[00:00:47] Speaker 04:
And our final case this morning is number 17-1357, Supernus Pharmaceuticals Inc.

[00:00:52] Speaker 04:
versus Mattel.

[00:00:54] Speaker 00:
Mr. Karsten.

[00:00:55] Speaker 00:
Good morning, Your Honor.

[00:00:56] Speaker 00:
May it please the Court?

[00:00:57] Speaker 00:
My name is Doug Karsten.

[00:00:58] Speaker 00:
I'm arguing on behalf of the applicants here, Supernus and United Therapeutics.

[00:01:03] Speaker 00:
An issue in this case is nearly two years of patent term for a lifesaving pharmaceutical product that the Patent Office charged as applicant delay.

[00:01:14] Speaker 00:
despite admitting below in the district court, that for at least 546 days of that term... Can I just clarify where we are?

[00:01:24] Speaker 04:
As I understand it, you're not disputing that you could have probably be charged with the 30 days which otherwise would be saved by the safe harbor because you missed the safe harbor.

[00:01:38] Speaker 04:
What your contention is that

[00:01:41] Speaker 04:
that you can only be charged for the time after the filing of the opposition in the European Patent Office?

[00:01:48] Speaker 00:
Yes, Your Honor.

[00:01:48] Speaker 00:
So essentially, yes.

[00:01:50] Speaker 00:
I mean, there are a number of different ways in which you might carve this up.

[00:01:52] Speaker 00:
And frankly, I apologize for some of the math in the brief.

[00:01:58] Speaker 00:
Certainly, I think, for 546 of those days, that's the period of time before we received, the European Council received the notice from the European Patent Office.

[00:02:08] Speaker 00:
The Patent Office admits... This is the period that starts February 22nd, 2011.

[00:02:12] Speaker 00:
Exactly right.

[00:02:14] Speaker 00:
The Patent Office admits, and we submit, that there was nothing further that we could have done to advance prosecution.

[00:02:20] Speaker 00:
And that's got to be off the table under statute 154B2C1.

[00:02:26] Speaker 00:
The statute requires, in terms of the period of time, that the deduction be equal to the amount of time in which we failed to engage in concluding prosecution.

[00:02:35] Speaker 01:
Larsen, let me ask you, as I understand it, your

[00:02:38] Speaker 01:
contention is that the statute says you can't be docked for a period of time during which you failed, which you did not fail to engage in reasonable efforts.

[00:02:48] Speaker 01:
I think that's right.

[00:02:50] Speaker 01:
Now, I didn't say that.

[00:02:52] Speaker 01:
In order to rule in your favor, do we have to invalidate the regulation?

[00:02:58] Speaker 00:
Your Honor, what we're asking for is for you to agree with us that we're entitled to this quantum

[00:03:06] Speaker 00:
of additional patent term and then remanded it.

[00:03:09] Speaker 00:
And you don't care how we get there.

[00:03:11] Speaker 00:
Well, in all candor, that's correct, Your Honor.

[00:03:14] Speaker 00:
However, look, I think that the patent office recognizes there's an issue with CA.

[00:03:18] Speaker 00:
They do that in their brief.

[00:03:20] Speaker 00:
I think it's at page 39 where they say, look, there are times when an applicant is going to get charged.

[00:03:27] Speaker 00:
But you know what?

[00:03:27] Speaker 00:
This is our regulation.

[00:03:28] Speaker 00:
It's reasonable, so hard sheets.

[00:03:30] Speaker 00:
We think, sorry, that's not right.

[00:03:32] Speaker 00:
You have to be consistent with the statute.

[00:03:34] Speaker 00:
And then they come back and say, well, D1 makes it

[00:03:37] Speaker 00:
sort of consistent.

[00:03:39] Speaker 01:
Well, D1 really doesn't.

[00:03:41] Speaker 01:
Maybe I'm wrong, but D1, I don't see it really as a fact here, because you're saying, OK, assume we didn't meet the safe harbor provisions of D1.

[00:03:51] Speaker 01:
Still, you can't dock us for a period of time, February 22, 2011, through 8, 21, 12, when, as the parties agree, and you cite that paragraph 9, we couldn't do anything.

[00:04:05] Speaker 01:
We were waiting for ruling on the RCE.

[00:04:08] Speaker 00:
Precisely right, Your Honor.

[00:04:09] Speaker 00:
In fact, I actually think D1 highlights the problem with C8 as opposed to being a broad savings provision.

[00:04:16] Speaker 03:
Is it this case really about choices and the choices that your client made as to when to file the IDS?

[00:04:24] Speaker 03:
I mean, you could have filed it within the safe harbor.

[00:04:26] Speaker 03:
You could have waited to have filed it.

[00:04:29] Speaker 03:
And he didn't.

[00:04:30] Speaker 03:
And now you're caught in this situation just

[00:04:33] Speaker 03:
I mean, this is classic being raised by your own petard here.

[00:04:37] Speaker 00:
I hear you, Your Honor.

[00:04:39] Speaker 00:
I mean, there are lots of ways in which we might not have the privilege of standing before you here today.

[00:04:44] Speaker 00:
One, the patent office could have actually acted within four months, right?

[00:04:48] Speaker 00:
Right there.

[00:04:49] Speaker 00:
Two, we might have filed within the 30-day, they call it a safe harbor.

[00:04:55] Speaker 00:
I'm going to call it a life preserver, I guess, because it certainly doesn't seem like it fits any boats in my view.

[00:05:01] Speaker 00:
We also could have set our hands, and here's why I think it's really crazy.

[00:05:06] Speaker 00:
We could have intentionally delayed.

[00:05:08] Speaker 00:
We could have set our hands and just waited and waited and see what happens with the patent office.

[00:05:15] Speaker 00:
And if so, we still would be able to recapture that patent office delay.

[00:05:20] Speaker 00:
It wouldn't be charges applicant delay.

