Digest of Gilead Sciences, Inc. v. Lee, No. 2014-1159 (Fed. Cir. Feb. 26, 2015) (precedential). On appeal from E.D. Va. Before Dyk, Wallach, and Hughes.

Procedural Posture: Appeal from the district court’s grant of summary judgment that the U.S. Patent and Trademark Office (“PTO”) properly calculated the Patent Term Adjustment period for U.S. Pat. No. 8,148,374. CAFC affirmed.

  • Patent Term Adjustment: The Federal Circuit affirmed that the submission of a supplemental invention disclosure statement (“IDS”) after filing a response to a restriction requirement, but before a first Office Action on the merits is issued, constitutes applicant delay which reduces the period of adjustment under 35 U.S.C. § 154(b)(2)(C). Under this authority, the PTO promulgated 37 C.F.R. § 1.704(c)(8), which addresses this precise situation and provides that submitting a supplemental reply or other paper after a reply has already been filed (absent an express request from the examiner) constitutes a failure of the applicant to engage in reasonable efforts to conclude examination. Rejecting Gilead’s argument that Congress had intended to penalize only applicant conduct that resulted in an actual delay, the Federal Circuit applied the two-step framework of Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) to find that: (i) Congress did not directly address the issue of whether filing a supplemental IDS after submitting a reply to a restriction requirement constitutes a failure to engage in reasonable efforts to conclude prosecution of the application; and (ii) the PTO’s construction of § 154(b)(2)(C) was neither arbitrary, capricious, nor manifestly contrary to the statute, and was therefore permissible. The Federal Circuit noted that § 154(b)(2)(C)(iii) expressly delegated authority to the PTO to “prescribe regulations establishing the circumstances that constitute a failure of an applicant to engage in reasonable efforts to conclude processing or examination of an application.”