[author: Courtenay C. Brinckerhoff]
Although 35 USC § 21(b) provides that a response that falls due on a weekend or Federal holiday is timely when filed on the next business day, we often try to file a response before such a deadline because the USPTO has interpreted the relevant provision of the Patent Term Adjustment (PTA) statute as not being subject to that grace provision. That practice can come to an end for three month response deadlines, because the District Court for the District of Columbia has determined that the USPTO’s interpretation is not correct, and the USPTO did not appeal that decision.
Arqule, Inc. v. Kappos
I first wrote about this case in May 2011, shortly before the district court rendered its decision. Arqule’s patent (U.S. 7,713,969) was granted with 1127 days of PTA, but Arqule believed that it was entitled to one additional day of PTA.
The Relevant Statutes
The PTA statute (35 USC § 154(b)(2)(C)) provides for a deduction from PTA “equal to the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application” and expressly deems taking “in excess of 3 months . . . to respond” as such a failure.
On the other hand, 35 USC § 21(b) expressly provides a grace period when a response deadline falls on a weekend or Federal holiday:
When the day, or the last day, for taking any action or paying any fee in the United States Patent and Trademark Office falls on Saturday, Sunday, or a Federal holiday within the District of Columbia, the action may be taken, or fee paid, on the next succeeding secular or business day.
The question presented in this case was whether the 3 month period set forth in 35 USC § 154(b)(2)(C) is subject to the grace period of 35 USC § 21(b).
The District Court’s Analysis
As noted by the district court, an agency’s interpretation of a statute is reviewed under the Chevron framework, which includes a two-step process:
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In the first step, “the court examines the statute de novo, applying the traditional tools of statutory construction in order to discern whether Congress has spoken directly to the question at issue.” If the meaning of the statute is clear, the agency interpretation is entitled to no deference, and the court “must give effect to the unambiguously expressed intent of Congress.”
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The second step is necessary only if the court determines that Congress has not directly addressed the question at hand. In that case, the court must decide whether “the agency’s answer is based on a permissible construction of the statute.”
The district court’s analysis in this case started and ended with Chevron step one. The court noted that § 21(b) broadly applies to “any action an applicant can take,” from satisfying a new application filing deadline to complying with a response deadline. The court rejected the USPTO’s interpretation of § 154(b)(2)(C) as falling outside the reach of § 21(b), noting that the USPTO’s interpretation “violates two traditional canons of statutory interpretation.”
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The USPTO “fails to read [the PTA statute] in the context of the overall statutory scheme.
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The USPTO fails “to construe related statutory provisions in a similar fashion.”
The district court also was dissatisfied by the inconsistent result that flows from the USPTO’s interpretation:
an applicant who receives a PTO request with a three-month deadline may respond in a timely manner under § 133 [(which is recognized to be subject to § 21(b)] but still be charged with applicant delay under [the PTA statute].
The court found that this inconsistency in effect fails to give full effect to § 21(b), and so violates another canon of statutory construction.
Having found that the statute is clear, the court held that the USPTO’s interpretation of § 154(b)(2)(C) was incorrect, and awarded Arqule the additional day of PTA that it had requested.
The Reach Of Arqule
Although the specific issue raised by Arqule generally will amount to only a few days of additional PTA, it does relieve applicants of a peculiar procedural burden. It would be nice if the USPTO would review other aspects of its PTA rules that are inconsistent with other filing deadlines, such as those related to Information Disclosure Statements. For example, while 37 CFR § 1.97 outlines one framework for timely submission of IDSs, the PTA rules impose different (shorter) filing deadlines. While the legal issues surrounding the IDS PTA deductions may be less compelling because they relate to inconsistencies between different USPTO rules, the inconsistencies still may support a finding that the more burdensome PTA deadlines are “arbitrary and capricious.”
Relax, But Verify
If you are facing a three month resposne deadline that falls on July 4th, you can celebrate your freedom from the USPTO’s strict interpretation of § 154(b)(2)(C), and put off your filing until July 5th. However, you should make a note to verify any PTA awarded to any affected application. While we have been able to confirm that the USPTO will grant a request for reconsideration of a PTA award based on this court decision, we have not been able to determine whether the USPTO has updated its PTA calculator to ensure that its initial PTA awards are in accordance with this aspect of the law.
Note: The America Invents Act changed the jurisdiction over PTA cases from the District Court for the District of Columbia to the District Court for the Eastern District of Virginia, so PTA cases filed on or after September 16, 2011 should be brought in that court.
