Chudik v. Hirshfeld

• Citation: 987 F.3d 1033
• Decision Date: 08 February 2021
• Docket Number: 2020-1833
• Parties: Steven C. CHUDIK, Plaintiff-Appellant v. Andrew HIRSHFELD, Performing the Functions and Duties of the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, Defendant-Appellee
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

987 F.3d 1033

Steven C. CHUDIK, Plaintiff-Appellant

v.Andrew HIRSHFELD, Performing the Functions and Duties of the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, Defendant-Appellee

2020-1833

United States Court of Appeals, Federal Circuit.

Decided: February 8, 2021

Eric Ryan Waltmire, Erickson Law Group, PC, Wheaton, IL, argued for plaintiff-appellant.

Catherine Yang, Office of the United States Attorney for the Eastern District of Virginia, United States Department of Justice, Alexandria, VA, argued for defendant-appellee. Also represented by G. Zachary Terwilliger ; Kakoli Caprihan, Daniel Kazhdan, Thomas W. Krause, Brian Racilla, Farheena Yasmeen Rasheed, Office of the Solicitor, United States Patent and Trademark Office, Alexandria, VA.

Before Taranto, Bryson, and Hughes, Circuit Judges.

Taranto, Circuit Judge.

Dr. Steven Chudik applied to the Patent and Trademark Office (PTO) for a patent on his "Guide for Shoulder Surgery" on September 29, 2006. When the assigned PTO examiner issued a second rejection of all then-pending claims as unpatentable in 2010, Dr. Chudik took a step that would turn out to have consequences for the patent term adjustment awarded under 35 U.S.C. § 154(b) when his application ultimately issued as a patent. Rather than immediately taking an appeal to the Patent Trial and Appeal Board under 35 U.S.C. § 134(a), Dr. Chudik requested a continued examination under 35 U.S.C. § 132(b). In 2014, the examiner again rejected his claims, and Dr. Chudik then appealed to the Board. But instead of filing an answer, the examiner reopened prosecution, only to reject the claims as unpatentable on a different ground, in early 2015. That 2014–2015 process—notice of appeal filed, prosecution reopened before answer, new rejection on a new ground—occurred again in 2015. It occurred once more in 2016. Finally, in 2017, while Dr. Chudik's fourth notice of appeal from an examiner rejection was pending, the examiner issued yet another new rejection, but this one led, in 2018, to a notice of allowance after Dr. Chudik altered some of his claims. Dr. Chudik's U.S. Patent No. 9,968,459 issued on May 15, 2018, eleven and a half years after the application was filed.

The PTO ultimately awarded Dr. Chudik a patent term adjustment of 2,066 days under 35 U.S.C. § 154(b), but it rejected Dr. Chudik's argument that he was entitled to an additional 655 days, under 35 U.S.C. § 154(b)(1)(C)(iii) (C-delay), for the time his four notices of appeal were pending in the PTO. The C-delay provision covers delay due to "appellate review by the Patent Trial and Appeal 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." 35 U.S.C. § 154(b)(1)(C)(iii). The PTO concluded that the provision does not apply here because, in light of the examiner's reopening of prosecution, (1) the Board's jurisdiction over the appeals never attached and (2) there was no Board (or reviewing court) reversal. The United States District Court for the Eastern District of Virginia affirmed the PTO's decision. Chudik v. Iancu , No. 1:19-cv-01163 (E.D. Va. March 25, 2020), ECF No. 33.

We now affirm. The statutory language regarding C-delay for "appellate review" requires a "decision in the review reversing an adverse determination of patentability." 35 U.S.C. § 154(b)(1)(C)(iii). That language, we conclude, is reasonably interpreted—indeed, is best interpreted—to require a reversal decision made by the Board or a reviewing court, thus excluding time spent on a path pursuing such a decision when, because of an examiner reopening of prosecution, no such decision is ever issued.

I

A

In 1994, Congress changed the length of a patent term from 17 years (measured from the patent's issue date) to 20 years (measured from the patent's earliest effective non-provisional-filing date). See Mayo Found. for Med. Educ. & Research v. Iancu , 938 F.3d 1343, 1345 (Fed. Cir. 2019). Because time spent in the PTO could now eat up part of the patent term, Congress also provided a list of specific situations in which the patent owner could seek an adjustment of the patent's term to offset delays in the PTO. Id. ; see Uruguay Round Agreements Act, Pub. L. No. 103-465, § 532, 108 Stat. 4809, 4983–85_(1994); 35 U.S.C. § 154(b) (1994 ed.). In 1999, Congress supplemented and modified the list and gave the provision its current structure. See American Inventors Protection Act of 1999, Pub. L. No. 106-113, § 4402, 113 Stat. 1501, 1501A-557 to -559 (codified at 35 U.S.C. § 154(b) ).

