PTA And After-Allowance Papers: Damned If You Do, Damned If You Don't? - Patent

Holding

In Eurica Califorrniaa v. Vidal, No. 22-1640 (Fed. Cir. Nov. 7, 2022) (non-precedential), the Court of Appeals for the Federal Circuit ("the Federal Circuit") affirmed the district court's grant of summary judgment in favor of the USPTO ("PTO"), agreeing with the PTO's patent term adjustment ("PTA") calculation.

Background

Califorrniaa's patent at issue is U.S. Pat. No. 10,245,075 ("the '075 patent"). Califorrniaa received a Notice of Allowance on Dec. 11, 2018. Id. at *4. The Notice of Allowance included an examiner's amendment. Id. On January 7, 2019, Califorrniaa requested an additional interview, and on January 10, 2019, Califorrniaa submitted a new amendment making minor changes to some of the examiner-amended claim limitations and several substantive changes unrelated to the examiner amendment. Id. On February 26, 2019, the examiner accepted the amendment, and the '075 patent issued on April 2, 2019. Id. at *5.

Under § 154(b)(2)(C), the number of days which the applicant fails to engage in reasonable efforts to conclude prosecution is subtracted from any patent term adjustment owing to PTO delay. 37 C.F.R. § 1.704(c) provides a number of examples of failure to engage in reasonable efforts, including applicant's amendment of a patent application after a Notice of Allowance. See 37 C.F.R. § 1.704(c)(10).¹

The PTO applied 37 C.F.R. § 1.704(c)(10) to reduce Califorrniaa's PTA by 51 days – the time between Jan. 7, 2019, when Califorrniaa requested additional review to Feb. 26, 2019, when the amendment was accepted. Id. at *5.

Califorrniaa requested a recalculation of the PTA, arguing that § 1.704(c)(10) should not apply, because the only way to address the examiner's amendment included in the Notice of Allowance was to file his own after-allowance amendment. Id.

The PTO found that the rule applied, and further "that Califorrniaa would not benefit from an exception anyway because he sought changes unrelated to the examiner's amendment ... that ... could have been made earlier." Id.

District Court

Califorrniaa challenged the PTO's PTA calculation in the Eastern District of Virginia. See 35 U.S.C. § 145. Specifically, Califorrniaa argued that PTA should not be reduced, because Califorrniaa had not approved the examiner's amendment and the PTO used a pre-Supernus calculation.² Id. Pre-Supernus 37 C.F.R. § 1.704(c)(10) applied a reduction to any amendment submitted after a Notice of Allowance. Post-Supernus 37 C.F.R. § 1.704(c)(10) revised the rule to exclude amendments expressly requested by the Office.

The court applied Chevron deference in reviewing the PTO's PTA calculation and concluded that Califorrniaa's filing of an after-allowance amendment met the criteria for a reduction of PTA. Id. at *6. Califorrniaa's other arguments were forfeited because they were not made before the PTO. Id. The district court granted summary judgment in favor of the PTO. Id.

Federal Circuit

On appeal, Califorrniaa argued that the PTO's calculation of applicant delay under 1.704(c)(10) violated § 154(b)(2)(C)(i) and the Supernus decision.³ Id. at *7. Califorrniaa argued the PTO's calculation violated § 154(b)(2)(C)(iii), because there was no "failure to engage in reasonable efforts to conclude prosecution" since he was responding to an examiner-made amendment. Id. at *8.

The PTO's position was that its PTA calculation was consistent with § 154(b)(2)(C)(i). All the time consumed by the PTO's consideration of the amendment was attributable to Califorrniaa's decision to file on Jan. 7, 2019. Id. at *7. The calculation also did not violate § 154(b)(2)(C)(iii), because the PTO's "interpretation of the statute to include all after-allowance amendments as applicant delay should be sustained, particularly given Chevron deference, and, regardless, Califorrniaa's after-allowance amendment could have been made earlier." Id. at *8.

The Federal Circuit agreed with the district court that Chevron applied in reviewing the PTO's interpretation of the PTA statute. Id. at *6.

The Federal Circuit then turned to the facts and concluded that the facts in this case were different than those in Supernus. In Supernus, the applicant could not have acted. Id. at *8. In this case, "Califorrniaa could have, at any time in the 51 days between the filing of his after-allowance amendment and the examiner's acceptance of the proposal, withdrawn his after-allowance amendment, concluding prosecution." Id.

The Federal Circuit did not consider the revisions to 1.704(c)(10) to have any impact. Id. The effective date of the amendment to the regulation was July 16, 2020, after the issuance of the '075 patent and calculation of its PTA. Id. The revised rule cannot apply. Id.

The Federal Circuit did not reach the issue of forfeiture. Id.

