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In Mayo, Federal Circuit Seeks to Head Off Disputes Over When Claims Are “Deemed Allowable” by Counting Continued Examination Time Until Notice of Allowance

Earlier this week, the Federal Circuit declined to further extend the patent term of an antibody patent held by the Mayo Foundation.  In Mayo Foundation v. Iancu,[1] the court held that the time spent on a request for continued examination (“RCE”) following a declaration of interference did not count toward the three-year application pendency period for purposes of patent term extension.  As discussed below, the Mayo decision could have implications for the terms of biologics patents issued following a request for continued examination.

Patent term extension under 35 U.S.C. § 154(b)(1)(B) adds a day to the patent term for each day beyond three years that an application is pending, in order to prevent the prosecution period from eroding the patent term.  However, there is no extension of the patent term for “any time consumed by [a] continued examination” requested by the applicant.[2]  Under Novartis AG v. Lee,[3] the continued examination period stops when the PTO mails a notice of allowance.[4]  The Mayo case presented the question whether that rule still applies when an interference occurs during the continued-examination period.

Mayo concerns the prosecution of U.S. Patent 8,981,063 (the “’063 Patent”), a Mayo Foundation utility patent concerning antibodies used to treat disease conditions characterized by immunosuppression, such as cancer and AIDS.  In the prosecution of the ’063 Patent, an interference was declared during RCE time, pausing patent examination.  After that interference was resolved, the PTO reopened prosecution and issued a notice of allowance. 

The following timeline in the Federal Circuit’s opinion summarizes the key prosecution events:

This sequence led to a dispute concerning whether the post-interference examination time was “time consumed by continued examination of the application requested by the applicant” for purposes of § 154(b)(1)(B)(i).  While Mayo and the PTO agreed that period 1 was RCE time and that period 2 was not, they disagreed as to period 3.  Mayo argued that the interference constituted a de facto allowance under Novartis ending the RCE period, because an interference cannot be declared unless at least some claims are deemed allowable but for the interference. [5]  Mayo also argued, from a procedural standpoint, that it did not “request” the remaining examination following remand from the interference.  The PTO responded that a declaration of interference does not close prosecution on the merits and is not an effective notice of allowance.[6]

The Federal Circuit was split, but ultimately decided against Mayo.  Judge Lourie, joined by Judge Dyk and writing for the majority, held that the continued examination period did not end until the PTO mailed a notice of allowance and that, therefore, both period 1 and period 3 counted as “time consumed by continued examination of the application.”[7]  The majority found Mayo’s reading of Novartis to treat a declaration of interference as an allowance “strained.”[8]  The majority explained that “Mayo requested continued examination, and that is what it received, both before and after the interference proceeding.”[9]  The majority was also “persuaded by the PTO’s point that Mayo’s rule could require an unduly burdensome, fact-intensive inquiry into when the PTO actually conceded the allowability of the claims.”[10]

Judge Newman dissented, arguing that the post-interference examination period “plainly is examination delay due to PTO procedures.”[11]  Judge Newman focused on the fact that the interference judgment “contained no recommendation for further action” and, therefore, the “further examination” was “at the initiative of the examiner.”[12]  In Judge Newman’s view, the later-issued claims were already “free of grounds for rejection” other than a mistaken double-patenting rejection raised by the examiner and later withdrawn, and thus the post-interference period was a delay caused by the PTO that merited extension of the patent term.[13]

Going forward, the Mayo majority’s decision reaffirms Novartis’ holding that RCE time presumptively ends upon the mailing of a notice of allowance—not upon an allowance inferred from some earlier, case-specific prosecution event.  With its holding, the Mayo majority sought to head off a “fact-intensive inquiry into when the PTO actually conceded the allowability of the claims.”[14]  As the majority explained, the PTO “understandably wishes to avoid such disputes over what ‘indicated’ means and when claims are ‘deemed allowable.’”[15]

[1] No. 2018-2031 (Fed. Cir. Sept. 16, 2019).

[2] 35 U.S.C. § 154(b)(1)(B)(i).

[3] 740 F.3d 593 (Fed. Cir. 2014).

[4] Id. at 602; see also 37 C.F.R. § 1.703(b)(1) (2019). A notice of allowance indicates that the PTO has decided to issue a patent.

[5] Mayo Found v. Iancu, No. 2018-2031, slip op. at 9-10.

[6] Id. at 10.

[7] Id. at 10-12.

[8] Id. at 11.

[9] Id. at 12.

[10] Id.

[11] Id. (Newman, J., dissenting) at 2.

[12] Id. (Newman, J., dissenting) at 6.

[13] Id. (Newman, J., dissenting) at 6.

[14] Id. (majority op.) at 12.

[15] Id.

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