TAKEAWAY: In calculating patent term adjustment, the USPTO cannot count as applicant delay a period of time during which there was no possible action that the applicant could take to conclude prosecution.
In Supernus Pharmaceuticals, Inc. v. Iancu, decided on January 23, 2019, the U.S. Court of Appeals for the Federal Circuit reversed a district court ruling regarding the U.S. Patent and Trademark Office’s (USPTO’s) calculation of patent term adjustment (PTA). The Federal Circuit concluded that the USPTO deducted an amount of time beyond the period during which the applicant failed to undertake reasonable efforts to conclude prosecution, and thereby exceeded the limitations set by the PTA statute.
In 2006, Supernus Pharmaceuticals, Inc. (Supernus) filed patent applications in both the United States and Europe covering an osmotic drug delivery system. In February 2011, Supernus filed a Request for Continued Examination (RCE) in the U.S. application after a final rejection. Supernus’s European application was granted later that year, and in August 2012, the patent was the subject of a third-party opposition. Shortly after being notified of the opposition, Supernus filed a supplemental Information Disclosure Statement (IDS) in the U.S. application to provide the USPTO with the documents cited in the European opposition.
In calculating PTA when the U.S. patent issued, the USPTO deducted 886 days for applicant delay, corresponding to the period of time between filing the RCE and the supplemental IDS. Of this period, 546 days corresponded to the period between the filing of the RCE and notification of the opposition from the European Patent Office. There was no dispute that Supernus could not have undertaken any efforts to avoid delay in filing the IDS during this 546-day period, considering that the opposition had not yet been filed. The question before the Federal Circuit was whether the USPTO’s reduction of PTA was permissible under the PTA statute, which provides that “[t]he period of adjustment of the term of a patent . . . shall be reduced by a period equal to the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application.” 35 U.S.C. § 154(b)(2)(C)(i).
The Federal Circuit first concluded that the language of the PTA statute was clear and unambiguous, and therefore the USPTO’s interpretation should not be given deference. The court noted that the statute imposes two limitations: i) that any reduction to PTA be equal to the period of time during which an applicant fails to engage in reasonable efforts, and ii) that the reduction of the PTA be tied to the specific time period during which the applicant fails to engage in reasonable efforts. The court then reasoned that deductions corresponding to a period of time during which there was no action that the applicant could take to conclude prosecution “would not be ‘equal to’ and would instead exceed the time during which an applicant failed to engage in reasonable efforts.” Slip op at 15-16. Based on this rationale, the court found the USPTO exceeded its authority to deduct from PTA, and the court therefore reversed and remanded the district court’s ruling.
In Supernus, the court reiterated Congress’s intent in enacting the PTA statute, namely “to discourage dilatory conduct by patent applicant and reward applicants that take action to conclude prosecution” and to “not adversely impact applicants . . . who could have done nothing to advance prosecution.” Id. at 18. The court’s ruling provides guidance for practitioners when verifying PTA to recognize when it may be appropriate to challenge an impermissible or unfair reduction of PTA based on circumstances beyond an applicant’s control.