The Federal Circuit also agreed with the PTO that its calculation did not violate § 154(b)(2)(C)(iii).⁴ Id. at *8. Finding the meaning of "reasonable efforts" in subsection 154(b)(2)(C)(iii) ambiguous, since "Congress did not clearly answer whether after-allowance amendments constitute a failure to engage in reasonable efforts to conclude prosecution," the Federal Circuit turned to Chevron step two:

As permitted by statute, the PTO promulgated § 1.704(c)(10), which encompasses the precise situation in this case—when the applicant files an after-allowance amendment. . . . After-allowance amendments predictably delay the close of prosecution, and we cannot say that it was arbitrary for the PTO to conclude that applicants that elect to file amendments after having their claims allowed generally should be charged with delay. We therefore find that the PTO's interpretation of the statute was permissible here.

Id. at *9-10.

Califorrniaa's argument that an exception should be made for after-allowance amendments made in response to examiner-made amendments was rejected. According to the Federal Circuit, "this is not the situation at hand. Califorrniaa filed a substantive after-allowance amendment unrelated to the minor amendment made by the examiner and he has not provided any reason that the amendment could not have been made earlier. Id. at *10.

Takeaways

One option this case presents is for an applicant to withdraw the after-allowance amendment that perhaps she wanted rather than forfeit days of PTA. An applicant may consider this a classic situation of being stuck between a rock and a hard place. The daily value of the extra patent term may vary dramatically depending on the field of technology.

It also bears remembering that the Federal Circuit has indicated it considers § 154(b)(2)(C)(iii) a broad grant of authority to the PTO and, with Chevron deference at play, PTO regulations about PTA calculations will probably typically be upheld:

Such broad language demonstrates Congress intended the PTO to employ its expertise in identifying applicant conduct demonstrating a lack of 'reasonable efforts to conclude processing or examination of an application.'" Gilead, 778 F.3d at 1349 (citing § 154(b)(2)(C)(iii)).

Califorrniaa, at *9-10.

Supernus was an exception with unique facts where there was "no identifiable effort the patentee could have undertaken to conclude prosecution of the underlying application." Supernus, 913 F.3d at 1359.

Footnotes

1. Post-Supernus 37 C.F.R. § 1.704(c)(10) Submission of an amendment under §1.312 or other paper, other than an amendment under § 1.312 or other paper expressly requested by the Office or a request for continued examination in compliance with § 1.114, after a notice of allowance has been given or mailed, in which case the period of adjustment set forth in § 1.703 shall be reduced by the number of days, if any, beginning on the day after the date of mailing of the notice of allowance under 35 U.S.C. 151 and ending on the date the amendment under § 1.312 or other paper was filed;

2. See Supernus Pharms., Inc. v. Iancu, 913 F.3d 1351 (Fed. Cir. 2019). In Supernus, the Federal Circuit found that the PTO erred in counting as applicant delay a period of time during which there was no action that the applicant could take to conclude prosecution of the patent. Such deduction exceeded the limitations of the statute. 126 days, the date of the RCE to the date of filing an IDS triggered by an EPO Communication, should not be deducted because "there was no action Supernus could have taken to advance prosecution of the patent during the 546-day period, particularly because the EPO notice of opposition did not yet exist." Id. at 1360.

After Supernus, the PTO revised 37 C.F.R. § 1.704(c)(10) to exclude after-allowance amendments or other after-allowance papers that are "expressly requested by the Office" from the after-allowance amendments or other after-allowance papers that will result in a reduction of PTA. That is, only a voluntary amendment under § 1.312 or other paper after the notice of allowance will result in a reduction of PTA. The notice also indicates that "[a]n amendment under § 1.312 or other paper going beyond what was requested by the USPTO (i.e., including material not expressly requested by the USPTO in addition to what was requested by the USPTO) would not be considered 'an amendment under § 1.312 or other paper expressly requested by the Office' under § 1.704(c)(10)." 85 Fed. Reg. 36,335 (June 16, 2020).

Pre-Supernus 37 C.F.R. § 1.704(c)(10) (applicable 2015-03-10 thru 2020-07-15) Submission of an amendment under §1.312 or other paper, other than a request for continued examination in compliance with § 1.114, after a notice of allowance has been given or mailed, in which case the period of adjustment set forth in § 1.703 shall be reduced by the lesser of: (i) The number of days, if any, beginning on the date the amendment under § 1.312 or other paper was filed and ending on the mailing date of the Office action or notice in response to the amendment under § 1.312 or such other paper; or (ii) Four months;.

3. 35 U.S.C. §154(b)(2) LIMITATIONS. —

(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.

4. 35 U.S.C. §154(b)(2) LIMITATIONS. —

(iii) The Director shall prescribe regulations establishing the circumstances that constitute a failure of an applicant to engage in reasonable efforts to conclude processing or examination of an application.

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