[00:05:23] Speaker 00:
But because we timely filed our IDS under other patent office regulations, we are here

[00:05:31] Speaker 00:
With 18 months plus.

[00:05:33] Speaker 04:
So you're arguing that you would have been in good shape if you ignored the regulation about the time for filing the IDS.

[00:05:39] Speaker 00:
Exactly, Your Honor.

[00:05:39] Speaker 00:
And that makes zero sense whatsoever.

[00:05:41] Speaker 00:
That's not too sympathetic.

[00:05:43] Speaker 00:
Well, Congress said it's important for us not to charge applicants unless they're actually doing something nefarious and trying to create submarine patents.

[00:05:57] Speaker 00:
That's in the Rohrabacher Statements in Legislative History.

[00:06:00] Speaker 00:
What I'm suggesting, and I think what the patent office admits in their paper, is this provision of the patent office, which it deems to be a safe harbor, would actually reward folks for sitting on their hands and doing the opposite of the incentive.

[00:06:16] Speaker 00:
I think that CH, and I submit that CH is against the statute 154B2C1, period, full stop.

[00:06:23] Speaker 00:
And D1 does not save it.

[00:06:26] Speaker 00:
But if you want to look at D1,

[00:06:28] Speaker 00:
and look at the reasonability of what the patent office has done here in terms of its regulatory scheme, D1 demonstrates that it's not doing what it's supposed to do.

[00:06:39] Speaker 00:
It hasn't saved the application of C8, because C8 has two parts.

[00:06:44] Speaker 00:
In the first part, there's an assumption baked in.

[00:06:48] Speaker 00:
And the assumption is that the applicant can have done something from day one.

[00:06:53] Speaker 00:
Here, we don't have that.

[00:06:55] Speaker 00:
And the second part,

[00:06:57] Speaker 00:
is the patent office goes further and identifies the period of time in which the applicant's going to be docked.

[00:07:04] Speaker 00:
And that's nowhere present in 154B2C3.

[00:07:08] Speaker 00:
In fact, Congress was very specific.

[00:07:11] Speaker 00:
In B2C1, they say, here's the period of time that you can be docked in this circumstance.

[00:07:20] Speaker 00:
And then in C3, it says, Mr. Patent Office,

[00:07:24] Speaker 00:
Go ahead and identify those circumstances.

[00:07:26] Speaker 00:
It says nothing about qualifying that period of time.

[00:07:31] Speaker 04:
And when we do look at the period of times in which... There argument basically is that we're trying to have a bright line rule here.

[00:07:38] Speaker 04:
We don't want to have each time period calculation result in a complicated litigation, and so this is reasonable.

[00:07:49] Speaker 04:
That's basically what they're saying.

[00:07:52] Speaker 04:
I mean, are they right?

[00:07:53] Speaker 04:
Would these computations potentially become complex if you had to do it on a case-by-case basis and determine whether the patent application had acted reasonably?

[00:08:05] Speaker 00:
I have three points to make on that, Your Honor.

[00:08:06] Speaker 00:
One, first of all, just because setting a general rule, if setting that general rule goes against the statute, you're out of luck, Mr. Agency, period.

[00:08:16] Speaker 00:
That's the Novartis case, essentially.

[00:08:18] Speaker 00:
That's the Wyeth case.

[00:08:19] Speaker 00:
We cited those.

[00:08:20] Speaker 00:
Pen offices opted not to address those in their papers.

[00:08:23] Speaker 00:
Two, with respect to the general rule setting, that doesn't save you if there are situations where applicants get swept up.

[00:08:42] Speaker 00:
In terms of the case-by-case basis, if you look at the record in this case, let me see if I can find the site.

[00:08:50] Speaker 00:
517 to 522 of the joint appendix, you'll actually see that there is a particularized assessment here.

[00:09:00] Speaker 00:
I understand the patent office doesn't want to be charged or have litigation every time they do a patent term adjustment calculation, but if you look the way that the regulations are set up, there's A delay and B delay and C delay and you have to subtract out the overlaps and then you look to see what applicant delay is there and offset it by that much.

[00:09:18] Speaker 00:
I'm not so sympathetic

[00:09:20] Speaker 00:
to an argument that we can't do a particularized assessment when in every case there is PTA, there is already done a particularized assessment.

[00:09:31] Speaker 04:
Well, but I guess their argument would be that you're adding another complexity on top of what is already a complex statute.

[00:09:39] Speaker 04:
Well, if you want to take advantage of... Is it true?

[00:09:42] Speaker 04:
I mean, is it true that it would make it more complicated if we were to approach it the way you'd like us

[00:09:48] Speaker 00:
I don't believe it does at all.

[00:09:49] Speaker 00:
If you look at those pages of the appendix, which I've set forth for Your Honor, you'll see what the Patent Office does.

[00:09:55] Speaker 00:
Now, sure, some of it's mechanical, but if the patent applicant wants to take advantage of D1, the lifesaver, then they need to come forward with facts to support the application of D1, which the Patent Office is ready to look at and accept.

[00:10:14] Speaker 00:
We're willing to do a particularized assessment on a case-by-case basis, except in this limited circumstance.

[00:10:21] Speaker 00:
It's essentially the argument I'm hearing.

[00:10:22] Speaker 00:
And that makes zero sense to me.

[00:10:24] Speaker 00:
And I have very spare lucidity.

[00:10:26] Speaker 04:
But if we had a situation in which the patent office, every time it was confronted with an adjustment situation, had to determine whether the applicant's efforts were reasonable,

[00:10:37] Speaker 04:
I mean, that could get pretty complicated.

[00:10:39] Speaker 00:
Well, we're not looking at reasonability here, though, in that sense, Your Honor.

[00:10:44] Speaker 00:
I mean, frankly, when you see a number like 546 days pop out of a calculation that'd be charged, or 646 to be charged as applicant delay, that ought to raise a red flag.

