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IP Alert: Federal Circuit Limits Patent Term Adjustment

February 26, 2015

Today, in Gilead Sciences, Inc. v. Lee, the Court of Appeals for the Federal Circuit again addressed the rules relating to patent term adjustment (PTA). Affirming a decision of the U.S. Patent and Trademark Office (USPTO), the court concluded that the filing of a supplemental information disclosure statement (IDS) after the mailing of a restriction requirement—but before a first office action on the merits—constitutes a failure to engage in “reasonable efforts to conclude prosecution of the application.” Like many other PTA-related decisions, today’s Gilead decision is of principal concern to pharmaceutical companies and other entities concerned with maximizing patent term.

Gilead owns a patent directed toward the drug cobicistat, which is used in the treatment of HIV infection. After filing its patent application in 2008, Gilead filed a number of IDSs before the patent examiner took up the case for review. The examiner issued a restriction requirement on November 18, 2009. On February 18, 2010, Gilead responded to the restriction requirement. Subsequently, on April 16, 2010, Gilead filed a supplemental IDS. The examiner did not issue a first substantive office action until May 13, 2010.

Eventually, Gilead successfully convinced the examiner to grant its patent. The USPTO accorded Gilead some PTA based on prosecution delays, but reduced the available PTA by 57 days, the period between Gilead’s initial response on February 18 and its filing of the supplemental IDS. Gilead opposed this reduction, arguing that its April IDS filing could not have led to any delay in examination. Gilead asserted that the IDS did not cause any delay because the examiner had the IDS in hand when issuing the office action. Gilead further pointed out that its restriction requirement response had not even been forwarded to the examiner until March 12, 2010.

The USPTO denied Gilead’s petition. Gilead subsequently sued the USPTO in the Eastern District of Virginia.  Upon consideration of cross motions for summary judgment, the district court granted summary judgment in favor of the USPTO. 

On appeal, the Federal Circuit affirmed. The court observed that the question at issue entailed review of an agency’s statutory interpretation, and therefore the court needed to apply the two-step framework established in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., a 1984 Supreme Court case. The first step of the Chevron inquiry asks whether Congress “directly addressed the precise question at issue.” The court concluded that in this case Congress had not done so, because the applicable statute “employs broad language in directing the PTO to prescribe” applicant delay.

Turning then to the second step of the Chevron inquiry, the court inquired “whether the [PTO’s] answer is based on a permissible construction of the statute.” The court concluded that the USPTO’s construction of the statute was, in fact, permissible, determining that the broad language of the statute “demonstrates Congress intended the PTO to employ its expertise in identifying applicant conduct demonstrating a lack of ‘reasonable efforts to conclude processing or examination of an application.’” The court concluded that it was reasonable to construe the term adjustment statute to penalize not only applicant conduct or behavior that actually resulted in delay, but also conduct having the potential to result in delay, irrespective of whether such delay actually occurred. 

The Gilead decision may portend the result in other cases challenging the USPTO’s resolution of arguably ambiguous questions of interpretation of the PTA statutes. For more information, please contact Fitch Even partner Allen E. Hoover, author of this alert.

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