The statute sets forth three broad categories of delay for which a patent may receive a patent term adjustment. See 35 U.S.C. § 154(b)(1)(A)–(C). First, patent owners may seek an adjustment where the PTO fails to meet certain prescribed deadlines for its actions during prosecution (A-delay). Id. § 154(b)(1)(A). Next, adjustment is generally authorized for each day that the patent application's pendency extends beyond three years (B-delay), subject to certain exclusions, such as—critically for Dr. Chudik—for "time consumed by continued examination of the application requested by the applicant under section 132(b)." Id. § 154(b)(1)(B). Finally, patent owners may seek an adjustment for "delays due to derivation proceedings, secrecy orders, and appeals," including "appellate review by the [Board] ... in a case in which the patent was issued under a decision in the review reversing an adverse determination of patentability" (C-delay). Id. § 154(b)(1)(C). In the case of a C-delay, "the term of the patent shall be extended 1 day for each day of the pendency of the proceeding, order, or review." Id.¹

The statute states that the Director of the PTO "shall prescribe regulations establishing procedures for the application for and determination of patent term adjustments." 35 U.S.C. § 154(b)(3)(A) ; see Wyeth v. Kappos , 591 F.3d 1364, 1367 (Fed. Cir. 2010) (emphasizing the word "procedures" in the statutory provision). Two of those regulations are at issue in the present case: 37 C.F.R. §§ 1.702, 1.703. Section 1.702(e) pertains to "[d]elays caused by successful appellate review" and provides:

[T]he term of an original patent shall be adjusted if the issuance of the patent was delayed due to review by the Patent Trial and Appeal Board under 35 U.S.C. 134 or by a Federal court under 35 U.S.C. 141 or 145, if the patent was issued under a decision in the review reversing an adverse determination of patentability.

37 C.F.R. § 1.702(e). In promulgating the regulation, the PTO explained that the condition that the patent be " ‘issued under a decision in the review reversing an adverse determination of patentability’ ... requires a [Board] or Federal court decision in the review that reverses all of the rejections of at least one claim." Changes To Implement Patent Term Adjustment Under Twenty-Year Patent Term, 65 Fed. Reg. 56,366, 56,370 (Sept. 18, 2000).

Section 1.703(e), the other regulation primarily at issue here, explains how to calculate C-delay. See 37 C.F.R. § 1.703(e). In its current form, adopted in 2012 and applicable to this case, § 1.703(e) states:

The period of adjustment under § 1.702(e) is the sum of the number of days, if any, in the period beginning on the date on which jurisdiction passes to the [Board] under § 41.35(a) of this chapter and ending on the date of a final decision in favor of the applicant by the [Board] ....

Id. Under 37 C.F.R. § 41.35(a), jurisdiction passes to the Board in an applicant's appeal, not when the applicant files a notice of appeal or brief, and not when the examiner files an answer, but only when the applicant files a reply brief or the time for filing a reply has expired, whichever is earlier.

Before 2012, § 1.703(e) provided that the adjustment period for C-delay began "on the date on which a notice of appeal to the [Board] was filed." See 65 Fed. Reg. 56,366, 56,369 –70. When the PTO revised the regulation in 2012, it specifically stated that an applicant "is not entitled to patent term adjustment for the reopening of prosecution" by a patent examiner under the regulations for C-delay; but it also explained that "under certain circumstances, the reopening of prosecution by the examiner may lead to additional patent term adjustment" under the provisions for B-delay (generally covering, with exceptions, prosecution time beyond three years). Revision of Patent Term Adjustment Provisions Relating to Appellate Review, 77 Fed. Reg. 49,354, 49,357, Resp. to Cmt. 11 (Aug. 16, 2012). The PTO also explained that it was making the revision to align the regulations on patent term adjustment with recently adopted general rules of practice before the Board providing that jurisdiction passes to the Board only when an applicant's reply brief is filed or due (whichever dates comes first). See id. at 49,354 –55; see also Rules of Practice Before the Board of Patent Appeals and Interferences in Ex Parte Appeals, 76 Fed. Reg. 72,270, 72,273 (Nov. 22, 2011).

B

On September 29, 2006, Dr. Chudik filed U.S. Patent Application No. 11/529,197, entitled "Guide for Shoulder Surgery." J.A. 107. On December 23, 2009, the examiner issued a non-final rejection, and on August 18, 2010, the examiner issued a final office action rejecting all pending claims as unpatentable. J.A. 269–70. It is not disputed before us that Dr. Chudik, whose claims had been "twice rejected," could have appealed the final rejection to the Board. 35 U.S.C. § 134(a). Instead of pursuing that path, however, on January 21, 2011, he sought further engagement with the examiner by filing a Request for Continued Examination under 35 U.S.C. § 132(b). J.A. 303.

Almost three years later, the examiner issued a non-final rejection, followed by a final rejection on September 9, 2014, which relied on prior art different from the art invoked in the 2010 rejection. J.A. 372–73. At that...