We know from Novartis v. Lee that a patent application does not earn “B delay” type Patent Term Adjustment (PTA) from the time an RCE is filed until a Notice of Allowance is issued, but an application still can earn PTA for “A delay” when the USPTO takes more than four months after the RCE is filed to act on the application. However, the USPTO has been charging “Applicant Delay” when the applicant files any paper between the RCE and the next Office Action or Notice of Allowance, even though no PTA statute or rule expressly governs the post-RCE period.
The PTA statute at issue is 35 USC § 154(b)(2)(C), which provides for a deduction from any PTA award “equal to the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application.” The statute also expressly delegates to the USPTO the authority to “prescribe regulations establishing the circumstances that constitute a failure of an applicant to engage in reasonable efforts to conclude processing or examination of an application.”
The USPTO exercised its delegated authority in 37 CFR § 1.704(c), which sets forth a number of circumstances deemed to constitute Applicant Delay under the PTA statute. In recent PTA decisions, the USPTO has invoked § 1.704(c)(8) as the basis for charging Applicant Delay when the applicant has filed a paper after filing an RCE, but before the next Office Action or Notice of Allowance:
(8) Submission of a supplemental reply or other paper, other than a supplemental reply or other paper expressly requested by the examiner, after a reply has been filed, in which case the period of adjustment set forth in § 1.703 shall be reduced by the number of days, if any, beginning on the day after the date the initial reply was filed and ending on the date that the supplemental reply or other such paper was filed.
Although the Federal Circuit recently upheld the application of this rule to an Information Disclosure Statement (IDS) filed after a Restriction Requirement in Gilead v. Lee, neither that case, Rule 704(c)(8) itself, nor the Federal Register Notice in which Rule 704(c)(8) first was published indicate that the rule applies to post-RCE submissions.
Indeed, given that RCEs are docketed to Examiners like other new continuing applications and are listed in the USPTO’s Patent Application Information Retrieval (PAIR) website with a status of “Docketed New Case – Ready for Examination,” the rule for preliminary submissions (Rule 704(c)(6)) seems to be more appropriate:
(6) Submission of a preliminary amendment or other preliminary paper less than one month before the mailing of an Office action under 35 U.S.C. 132 or notice of allowance under 35 U.S.C. 151 that requires the mailing of a supplemental Office action or notice of allowance, in which case the period of adjustment set forth in § 1.703 shall be reduced by the lesser of:
(i) The number of days, if any, beginning on the day after the mailing date of the original Office action or notice of allowance and ending on the date of mailing of the supplemental Office action or notice of allowance; or
(ii) Four months.
As most practitioners will realize, this rule will not support many deductions, since it is very rare that a submission is made so close in time to the Office Action or Notice of Allowance that it requires the mailing of a supplemental Office Action or Notice of Allowance. That also indicates that it is very rare that a post-RCE submission would actually delay the examination process.
Although the current RCE backlog statistics are much better than they were a few years ago, I still have a number of cases that have been waiting for the next Office Action for more than a year. As time passes, the applicant may want to take steps to nudge the application to the top of the Examiner’s docket, such as by filing an amendment to conform the claims to subject matter the Examiner has agreed is allowable (because Examiners may examine an application out of turn if it is believed to be in condition for allowance) or by filing a Request for Track I Expedited Examination (and $4000 fee). Moreover, an Applicant may need to file an IDS to cite references from a corresponding foreign application, and may not be able to make the strict 30-day certification required by Rule 1.704(d).
Under the USPTO’s current practice, any of these submissions will incur a deduction for Applicant Delay, and that deduction will correspond to the number of days from the filing of the RCE to the filing of the submission. That means that if an application has been languishing on an Examiner’s RCE docket for 12 months, and the applicant submits an IDS to cite refernences submitted in a corresponding foreign application two months ago (which would be timely under the IDS rules), the Applicant will be charged with 12 months of “Applicant Delay,” even if the Examiner does not act on the case for another year or longer.
Since an applicant’s efforts to advance prosecution (or comply with the Duty of Disclosure) during the post-RCE period cannot reasonably be characterized as “fail[ing] to engage in reasonable efforts to conclude prosecution of the application,” and does not, in fact, delay the examination process, I cannot think of any legitimate reasons why the USPTO is charging Applicant Delay under these circumstances. Rather, I think the USPTO is trying to mask the lingering problem of the RCE backlog, shift the blame of its examination delays to applicants, and avoid the scrutiny it might face if it granted numerous patents with several years’ worth of PTA.
But, is this practice a reasonable interpretation of the statute, or an arbitrary, capricious abuse of discretion?