[00:10:55] Speaker 00:
I don't think we're talking about hundreds or even dozens of cases where that's the case.

[00:11:00] Speaker 00:
Here, for whatever reason, the Patent Office... It can't turn on the amount of the delay.

[00:11:08] Speaker 04:
They have an interest in having a workable system.

[00:11:11] Speaker 04:
And what they're saying is that every determination required us to look at what the applicant did or didn't do and make an assessment as to whether that was reasonable, that would be unworkable.

[00:11:25] Speaker 04:
And it seems to me that it would be difficult to construe the statute that's requiring that kind of case-by-case determination of reasonable.

[00:11:33] Speaker 04:
Don't you agree with that?

[00:11:34] Speaker 00:
Well, I see.

[00:11:35] Speaker 00:
I'm into my rebuttal time.

[00:11:38] Speaker 00:
I'm sympathetic to a complexity here, but I think there's an easy fix to CA.

[00:11:44] Speaker 00:
It's not my place to tell the Patent Office what to do, of course.

[00:11:47] Speaker 00:
But where there's a situation where the applicant did not have access to that information, the Patent Office seems very willing to have the applicant provide that information and consider it already on a case-by-case basis with respect to D1.

[00:12:03] Speaker 00:
That's the fix.

[00:12:03] Speaker 00:
Just ask.

[00:12:05] Speaker 00:
have in C8 a situation where you flesh out, make the applicant flesh out the ability to have access to that information.

[00:12:17] Speaker 00:
Moreover, Your Honor, the statute is the statute.

[00:12:21] Speaker 00:
And Congress said equal to.

[00:12:24] Speaker 00:
Equal to the amount of time in which you fail to engage in concluding prosecution reasonably.

[00:12:30] Speaker 00:
By regulation and just by ease of administration, you can't

[00:12:34] Speaker 00:
violate what Congress told you to do.

[00:12:38] Speaker 01:
Of course, let me ask you one question.

[00:12:39] Speaker 01:
I assume that you would have no problem with the regulation C-8 if it said submission of a supplemental reply or other paper other than a supplemental reply or other paper expressly requested by the examiner after a reply has been filed, in which case, and this is the key part,

[00:13:00] Speaker 01:
This period of adjustment set forth in section 1.703 shall be reduced in accordance with the provisions and then cite the statute.

[00:13:12] Speaker 01:
That seems right to me, Your Honor.

[00:13:13] Speaker 01:
That seems exactly right.

[00:13:16] Speaker 01:
That's what you would say is the way that regulation should be worded.

[00:13:21] Speaker 00:
And in that case, those 546 days at least,

[00:13:24] Speaker 00:
maybe even the thirty days in which you could have been reasoned with you keep cutting you could have taken advantage of the safe harbor all would not be docked against the aperture really in this case now as i understand the breeze you're only arguing with respect to the five hundred forty six days correct the i think i think that there could be some line that's where i read brief there could be some line drawing you you might say for example will look we give you the you you you took notice on day five forty six

[00:13:50] Speaker 00:
You had 30 days to take advantage of the safe harbor.

[00:13:53] Speaker 00:
It was day 31 that you did.

[00:13:56] Speaker 00:
546 is what we're, to simplify everything in terms of the math, that's what we're asking for.

[00:14:01] Speaker 00:
But there are other ways in which, and I think it's after 546, that's what Congress wanted the Patent Office to do in C3.

[00:14:11] Speaker 00:
Tell me what that particular circumstance, at what point, what's the circumstance at which your applicant has failed to engage?

[00:14:19] Speaker 00:
It's not that 546 part.

[00:14:21] Speaker 00:
Is it day 31 after you receive notice, et cetera?

[00:14:24] Speaker 00:
That's what Congress asked them to do.

[00:14:26] Speaker 00:
And that's not what the patent office did here.

[00:14:29] Speaker 00:
I'm well into my rebuttal time.

[00:14:30] Speaker 04:
But you don't have the right to sit down.

[00:14:32] Speaker 00:
OK, fair enough.

[00:14:33] Speaker 00:
I'll talk about this all day, Your Honor, as long as you'd like to.

[00:14:37] Speaker 03:
So explain to us real quickly why Gilead doesn't resolve this matter.

[00:14:42] Speaker 00:
So Gilead was a completely different case, Your Honor.

[00:14:47] Speaker 00:
It was Gilead's own copending application.

[00:14:53] Speaker 00:
They had it in their pocket the whole time, for each one of those 57 days.

[00:14:59] Speaker 00:
Remember, I talked about C8 and how it has two parts.

[00:15:03] Speaker 00:
And the first part bakes into it an assumption, the assumption being that the applicant could not have done anything from day one.

[00:15:11] Speaker 00:
But Gilead, they could have done everything from that point.

[00:15:13] Speaker 00:
The assumption applied to Gilead.

[00:15:16] Speaker 00:
Point two.

[00:15:18] Speaker 00:
I read Gilead fairly carefully.

[00:15:20] Speaker 00:
And in Gilead, there was no hook, no statutory provision that Gilead could point to and say, aha, you are at odds with the mandate of Congress, with particular statutory language.

[00:15:35] Speaker 00:
Here, we've got that.

[00:15:38] Speaker 00:
It is 154B2C1, and NC3 taken together even, or separately for that matter.

[00:15:48] Speaker 00:
That's where they ran a foul by virtue of the C8 regulation.

[00:15:54] Speaker 00:
So I think, one, we have an utterly different factual scenario.

[00:15:57] Speaker 00:
Two, we actually point to a statutory provision, or two, where the patent office has run a foul.

[00:16:05] Speaker 03:
Doesn't that address the issue of conduct that results in actual delay?

[00:16:10] Speaker 00:
We're not challenging whether it's actual delay or potential for delay.

[00:16:16] Speaker 00:
Here, we had a bunch of delay on the part of the patent office.

