In an action that has advanced to the summary judgment stage, ArQule, Inc. is challenging the PTO’s practice of charging “applicant delay” when a response is filed on the next business day after a deadline that fell on a Federal holiday. While a decision in ArQule’s favor could impact numerous patents, the single day at issue is not likely to spawn an onslaught of litigation.

The Patent At Issue

The patent at issue is U.S. 7,713,969, directed to “Compositions and Methods for Treatment of Cancer,” and apparently related to a product that ArQule has in clinical trials.

The patent was granted with 1127 days of Patent Term Adjustment (PTA).

ArQule is seeking a total award of 1128 days PTA—one additional day.

The PTA Dispute

The PTA dispute in this case relates to the treatment of filings made on the first business day after a weekend or Federal holiday.

According to 35 USC § 21(b), a response that falls due on a weekend or Federal holiday is timely when filed on the next business day:

When the day, or the last day, for taking any action or paying any fee in the United States Patent and Trademark Office falls on Saturday, Sunday, or a Federal holiday within the District of Columbia, the action may be taken, or fee paid, on the next succeeding secular or business day.

On the other hand, the PTA statute (35 USC § 154(b)(2)(C)) provides for a deduction from PTA “equal to the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application” and expressly deems taking “in excess of 3 months . . . to respond” as such a failure.

The question presented in this case, then, is whether the 3 month period set forth in 35 USC § 154(b)(2)(C) is applied with the same weekend/holiday flexibility as other statutory time periods.

ArQule’s Request For Reconsideration

ArQule filed an “Application for Patent Term Adjustment” requesting reconsideration of the PTA award indicated on the Notice of Allowance. ArQule noted that the filing of the response the day after a Federal holiday did not amount to a “fail[ure] to engage in reasonable efforts to conclude processing or examination” because:

  • the filing of the response on the day after the Federal holiday could not have delayed prosecution because the USPTO was closed on the holiday
  • charging ArQule with delay is inconsistent with other USPTO rules that deem a response “timely” and do not require any extension of time when a response is filed the first business day after a Federal holiday
  • charging ArQule with delay is inconsistent with the flexibility applied to other statutory deadlines, including the 6-month statutory response period set forth in 35 USC § 133, the one-year grace periods embodied in 35 USC § 102(b), and the one-year filing deadlines reflected in 35 USC § 119(a).

The USPTO Decision

The USPTO denied ArQule’s request for reconsideration, but its comments were non-responsive and inapplicable to ArQule’s application.  For example, the USPTO cited 37 CFR 1.703(f), which relates to certificates of mailing:

The date indicated on any certificate of mailing or transmission under § 1.8 shall not be taken into account in this calculation.

The USPTO also cited advice that “Applicant may wish to consider the use of ‘the Express Mail Post Office to Addressee’ service . . . or facsimile transmission to be accorded the earliest possible filing date for patent term adjustment calculations.” From these citations, the USPTO concluded:

The USPTO “properly used November 12, 2009, the filing date of the reply . . . in calculating the patent term adjustment.

But the “actual filing date of the reply” was not at issue. Nor was a certificate of mailing used for the reply. Rather, ArQule filed it’s reply electronically on the first business day after a Federal holiday, and does not believe that such an otherwise timely filing warrants a PTA deduction under 35 USC § 154(b)(2)(C).

The USPTO did not address that issue in its Decision.

The USPTO’s Motion for Summary Judgment

In its motion for summary judgment, the USPTO argues that “ArQule fails to grasp that the calculation of applicant delay . . . is independent from, and unrelated to, the timeliness of an applicant’s submission.” The USPTO provides examples of responses that would be timely but still would incur a PTA deduction for applicant delay (such as if a six month response period were set), and responses that might not be timely but would not incur a PTA deduction (such as a response to a Restriction Requirement filed after two or three months).

The USPTO also emphasizes the mandatory language of 35 USC § 154(b)(2)(C) and its sweeping applicability:

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 3 months that are taken to respond to a notice from the Office . . . .

The USPTO does not address the mandatory language that also appears in 35 USC § 133:

Upon failure of the applicant to prosecute the application within six months after any action therein, of which notice has been given or mailed to the applicant, or within such shorter time, not less than thirty days, as fixed by the Director in such action, the application shall be regarded as abandoned by the parties thereto, unless it be shown to the satisfaction of the Director that such delay was unavoidable.

except to say that the “timeliness” requirement of § 133 is subject to the grace period set forth in § 21(b), while the “delay” provisions of § 154(b)(2)(C) are not. The USPTO draws a line between the statutes, stating that § 133 sets a time period for taking action (and is thus subject to § 21(b)) while § 154(b)(2)(C) does not.

(The USPTO does not address the language of 35 USC 102(b) or 35 USC 119(a), which also set forth time periods that are governed by § 21(b)).

The USPTO argues that ArQule’s position would negate the 3-month time period in § 154(b)(2)(C) by shielding any “timely” response from a PTA deduction, even if it was filed after six months.  But that is not ArQule’s position. Rather, ArQule simply argues that the 3-month time period set forth in the PTA statute should be applied with the flexibility mandated by § 21(b).

What Difference Will A Day Make?

It will be interesting to see how the district court resolves this question. While it is true that § 154(b)(2)(C) does not require applicants to file responses within 3 months to avoid abandonment, it does, in effect, set a time period for taking action to avoid a PTA deduction. Is that enough to bring it within the scope of § 21(b)?

It is even more interesting to realize that ArQule is challenging the USPTO over a single day of patent term. While a patent covering an important pharmaceutical product can hold its value through the end of its patent term, I think one reason that this aspect of the PTA statute has gone unchallenged for so long is that most patent holders do not believe that one day will make that much of a difference—especially when the cost/benefit analysis is undertaken soon after the patent issues, and possibly long before the product is even approved by the FDA. Still, if ArQule’s challenge is successful, it will be an important development for pharmaceutical patents.