Patent Term Adjustment

In Gilead Sciences, Inc. v. Lee (decided February 26, 2015), a panel of the Federal Circuit held that the Patent Office’s rules for calculating patent term adjustment (“PTA”) are not “overbroad and an unreasonable interpretation of the statute.” At issue in Gilead was the “interpretation and application of 35 U.S.C. § 154(b),” which granted the Director authority to “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.” Specifically, under that authority, the PTO promulgated a rule that filing a supplemental reply or other paper after a reply has been filed constitutes a “failure to engage in reasonable efforts to conclude prosecution of the application.”  37 C.F.R. 1.704(c)(8).

Gilead filed the application that issued as U.S. Patent No. 8,148,372 (“the ’374 patent”) on Feb. 22, 2008.  The PTO issued a restriction requirement on Nov. 18, 2009, and Gilead filed a response to a restriction requirement on Feb. 18, 2010. Fifty-seven days later, Gilead filed a supplemental IDS citing two co-pending Gilead patents. The PTO asserted that 37 C.F.R. § 1.704(c)(8) establishes that a submission of a supplemental IDS (“other paper”) after a response to a restriction requirement (“reply”) requires a reduction of PTA and thus reduced the PTA by 57 days.

At the District Court, Gilead asserted that the PTO’s interpretation and application of 35 U.S.C. § 154(b) in its case was “arbitrary, capricious, an abuse of discretion or otherwise not in accordance with the law and in excess of statutory jurisdiction, authority, or limitation” because its filing of the supplemental IDS did not cause an actual delay. The District Court granted the PTO’s motion for summary judgment.

A panel of the Federal Circuit affirmed the judgment of the District Court, applying the two-step test from Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). Under Chevron step-one, the panel found that Congress was silent on the precise issue before the court. Since Congress expressly delegated its authority to the Director of the PTO to prescribe regulations under 35 U.S.C. § 154(b)(2)(C)(iii), the panel gave deference to the PTO’s statutory interpretation under Chevron step-two. Under deferential review, the panel found that the PTO’s interpretation of 35 U.S.C. § 154(b), asserting that actual delay is not necessary for a PTA reduction, was reasonable. The panel held that “a reasonable interpretation of the statute is that Congress intended to sanction not only applicant conduct or behavior that result in actual delay, but also those having the potential to result in delay irrespective of whether such delay actually occurred.” The panel highlighted the significant time constraints faced by the PTO, particularly when responding to a reply by the applicant, and the broader effect that delays can have on other applications, not just the application at issue.

Even under the PTA rules as promulgated by the PTO, Gilead could have avoided the loss of 57 days of PTA.  Gilead filed an IDS with the response to the restriction requirement.  If Gilead had included the patents from the Supplemental IDS in the IDS that was filed with response to the restriction requirement, the PTA would not have been reduced.  This was possible because the patents that were cited in the Supplemental IDS were filed in 2008 (well before the response to the restriction requirement was filed). Gilead also could have waited and filed the IDS with its response to the non-final OA that was issued a month later.  This also would have saved the 57 days of PTA.

Summary By: Kyle Helgemoe, associate attorney at Fogg & Powers LLC; Posted: March 5, 2015

The information contained herein is not intended as legal advice but merely conveys general information about law and/or court decision(s).  This information should not be relied upon or used as a substitute for consultation with a licensed professional.  Please consult a licensed professional to obtain advice with respect to any particular legal issue or problem.