In a Federal Register Notice issued December 28, 2011, the USPTO announced that it is considering changes to the Patent Term Adjustment (PTA) rules relating to “appellate review by the Board.” I have written previously about the post-Notice of Appeal gap left by the current PTA rules, and believe that these new proposed changes would go far to close that gap, although they will not benefit all applications on appeal. The USPTO will accept written comments on these proposed rule changes through January 27, 2012.  

The Patent Term Adjustment Statute

The PTA statute (35 USC § 154(b)) compensates applicants for three different types of USPTO 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.

Patent Term Adjustment & Appeals

PTA for A delay is awarded when the USPTO fails to “respond . . . to an appeal . . . within 4 months after the date on which . . . appeal was taken.”

On the other hand, PTA for B delay (also referred to as “3 year” delay) is not awarded for

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.

(PTA for B delay also is not awarded for any time consumed by a request for continued examination.)

As noted above, PTA for C delay can accrue for the delays that are excluded from B delay. With regard to C delay, however, PTA only accrues for

appellate review by the Board of Patent Appeals and Interferences or by a Federal court in a case in which the patent was issued under a decision in the review reversing an adverse determination of patentability . . . .

Thus, 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 does not win at the Board, no PTA is awarded for the time spent on appeal, even if the application is remanded for further prosecution.

The Post-Notice of Appeal Patent Term Adjustment Gap

Under the USPTO’s current rules, B delay does not accrue once a Notice of Appeal is filed, even if it is the USPTO Examiner that delays the proceedings, such as by taking a long time to review the Appeal Brief and then reopening prosecution. The USPTO has justified this interpretation of 35 USC § 154(b)(1)(B) as being parallel to the provisions of 35 USC § 154(b)(1)(C)(iii). The latter section of the statute provides that when prosecution 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 . . . .

The USPTO currently measures the “pendency of the proceeding” under 35 USC § 154(b)(1)(C)(iii) from the date of the Notice of Appeal, based on previous statutory language from the Uruguay Round Agreements Act (URAA).

The USPTO’s New Proposal To Address The Post-Notice of Appeal PTA Gap

As set forth in the December 28, 2011 Federal Register Notice, the USPTO is proposing to change the PTA rules such that the carve-out from B delay due to “time consumed by appellate review” does not occur until the Board assumes jurisdiction over the appeal, instead of the date that a Notice of Appeal is filed. The carve-out would be defined as:

The number of days, if any, in the period beginning on the date on which jurisdiction over the application passes to the Board of Patent Appeals and Interferences under § 41.35 of this title and ending on the date of the last decision by the Board of Patent Appeals and Interferences or by a Federal court in an appeal under 35 USC § 141 or a civil action under 35 USC § 145.

Parallel amendments would be made to the rule for calculating the award for C delay, which would be:

the sum of the number of days, if any, in the period beginning on the date on which jurisdiction over the application passes to the Board of Patent Appeals and Interferences under § 41.35 of this title and ending on the date of a final decision in favor of the applicant by the Board of Patent Appeals and Interferences or by a Federal court in an appeal under 35 USC § 141 or a civil action under 35 USC § 145.

The USPTO notes that these amendments are consistent with the recent changes to the rules governing ex parte appeals before the Board (effective January 23, 2012) which provide that jurisdiction passes to the Board at the earlier of the filing of the Reply Brief or upon the expiration of the time in which to file a Reply Brief (e.g., not upon the filing of a Notice of Appeal).

The USPTO also proposes to define a new type of applicant delay, relating to prosecution after a Notice of Appeal is filed. In particular, applicant delay will accrue if an applicant takes more than two months to file a compliant Appeal Brief or Request for Continued Examination:

Failure to file an appeal brief in compliance with § 41.37 within two months from the date on which a notice of appeal to the Board of Patent Appeals and Interferences was filed under 35 USC § 134 and § 41.31 of this title, 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 two months from the date on which a notice of appeal to the Board of Patent Appeals and Interferences was filed under 35 USC § 134 and § 41.31 of this title and ending on the date an appeal brief in compliance with 41.37 or a request for continued examination in compliance with § 1.114 was filed

Reduced Awards For C Delay, Greater Awards For B Delay

As discussed in the Federal Register Notice, one effect of these proposed changes will be to shorten the time period awarded for C delay, because that award will not begin to accrue until jurisdiction passes to the Board, whereas now it begins to accrue when a Notice of Appeal is filed.

On the other hand, these proposed changes potentially will lengthen the time period awarded for B delay, because the carve-out for appellate review will not start until jurisdiction passes to the Board, whereas now B delay ceases accruing when a Notice of Appeal is filed.

Thus, for applications in which no Request for Continued Examination has been filed (an independent carve-out for B delay), B delay would continue to accrue as the applicant prepares and files an Appeal Brief, the USPTO Examiner issues an Examiner’s Answer, and the applicant prepares and files a Reply Brief. These post-Notice of Appeal, pre-Board jurisdiction activities can take at least 6-12 months.

In another common scenario, B delay would continue to accrue as the applicant prepares and files an Appeal Brief and the USPTO Examiner reviews the application and decides to reopen prosecution—a scenario that the current PTA rules deprive of any PTA. 

The USPTO’s Previous Proposal To Address The Post-Notice of Appeal PTA Gap

On April 6, 2011, the USPTO announced proposed changes that would have addressed the post-notice of appeal PTA gap in a different way, by treating an examiner’s decision to reopen prosecution after a notice of appeal as a “decision in the review reversing an adverse determination of patentability” under 35 USC § 154(b)(1)(C)(iii). According to the proposal, the PTA award “would equal the number of days in the period beginning on the date on which a notice of appeal . . . was filed . . . and ending on the date of mailing of the Office action under 35 USC § 132 or a notice of allowance under 35 USC § 151.”

I had concerns with the previous proposal because it struck me as being inconsistent with the plain language of the statute, and so beyond the USPTO’s authority. The previous proposal in effect deemed a decision by the USPTO to be a decision of the Board, which was inconsistent with other USPTO rules and previous USPTO decisions.

The December 28, 2011 Federal Register Notice states that the USPTO received comments in response to the April 6, 2011 proposal, including “several comments suggesting that a better approach would be to treat the appellate review period as beginning when jurisdiction passes to the [Board], rather than on the date a notice of appeal . . . was filed.” It is interesting to see that the USPTO gave serious consideration to these suggestions and “decided to seek public comment on this approach.” This responsiveness should encourage stakeholders to provide serious feedback to the USPTO on this and other proposed rulemakings.

A Better Solution

Although the new proposed changes will not benefit all applications on appeal, I think that they will go far to close the post-Notice of Appeal gap for most applications. It will be interesting to see if the USPTO receives any written comments opposing these proposed rule changes, and how any further suggestions are incorporated into the final rule changes.