Patent term adjustment is not appropriate

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Where the patent was not issued under a decision in the Patent Trial and Appeal Board or federal court reversing an adverse determination of patentability, the United States Patent and Trademark Office did not err in concluding the plaintiff was not entitled to an extension.

Background

Before 1999, the term of a patent was 17 years, and it began to run from the date the patent issued. In part to speed up the process for patent review, the American Inventors Protection Act, or AIPA, changed the term of a patent to 20 years, but started that time from the date the first application for the patent was filed.

As a result of this change, delays in the United States Patent and Trademark Office’s, or USPTO, review of an application could reduce the term of the patent which ultimately issued. To address that problem, the AIPA provides for adjustment of the patent term for “any undue delays in patent examination caused by the PTO.” One of those, found in 35 U.S.C. § 154(b)(1)(C), grants adjustments based on the time an application is pending due to derivative proceedings, secrecy orders or appeals.

In this suit, plaintiff challenges the USPTO’s denial of its request for an 841-day increase in the term for the ‘476 patent. Pending before the court are the parties’ cross-motions for summary judgment.

Statutory text

Plaintiff argues that “the PTO’s interpretation and application of 35 U.S.C. § 154(b)(1)(C) is incorrect because it adds a new requirement to the statute, namely that a decision in the review reversing an adverse determination of patentability does not subject the claim at issue to a new rejection. In other words, plaintiff appears to be arguing that by subjecting claim 11 to a new ground of rejection, the PTAB necessarily reversed an adverse determination of patentability.

A patent term adjustment under § 154(b)(1)(C)(iii) is appropriate if the “patent was issued under a decision in the [PTAB or federal court] reversing an adverse determination of patentability.” This unambiguous language imposes two requirements: that an adverse determination of patentability be reversed and that the application reviewed in that appeal issue as a patent as a result of that reversal. Because neither of those requirements is met in plaintiff’s case, plaintiff fails to establish that defendant’s decision denying the patent term extension either violated the plain text of the statute or was arbitrary or capricious.

USPTO regulations

This conclusion is supported by a formal rule issued by the USPTO which provides that patent term extension for subsection (C)(iii) delay is only available following “a final decision in favor of the applicant.” The PTAB’s decision was not a final decision in favor of plaintiff on any of plaintiff’s claims. Plaintiff tries to avoid the impact of this regulation by citing Merck & Co. v. Kessler, 80 F.3d 1543 (Fed. Cir. 1996), to support its argument that this regulation is not entitled to Chevron deference. Merck held that Chevron deference was not appropriate for substantive rulemaking; however, a regulation like this one that “merely clarifies or explains existing law or regulations is ‘interpretative.’”

USPTO response to comments

Finally, the plain language of § 154 and the USPTO’s formal interpretive rule are consistent with the USPTO’s published responses to comments on its formal rulemaking. In response to a comment questioning which kinds of “successful appeals” warranted adjustments under § 154(b)(1)(C)(iii), the USPTO explained that a successful appeal included any decision that “reverses all of the rejections of at least one claim (without subjecting the claim to a new rejection).”
In other words, an appeal would be deemed successful if it ultimately rejected the examiner’s conclusion of unpatentability and did not substitute a new ground for finding the claim unpatentable. Because the decision on appeal of the ‘829 application clearly did not reverse the examiner’s ultimate conclusion rejecting all of the ‘829 application’s claims, this guidance plainly supports the USPTO’s denial of plaintiff’s patent term adjustment request.

Plaintiff’s motion for summary judgment denied. Defendant’s motion for summary judgment granted.

Sawstop Holding LLC v. Iancu, Case No. 19-cv-1198, Oct. 26, 2020. EDVA at Alexandria (Brinkema). VLW 020-3-541. 14 pp.