Last week, in Supernus Pharmaceuticals, Inc. v. Iancu, the Federal Circuit reversed the entry of summary judgment by the District Court for the Eastern District of Virginia, which concluded that the U.S. Patent and Trademark Office had not erred in calculating the Patent Term Adjustment (PTA) for U.S. Patent No. 8,747,897.  The '897 patent, which is directed to an oral osmotic pharmaceutical dosage form of treprostinil, is owned by Appellant Supernus Pharmaceuticals, Inc. and exclusively licensed by Appellant United Therapeutics Corp.

During prosecution of U.S. Application No. 11/412,100, which issued as the '897 patent, the Examiner issued a final Office Action, and Supernus responded by filing a Request for Continued Examination (RCE).  After filing the RCE, Supernus was notified that an opposition had been filed in related European Patent No. EP 2 010 189 (which had issued from a European application corresponding to an International application that claimed priority from the '100 application).  One hundred days after the European Patent Office's notification of the opposition, Supernus filed a supplemental Information Disclosure Statement (IDS) citing the Notice of Opposition and other documents concerning the opposition.  The USPTO ultimately issued the '100 application as the '897 patent, determining that the '897 patent was entitled to 1,260 days of PTA.  The Office's PTA determination included an assessment of 886 days of applicant delay, of which 646 days were assessed for the time between the filing of the RCE and the submission of the supplemental IDS.  Supernus filed a request for Reconsideration of Patent Term Adjustment, arguing that the Office should have applied 37 C.F.R. § 1.704(c)(6) in this instance rather than 37 C.F.R. § 1.704(c)(8).  The Office, however, rejected Supernus' request, concluding that § 1.704(c)(8) applied and that the 646-day reduction in PTA was proper.

Supernus challenged the Office's PTA determination in the Eastern District of Virginia, arguing, in part, that § 1.704(c)(8) is arbitrary, capricious, and contrary to the PTA statute, and contending that it was entitled to at least 546 of the 646 days of PTA reduction (i.e., the period of time between the filing of the RCE and the EPO notification of opposition).  The District Court granted summary judgment in favor of the USPTO, finding that the USPTO did not err in the PTA calculation for the '897 patent and that the Federal Circuit's decision in Gilead Sciences, Inc. v. Lee foreclosed, as a matter of law, Supernus' argument that § 1.704(c)(8) is arbitrary, capricious, and otherwise contrary to the PTA statute.

In reversing the District Court's grant of summary judgment in favor of the USPTO, the Federal Circuit began by concluding that its decision in Gilead did not foreclose Supernus' argument that § 1.704(c)(8) is arbitrary, capricious, and otherwise contrary to the PTA statute because "Gilead ruled only that the regulation reasonably drew no line between actual and potential delay," and "did not hold the regulation was reasonable in reducing PTA for periods during which there was no failure to engage in reasonable efforts to conclude prosecution."  The Court noted that in Gilead, a supplemental IDS could have been filed at the same time that Gilead filed a response to a restriction requirement (rather than 57 days after the response had been filed), but in the instant case, "there were no efforts that [Supernus] could have taken in the period of time during the preceding 546 days [i.e., between the filing of the RCE and the EPO notification of opposition]."  The Court therefore concluded that "[b]ecause Gilead involved different facts and a different legal question, Gilead is not controlling in this action."

The Federal Circuit next turned to the question of statutory interpretation by the USPTO, which required the Court to apply the two-step framework established in Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984).  The first step of that analysis requires a court to "ask whether the statute's plain terms 'directly addres[s] the precise question at issue,'" citing Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 986 (2005).  According to the opinion, "[t]he precise question at issue in this case is whether the USPTO may reduce PTA by a period that exceeds the 'time during which the applicant failed to engage in reasonable efforts to conclude prosecution,'" citing 35 U.S.C. § 154(b)(2)(C)(i).  Section 154(b)(2)(C)(i) specifies that the period of adjustment of patent term "shall be reduced by a period equal to the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application" (emphasis in opinion).

With respect to § 154(b)(2)(C)(i), the Federal Circuit found that "the pertinent language of the PTA statute is plain, clear, and conclusive," and therefore held that "the USPTO may not count as applicant delay a period of time during which there was no action that the applicant could take to conclude prosecution of the patent."  In particular, the Court stated that:

A plain reading of the statute shows that Congress imposed two limitations on the amount of time that the USPTO can use as applicant delay for purposes of reducing PTA.  First, the statute expressly requires that any reduction to PTA be equal to the period of time during which an applicant fails to engage in reasonable efforts.  Second, the statute expressly ties reduction of the PTA to the specific time period during which the applicant failed to engage in reasonable efforts [emphasis in opinion].

As a result, "the statutory period of PTA reduction must be the same number of days as the period from the beginning to the end of the applicant's failure to engage in reasonable efforts to conclude prosecution," and "[t]he USPTO cannot . . . count as applicant delay any period of time during which there were no efforts in which the applicant could have engaged to conclude prosecution of the patent."

The Court concluded that "Congress expressly granted the USPTO authority to determine what constitutes reasonable efforts, but the USPTO lacks any authority to exceed the statutory 'equal to' limitation by including the 546-day time period during which it does not contend that Supernus failed to undertake reasonable efforts to conclude prosecution."  The Court therefore found the USPTO's PTA reduction in this case to be inconsistent with the PTA statute, accorded no deference to the USPTO's application of the regulations at issue in the circumstances of this case, and reversed and remanded the District Court's summary judgment order.

Supernus Pharmaceuticals, Inc. v. Iancu (Fed. Cir. 2019)
Panel: Circuit Judges Dyk, Schall, and Reyna
Opinion by Circuit Judge Reyna