The Federal Circuit issued its decision in the pending Patent Term Adjustment (PTA) appeals, resolving the issues raised in Exelixis I, Exelixis II and Novartis, in a precedential decision issued in Novatris AG v. Lee, Nos. 2013-1160, -1179 (Jan. 15, 2014); see also Exelixis v. Lee, Nos. 2013‑1175, -1198 (Jan. 15, 2014) (per curiam). The court interpreted 35 USC § 154(b)(1)(B)(i) as it relates to the impact that a Request for Continued Examination (RCE) has on a PTA award for the USPTO’s failure to grant a patent within three years of its filing date (so-called “B delay” PTA). The court partially upheld and partially reversed the USPTO’s interpretation of the statute, rendering a decision that could mean an additional several months of PTA for impacted patents.
The Statute at Issue
The statute at issue in this case is 35 USC § 154(b)(1)(B)(i), which provides:
(B) 申请审查期限不超过三年的保证——在符合第(2)款限制的前提下，若因美国专利商标局未能在申请在美国实际提交之日起三年内授予专利，导致原始专利的颁发延迟， 不包括——
(i) 申请人依据第132(b)条要求对申请进行持续审查所耗费的时间……
美国专利商标局对该条款的解释载于《联邦法规汇编》第37卷第1.703(b)(1)条：
(b) 根据§ 1.702(b)规定的调整期，是指自下列日期次日起至下列日期止的期间内（如有）的天数：根据《美国法典》第35编第111(a)条提交申请之日，或根据《美国法典》第35编第371(b)条进入国家阶段之日，或 (f) 国际申请的国家阶段开始之日后三年期满之日，至专利授予之日止的期间，但 不包括 下列时段之和：
(1) 自根据35 USC 132(b)提交继续审查请求之日开始，至专利授予之日结束期间的天数（如有）……
Thus, under the USPTO’s interpretation, once an RCE is filed, the patent no longer accrues “B” delay, although it might still accrue “A” delay and/or “C” delay. (Please see my article on Exelixis I for a more detailed discussion of this issue and the PTA framework.)
联邦巡回法院判决
The Federal Circuit adopted a construction of the statute that conforms with that recently rejected by the district court in Abraxis Bioscience, LLC v. Kappos, Civil Action No. 1:11-cv-00730., (D.D.C. Jan. 08, 2014). In particular, the Federal Circuit agreed with the USPTO that “any time consumed by continued examination” should not count towards any B delay award regardless of when the RCE is filed, but did not agree that time after allowance is time “consumed by continued examination” that should be excluded from the B delay calculation.
The Federal Circuit began its analysis by noting that “[t]he correct interpretation of section 154 is an issue of law, which this court decides de novo.” Thus, the court does not appear to have given any deference or preference to the USPTO’s interpretation.
The first issue under § 154(b)(1)(B)(i) decided by the court (the issue over which Exelixis I and Exeliixis II are at odds) is whether an RCE filed more than three years after the application was filed has any impact on the B delay PTA calculation. The Federal Circuit agreed with the USPTO on this issue:
The better reading of the language is that the patent term adjustment time should be calculated by determining the length of the time between application and patent issuance, then subtracting any continued examination time (and other time identified in (i), (ii), and (iii) of (b)(1)(B)) and determining the extent to which the result exceeds three years. Such a reading ensures that applicants recover for any “delay[s] due to the failure of the [PTO],” without allowing the applicant to recover for “any time consumed by continued examination,” as the statute requires.
The Federal Circuit explained that “[t]his construction is supported by the statutory purpose and other aspects of the statutory structure,” such as the exclusion of ”certain delays [that] are not attributable to the PTO.” According to the court, “That focus on PTO responsibility or its absence does not distinguish continued examinations according to when they were initiated.” Thus, on this issue the Federal Circuit concluded:
[T]he correct interpretation of the statute is the PTO’s view that time spent in a continued examination does not deplete the PTO’s allotment of three years for application processing before a resulting patent has its term extended, no matter when the continued examination begins.
The second issue under § 154(b)(1)(B)(i) decided by the court is whether the “time consumed by continued examination” that is excluded from the B delay calculation runs until the patent issues. On this issue, the Federal Circuit disagreed with the USPTO:
We reject the PTO’s view that the time after allowance, until issuance, is “time consumed by continued examination” and so is excluded from adjustments given to the patentee. Such time from allowance to issuance undisputedly would count toward the PTO’s three-year allotment in a case not involving a continued examination. There is no basis for distinguishing a continued examination case.
In support of this interpretation, the court noted that a Notice of Allowance states that “prosecution on the merits is closed,” and that once a Notice of Allowance is issued “the application moves from the examiner to the office of publication.”
Because the USPTO had not awarded PTA in accordance with the court’s interpretation of the statute, the court remanded the case to the USPTO “for redetermination of the proper adjustments in accordance with this opinion.”
Time for Requesting Additional PTA
The Federal Circuit also addressed and rejected Novartis’ arguments regarding the timeliness of its claims that were brought outside of the statutory period provided in 35 USC § 154(b)(4)(A). (Please see this article for a more in-depth discussion of these arguments.) The court found that the statute at issue applied to the Novartis claims at issue, that Novartis was not entitled to equitable tolling, and that the application of the statutory limitations period did not effect a taking in violation of the Fifth Amendment. Thus, the court upheld the dismissal of a number of Novartis’ PTA claims as untimely.
In this regard, it is important to understand that the dismissed claims were not associated with any request for reconsideration pending at the USPTO. The Federal Circuit expressly noted that tolling of the version of 35 USC § 154(b)(4) at issue does apply in those circumstances:
It is undisputed in this court that the 180-day clock does not run while the PTO considers a timely request for reconsideration under regulations promulgated pursuant to § (b)(3)(B)(ii)’s guarantee of “one opportunity to request reconsideration of any patent term adjustment determination made by the Director.”
(The PTA statute has since been revised to provide that the 180-day period for bringing a district court PTA action runs from “the date of the Director’s decision on the applicant’s request for reconsideration,” not from the patent’s grant date.)
Obtaining Additional PTA
Patent holders who may have patents impacted by this decision should review their portfolios and identify those cases where additional PTA may be available. Under the current law and regulations that apply to patents granted on or after January 14, 2013, a patentee can seek reconsideration of a PTA award by filing a request for reconsideration (and $200 fee) within 2 months of the patent’s grant date, which period is extendable for up to 5 months under normal extension of time practice. The USPTO has not yet issued any special procedures for obtaining additional PTA under this decision, although it is possible that the USPTO may decide to waive the request for reconsideration fee or the extension of time fees.
Patent holders with pending PTA requests for reconsideration or pending PTA district court proceedings also should be able to benefit from this decision, but may want to consider making a submission to expressly request that PTA be redetermined in accordance with this decision in Novartis v. Lee.