[00:16:20] Speaker 00:
And it's not fair for them to use this regulation, which is against the statute, to tack that 18 months off of our patent term.

[00:16:30] Speaker 00:
Actual delay otherwise, I don't know that you could show actual delay here.

[00:16:36] Speaker 00:
Certainly, the patent office delayed quite a bit.

[00:16:39] Speaker 00:
But I don't think that the issue in Gilead, actual delay versus potential for delay, doesn't apply whatsoever.

[00:16:46] Speaker 04:
What troubles me is when you say that you accept Judge Schall's amendment to the regulation, which would say we get charged with the delay unless we acted reasonably using the statutory language.

[00:17:08] Speaker 04:
It seems to me that just potentially opens up all sorts of problems where someone in your position could say, well,

[00:17:15] Speaker 04:
Yeah, they sent us the opposition from the European Patent Office but, you know, FedEx didn't deliver our copy and it was reasonable for us to be delayed because we didn't get things straightened out with FedEx until two months later, so on and so forth.

[00:17:34] Speaker 04:
You can imagine all sorts of horror stories where applicants might say, well, we behaved reasonably even though we were late.

[00:17:42] Speaker 04:
And it seems to me that if the patent was trying to avoid getting into that kind of situation, which is a reasonable objective on their part.

[00:17:50] Speaker 00:
Well, it certainly is a reasonable objective, but you can't go against the mandate of the statute.

[00:17:54] Speaker 00:
Congress said equal to the period in which the applicant has failed to engage in concluding the application, the prosecution of the application, reasonably.

[00:18:03] Speaker 00:
If that's the concern,

[00:18:05] Speaker 00:
then there are mechanisms within the patent office where they can say, look, they do it in D1.

[00:18:10] Speaker 00:
They say, let us know what the facts are, and we'll assess them, and we'll see if you're entitled to this safe harbor or not.

[00:18:17] Speaker 00:
And then we can challenge that.

[00:18:20] Speaker 00:
So that's already there in the regulation with respect to the 30 days.

[00:18:26] Speaker 00:
But you can't just say, it doesn't say.

[00:18:28] Speaker 03:
So the patent office has informed the bar, has informed the profession,

[00:18:34] Speaker 03:
how it can avoid an adverse PTA by saying you follow your IDS within this time period or the other and you followed it outside of those time periods and you're saying that any delay that happened here wasn't as a result of your making, that you didn't actually cause the delay and therefore you shouldn't be docked for it.

[00:18:56] Speaker 03:
I think that Gilead does answer that question.

[00:19:01] Speaker 00:
The statute says we are docked for that period equal to the amount of time in which we failed to engage reasonably in concluding prosecution.

[00:19:10] Speaker 00:
The patent office admitted below that for 546 days of that 646 in which we were docked, there was nothing further we could have done but to advance prosecution.

[00:19:22] Speaker 00:
I don't believe Gilead answers that question at all.

[00:19:24] Speaker 00:
Again, Gilead presented the question of actual versus potential for delay, which had no statutory hook whatsoever.

[00:19:31] Speaker 00:
Here, we have the very language of the authorizing statute, 154B2C1.

[00:19:37] Speaker 00:
That says equal to.

[00:19:39] Speaker 00:
And everyone on this side of the bench agrees that there was nothing more that the applicants here could have done for a year and a half, for 546 days of that period.

[00:19:49] Speaker 00:
Therefore, by docking us that amount, they are adverse to the statute.

[00:19:54] Speaker 00:
They're against what Congress told them they must do.

[00:19:58] Speaker 00:
OK.

[00:19:58] Speaker 00:
Thank you.

[00:19:59] Speaker 00:
Thank you very much, Your Honor.

[00:20:01] Speaker 04:
We'll give you two minutes for a model.

[00:20:03] Speaker 02:
I appreciate that.

[00:20:04] Speaker 02:
Mr. McCotter.

[00:20:06] Speaker 02:
Thank you, Your Honor, and may it please the Court.

[00:20:09] Speaker 02:
General McCotter on behalf of APOLI, Joseph Mittal with me, Mr. Rosilla from the PTO.

[00:20:15] Speaker 02:
Judge Reyna, you have it exactly right.

[00:20:17] Speaker 02:
Here, the appellants failed to follow a PTO regulation designed specifically to avoid PTA loss in this exact kind of circumstance.

[00:20:27] Speaker 02:
D1 gave appellants 30 days simply to send

[00:20:31] Speaker 02:
the European Patent Office letter, and a simple timeliness certification to the PTO, there would have been no PTA reduction.

[00:20:37] Speaker 02:
The patent bar is on notice of those regulations.

[00:20:39] Speaker 02:
They're duly issued.

[00:20:41] Speaker 02:
We argue they're entitled to chevron deference.

[00:20:43] Speaker 04:
Do you agree that there's nothing the applicant could have done to avoid this delay because it didn't get the European Patent Office opposition until, what is it, February 21st?

[00:20:59] Speaker 02:
Well, so they could have, appellants could have submitted a status request.

[00:21:03] Speaker 04:
I mean, aside from the safe harbor.

[00:21:05] Speaker 02:
Well, all right.

[00:21:05] Speaker 02:
Aside from the safe harbor, of course, if they'd done that, we would not be here at all.

[00:21:08] Speaker 02:
But they also could have submitted a status request.

[00:21:11] Speaker 02:
They could have called the examiner.

[00:21:12] Speaker 02:
The notion that they're simply locked out and this is a black box is incorrect.

[00:21:17] Speaker 02:
But even setting that aside, we think... Explain that.

[00:21:20] Speaker 04:
They could have done what?

[00:21:21] Speaker 04:
They could have asked for a status report from the European Patent Office?

[00:21:25] Speaker 02:
No, sorry.

[00:21:26] Speaker 02:
They could have filed a status request

[00:21:27] Speaker 02:
with the patent examiner.

