United States: Federal Circuit Clarifies PTA Calculation In Face Of RCE, Interference

Last Updated: September 24 2019
Article by Clyde A. Shuman

The Federal Circuit has held that where a request for continued examination (“RCE”) has been filed, the time between termination of an interference and mailing of the Notice of Allowance is “time consumed by continued examination of the application requested by the applicant under section 132(b)” under 35 U.S.C. § 154(b)(1)(B)(i), and is excluded from B Delay, when calculating the patent term adjustment (“PTA”). In Mayo Foundation for Medical Education and Research v. Iancu, Appeal No. 2018-2031, the Court affirmed a decision from the Eastern District of Virginia which itself affirmed the USPTO’s PTA calculation, concluding that the USPTO’s interpretation of “any time consumed by continued examination of the application requested by the applicant under section 132(b)” was correct. 

By way of background, the statute for calculating PTA, 35 U.S.C. § 154(b), compensates applicants for three broad classes of delay, including what is termed “B Delay,” which generally provides PTA for each day the application is pending beyond three years after filing. Under § 154(b)(1)(B), the three-year pendency guarantee (“B Delay”) is subject to exclusions, including (relevant here): “(i) any time consumed by continued examination of the application requested by the applicant under section 132(b).” The USPTO has repeatedly promulgated regulations setting forth its interpretation of this exclusion (also known as “RCE time”).

In Novartis AG v. Lee, 740 F.3d 593 (Fed. Cir. 2014), the Federal Circuit held that the USPTO’s previous interpretation of RCE time—from the filing date of the RCE to issuance—was incorrect because, absent exceptional circumstances, “allowance-to-issuance time” is “plainly attributable to the PTO,” regardless of “whether there is a continued examination in a prosecution.” The USPTO subsequently promulgated a new regulation, interpreting RCE time as “[t]he number of days . . . beginning on [the RCE filing date] and ending on the date of mailing of the notice of allowance.”

Here, the patent issued from an application filed on April 9, 2009. The USPTO issued a final rejection of the pending claims on October 14, 2010, as anticipated. Mayo filed an RCE on September 14, 2011, along with remarks suggesting an interference.

An interference was declared on February 9, 2012. On February 19, 2014, the PTAB awarded priority to Mayo’s application. The decision became final on April 23, 2014.

The Board returned Mayo’s application to the examiner, who (on June 30, 2014) rejected Mayo’s claims on the ground of non-statutory obviousness-type double patenting. Mayo filed a reply on October 24, 2014; the examiner withdrew the rejection and mailed a Notice of Allowance on November 3, 2014. The patent issued on March 17, 2015.

The parties agreed that the time from Mayo’s filing the RCE to the declaration of interference (148 days) was RCE time, and that the duration of the interference proceeding (805 days) was not. Mayo’s appeal concerned the time from the end of the interference to the Notice of Allowance (194 days).

The USPTO calculated a PTA of 621 days, with no B Delay. Mayo argued that “[t]he examiner’s sua sponte reopening of prosecution after termination of the interference was not [RCE time].” Per Mayo, RCE time was only the above-referenced 148 days. For its part, the USPTO argued that RCE time did not end when the interference was declared, but when the Notice of Allowance was mailed. Accordingly, the USPTO calculated an additional 194 days of RCE time, between termination of the interference and mailing the Notice of Allowance. Because RCE time is deducted from B Delay, and the USPTO’s calculation of RCE time exceeded Mayo’s, the USPTO concluded there was no B Delay and Mayo was entitled to less PTA than it sought.

On appeal to the Eastern District of Virginia, the court disagreed that a declaration of an interference terminates RCE time. The court rejected Mayo’s argument that Novartis holds that continued examination ends once the claims are “deemed allowable,” not necessarily on the date of mailing of the Notice of Allowance, and that a declaration of interference is tantamount to a Notice of Allowance. Instead, the court found that Novartis established that RCE time “presumptively ends” upon mailing of the Notice of Allowance. The court also found that, because “the applicant’s requested continued examination does not presumptively end at the time the interference is declared,” declaring an interference is not analogous to resuming examination after the Notice of Allowance.

The court also rejected Mayo’s claim that the examiner’s reopening of examination after remand was attributable to the USPTO. Per the court, examination after remand was RCE time “attributable to Mayo” because “[h]ad Mayo not requested a continued examination, the PTO would not have conducted the interference proceedings . . . [or] examined the issue of double patenting.”

The Federal Circuit agreed. The Court agreed with the USPTO that a declaration of an interference does not close prosecution on the merits, and USPTO procedures and regulations contemplate that examination may continue afterward. The Court also agreed that Mayo’s rule requiring a determination of when the USPTO deems the claims allowable would turn PTA calculation into a “hotly contested factual inquiry in nearly every [ ] case.”

The Court also addressed Novartis, where it held that the time between mailing the Notice of Allowance and issuance is not RCE time, generally. The Court noted that, post remand, Mayo argued against a double patenting rejection and secured allowance. As such, “examination clearly did not end until [ ] the Notice of Allowance was mailed.”

The Court also rejected Mayo’s argument that the examiner could not have issued a rejection that “had nothing to do with any issue raised in the [RCE].” Per the Court, “Mayo requested continued examination, and that is what it received, both before and after the interference proceeding.”The Court concluded, “[W]e hold that, where an RCE has previously been filed, the time between termination of an interference and the date of mailing of the Notice of Allowance is ‘time consumed by continued examination of the application requested by the applicant under section 132(b)’ pursuant to 35 U.S.C. § 154(b)(1)(B)(i).”

Judge Newman, dissenting, agreed with Mayo that the calculation of PTA includes the period of examination after termination of the interference, saying “it plainly is examination delay due to [USPTO] procedures.”

She disputed the majority’s application of Novartis, saying that Novartis “did not relate to ongoing or continuing prosecution or any activity before mailing of the notice of allowance. Novartis was concerned only with the ‘time from allowance to issuance.’”

As for examination after remand, she noted that the interference judgment contained no recommendation for further action. In that case, per MPEP § 2308, post-interference examination was at the initiative of the examiner, not Mayo. “It is not disputed that Mayo did not request further examination.”

Finally, Judge Newman said the majority result was contrary to the statute and policy. Post-interference examination was USPTO activity, part of the examination before the notice of allowance, and thus “plainly [ ] within the purpose of the [PTA] statute.” Were post-interference activity part of interference delay, it would be included in C Delay. Either way, the adjusted term would include this period of examination.

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