Intellectual Property News
The drug company Actelion Pharmaceuticals, Ltd., recently lost a bid to increase the term of its U.S. Patent No. 8,658,675 by five days, ultimately because its patent attorney failed to check a box on the application form. The decision in Actelion Pharmaceuticals, Ltd. v. Matal, Case No. 2017-1238 (Fed. Cir., Feb. 6 2018) illustrates the risks of ignoring the fine details of the Patent Cooperation Treaty and its implementing statutes.
The International Patent System
Actelion’s problems arose from the improper use of an “international patent application.” The U.S. is a signatory to the Patent Cooperation Treaty (PCT), which allows a patent applicant in any signatory country to reserve its patent rights in all of the other 151 countries by filing a single “international patent application.” Prior to the PCT, a U.S. inventor wishing to preserve patent rights in foreign countries was required to file a patent application in each foreign country within 12 months of filing a U.S. patent application. Under the PCT, once a single international application has been filed within 12 months, patent rights are preserved in all of the signatory countries for up to 30 months, during which the applicant must file local “national stage” applications in each country. The PCT allows patent applicants to delay the significant expense of filing and prosecuting patent applications in national patent offices for an additional 18 months. This gives the applicant time to analyze the value of the invention in order to weigh the costs and benefits of filing patent applications.
Because the treaty defines the conditions and requirements for filing international patent applications, they differ from the laws of each individual country, creating a legal dichotomy between PCT national stage applications and other kinds of U.S. patent applications. As demonstrated in this case, it is critical to be aware of the effects of this dichotomy prior to using the PCT system.
The term of a patent has varied throughout U.S. history, and presently a utility patent expires 20 years from its earliest effective filing date. Because it takes time for the U.S. Patent and Trademark Office (PTO) to approve an application for a patent, slow action on the part of the PTO can reduce the term of the patent. To address this problem, Congress provided that for every day of undue delay on the part of the PTO the term of a patent will be extended by one day. The definition of “undue delay” is set out in 35 U.S.C. § 154. There are several actions by the PTO that constitute undue delay, one of which is failure to take initial action promptly (within 14 months).
The definition of delay differs for PCT national stage applications and non-PCT applications. In the case of non-PCT applications, initial action must occur within 14 months of the filing date. For PCT national stage applications, initial action must occur within 14 months of “the date of commencement of the national stage under section 371 in an international application.” An earlier version of the same statute instead required that initial action occur within 14 months of “the date on which an international application fulfilled the requirements of section 371 of this title.”
The requirements of Section 371 include (in subsection (c)) that the applicant provide to the PTO a copy of the international application, a filing fee, and a specific sworn statement by the inventor (the “oath”); and (in subsections (b) and (f)) that the national stage commences within 30 months, with the caveat that “[a]t the express request of the applicant, the national stage of processing may be commenced at any time…”
In this case, Actelion and the PTO disagreed about whether the PTO’s action must come within 14 months of only the requirements of Section 371(c), or whether 371(b) and (f) must also be satisfied. In other words, does the time limit run from the day on which the applicant submits the required materials (application, fee, and oath), or does it then run from the earlier of the 30-month date and the date on which the applicant made an express request for national stage processing? Actelion and the PTO also disagreed about what constitutes an “express request” under Section 371(f).
The Actelion Story
Actelion filed its first patent application for this invention on July 16, 2009. Actelion later filed the international patent application (PCT application) that was the basis for its U.S. Patent No. 8,658,675 (the ‘675), citing the first patent application for priority. Thus the priority date for both the PCT application and the ‘675 was July 16, 2009. The 30-month date under Section 371(b) fell on January 16, 2012. On January 12, 2012, Actelion filed the ‘675 by sending to the PTO a copy of the PCT application, the fee, and a statement that “Applicant earnestly solicits early examination and allowance of these claims” (emphasis added). Notably, Actelion included the PTO’s usual form for filing a U.S. national application based on an international application, but neglected to check the box next to the statement “This is an express request to begin national examination procedures.”
