Biotechnology patent applicants dissatisfied with the examination of their patent applications can look to the PTAB for relief by filing an appeal – but they will need to be very, very patient. The procedures created by the America Invents Act (AIA) for challenging U.S. patents – inter partes review, post grant review, and covered business methods – have transformed strategies for contesting the validity of patents. In just a few years, the Patent Trial and Appeal Board (PTAB) has become one of the busiest forums for contesting patent validity, due in part because the PTAB must complete its review within 18 months of receiving a petition. Patent applicants dissatisfied with a patent examiner’s rejection of their patent application may appeal the rejections to the same PTAB that administers AIA trials. But, these applicants cannot expect the PTAB to decide their appeal with the same timeliness with which the PTAB completes AIA trials.
The mandate for prompt disposition of AIA patent challenges has not been without repercussions for other aspects of the PTAB’s workload, including appeals.
Congress disfavors lengthy appeals, as evinced by a statutory framework that awards patent term adjustment for Patent Office delays. Congress has not, however, imposed a statutory time limit on the PTAB for resolving appeals. The mandate for prompt disposition of AIA trials has imposed significant burdens on the PTAB’s workload. The Patent Office hired more administrative patent judges to shoulder this burden, but the pendency of appeals has increased nevertheless.
To help manage its backlog of appeals, the PTO implemented two pilot programs in 2015, one that permits a party to expedite one appeal if the party withdraws a different appeal (in another application), and a second that permits “small entity” applicants to expedite appeals in exchange for making concessions to streamline the appeal process and limit the issues appealed. Although these programs were made available for up to 2000 petitions, only 22 expedited appeals petitions and 15 small entity petitions were filed between June 19, 2015, and January 6, 2016. These miniscule numbers undoubtedly reflect both the strategic importance of cases that have been appealed, and the substantial time and costs incurred for every application with a pending appeal.
Statistics published by the Patent Office show that those appealing rejections of applications in Patent Examining Group 1600, are experiencing long delays.
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Notably, although the backlog of appeals appears to have leveled off or fallen after a period of rapid growth, the backlog of biotechnology appeals – definable as those coming from Patent Examining Group 1600 – has been increasing. Group 1600 reportedly had the longest average appeal pendency of any art unit for Q4 of calendar year 2015:
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The Patent Office reports that a typical application that received a decision on appeal in March 2016 had been pending for seven years, a decrease of only about two months in the last two years.
A long appeal process can be a mixed blessing. For universities and small companies, the uncertainty over whether a patent will grant can adversely affect funding opportunities, partnering opportunities, and project valuations, and may influence decisions on whether to maintain a product development program at all. On the other hand, the possibility of a favorable patent term adjustment, adding days to the end of the patent term when a commercial product might be most valuable, may be a welcome consolation for some biotechnology applicants. Slow resolution of appeals also may be welcome if the appeal involves an issue of rapidly changing judge-made law, such as the Supreme Court’s interpretation of 35 USC §101 (patent-eligible subject matter.) Potential investors and the public generally benefit from the certainty provided by more rapid resolution of patent examination decisions.
One thing remains certain at the moment: biotechnology patent applicants looking to the PTAB for relief from examiners’ rejection will need to wait their turns in line for their appeals to be decided.