The US Court of Appeals for the Federal Circuit affirmed a grant of summary judgment for the Director of the US Patent and Trademark Office (PTO), holding that the statutory language authorizing so-called “C-delay” patent term adjustment requires an adverse patentability finding that is reversed by a court or the Patent Trial & Appeal Board. Chudik v. Hirshfeld, Case No. 20-1833 (Fed. Cir. Feb. 8, 2021) (Taranto, J.) C-delay adds to a patent’s term to account for delay experienced during appellate review of an adverse patentability finding. C-delay does not apply when the examiner reopens examination after final rejection (in this case, four times over an 11-year period) because appellate review is not triggered when an examiner, and not the Board or a court, undoes a final unpatentability decision by reopening examination.
Chudik filed a patent application, and the examiner rejected all pending claims as unpatentable. Chudik declined to appeal, instead filing a request for continued examination. Over the next eight years, the examiner issued four more final rejections. After each rejection, Chudik filed a notice of appeal and opening brief, and after each notice of appeal, the examiner reopened prosecution rather than answering the appeal. The patent finally issued more than 11 years after Chudik filed the application. The PTO added time to the term of the patent for A-delay (where the PTO fails to meet certain prescribed deadlines) and B-delay (each day that the patent application’s pendency extends beyond three years), but not C-delay.
The C-delay provision of the Patent Act provides for a patent term adjustment where the delay is due to “appellate review by the [Board] or by a Federal Court in a case in which the patent was issued under a decision in the review reversing an adverse determination of patentability.” Chudik challenged the PTO’s calculation of the patent extension, arguing that he was entitled to C-delay patent term adjustment for the time his four notices of appeal were pending in the PTO. Chudik argued that the C-delay provision’s “appellate review” included the examiner’s decision to undo her final action through a reopening of prosecution. The PTO rejected that argument, concluding that the C-delay provision did not apply because the Board’s jurisdiction over the appeals never attached and no Board or reviewing court reversed an adverse determination of patentability.
Chudik then sued the PTO director in federal district court, again arguing that “appellate review” referred to the Board’s entire review process, starting when the notice of appeal is filed. Chudik also argued that “a decision in the review reversing an adverse determination of patentability” covered an examiner’s own decision, through a reopening of prosecution. Although characterizing it as “based on a reasonable construction of statutory text,” the court rejected Chudik’s challenge. Applying Chevron, the district court held that the PTO’s position must be affirmed because that position was reasonable. Chudik appealed to the Federal Circuit.
The Federal Circuit affirmed the district court’s decision, finding that the PTO’s interpretation of the C-delay provision’s statutory language was the best interpretation. Because the statutory language speaks to “appellate review by” the Board or a court, the subsequent reference to a “decision in the review” refers to a decision by the appellate tribunal—the Board or a court—not an examiner’s decision to reopen prosecution made during the review (whether the review is deemed to start when the notice of appeal is filed or later). Interpreting the provision to cover an examiner’s reopening that withdraws a rejection would be “if not linguistically impossible, strained.” The Court also found that the statute’s use of the term “reversing” supported the Court’s interpretation, noting that the term “reverse” typically refers to action taken by the appellate reviewer to undo the ruling being reviewed and not a reconsideration of one’s own ruling. The Court thus concluded that “[c]onsidering the language as an integrated whole . . . the provision is most fairly read to require a Board or court decision reversing an adverse ruling (e.g., by the Board of the examiner or by a court of the Board).”
The Federal Circuit did not decide whether the C-delay statutory provision “unambiguously forbids the PTO to adopt a position different from its current one, only what the best interpretation of the statutory provision is as applied to [this patentee’s] situation.” Likewise, the Federal Circuit did not address the PTO’s other ground for denial concerning when jurisdiction over an appeal to the Board attaches.
The Federal Circuit did comment, however, on certain scenarios involving examiners reopening prosecution after a notice of appeal has been filed. It noted that when the PTO adopted the limitation on C-delay patent term adjustments (i.e., that “appellate review” would not start until Board jurisdiction attached, and that “reversal” required a Board or court decision), the PTO commented that the limitation may be offset by increased B-delay adjustments for time that exceeds three years of prosecution if an examiner’s reopening occurs before Board jurisdiction attaches. In this case, no such B-delay increase occurred because Chudik, instead of appealing to the Board after his initial final rejection, sought continued examination, which triggered a statutory exclusion from the time counted for a B-delay adjustment.