Fourteen months and 45 days later, the PTO sent a first action. When Actelion later requested 45 days of extra patent term under 35 U.S.C. § 154, the PTO refused, instead granting only 40 days. The PTO reasoned that Actelion had not fulfilled the requirements of Section 371 until January 17, 2012, the working day following the 30-month date. According to the PTO’s analysis, the express request for examination or expiration of the 30-month period is one of the requirements of Section 371; because Actelion’s attorneys had not checked the box, there was no express request for examination.
Actelion filed an Administrative Procedure Act complaint challenging the PTO’s determination for multiple reasons. First they argued that under the old version of Section 154 “the requirements” of Section 371 refer to the things that the applicant is required to furnish (i.e., a copy of the international application and the fee), not the expiration of the 30-month period or the express request. Second, they argued that even if Section 371 requires expiration of the 30-month period or an express request, and express request was made on January 12, 2012, Actelion’s papers filed on that date included the statement “Applicant earnestly solicits early examination and allowance of these claims.”
The district court disagreed with all of Actelion’s arguments and refused to remand the PTO’s decision. Actelion appealed to the U.S. Court of Appeals for the Federal Circuit.
A three-judge panel of the Federal Circuit affirmed the district court on all points. The appeals court held that the requirements of Section 371 have not been fulfilled until either the expiration of the 30-month period or the filing of an express request for examination. The court deemed the old version of Section 154 to be substantially identical in meaning to the new version, despite Congress’ explicit revision of the language. Finally, the court held that the statement “Applicant earnestly solicits early examination and allowance of these claims” is not an “express request… [for the] national stage of processing.”
The court’s logic on the first point was simply that Section 371 has multiple subsections, and that Congress did not limit “the requirements” to one particular subsection; therefore the most reasonable interpretation of the statute is that all subsections must be satisfied. It is interesting that the court did not comment on the intent of the statute, which is to extend the term of a patent if there is delay caused by the PTO. Under Acetlion’s interpretation, a patent applicant could submit the required materials under Section 371(b) up to 30 months early; in the absence of an express request the PTO could not take action on the application until the expiration of the 30- month period, which would automatically accrue at least 16 months of “undue delay” under Section 154. Thus the term of the patent would be extended even if the PTO acted as promptly as possible.
The court provided little explanation as to why Actelion’s statement “Applicant earnestly solicits early examination” is inferior to the statement on the PTO’s form that “This is an express request to begin national examination procedures.” Although there are apparent differences in diction, the meanings of the two sentences do not differ much, if at all. To “solicit” is to “request,” and “early examination” means “national examination procedures” in the context of a request (or solicitation) made before the normal period of time has elapsed. The court referred to Actelion’s language as “boilerplate” and noted that the same language was used in all of Actelion’s correspondence with the PTO. Perhaps what was left unsaid is the practical issue of how carefully a clerk at the PTO must review an applicant’s paper to discover an express request for processing. As illustrated in this case, the filing of an express request in a national stage is not a trivial matter, and the PTO must be able to clearly discern a request for early commencement of national stage processing from the customary request by the applicant for expedient examination and allowance.
The immediate lesson of Actelion’s folly is that one must understand the legal scheme under which one files a patent application. Actelion had the option of filing a non-PCT application citing its international application (known in the jargon of patent attorneys as a “bypass”), which would have required no express request for examination. The filing of the specification, claims, and drawings would constitute the filing date from which the PTO’s undue delay would have been calculated. Had Actelion done so it might have been awarded the additional patent term it sought.
Stated another way, every decision during patent prosecution has repercussions on the patentee’s future rights, so every decision must be made deliberately and as part of a larger patenting strategy. One of the most useful aspects of the PCT is the ability of the applicant to delay its patenting costs. If delay is not the goal, the applicant may wish to avoid the relative complexities of filing a PCT national stage in favor of the more straightforward requirements of a bypass. Was delay Actelion’s goal? If not, why was a U.S. national stage filed?
And finally, if one files an official form during patent prosecution, check the right boxes.