Yet another complaint has been filed against the USPTO challenging Patent Term Adjustment. The issue raised in Oncolytics Biotech Inc. v. Kappos is whether a deficient Office Action that was subsequently vacated by the USPTO nevertheless satisfied the USPTO’s obligation to take action within four months of the applicant’s previous reply.

The Patent At Issue

Oncolytics is the assignee of U.S. 7,803,385, directed to isolated reoviruses that may be useful in the therapy of proliferative disorders. The patent issued on September 28, 2010, and originally was awarded 0 days PTA. In its complaint, Oncolytics seeks 122 days PTA.

The USPTO Delay At Issue

An application accrues PTA for USPTO delay when the USPTO fails to issue an Office Action (or Notice of Allowance) within four months of a reply, in accordance with 35 USC §154(b)(1)(A)(ii).

Oncolytics filed a reply to a Restriction Requirement on May 6, 2009. An Office Action was mailed August 26, 2009, but that Office Action subsequently was “vacated” by the USPTO and a new Office Action was issued on January 26, 2010, 122 days longer than four months after the May 6, 2009 reply.

Oncolytics is requesting 122 days PTA for the USPTO delay between the May 6. 2009 reply and the January 26, 2010 Office Action.

The USPTO’s First PTA Decision

In a Decision dated August 9, 2010, the USPTO “dismissed” Oncolytic’s PTA request, asserting that the August 26, 2009 Office Action satisfied the USPTO’s obligation to issue an Office Action within four months of the reply. The USPTO offered two reasons for its decision:

The fact that the Office later withdrew the non-final Office action does not negate the fact that the Office took action . . . on August 24, 2009.

[T]he examiner does not have the authority to vacate, rescind, or withdraw an Office action. Unless vacated by the Technology Center Director, for purposes of calculating [PTA], the action originally mailed by the examiner on August 24, 2009, will be used to calculate the amount of Office delay.

Oncolytic’s Request for Reconsideration

Oncolytics filed a Request for Reconsideration, noting the following:

  • The August 2009 Office Action contained “inadequacies” that were discussed during an in-person interview on October 29, 2009.
  • The Interview Summary issued by the examiner acknowledged “the possibility of a new action vacating the first action.”
  • The January 2010 Office Action stated that “the previous Office Action mailed on August 24, 2009, is vacated in favor of the instant Office Action.”

Oncolytics therefore questioned the factual and legal basis for the USPTO’s assertion that the Examiner did not have the authority to “vacate” the August 2009 Office Action.

Oncolytics also asserted that the deficiencies of the August 2009 Office Action were such that it did not qualify as an action under 35 USC § 132.

The USPTO’s Second PTA Decision

In a Decision dated February 16, 2011, the USPTO “denied” Oncolytic’s PTA request, refining it’s position on the status of the August 2009 Office Action. In particular, the USPTO asserted:

The vacatur of an Office action signifies that the Office action has been set aside . . . . The vacatur of an Office action, however, does not signify that the vacated Office Action is void ab initio and is to be treated as if the USPTO had never issued the Office action.

The USPTO explained that an Office Action would be void ab initio only if it would be appropriate to “expunge” the Action from the record, such as if it were issued “by an employee who does not have the authority to issue that type of Office action,” if it were issued “in the wrong application,” or if it were issued with “language not appropriate for inclusion in an official document.”

(Where did it get these examples?!)

The USPTO asserts that the only time that an Office Action would be discounted for PTA purposes is if it were “expunged from the record.” Because expunging was “not warranted” in Oncolytics’ case, the August 2009 response was found to satisfy the USPTO’s obligation to issue an Action within four months of the May 2009 reply, and so stopped the clock running under 35 USC §154(b)(1)(A)(ii).

One-Sided Application of the PTA Statute

This case is an infuriating example of the imbalanced way in which the USPTO applies the PTA statute.

As I discussed in this article, if an applicant files a “non-compliant” response, that response does not stop the clock running for applicant delay. Instead, an applicant can be charged with “delay” for the entire time until the Examiner notices the deficiency and the applicant corrects it.

Why then should a deficient Office Action stop the clock running on USPTO delay?

Wasn’t prosecution delayed while the applicant awaited a new Office Action?

The USPTO’s strict interpretation here of when a paper can be “void ab initio” also is inconsistent with its position in other situations. For example, when prosecution is reopened long after the issue fee has been paid, the USPTO denies any obligation to award PTA for its failure to grant the patent within four months of the issue fee payment. The USPTO asserts that whatever led to the decision to reopen prosecution retroactively negates the previous finding that all requirements for patentability were satisfied, and so relieves the USPTO of any obligation to have granted the patent within the statutory four-month time period.  See 65 Fed. Reg. 56366, 56369 (Sep. 18, 2000) (explaining the USPTO’s interpretation of 37 CFR § 1.703(a)(6)).

Is discovering a new issue or uncovering a new reference comparable to the USPTO’s “extremely rare situations” that would justify expungement?

Timing of the USPTO’s Final Decision

This case does not appear to suffer from the issue of the relative timing of USPTO and district court review of PTA awards that has arisen in other cases. Oncolytics was lucky to receive the USPTO’s “final” decision within 180 days of the patent grant date, although it only had a few weeks to spare. Still, this case shows the significance of obtaining the USPTO’s final decision before bringing a district court action, because the USPTO significantly changed its rationale between its original and final decisions.