PTO Sued After Denying “Mildly Tardy” Second Interim PTE Request

January 13, 2011

By Kurt R. Karst –      

In a Complaint lodged against the U.S. Patent and Trademark Office (“PTO”) in the U.S. District Court for the Eastern District of Virginia last September, but only recently served, the Genetics & IVF Institute (“GIVF”) is challenging the PTO’s August 2010 denial of a Patent Term Extension (“PTE”) for U.S. Patent No. 5,135,759 (“the ‘759 patent”), which covers a method to preselect the sex of offspring.  The patent is for a medical device for sperm sorting apparatus that is the subject of a Premarket Approval application (“PMA”) undergoing FDA review.  The ‘759 patent is owned by the U.S. Department of Agriculture (“USDA”) and is exclusively licensed to GIVF.

Under the PTE statute at 35 U.S.C. § 156(d)(5)(A), the PTO may grant an interim patent extension while a PMA is undergoing FDA review if the patent owner (or his agent) “reasonably expects that the applicable regulatory review period . . . that began for a product that is the subject of such patent may extend beyond the expiration of the patent term in effect.”  To request an initial interim PTE, the owner (or his agent) submits an application to the PTO “during the period beginning 6 months, and ending 15 days before such term is due to expire.”  The statute provides that a total of 5 interim PTEs may be granted.  After the initial interim PTE is granted, 35 U.S.C. § 156(d)(5)(C) provides that “[e]ach such subsequent application shall be made during the period beginning 60 days before, and ending 30 days before, the expiration of the preceding interim extension” (emphasis added).

The 17-year term of the ‘759 patent was set to expire on August 4, 2009; however, the USDA requested, and the PTO granted, an interim PTE for a period of one year, through August 4, 2010.  Just days before the interim PTE was going to expire, the USDA, on July 27, 2010 petitioned the PTO under 37 C.F.R. §§ 1.182 and 1.183 for an extension of time to file a second interim PTE and also a request for a second subsequent interim PTE.  Sections 1.182 and 1.183 relate to mechanisms for persons to file petitions to seek waiver of a rule or relief from the enforcement of a rule.  The USDA argues in its petition, among other things, that the language, structure, and purpose of the PTE statute give the PTO discretion to grant a second subsequent interim PTE outside of the timing window of 35 U.S.C. § 156(d)(5)(C).  In particular, the USDA argues that the PTE statute at 35 U.S.C. § 156(a) states that a PTE “shall” be granted provided certain conditions are met, and the USPTO’s implementing regulation at 37 C.F.R. § 1.720(a) uses the word “may.”  Thus, according to the USDA, if the word “shall” means “may” to the PTO for purposes of 35 U.S.C. § 156(a), then the word “shall” in 35 U.S.C. § 156(d)(5)(C) should also mean “may,” and the PTO has discretion to grant the USDA’s untimely request for a second subsequent interim PTE for the ‘759 patent.

The PTO was unconvinced and on August 2, 2010 denied both the USDA’s petition and request for a second subsequent interim PTE. 

As an initial matter, the PTO ruled that 37 C.F.R. §§ 1.182 and 1.183 do not permit an extension of the time period to request a second subsequent interim PTE.  “Because the relief that petitioner seeks is from a statute, the USPTO, without any statutory authority to grant such relief, cannot excuse failure to comply with the statutory timing requirement of § 156(d)(5)(C), and thus must deny the petition under 37 C.F.R. § 1.182,” states the PTO in its ruling.  Similarly, with respect to the USDA’s petition under 37 C.F.R. § 1.183, the PTO ruled that “Petitioner’s situation is controlled by statute, thus, there is no rule which can be waived which would provide sufficient relief.”

With respect to the meaning of the word “shall” in the PTE statute, the PTO states that as a general matter “the best definition of ‘shall’ as used throughout section 156 indicates an imperative duty based upon the text, structure, and purpose of the statute.”  Moreover, the USDA’s “shall/may” argument is misplaced, according to the PTO:

Petitioner’s argument fails to appreciate the “if” at the end of the introduction to 37 C.F.R. § 1.720(a).  Specifically, the rule states, “[t]he term of a patent may be extended if.”  The use of “if” in the rule language serves to require certain information in order for the Director to have authority to issue an extension.  Thus, the “may” to which petitioner refers, when read in conjunction with the “if” of the phrase, actually means “may only.”  In essence, the USPTO may only grant a patent term extension if certain conditions are met.  Because the USPTO may only grant a patent term extension is certain conditions are met, the “may . . . if” of 37 C.F.R. § 1.720 has the effect of requiring a timely filing, i.e. “shall.”  The USPTO’s use of “may . . . if” does not mean that the USPTO is departing from “shall.” [(Emphasis in original)]

GIVF, as the exclusive licensee of the now-expired ‘759 patent, sued the PTO under the Administrative Procedure Act, and asks the court to, among other things, vacate and set aside the PTO’s August 2nd decision and to declare that the PTO has the discretion to extend the term of the ‘759 patent for the full period required under 35 U.S.C. § 156.  The arguments in GIVF’s Complaint echo some of those made by the USDA in its petition and request for a second subsequent interim PTE.  In particular, GIVF argues that:

The language, structure, and purpose of § 156 give the USPTO discretion to authorize a second interim [PTE] sought outside the statutory window.  Though § 156 states that “[t]he term of a patent . . . shall be extended” as long as certain criteria are met, .the regulations promulgated pursuant to this statute do not use the word “shall.”  Instead, they list the same statutory criteria, and state that the [sic] “[t]he term of a patent may be extended.” [(Internal citations omitted)] 

And pulling the U.S. District Court for the Eastern District of Virginia’s March 2010 decision (and later August 2010 decision) concerning a late-filed PTE application for ANGIOMAX out of it’s back pocked, GIVF notes that:

Indeed, this Court recently recognized in a similar matter that “[t]here is a strong presumption that when Congress repeats the same word in the same statute, it intends for that word to be given the same meaning.”  If the word “shall” in § 156(a) means “may” as the USPTO seems to indicate in its own regulations, then that word should have the same meaning in § 156(d)(5)(C) as well.  Given the permissive, discretionary nature of the word “shall” in § 156, it stands to reason that the USPTO has the discretion to approve USDA’s petition for a second interim [PTE]. [(Internal citation omitted)]

GIVF also takes issue with the PTO’s decision that 37 C.F.R. §§ 1.182 and 1.183 do not permit an extension of the time period to request a second subsequent interim PTE.  According to GIVF, both sections provide the PTO with ample discretion to remedy the USDA’s “mild tardiness” in untimely requesting a second subsequent interim PTE.