SUPERNUS PHARMACEUTICALS, INC. ET AL. V. IANCU

Before Dyk, Schall, and Reyna.  Appeal from U.S. District Court for the Eastern District of Virginia.

Summary: The USPTO is only authorized to reduce Patent Term Adjustment (PTA) for applicant delay equal to a period of time during which applicant failed to engage in reasonable efforts to conclude prosecution.

Supernus, Inc. filed patent applications for osmotic drug delivery systems in both the US and Europe.  Supernus filed an RCE in the US application in February 2011. In September 2012, Supernus received notice that an opposition had been filed to its European patent.  Supernus submitted an IDS in November 2012, informing the USPTO of the opposition and providing relevant documents.  The US patent issued in June 2014, reflecting 1,260 days of PTA.  The USPTO had reduced the PTA by 886 days for applicant delay, including the 546-day period between filing of the RCE and the EPO notification of the opposition.  The applicant filed a request for reconsideration of the PTA to the USPTO.  After the USPTO rejected the request, the applicant appealed to the District Court.  On summary judgment, the District Court held that the PTA calculation by the USPTO was correct.

Supernus appealed to the Federal Circuit, challenging the USPTO’s application of its regulation governing PTA calculation as arbitrary and capricious, and contrary to the statute.  The statute provides that “[t]he period of adjustment of the term of a patent under paragraph (1) 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.”  35 U.S.C. § 154(b)(2)(C)(i) (emphasis added). 

The Federal Circuit had previously held in Gilead Sciences, Inc. v. Lee that the regulation was a reasonable interpretation of the statute.  The Federal Circuit distinguished Gilead because unlike the applicant in Gilead, Supernus had no knowledge of the opposition during the 546-day period.  Therefore, the Federal Circuit concluded that there was nothing Supernus could do to advance prosecution.  Applying the Chevron analysis, the Federal Circuit further concluded that the language of the statute was clear, setting an unambiguous rule that authorized the USPTO to determine “reasonable efforts” but did not authorize reducing PTA beyond the statutory “equal to” limitation.  In this case, the Federal Circuit found that the USPTO’s application of the regulation was inconsistent with the statute and did not accord any deference to the USPTO’s application.  The Federal Circuit held that the District Court erred in granting summary judgment, reversing the order and remanding for further proceedings.