[00:21:32] Speaker 02:
When would this be?

[00:21:34] Speaker 02:
There's no specific timeline.

[00:21:35] Speaker 02:
Essentially, if the applicants are trying to push their application along, they can contact the examiner.

[00:21:41] Speaker 04:
I don't understand what you're saying.

[00:21:42] Speaker 04:
I'm sorry.

[00:21:42] Speaker 04:
How does that bear on whether they could have done something earlier?

[00:21:48] Speaker 02:
Well, they make the argument that during the entire 546 days, there's absolutely nothing they could have done to try to reduce this amount of delay or to try to move the application along.

[00:21:57] Speaker 02:
And that's incorrect because they could have filed a request for status.

[00:22:00] Speaker 02:
They could have reached out.

[00:22:01] Speaker 04:
But we're addressing a specific thing, whether they could have filed this IDS earlier.

[00:22:11] Speaker 04:
And there was no way they could have filed the IDS earlier because they didn't have the information.

[00:22:16] Speaker 04:
It wasn't available to them, right?

[00:22:18] Speaker 02:
That's correct, Your Honor.

[00:22:19] Speaker 02:
They couldn't have filed it before they received it.

[00:22:21] Speaker 02:
But because they missed the deadline in D1, the PTO applies a bright line rule

[00:22:27] Speaker 02:
though we believe was blessed by this court in Gilead that says if applicant behavior results in potential PTO delay, which I don't think there's any doubt occurred here, or at least potentially occurred here, then the PTO reasonably, rationally can subtract the time that has actually been wasted or potentially wasted.

[00:22:45] Speaker 02:
And that would be back to the request for continued examination itself, Your Honor.

[00:22:49] Speaker 04:
Suppose instead of the

[00:22:54] Speaker 04:
interpretation of the regulation that Judge Shaw was talking about earlier, which incorporated the statutory standard, you had something that was stricter than that and said you can't be charged with the delay if there was no possibility of doing anything to avoid the delay.

[00:23:14] Speaker 02:
If the statute said that, Your Honor?

[00:23:16] Speaker 04:
If the regulation were interpreted to have that standard in it.

[00:23:22] Speaker 02:
if there were no possibility that the applicant could have done something sooner.

[00:23:25] Speaker 02:
I still think under Gilead, Your Honor, that the PTO rationally could subtract the amount of time back to the RCE.

[00:23:33] Speaker 02:
And again, appellants clearly would draw the line differently.

[00:23:37] Speaker 02:
Perhaps even the court would draw the line differently.

[00:23:39] Speaker 02:
But because these regulations are issued pursuant to the Congress's express delegation under 154B2C3, they're entitled to the

[00:23:50] Speaker 02:
strongest administrative deference.

[00:23:52] Speaker 02:
And again, this case is under arbitrary and capricious.

[00:23:54] Speaker 02:
The PTO only needs a rational reason for subtracting that time.

[00:23:58] Speaker 02:
And whenever applicants submit IDSs like this, it interferes with the PTO's ability to timely process applications, not just appellants applications, but... But that's not the only question.

[00:24:11] Speaker 04:
The question is whether the applicant behaved reasonably or not.

[00:24:16] Speaker 02:
Right.

[00:24:18] Speaker 02:
Congress specifically said that the PTO gets to define that term, except for one narrow example that was defined in 154 itself.

[00:24:26] Speaker 02:
Once the PTO defines the failure to engage reasonably as filing an IDS during this time period after an RCE, it's almost a natural byproduct, or at least a rational byproduct, that the next step would be the subtraction of PTA time would go back to the RCE itself.

[00:24:43] Speaker 02:
That's the potential amount of time that's been undone, that's been wasted by filing this IDS.

[00:24:49] Speaker 01:
Ricardo, the statute says, shall be reduced by a period equal to the period during which the applicant failed to engage in reasonable efforts to conclude prosecution.

[00:25:03] Speaker 01:
And for the 546 days, the parties agree he couldn't do anything.

[00:25:09] Speaker 01:
And that hasn't been in the briefs.

[00:25:11] Speaker 01:
That hasn't been disputed.

[00:25:13] Speaker 01:
So isn't the situation where here the

[00:25:16] Speaker 01:
applicant is being docked for a period during which, unlike what's in the statute, he couldn't do anything.

[00:25:25] Speaker 02:
But being docked for a time period that resulted in a potential delay to the PTO.

[00:25:31] Speaker 01:
But he didn't cause any delay during that 546-day period, did he?

[00:25:38] Speaker 01:
He was waiting for the PTO to rule on the RCE that had been filed in February of 2011, correct?

[00:25:45] Speaker 02:
Correct.

[00:25:46] Speaker 02:
During that time, type A delay is accruing, undoubtedly, against the PTO.

[00:25:52] Speaker 02:
And so all the PTO is saying is then, if that time potentially gets wasted, gets undone by the filing of an IDS.

[00:25:58] Speaker 01:
But how did it get undone?

[00:26:00] Speaker 01:
Because he's saying, during that period, ending on, I guess, August 21st, 2012, during that period in there, how did the IDS undo any of that?

[00:26:14] Speaker 01:
He's saying, I'm on the hook.

[00:26:16] Speaker 01:
For the period when I didn't file during the safe harbor or lifesaver provision, whatever you want to call it.

[00:26:24] Speaker 01:
But the period that he's being docked for, the 546 days, the parties agree he couldn't do anything.

[00:26:32] Speaker 02:
Your Honor asks, how did the IDS undo the time between the request for a continued examination and when they received this European patent letter?

[00:26:41] Speaker 02:
And that's an argument that we think is squarely addressed by Gilead.

[00:26:43] Speaker 02:
It undid it.

[00:26:44] Speaker 01:
The IDS didn't affect that.

[00:26:45] Speaker 01:
I'm sorry.

