Gilead Sciences, Inc. v. Lee

Addressing the issue of whether the U.S. Patent and Trademark Office (PTO) properly calculated the Patent Term Adjustment (PTA) based on an applicant’s filing of a supplemental information disclosure statement (IDS), the U.S. Court of Appeals for the Federal Circuit affirmed a district court’s summary judgment in favor of the PTO, finding that any delays in prosecution caused by an applicant, irrespective of whether the applicant’s conduct actually results in a delay in prosecution, will result in a reduction of the PTA.  Gilead Sciences, Inc. v. Lee, Case No. 14-1159 (Fed. Cir, Feb. 26, 2015) (Wallach, J.).

In 1994, Congress changed the method of calculating a patent term to 20 years after the application is filed.  Since the patent term is no longer based on the date of issuance, Congress enacted provisions under which an applicant can seek a PTA in order to account for delays caused by the PTO between the filing and issuance dates.  There are three categories under which an applicant can seek a PTA if the PTO does not issue a notification under §132 or provide a motion of allowance under §151 within 14 months of an application filing, if the PTO fails to issue a patent three years after the actual filing date of the application, and if there is a delay due to an interference, secrecy order or successful appeal.  The statute also accounts for delays caused by the applicant which will reduce the PTA if the applicant failed to engage in reasonable efforts to conclude prosecution of the application. 35 U.S.C. §154.

Gilead filed its patent application on February 22, 2008.  On November 18, 2009, the PTO issued a restriction requirement.  Gilead filed a response to the restriction requirement on February 18, 2010, electing a group for further prosecution.  While waiting for the PTO to issue its first office action, Gilead filed a supplemental IDS on April 16, 2010 that disclosed two other co-pending Gilead applications.  A notice of allowance was issued on July 29, 2011 and the patent issued on April 3, 2012 directed to a pharmaceutical compound cobicistat.

There is no dispute Gilead was entitled to some PTA based on the PTO’s failure to meet the statutorily mandated timeliness requirements.  At issue is whether the PTA should be reduced by 57 days, the period of time between Gilead’s initial reply to the restriction requirement and its filing of the supplemental IDS.  Gilead contested the PTO’s assessment of the 57-day delay, arguing that the supplemental IDS did not cause any actual delay and therefore should not be subtracted from the PTA.  However, according to the PTO, the filing of the supplemental IDS after it had filed a restriction requirement constituted a failure to engage in a reasonable effort to conclude prosecution.  Gilead appealed to the district court where summary judgment was entered in favor of the PTO because Gilead did not demonstrate that the PTO’s interpretation of § 154 was not unreasonable. 

On appeal to the Federal Circuit, Gilead argued that the PTA statute only allows for adjustments in instances where the applicant’s conduct actually delays the conclusion of prosecution.  Applying the Chevron factors, the Federal Circuit rejected Gilead’s arguments finding that Congress did not directly address whether a failure to engage in reasonable efforts to conclude prosecution requires conduct that actually causes delay and the PTO’s construction of the statute was reasonable because Congress not only intended to sanction applicant conduct that results in actual delays, but conduct having the potential of causing delays.  The Federal Circuit noted § 132 requires the PTO to respond to a reply within four months after the date a reply is filed.  Since restriction requirements are notifications, the PTO has a significantly reduced window of time to reply to the applicant.  Therefore, the filing of a supplemental IDS after an initial reply to a restriction requirement adds additional references the PTO must consider before responding to the restriction requirement.  As a result, the PTO is burdened in meeting its statutorily mandated time requirement.