A Different Challenge to the Post-Notice of Appeal Patent Term Adjustment Problem

Deca-Medics, Inc. has filed a complaint in the U.S. District Court for the Eastern District of Virginia challenging a Patent Term Adjustment (PTA) award based on how its patent application was processed after a Notice of Appeal was filed. While I have written about the problem with the USPTO’s interpretation of 35 USC § 154(b)(1)(B)(ii) and the USPTO is considering changing the rule that interprets that portion of the PTA statute, Deca-Medics takes a different approach in its complaint.

The Deca-Medics Prosecution Delays

Deca-Medics challenges the PTA awarded to U.S. Patent 8,092,404. The events surrounding the delay at issue are outlined below:

April 21, 2009: USPTO issues final Office Action

October 16, 2009: Deca-Medics files Notice of Appeal with Extension of Time

May 17, 2012: Deca-Medics files Appeal Brief with Extension of Time

August 30, 2010: Deca-Medics files revised Appeal Brief with Extension of Time

February 16, 2011: USPTO issues new Office Action withdrawing April 21, 2009 final Office Action

According to the Deca-Medics complaint, the USPTO’s PTA award for the ’404 patent does not include any award for the delays during this time period.

The Statutory Framework

The PTA issue in this case stems from the award for “B” delay, which accrues when the USPTO fails to issue a patent within three years of the actual filing date of the patent application. The relevant section of the PTA statute (§ 154(b)(1)(B)(ii)) excludes from a “B” delay award

any time consumed by appellate review by the Board of Patent Appeals or Interferences ….

On the other hand, the “C” delay provision of the PTA statute compensates applicants for delays due to an appeal, but only in cases where “the patent was issued under a decision in the review reversing an adverse determination of patentability.”

This means that if an applicant appeals a rejection and wins at the Board, B delay will not accrue while the application was on appeal, but C delay will. But if an applicant files a Notice of Appeal and never gets to the Board, the current USPTO rules do not award any PTA for post-Notice of Appeal delays.

While the USPTO announced in a December 28, 2011 Federal Register Notice that it was considering changing the PTA rules such that the carve-out from B delay due to “time consumed by appellate review” would not commence until the Board assumes jurisdiction over the appeal instead of the date that a Notice of Appeal is filed, the USPTO has yet to implement that change.

The Deca-Medics Complaint

Instead of challenging the USPTO’s interpretation of the “B” delay carve-out, the Deca-Medics complaint asserts that it should be awarded “C” delay as if it was the Board, and not the examiner, who withdrew the April 20, 2009 final Office Action.  Deca-Medics takes the position that the USPTO’s unilateral decision to reopen prosecution deprived the patent of PTA that it would have been awarded if its appeal had been permitted to proceed to the Board and the Board had reversed the rejections. Deca-Medics argues that the USPTO violates the intent of the PTA statute by treating applications in which the rejections are withdrawn after a Notice of Appeal has been filed the same as applications that receive an adverse Board decision on appeal.

Deca-Medics’ position appears to be in line with an earlier proposed rule change that the USPTO announced in an April 6, 2011 Federal Register Notice.  In accordance with that proposal, the USPTO would have treated an examiner’s decision to reopen prosecution after a notice of appeal as a “decision in the review reversing an adverse determination of patentability” under 35 USC § 154(b)(1)(C)(iii).  As such, the application would accrue “C” delay “equal [to] the number of days in the period beginning on the date on which a notice of appeal . . . was filed . . . and ending on the date of mailing of the Office action under 35 USC § 132 or a notice of allowance under 35 USC § 151.” As I explained previously, I was not comfortable with that proposal, because I do not think it comports with the plan language of the statute, which refers to “appellate review by the Board.”

The USPTO Needs to Address the Post-Notice of Appeal PTA Problem

It will interesting to see how the USPTO responds to this complaint, and whether it prompts the USPTO to issue a final rule that addresses the post-Notice of Appeal PTA problem. Many patent applications endure USPTO delays after a Notice of Appeal is filed without jurisdiction ever being transferred to the Board. Given the general statutory intent to provide a “GUARANTEE OF PROMPT PATENT AND TRADEMARK OFFICE RESPONSES” and a “GUARANTEE OF NO MORE THAN 3-YEAR APPLICATION PENDENCY,” the USPTO’s refusal to account for its delays during this time period surely must be contrary to law.