[00:26:46] Speaker 01:
The IDS didn't, nobody, everyone agrees, and correct me if I'm wrong, that he couldn't do anything during the 546 day period.

[00:26:57] Speaker 01:
So how can you dock someone for that period when the statute says you're only liable for a period during which you fail to engage in reasonable efforts?

[00:27:07] Speaker 02:
Well, on the first point, Your Honor, we agree there was nothing you could have done about the European Patent Office letter before you received it, of course.

[00:27:14] Speaker 02:
Well, as I said, during that time, they could have tried to move the application along.

[00:27:18] Speaker 01:
They should have made that argument before in the briefs.

[00:27:21] Speaker 01:
Is that in the briefs?

[00:27:23] Speaker 02:
It's not, your honor.

[00:27:23] Speaker 01:
I mean, I don't think anyone's argued that, I don't recall anybody, I could be wrong.

[00:27:30] Speaker 01:
I could have missed it in the briefs, but it didn't seem to be anywhere in the briefs that the office was saying there was something he should have done during that 546 day period.

[00:27:42] Speaker 01:
As far as I can tell.

[00:27:45] Speaker 01:
That's the case.

[00:27:45] Speaker 01:
Am I wrong?

[00:27:47] Speaker 02:
I think during that time period, correct, there was nothing that he could have done about the European Patent Office letter.

[00:27:53] Speaker 01:
But the office didn't say he could have done anything.

[00:27:56] Speaker 02:
Well, I think ultimately, Your Honor, setting aside, we think that's irrelevant.

[00:28:00] Speaker 02:
That's an argument.

[00:28:01] Speaker 01:
Why is it irrelevant if the statute says you're on the hook for a period during which you fail to engage in unreasonable efforts, right?

[00:28:11] Speaker 01:
Correct.

[00:28:12] Speaker 01:
And everyone agrees here.

[00:28:13] Speaker 01:
that during the 546 day period, he did not fail to engage in reasonable efforts.

[00:28:21] Speaker 01:
We do not agree on that point, Your Honor.

[00:28:23] Speaker 01:
Why?

[00:28:24] Speaker 01:
What did he not do?

[00:28:25] Speaker 01:
During the time period of... 546 days.

[00:28:29] Speaker 01:
He was waiting for the RCE ruling, correct?

[00:28:32] Speaker 01:
Correct, Your Honor.

[00:28:33] Speaker 01:
But what did he not do then?

[00:28:36] Speaker 02:
Well, looking back retrospectively is often how we can determine whether a party was failing to reasonably engage.

[00:28:41] Speaker 02:
And the PTO can say,

[00:28:43] Speaker 02:
that that time period that's been undone can count as time.

[00:28:47] Speaker 02:
But how's it been undone?

[00:28:48] Speaker 01:
He couldn't do anything during that period.

[00:28:50] Speaker 01:
What could he have done during that period that he didn't do?

[00:28:54] Speaker 01:
Just answer that.

[00:28:55] Speaker 02:
Well, besides filing a status request and trying to move the application along.

[00:28:59] Speaker 02:
You're saying he shouldn't have been banging on the examiner's door.

[00:29:02] Speaker 02:
Well, I don't think it has to be that aggressive.

[00:29:03] Speaker 02:
He could have inquired, yes.

[00:29:06] Speaker 02:
But that hasn't been argued before this.

[00:29:08] Speaker 02:
But as to the European Patent Office letter itself, yes, we agree.

[00:29:13] Speaker 02:
have submitted information before they got it.

[00:29:15] Speaker 02:
How often does this come up?

[00:29:17] Speaker 02:
I'm sorry, Your Honor?

[00:29:18] Speaker 04:
How often does this particular problem come up?

[00:29:20] Speaker 02:
Under D1 specifically?

[00:29:22] Speaker 04:
Yeah, that's the sort of situation that we have here.

[00:29:24] Speaker 04:
Is this a one-off case or are there other cases like this?

[00:29:28] Speaker 02:
It's actually relatively common, Your Honor, for parties to learn about information, say in litigation that's going off on the side, they'll submit an IDS with that new information.

[00:29:37] Speaker 02:
They'll say that's information we could not have learned about before.

[00:29:40] Speaker 02:
And that time between that IDS back to the request for continued examination gets subtracted as a matter of course.

[00:29:47] Speaker 02:
As far as I'm aware, no other parties ever challenged it.

[00:29:50] Speaker 02:
And this case, we think, is even easier because of the D1 provision that allowed them to possibly, by simply flagging it.

[00:29:56] Speaker 04:
So there are other situations in which people have missed the safe harbor and the same issue has come up?

[00:30:02] Speaker 04:
I'm not aware of any that have made it to court, Your Honor.

[00:30:05] Speaker 04:
No, but the patent office.

[00:30:07] Speaker 04:
It comes up at the patent office.

[00:30:09] Speaker 02:
It does come up, Your Honor, yes.

[00:30:10] Speaker 04:
Are there other situations in which there are disputes about reasonable efforts?

[00:30:15] Speaker 02:
Well, so I think if I understand your question correctly, Your Honor, you're getting at the case-by-case inquiry that appellants say that is not required, but we think clearly would be.

[00:30:26] Speaker 02:
We think it's illustrated by the fact that appellants themselves don't seem to be able to agree on how much time they think they're entitled to.

[00:30:32] Speaker 02:
They said 646 days below.

[00:30:34] Speaker 02:
They said 546 states.

[00:30:35] Speaker 04:
Now they're saying we at least shouldn't be docked for the period of time when we couldn't do anything.

[00:30:41] Speaker 04:
I guess what I'm saying is I'm trying to understand this.

[00:30:44] Speaker 04:
We're here interpreting the statute.

[00:30:47] Speaker 04:
We're here interpreting regulation.

[00:30:48] Speaker 04:
I'm trying to understand the kinds of situations in which this comes up.

