United States: After-Final Response Does Not Stop PTA Clock

Last Updated: October 1 2019
Article by Courtenay C. Brinckerhoff

In Intra-Cellular Therapies, Inc. v. Iancu, the Federal Circuit agreed with the USPTO’s Patent Term Adjustment (PTA) calculation that charged a deduction for “applicant delay” for time after the applicant filed a first response to a final Office Action, because the response did not comply with 37 CFR § 1.113. While the ultimate PTA decision is consistent with how we have been calculating PTA, language in the unanimous opinion regarding after-final practice is concerning.

The Patent At Issue

The patent at issue was Intra-Cellular’s U.S. Patent No. 8,648,077. The relevant prosecution history relates to the final Office Action mailed April 17, 2013. The Applicant filed a first “Amendments and Response Under 37 C.F.R. 1.116” within three-months of the Office Action, but that response did not overcome the rejections, and an Advisory Action was issued on July 26, 2013. Thereafter, on August 7, 2013, the Applicant filed a second after-final response, characterized by the Federal Circuit as “adopting all of the examiner’s suggestions for overcoming the outstanding rejections and objections,” and as “a complete capitulation to the examiner’s final Office action.” A Notice of Allowance was issued August 20, 2013.

The USPTO’s PTA calculation included a charge of 21 days of “applicant delay” for the time period between three-months after the final Office Action and the second after-final response. Intra-Cellular argued that no PTA deduction should have been charged because the first response was timely.

The Patent Term Adjustment Provisions At Issue

The PTA deduction at issue is set forth in 35 USC § 154(b)(2)(C)(i), which provides:


(i) The period of adjustment of the term of a patent under paragraph (1) shall be reduced by a period equal to the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application.

The USPTO’s interpretation of this provision is set forth in 37 CFR § 1.704(b):

(b) … an applicant shall be deemed to have failed to engage in reasonable efforts to conclude processing or examination of an application for the cumulative total of any periods of time in excess of three months that are taken to reply to any notice or action by the Office making any rejection, objection, argument, or other request, …in which case the period of adjustment … shall be reduced by the number of days, if any, beginning on the day after the date that is three months after the date of mailing or transmission of the Office communication notifying the applicant of the rejection, objection, argument, or other request and ending on the date the reply was filed.

The Federal Circuit Decision

The Federal Circuit decision was authored by Judge Chen and joined by Judges Wallach and Hughes.

The Federal Circuit considered whether the USPTO’s interpretation of the statute was entitled to deference under Chevron. The Federal Circuit first determined that “the language of the PTA statute does not answer the question of what type of action by an applicant constitutes ‘reasonable efforts to conclude prosecution’ for purposes of responding to a final Office action.”  The Federal Circuit next determined that the USPTO’s interpretation was “based on a ‘permissible construction of the statute,’” as required for deference under Chevron.  Thus, the Federal Circuit affirmed the district court decision that likewise had applied deference under Chevron and upheld the USPTO’s interpretation of the statute.

As noted above, this PTA decision does not surprise me. What did surprise me was the Federal Circuit’s discussion of after-final practice.

For example, it framed the question at issue as “whether an applicant submission, filed after a final Office action, that continues to argue the merits of the examiner’s rejection, without good cause” constitutes a failure “to engage in reasonable efforts to conclude prosecution” under the PTA statute. I cringe at the assumption that the Examiner’s failure to withdraw the rejection means that the arguments were made “without good cause.”

Along the same lines, the Federal Circuit stated:

Intra-Cellular “no longer had the right to continue debating the merits of the rejection once the final Office action issued in this case.”

It seems to have reached that conclusion based on 37 CFR § 1.113(c):

(c) Reply to a final rejection or action must include cancellation of, or appeal from the rejection of, each rejected claim. If any claim stands allowed, the reply to a final rejection or action must comply with any requirements or objections as to form.

According to the Federal Circuit:

To properly respond to a non-final Office action, regulations require a “bona fide attempt to advance prosecution,” which entails addressing each and every outstanding objection and rejection. § 1.135; § 1.111. But the requirements for responding to a final Office action are stricter. If the applicant wishes to keep arguing against the examiner’s rejections, it must take those arguments to the Patent Board on appeal or file an RCE to reopen prosecution in front of the examiner. § 1.113(a); § 1.114. If the applicant wishes to make an amendment to a claim, only certain types of amendments are allowed to be admitted under § 1.116. See § 1.116(b)(1)–(3).

(The Federal Circuit noted that Intra-Cellular did not present claim amendments under AFCP 2.0, which permits certain additional types of claim amendments after-final.)

Considering Intra-Cellular’s first response, the Federal Circuit stated:

Intra-Cellular “could have pursued either path [37 CFR § 1.113(c) or 37 CFR § 1.114] for filing a proper reply to the final Office action, but it chose not to. In that first after-final submission, Intra-Cellular continued to dispute the § 103 rejection with the same arguments the examiner had previously found unpersuasive …. Because prosecution was closed and the examiner at that point was under no obligation to reconsider arguments that had already been rejected in the final Office action, such applicant conduct does not amount to “reasonable efforts to conclude” prosecution under § 1.704(b).

I also cringed at the Federal Circuit’s characterization of the second response as “a complete capitulation to the examiner’s final Office action.” As stakeholders know, many claim amendments are made without acquiescing to the Examiner’s position.

After-Final Practice

While I am not bothered by the Federal Circuit’s PTA decision, I am bothered by the suggestion that an after-final response that only presents arguments is improper, although 37 CFR § 1.113(c) seems to support that finding. Here, the Federal Circuit found that the after-final arguments were the same as those presented previously, but often after-final arguments may respond to new assertions or new rejections made in the final Office Action. At least in that case, an applicant should be able to point out any errors in the Examiner’s reasoning without being criticized for filing an improper response.

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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