Incomplete Restriction Requirement Stops Clock For Patent Term Adjustment

26 January 2016 PharmaPatents Blog

In Pfizer v. Lee, the Federal Circuit affirmed the decision of the U.S. District Court for the Eastern District of Virginia that upheld the USPTO’s Patent Term Adjustment (PTA) calculation that stopped the clock running against the USPTO when the examiner issued an incomplete Restriction Requirement. This decision is not surprising, but Applicants should remember that they are held to a different standard under the PTA rules.

Patent Term Adjustment

It’s been a while since I’ve written about Patent Term Adjustment, so here’s a refresher on the basics:

The PTA statute (35 USC § 154(b)) was created to compensate for delays in the patent examination process that can erode the effective term of a patent, which is measured from the patent’s earliest non-provisional U.S. priority date. The statute provides “guarantees” against different types of USPTO delays, and requires a day-for-day deduction of Applicant delays against USPTO delays.

“A” delay accrues when the PTO fails to act in accordance with set time frames (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.

The issue in this case relates to the amount of A delay the patent should have been awarded for the USPTO’s failure to meet the time frames set forth in 35 USC §154(b)(1)(A).

The USPTO Delay At Issue

The patent at issue was Pfizer’s U.S. Patent No. 8,153,768, directed to certain chemotherapeutic agents. The relevant events for the PTA dispute are outlined below:

May 2, 2003: Application filed.

June 2, 2004: “A” Delay begins to accrue against USPTO.

August 10, 2005: USPTO issues incomplete Restriction Requirement*  (404 days “late”).

February 6, 2006: Applicant contacts Examiner regarding incomplete Restriction Requirement.

February 23, 2006: USPTO issues revised Restriction Requirement.

*The first Restriction Requirement was incomplete in that it did not address all of the dependent claims.

The USPTO awarded 404 days of PTA for the delay running from June 2, 2004, to August 10, 2005. Pfizer challenged that award, seeking an additional 197 days of PTA based on the date of the second Restriction Requirement.

The Federal Circuit Decision

The Federal Circuit decision was authored by Judge O’Malley and joined by Judge Dyk. Judge Newman dissented.

Under the PTA statute, the USPTO has fourteen months from an application’s filing date to issue “at least one of the notifications under section 132 or a notice of allowance under section 151.” At issue was whether the incomplete Restriction Requirement qualified as “notification[] under section 132.”

35 USC § 132 states in relevant part:

(a) Whenever, on examination, any claim for a patent is rejected, or any objection or requirement made, the Director shall notify the applicant thereof, stating the reasons for such rejection, or objection or requirement, together with such information and references as may be useful in judging of the propriety of continuing the prosecution of his application; and if after receiving such notice, the applicant persists in his claim for a patent, with or without amendment, the application shall be reexamined. ….

Pfizer argued that the incomplete Restriction Requirement “failed to satisfy the notice requirement of Section 132 because it failed to classify six dependent claims … and thus failed to place the applicants on notice of the restriction requirement as to those dependent claims.” The Federal Circuit rejected that argument:

The examiner’s initial requirement satisfied the statutory notice requirement because it informed the applicant of “the broad statutory basis for [the rejection of] his claims.” Chester [v. Miller], 906 F.2d [1574,] at 1578 [(Fed. Cir. 1990)]. Here, the examiner’s detailed descriptions of the 21 distinct invention groups outlined in the examiner’s initial restriction requirement were clear, providing sufficient information to which the applicants could have responded. …. And, significantly, the examiner’s defined invention groups remained identical between the two restriction
requirements. ….

As for the six claims whose classifications were omitted from the initial restriction requirement, …. the dependent claims would naturally have been classified in a subset of the invention groups to which the claims they depend from belong.

The court also noted that the “Summary” of the Restriction Requirement noted that all claims were subject to restriction, and that MPEP § 814 “supports the PTO’s position that the original restriction requirement satisfied the notice requirements of Section 132,” where it provides:

While every claim should be accounted for, the omission to group a claim, or placing a claim in the wrong group will not affect the propriety of a final requirement where the requirement is otherwise proper and the correct disposition of the omitted or erroneously grouped claim is clear.

Thus, the court upheld the USPTO’s determination that the incomplete Restriction Requirement stopped the fourteen-month clock from running, e.g., stopped further accrual of “A” Delay.

Judge Newman’s Dissent

In her dissent, Judge Newman emphasized that it was undisputed that the incomplete Restriction Requirement delayed prosecution, and criticizes the majority for inexplicably shifting the blame for that error to the Applicant.

The panel majority holds that this period of delay should be attributed to the applicant, not the PTO. This is indeed curious, for the applicant made no error. The panel majority holds that PTO error does not count if the applicant could have figured out what the examiner might have done if he had not erred. The panel majority  appears to believe that this would have eliminated the delay consumed by the correction of the error. However, the prosecution was delayed by the PTO’s error.


The statutory purpose is clear: when patent issuance is delayed because of proceedings that are not the fault of the applicant, the patent term is extended to compensate for the delay. H.R. Rep No. 106-287, at 49 (1999) (“Title III amends the provisions in the Patent Act that compensate patent applicants for certain reductions in patent term that are not the fault of the applicant.”). My colleagues’ statutory interpretation and application are contrary to the letter and purpose of the law. I respectfully dissent.

Applicants Are Held To A Different Standard

Although the court here seems to hold that a substantially complete Office Action can stop the PTA delay clock that runs against the USPTO, Applicants are held to a different standard under 37CFR 1.704(c)(7) and (8). Those rules call for PTA deductions when an Applicant submits an incomplete reply or a supplemental response. In both cases, the deduction runs from the day after the initial reply was filed until the day the second reply was filed.

Did the Federal Circuit realize that USPTO PTA rules hold Applicants to a different standard?

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