[00:30:52] Speaker 04:
Are there other cases, types of cases, other than the delay in receiving information where applicants are arguing that they shouldn't be docked because their efforts were reasonable?

[00:31:03] Speaker 04:
Does the concern about a case-by-case adjudication of this issue bear on other situations?

[00:31:10] Speaker 02:
Absolutely, Your Honor.

[00:31:11] Speaker 02:
I think the example of parties who learn about information through other litigation, and they'll submit an IDS, and they can raise the exact same kind of arguments that appellants have here.

[00:31:20] Speaker 04:
I understand that, but apart from that, apart from situations where they're saying, we didn't get the information, so we couldn't have done anything earlier, are there other situations where

[00:31:32] Speaker 04:
the question of what constitutes reasonable efforts comes up?

[00:31:36] Speaker 02:
I think even in a fact pattern, as the court saw in Gilead, parties could raise that kind of argument.

[00:31:42] Speaker 02:
If I understand in Gilead, during our argument, the appellant was arguing that, well, what if we have a situation where there's information sitting in the mail room, and we don't know about it?

[00:31:53] Speaker 02:
And I think Your Honor even mentioned that kind of example.

[00:31:55] Speaker 02:
Well, that's an argument where they're going to say, we couldn't reasonably have submitted that, and therefore we couldn't reasonably have failed to engage in efforts.

[00:32:02] Speaker 02:
yet it was sitting in the mail room.

[00:32:04] Speaker 02:
And so now the PTO is what can have to take affidavits from people at the law firm or is going to have to introduce extra evidence, extra record evidence.

[00:32:13] Speaker 02:
We think that PTO is entirely entitled to issue bright line rules like C8.

[00:32:19] Speaker 02:
And then, especially in a case like this, where they make an exception for D1 because they badly want this kind of information to be submitted timely, foreign patent office information, then when you put those together,

[00:32:30] Speaker 02:
the entirety of the scheme is certainly rational, which we believe is the only requirement that needs to be satisfied here under Chevron.

[00:32:38] Speaker 03:
When you say the entirety of the scheme, then noting that PTO has its own deadlines that the statute imposes with respect to these proceedings, how do those deadlines interact with the interpretation of the word reasonable that we're looking at?

[00:32:57] Speaker 02:
Well, I think it's a good way to frame the case, Your Honor.

[00:32:59] Speaker 02:
During most of the time period between the RCE and the IDS, the PTO was accruing type A delay.

[00:33:06] Speaker 02:
And that's undisputed.

[00:33:07] Speaker 02:
That's time that's counting against the PTO.

[00:33:09] Speaker 02:
And all that happens here is that time then gets reduced by the amount of delay or potential delay by applicants' behavior in filing this IDS.

[00:33:18] Speaker 02:
And so they do kind of work together, Your Honor.

[00:33:20] Speaker 02:
The PTO is, in a way, trying to prevent what you might call double-dipping in terms of time here.

[00:33:26] Speaker 02:
They're saying, we're not going to give you a delay, type a delay, when you submit an IDS that causes us to go back and start over again, or at least potentially.

[00:33:34] Speaker 02:
And here, the PTO's next office action after this IDS did incorporate and respond to the information that was submitted in the IDS.

[00:33:43] Speaker 02:
And so in this case, there actually is evidence that the PTO had to go back and start over the process.

[00:33:49] Speaker 03:
Do you see a scenario where a septus supernosus argument that can lead to a windfall of PTA?

[00:33:56] Speaker 02:
Well, I think you'll have parties who serially submit IDSs.

[00:34:01] Speaker 02:
And then they'll say, all that time gets added in.

[00:34:04] Speaker 02:
Meanwhile, the PTO has to sit here and respond to one after the other, or at least consider responding, consider its effect.

[00:34:11] Speaker 02:
And if parties are filing them over and over, then you end up with this long period of A delay, type A delay.

[00:34:17] Speaker 02:
And appellants are going to argue, oh, but you can't subtract any of that time from our IDS because C8 is

[00:34:24] Speaker 02:
void or invalid, or at least we reasonably couldn't have turned over some of that information.

[00:34:27] Speaker 02:
And let's have a fact finding to determine whether we could.

[00:34:30] Speaker 02:
The PTO is entitled to issue bright line rules.

[00:34:34] Speaker 02:
And they even have a specific safe harbor here under D1.

[00:34:36] Speaker 02:
We think the PTO did not need to do anything further, Your Honor.

[00:34:41] Speaker 01:
Well, let me just ask you one question.

[00:34:43] Speaker 01:
This is respect to, I guess, his footnote 10 in your brief on page 44.

[00:34:47] Speaker 01:
This came up in Mr. Karsten's argument.

[00:34:51] Speaker 01:
He was saying sort of,

[00:34:54] Speaker 01:
collaterally saying, look, we could have waited until the end of prosecution and filed the IDS then.

[00:35:02] Speaker 01:
And I guess, as I understand it, that is correct.

[00:35:08] Speaker 01:
And we wouldn't be in this.

[00:35:09] Speaker 01:
In footnote 10, you say, if that had been done, the applicant would have mooted any application of C8.

[00:35:20] Speaker 02:
Is that correct?

[00:35:22] Speaker 02:
It is theoretically possible that they could hold onto this information and file it at the right time.

[00:35:28] Speaker 04:
That would be in violation of the PTA rules, right?

[00:35:32] Speaker 02:
It would depend on how late they filed it.

[00:35:34] Speaker 02:
Rule 1.97, which is cited in the footnote, Your Honor, it sets wider timelines for when a party can submit the information.

[00:35:41] Speaker 02:
That doesn't mean they're going to get PTA time for it.

[00:35:43] Speaker 02:
And that kind of dichotomy is in the statute itself, section 154, B2, C2.

[00:35:50] Speaker 02:
It's possible.

