On October 4, 2019, the United States Patent and Trademark Office (USPTO) published a notice of proposed rulemaking to revise the rules of prosecution practice pertaining to patent term adjustment (“PTA”) in view of the decision by the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) in Supernus Pharm., Inc. v. Iancu, 913 F.3d 1351 (Fed. Cir. 2019) (“Supernus”). The Federal Circuit held in Supernus that a reduction of PTA under 35 U.S.C. 154(b)(2)(C) must be equal to the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application. This holding means that the regulations pertaining to reduction of period of adjustment under 37 CFR 1.704 need to be revised. Currently 37 CFR 1.704 specifies reduction amounts that correspond to particular actions taken by the applicant. The proposed rule change will modify the following provisions of 37 CFR 1.704 such that they will instead explicitly quantify reduction of PTA as “the period from the beginning to the end of the applicant’s failure to engage in reasonable efforts to conclude prosecution”:

  • deferral of issuance of a patent (37 CFR 1.704(c)(2));
  • abandonment of an application (37 CFR 1.704(c)(3));
  • submission of a preliminary amendment (37 CFR 1.704(c)(6));
  • submission of papers after a decision by the Patent Trial and Appeal Board or by a Federal court (37 CFR 1.704(c)(9)); and
  • submission of papers after a notice of allowance under 35 U.S.C. 151 (37 CFR 1.704(c)(10)).

Written comments must be received on or before December 3, 2019.

Section 154 of Title 35 of the U.S. Code governs the contents and term of patents, as well as provisional rights. The patent term adjustment provisions were added to statutory law in 1999 as a countermeasure against the potential threat of the application process consuming too much of a patent’s lifespan. Under Section 154(b)(1), a number of days could be added to the term of a patent to compensate the applicant for delays that were the fault of the USPTO. Knowing that the applicant may also be at fault for delays in prosecution, Congress added 154(b)(2)(C)(i) to allow the USPTO to reduce those awarded patent term adjustment days “equal to the period of time the applicant failed to engage in reasonable efforts to conclude prosecution of the application.” Congress then designated the Director of the USPTO with authority to prescribe regulations establishing the circumstances that constituted failure to engage in reasonable efforts.

Supernus involved a pharmaceutical company challenging the USPTO’s reduction of six-hundred forty six (646) days against a PTA of 2,321 days corresponding to their patent application. The challenged reduction included a period of five-hundred forty six (546) days beginning when Supernus filed their request for continued examination (“RCE”) and the moment they filed a supplemental information disclosure statement (“IDS”), including a notice of opposition against their related European patent. Supernus conceded that the time between finding out about the opposition and filing the IDS – one hundred days – should be deducted against the PTA, but argued that the remaining five-hundred forty six should not because there was no reasonable action it could have taken during that period. See Supernus, 913 F.3d at 1360.

On its way to holding for the appellants, the Federal Circuit applied the Chevron two-step analysis and concluded that the USPTO’s interpretation of its own authority as arbitrary and capricious. Noting that the statute gave express authority to the USPTO to regulate what circumstances constitute failure to engage in reasonable efforts, the Court concluded that the plain language of the statute prohibited the USPTO from reducing PTA by an amount exceeding the time the applicant failed to engage in reasonable efforts. Id. at 1358-59. In other words, reduction of PTA may not include periods of time where no course of action can be taken by the applicant to help conclude the prosecution of the application. Id.

The USPTO has stated that while prior notice and opportunity for public comment for the proposed rulemaking are not required pursuant to 5 U.S.C. 553(b) or (c) or any other law, the Office has chosen to seek public comment to benefit from the public’s input. As stated above, those seeking to submit comments must do so by December 3, 2019.