United States: RCE PTA Carve-Out Resumes After Interference

Last Updated: October 8 2019
Article by Courtenay C. Brinckerhoff

In Mayo Foundation for Medical Education and Research v. Iancu, the Federal Circuit agreed with the USPTO's Patent Term Adjustment (PTA) calculation that excluded prosecution that occurred after an interference was decided from the award for USPTO delay. In particular, the Federal Circuit upheld the application of the RCE PTA carve-out before and after the interference proceeding. 

The Patent At Issue

The patent at issue was Mayo's U.S. Patent No. 8,981,063. The chart below (which is taken from the Federal Circuit decision as reproduced from Mayo's Appeal Brief) outlines the events and time periods relevant to the PTA calculation. As reflected in the chart, after the applicant filed an RCE, an interference was declared. After the interference was decided, there was additional prosecution before the application was allowed. 

Judge Lourie's opinion for the majority summarizes the post-interference prosecution as follows:

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, which contained the claims that had been cancelled in the '310 application. 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.

With regard to the PTA calculation, the parties agreed that time period 1 was subject to the RCE PTA carve-out and that time period 2 should be awarded as "C" delay, but disagreed with the treatment of time period 3. Mayo argued that it should be awarded as "B" delay, while the USPTO found it to be subject to the RCE PTA carve-out.

The Patent Term Adjustment Provisions At Issue

The RCE PTA carve-out is set forth in 35 USC § 154(b)(1)(B)(i), which provides:

(B) GUARANTEE OF NO MORE THAN 3-YEAR APPLICATION PENDENCY.- Subject to the limitations under paragraph (2), if the issue of an original patent is delayed due to the failure of the United States Patent and Trademark Office to issue a patent within 3 years after the actual filing date of the application in the United States, not including
(i) any time consumed by continued examination of the application requested by the applicant under section 132(b) ....

The USPTO's interpretation of this provision is set forth in 37 CFR § 1.703(b)(1):

(b) The period of adjustment under § 1.702(b) is the number of days, if any, in the period beginning on the day after the date that is three years after the date on which the application was filed under 35 USC 111(a) or the national stage commenced under 35 USC 371(b) or (f) in an international application and ending on the date a patent was issued, but not including the sum of the following periods:

(1) The number of days, if any, in the period beginning on the date on which a request for continued examination of the application under 35 USC 132(b) was filed and ending on the date of mailing of the notice of allowance ....

(The emphasized clause was revised after the Federal Circuit decision in Novartis v. Lee, which held that the USPTO could not include the allowance-to-issue time in the RCE PTA carve-out) 

Please see this article for a more detailed discussion of the PTA framework.

The Federal Circuit Decision

The Federal Circuit decision was authored by Judge Lourie and joined by Judge Dyk. Judge Newman dissented. 

According to Judge Lourie's opinion for the majority, Mayo argued that, under Novartis, the RCE carve-out ends "once the [PTO] takes an official action indicating that all the pending claims are allowable and closes prosecution." While that usually occurs with the mailing of a Notice of Allowance, Mayo argued that in this case it occurred when the interference was declared, because an interference cannot be declared unless the involved claims are otherwise in condition for allowance. 

In contrast, the USPTO pointed out that a declaration of interference does not close prosecution, which always may resume after the interference is decided. The USPTO also argued that a rule based on Mayo's interpretation "requiring a determination of when the PTO deems the claims allowable would turn PTA calculation into a 'wildly impractical' and 'hotly contested factual inquiry in nearly every PTA case.'" 

The majority of the Federal Circuit panel agreed with the USPTO, citing 37 CFR § 41.127(c) and MPEP § 2308 as contemplating further examination after an interference has been decided. 

"[T]he PTO's regulations as a whole do not indicate that a declaration of an interference is tantamount to a Notice of Allowance."

The majority also found Mayo's reading of Novartis inconsistent with language in Novartis explaining that "[t]he common-sense understanding of 'time consumed by continued examination' . . . is time up to allowance, but not later, unless examination on the merits resumes" (emphasis added). Here, to the extent the declaration of interference constituted an indication of allowability, examination on the merits resumed after the interference was decided.

The majority also was "persuaded by the PTO's point that Mayo's rule could require an unduly burdensome, fact-intensive inquiry into when the PTO actually conceded the allowability of the claims."

Judge Newman's Dissent

Judge Newman dissented, agreeing with Mayo that the post-interference prosecution was initiated by the examiner and not conducted pursuant to the pre-interference RCE. Judge Newman emphasized that Novartis did not address this issue, as it was "concerned only with the 'time from allowance to issuance.'" Thus, Judge Newman found the USPTO's inclusion of the post-interference examination in the RCE PTA carve-out to be contrary to the statute, and not entitled to deference.

What About Prosecution After A Successful Appeal?

According to the USPTO's statistics, only 15 interferences were pending as of July 2019. That may lead some to question the significance of this decision. A more common, somewhat parallel circumstance might arise if an examiner reopens prosecution after a successful ex parte appeal. If an RCE had been filed prior to the Notice of Appeal, does this decision give the USPTO authority to carve-out any post-appeal examination from "B" delay? 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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