[00:35:52] Speaker 04:
This applicant couldn't have waited the period of time that would have been necessary to file it later without violating the rules, right?

[00:36:02] Speaker 02:
Well, they definitely would have violated D1.

[00:36:03] Speaker 02:
And I think under their duty of candor under 1.56, I wouldn't say it would be a violation, Your Honor.

[00:36:07] Speaker 02:
I think it would be very risky.

[00:36:10] Speaker 02:
Because if the next office action was a notice of allowance, then they could be subject to a huge delay under a huge reduction of PTA delay under

[00:36:20] Speaker 02:
C10 or C12.

[00:36:22] Speaker 02:
So it's theoretically possible, but very risky.

[00:36:25] Speaker 02:
The appellant and Gilead, Your Honor, made that exact same argument, and it's briefed to this court.

[00:36:30] Speaker 02:
And we'd submit the court did not find that a persuasive point in that case.

[00:36:34] Speaker 01:
What I was saying is, I guess, leaving aside for the moment when they did file the IDS, I guess the PTO on September 13th of 2013 issued the first office action after the filing of the

[00:36:49] Speaker 01:
September of the February 22, 2011 RCE.

[00:36:54] Speaker 01:
And could they have, would they have been untimely if they had filed the IDS?

[00:37:00] Speaker 01:
In other words, would we be in this situation if they had filed the IDS the day after that?

[00:37:07] Speaker 02:
I don't, I don't believe that they would necessarily be subject to a reduction, Your Honor, in that case.

[00:37:13] Speaker 02:
But again, that's kind of hindsight bias here.

[00:37:15] Speaker 02:
If they knew the next legislation would be that exact kind.

[00:37:18] Speaker 02:
Whereas if the next office action were a notice of allowance, they could be subject to a huge reduction yet again.

[00:37:23] Speaker 02:
So it's one of these kind of gamesmanship issues where if an appellant really wants to try and be very risky and kind of bet it all on reducing this amount of time.

[00:37:32] Speaker 01:
The problem is, I guess, 1.97 or whatever it is kind of puts you in a little bit different world than 704C.

[00:37:38] Speaker 01:
And it's hard sometimes to juxtapose them is what you're saying.

[00:37:43] Speaker 02:
Correct.

[00:37:43] Speaker 02:
A filing like an IDS can be timely under 1.97.

[00:37:47] Speaker 02:
but not entitled to PTA time under C8 or D1, Your Honor.

[00:37:52] Speaker 02:
And we think that's an example.

[00:37:54] Speaker 01:
We obviously don't have that case here.

[00:37:55] Speaker 01:
I mean, we don't have that issue here of the applicant waiting to file the IDS until September 13th.

[00:38:03] Speaker 01:
But it's just come up in the course of a little bit in the briefing and in the argument.

[00:38:08] Speaker 02:
Right, Your Honor.

[00:38:08] Speaker 02:
But we don't think that that renders C8 or D1 irrational or arbitrary and capricious, the fact that a party could get very lucky and try to time it and therefore avoid any penalties.

[00:38:18] Speaker 02:
If there are no further questions.

[00:38:20] Speaker 02:
Thank you, Mr. McCormick.

[00:38:21] Speaker 00:
Thank you.

[00:38:22] Speaker 00:
Mr. Kirsten, you've got two minutes.

[00:38:24] Speaker 00:
Yes, Your Honor.

[00:38:24] Speaker 00:
Thank you so much for the extra two minutes.

[00:38:26] Speaker 00:
I may please the court.

[00:38:28] Speaker 00:
I thought I heard the government argue that the word reasonable in the statute is now irrelevant.

[00:38:33] Speaker 00:
That's a heck of an argument to make.

[00:38:38] Speaker 00:
There's an undisputed fact here, and that is 546 of those dates.

[00:38:43] Speaker 04:
I think what the government is arguing that a case by case determination of reasonableness would

[00:38:49] Speaker 04:
be a mess.

[00:38:50] Speaker 00:
Well, you know, I hear you, Your Honor.

[00:38:55] Speaker 00:
The Patent Office can go back to the drawing board if it so desires and fix it.

[00:39:01] Speaker 00:
They've already changed D1.

[00:39:03] Speaker 00:
Well, so D1 was implemented in 2000.

[00:39:05] Speaker 00:
They came back and fixed it in 2011.

[00:39:07] Speaker 00:
I also heard counsel argue that, well, there are situations where folks learn about stuff in litigation.

[00:39:12] Speaker 00:
Well, that's not D1 at all.

[00:39:15] Speaker 00:
I mean, if you actually look at the brief,

[00:39:17] Speaker 00:
D1 applies only to materials that are learned about in foreign prosecution or in a related application in the Patent Office.

[00:39:26] Speaker 00:
And D1 reflects, to address the concern about serial IDSs, D1 reflects a policy decision by the agency, by the Patent Office, that it wants to encourage people to file IDSs in those limited circumstances, serially or otherwise.

[00:39:42] Speaker 00:
I also heard a question or a suggestion that maybe we could have

[00:39:48] Speaker 00:
pinged the examiner with a status report or picked up the phone and called the examiner.

[00:39:53] Speaker 00:
Well, had we done that the day before we learned of the European material, that would be an other paper that wasn't asked for by the examiner under 1704 C-8 and not arbitrary capricious.

[00:40:13] Speaker 00:
By the virtue of filing a status report and saying, hey, Mr. Examiner or Ms.

[00:40:18] Speaker 00:
Examiner, please, please, please conclude prosecution.

[00:40:22] Speaker 00:
Under C8, we have just converted patent office delay into applicant delay by seeking to advance the prosecution.

[00:40:35] Speaker 00:
It turns the world on its head.

[00:40:37] Speaker 00:
By filing an other paper, that is a status report request,

[00:40:41] Speaker 00:
We've then fallen within the realm of C8 because the patent office didn't ask for it.