January 22, 2015

The USPTO Giveth and Taketh Away: New PTA Rules Following Novartis v. Lee

By Elisabeth A. Koral, Principal

On January 9, 2015, the final rules were published regarding patent term adjustment (PTA) following the decision in Novartis AG v. Lee 740 F.3d 593 (Fed. Cir. 2014).

Novartis Background

In Novartis, “B” delay under the PTA statute was at issue, which is a “[g]uarantee of no more than 3-year application pendency.” 35 U.S.C. §154(b)(1)(B). Specifically, if the USPTO fails to issue a patent within 3 years after the patent application filing date, PTA attributed to “B” delay is accrued for every day beyond the 3-year date. However, “any time consumed by continued examination of the application requested by applicant” is excluded from “B” delay. 35 U.S.C. §154(b)(1)(B)(i).

The Federal Circuit in Novartis confirmed that the time following the filing of an RCE is excluded from “B” delay regardless of when the RCE is filed (i.e., before or after the 3-year date). However, the Federal Circuit also held that such time consumed by continued examination does not include the time after the allowance. Therefore, applicant is entitled to “B” delay for the time between notice of allowance and issue even when an RCE was filed during prosecution.

The USPTO’s final rules (1) reflect the holding of Novartis but (2) also add a new type of applicant delay.

1. “B” Delay Accrues From After Notice Of Allowance To Issue—Revised §1.703

Effective Date and Applicability: The revisions to §1.703 are effective on January 9, 2015 and apply to any patent granted before, on, or after January 9, 2015.

Section 1.703(b)(1) is amended to provide that the time consumed by continued examination of the application under 35 U.S.C. § 132(b) is “[t]he number of days, if any, in the period beginning on the date on which any request for continued examination…under 35 U.S.C. § 132(b) was filed and ending on the date of mailing of the notice of allowance under 35 U.S.C. § 151”

The USPTO does note that the period of examination after the mailing of a notice of allowance resulting from the Office sua sponte reopening prosecution is not considered “time consumed by continued examination” unless applicant subsequently files an RCE.

The USPTO also provides clarification for the following scenarios.

2. New Applicant Delay—Revised §1.704

Effective Date and Applicability: The revisions to §1.704 are effective on March 10, 2015 and apply to all original applications (other than for a design patent) filed on or after May 29, 2000, and to patents issued on such applications.

(i) EXCEPT: 37 CFR § 1.704(c)(12) applies only to applications in which an RCE under 35 U.S.C. § 132(b) and 37 CFR § 1.114 is filed on or after March 10, 2015.

The USPTO final rules establish that filing an RCE after a notice of allowance now constitutes failure of the applicant to engage in reasonable efforts to conclude prosecution with one exception as further discussed below. Thus, a new type of applicant delay has been created. Consequently, even though the amendments to § 1.703(b)(1) now provide for accrual of “B delay” after a notice of allowance and until issue, if an RCE is filed after the notice of allowance, such additional “B” delay can be reduced due to the revisions to § 1.704(c)(12).

Thus, § 1.704(c)(12) is amended to state:

[s]ubmission of a request for continued examination under 35 U.S.C. 132(b) after any notice of allowance under 35 U.S.C. 151 has been mailed, in which case the period of adjustment set forth in § 1.703 shall be reduced by the number of days, if any, beginning on the day after the date of mailing of the notice of allowance…and ending on the date the request for continued examination…was filed.

Prior to this rule change, the USPTO did not consider filing of an RCE after a notice of allowance to be applicant delay and the Novartis case does not address such applicant delay. However, the USPTO explains that this provision is necessary to prohibit an applicant from attaining additional PTA after a notice allowance is mailed by filing further RCE(s).

§1.704(d) Exception: As mentioned above, there is one way to avoid triggering this new type of applicant delay when filing an RCE after a notice of allowance. Namely, § 1.704(d) is amended to provide that an RCE with submission of only an IDS will not be considered a failure to engage in reasonable efforts to conclude prosecution of the application under § 1.704(c)(12), if the RCE is accompanied by the statement provided for in § 1.704(d) (i.e., the information submitted in the IDS was cited in or is a patent office communication in a counterpart application (foreign or U.S.) and such information is submitted to the Office within 30 days of receipt of the patent office communication by any individual designated in § 1.56(c)).

Further Clarification Regarding Submission of Papers After Notice of Allowance: Lastly, the USPTO also provided a list of papers which may be submitted after notice of allowance that do not trigger applicant delay under § 1.704(c)(10) as follows:

  1. an issue fee(s) transmittal (PTOL-85B);
  2. a power of attorney;
  3. a power to inspect;
  4. a change of address;
  5. a change of entity status (micro, small, non-small);
  6. a response to the examiner’s reasons for allowance or a request to correct an error or omission in the “notice of allowance” or “notice of allowability”;
  7. status letters;
  8. requests for a refund;
  9. an inventor’s oath or declaration;
  10. an IDS with a statement in compliance with § 1.704(d);
  11. the resubmission by applicant of unlocatable paper(s) previously filed in the application(§ 1.251);
  12. a request for acknowledgment of an IDS in compliance with §§ 1.97 and 1.98, provided that the applicant had requested that the examiner acknowledge the IDS prior to the notice of allowance, or the request for acknowledgement was applicant’s first opportunity to request that the examiner acknowledge the IDS;
  13. comments on the substance of an interview where the applicant-initiated interview resulted in a notice of allowance; and
  14. letters related to government interests (e.g., those between NASA and the Office).