Since the Federal Circuit decision in Wyeth v. Kappos, we have been applying greater scrutiny to the USPTO’s interpretations of the Patent Term Adjustment (PTA) statute. While we previously reviewed the USPTO’s calculations to ensure that the USPTO delays and Applicant delays were correctly counted in accordance with the rules, we find ourselves more frequently questioning whether the rules themselves are in accord with the statute. Just like the Federal Circuit determined that the USPTO’s interpretation of 35 USC § 154(b)(2)(A) was inconsistent with the statute, I think that the USPTO’s interpretation of 35 USC § 154(b)(1)(B)(ii) improperly excludes time that has nothing to do with an actual appeal to the Board.
Patent Term Adjustment
The PTA statute (35 U.S.C. § 154(b)) was created to compensate for delays in the patent examination process that can eat away at the effective term of the patent, now that patent term is measured from the earliest U.S. priority date rather than the patent grant date. The statute provides “guarantees” against different types of USPTO delays, and requires a day-for-day deduction of Applicant delays against USPTO delays.
The Wyeth Decision
The PTA issue that was the subject of the Wyeth decision related to the interplay of the different types of delay:
“A” delay accrues when the PTO fails to act in accordance with set timeframes (such as issuing a first office action within 14 months, issuing a second action or allowance within 4 months of a response, and issuing a patent within 4 months of the Issue Fee payment).
“B” delay accrues when the PTO fails to issue a patent within three years of the actual filing date of the patent application.
“C” delay accrues when the application is involved in an interference or appeal, or is subject to a secrecy order.
The statute provides that “[t]o the extent that periods of delay . . . overlap, the period of adjustment . . . shall not exceed the actual number of days the issuance of the patent was delayed.”
Prior to Wyeth, the USPTO asserted that any A delay contributes to B delay, and thus “overlaps” with B delay. Under this interpretation, the PTO awarded PTA for only the longer of its A delay or its B delay, not both. The district court and the Federal Circuit disagreed with the USPTO’s reading of the statute, and held that periods of delay “overlap” only if they occur on the same calendar day. Thus, many patents that experience both A delay and B delay are entitled to a longer PTA award under Wyeth.
PTA For Appeals
The section of the statute that provides PTA for B delay (also referred to as “3 year” delay) includes three exceptions. B delay does not accrue after a Request for Continued Examination is filed or for delays requested by the Applicant. Additionally, Section 154(b)(1)(B)(ii) excludes
any time consumed by a [interference] proceeding under section 135(a), any time consumed by the imposition of a [secrecy] order under section 181, or any time consumed by appellate review by the Board of Patent Appeals or Interferences of by a Federal Court.
As noted above, however, PTA for C delay can accrue for the delays that are excluded from B delay.
With regard to delays due to an appeal, PTA only accrues in cases where “the patent was issued under a decision in the review reversing an adverse determination of patentability.” If an Applicant appeals a rejection and wins at the Board, B delay will not accrue while the application was on appeal, but C delay will. If an Applicant appeals a rejection and loses at the Board, it is not likely that a patent will grant from that application, so PTA is moot. But what happens if an Applicant files a Notice of Appeal and never gets to the Board? According to the USPTO, B delay does not accrue, even if it is the Examiner that delays the examination proceedings.
Notice of Appeal Practice
After filing a response to a “final” Office Action, an Applicant has to keep the application pending until the Examiner replies to the response. If the maximum six month response period draws to an end before the Examiner takes action, an Applicant will file a Notice of Appeal in order to keep the application pending. While in some cases the Applicant may end up pursuing an appeal to the Board, more often the Examiner will issue a Notice of Allowance or new non-final Office Action or the Applicant will file a Request for Continued Examination to continue prosecution before the Examiner.
When is an Appeal an Appeal?
We have had several cases where prosecution extended into the B delay period (more than 3 years after the filing date) and a Notice of Appeal was required to keep the application pending after a response to a final Office Action. We were surprised when the USPTO refused to award PTA for this time based on the B delay exclusion in 35 USC § 154(b)(1)(B)(ii).
As set forth above, this portion of the statute expressly excludes only “time consumed by appellate review by the Board,” but these applications never reached the Board. Indeed, Appeal Briefs were not even filed in these cases. The USPTO’s own rule, 37 CFR § 41.35, provides that jurisdiction does not pass to the Board until after all briefs and the examiner’s answer have been entered. Thus, the USPTO seems to be once again forcing an interpretation on the PTA statute that the statute itself does not tolerate.
The USPTO notes that when an Applicant is credited for a successful appeal, C delay accrues as of the filing date of the Notice of Appeal. But this calculation is supported by different language in 35 USC § 154(b)(1)(C)(iii), which provides that when grant is delayed due to appellate review by the Board,
the term of the patent shall be extended 1 day for each day of the pendency of the proceeding, order or review, as the case may be.
An Appealing PTA Issue
While the USPTO favors absolute harmony between the time period excluded from B delay and that encompassed by C delay, I have a hard time getting past the plain language of 35 USC § 154(b)(1)(B)(ii). Can it really be that “time consumed by appellate review by the Board” means time consumed by an Examiner deciding why the Applicant’s response did not overcome the rejection, conducting a new search to support a new Office Action, or preparing a Notice of Allowance? Will a court really agree that such an interpretation comports with the plain language of the statute?