b)) compensates applicants for three different types of USPTO delay:

“A” delay accrues when the PTO fails to act in accordance with set timeframes (such as issuing a first office action within 14 months, issuing a second action or allowance within 4 months of a response, and issuing a patent within 4 months of the Issue Fee payment).

“B” delay accrues when the PTO fails to issue a patent within three years of the actual filing date of the patent application.

“C” delay accrues when the application is involved in an interference or appeal, or is subject to a secrecy order.

Patent Term Adjustment and Appeals

PTA for A delay is awarded when the USPTO fails to “respond . . . to an appeal . . . within 4 months after the date on which . . . appeal was taken.”

On the other hand, PTA for B delay (also referred to as “3 year” delay) is not awarded for

any time consumed by a [interference] proceeding under section 135(a), any time consumed by the imposition of a [secrecy] order under section 181, or any time consumed by appellate review by the Board of Patent Appeals or Interferences of by a Federal Court.

(PTA for B delay also is not awarded for any time consumed by a request for continued examination.)

As noted above, PTA for C delay can accrue for the delays that are excluded from B delay. With regard to C delay, however, PTA only accrues for

appellate review by the Board of Patent Appeals and Interferences or by a Federal court in a case in which the patent was issued under a decision in the review reversing an adverse determination of patentability . . . .

Thus, if an applicant appeals a rejection and wins at the Board, B delay will not accrue while the application was on appeal, but C delay will. If an applicant appeals a rejection and does not win at the Board, no PTA is awarded for the time spent on appeal, even if the application is remanded for further prosecution.

The Post-Notice of Appeal Patent Term Adjustment Gap

I first wrote about the post-Notice of Appeal PTA gap in September of 2010. As I explained in that article, under the USPTO’s current PTA rules, the USPTO refuses to award B delay once a Notice of Appeal is filed, even if there is no actual “appellate review” by the Board. This may occur if a Notice of Appeal is filed to maintain pendency while an examiner considers an after-final response or if the examiner reopens prosecution after an Appeal Brief is filed. Because there is never a decision by the Board in such cases, the applications are not eligible for C delay. Thus, applicants may not be compensated for significant USPTO delays that may occur after a Notice of Appeal is filed.

The USPTO’s New Rules Address The Post-Notice of Appeal PTA Gap

 The USPTO’s new rules address the post-Notice of Appeal PTA gap by moving both the start of the B delay carve-out period and the start of the C delay award period to the date that jurisdiction over the application is transferred to the Board under 37 CFR § 41.35(a) (generally, the date that a Reply Brief is filed, or the date that the deadline for filing a Reply Brief expires). These changes appear to bring the rules more in line with the statutory language, which defines both periods with respect to “appellate review by the Board.”

Not surprisingly, the final rules also define a new type of applicant delay–failing to file an Appeal Brief or a Request for Continued Examination within three months of a Notice of Appeal. This deduction is in line with the PTA statute, which permits the USPTO to “prescribe regulations establishing the circumstances that constitute” applicant delay, and which states that taking “in excess of 3 months” to take certain actions constitutes applicant delay. Notably, this PTA deduction will apply to applications in which a Notice of Appeal is filed on or after September 17, 2012.

Which Patents Can Benefit From These Rule Changes? 

The basic effective date for the new calculations of the B delay carve-out and C delay start date is September 17, 2012. 

According to the Federal Register Notice, the USPTO will apply the new calculations to applications in which a Notice of Allowance is issued on or after September 17, 2012.

The Federal Register Notice also outlines three circumstances under which other patents may be able to benefit from the rule changes, if a timely request for reconsideration can be filed on or after September 17, 2012:

  1. reconsideration proceedings initiated pursuant to a remand from a timely filed civil action in Federal court.
  2. reconsideration proceedings initiated pursuant to a timely request for reconsideration of PTA under 37 CFR § 1.705(d) (e.g., filed within two month of the patent’s issue date) in which the patentee argues that these changes apply to the patent.
  3. reconsideration proceedings initiated pursuant to a timely request for reconsideration of a PTA decision rendered under the current rules (e.g., filed within two months of the date of the decision).

 This appears to leave out at least three groups that also should be able to benefit from these rule changes without having to pursue a civil action against the USPTO:

  1. patentees whose time periods for making timely requests for reconsideration of PTA under 37 CFR § 1.705(d) will expire between now and September 17, 2012, because their patents issued before July 17, 2012.
  2. patentees whose time periods for making timely requests for reconsideration of PTA decisions rendered under the current rules will expire between now and September 17, 2012, because the decisions were issued before July 17, 2012.
  3. patentees who raised this issue in timely requests for reconsideration and were advised in the USPTO’s PTA decisions that they would be able to seek reconsideration again if and when the USPTO changed its interpretation:

To the extent that the final rule on Revision of Patent Term Extension and Adjustment Provisions Relating to Appellate Review revises the interpretation of appellate review applied in this decision, Patentee is given one (1) month or thirty (30) days, whichever is longer, from the date of the final rule to file a request for reconsideration.

Patentees in either of the first two situations may want to consider making timely requests for reconsideration now, and urge the USPTO to apply the rule changes that take effect September 17, 2012. Patentees in the third situation should be able to file requests for reconsideration within one month of the rule changes, citing the language in the previous decisions. Additionally, any patentees who still are within the 180-day period for bringing a PTA civil action may want to consider doing so, particularly if a significant amount of PTA is at stake.

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