[00:00:00] Speaker 03:
So we will hear argument in number 20-1833, Chudik versus Yanku.

[00:00:07] Speaker 03:
Mr. Waltmeyer, please start when you're ready.

[00:00:12] Speaker 01:
Good morning, Your Honor, and may it please the Court, Eric Waltmeyer for Appellant Stephen Chudik.

[00:00:17] Speaker 01:
In denying Dr. Chudik's motion for summary judgment and in granting the PTO's motion for summary judgment, the District Court erred for at least two reasons and should be reversed.

[00:00:27] Speaker 01:
First, under the C delay portion of the Patent Term Adjustment Statute at 35 USC 154B1C IIII, the pendency of the review at the P tab begins like it does in this court upon the filing of a Notice of Appeal.

[00:00:44] Speaker 01:
The PTO errors in only providing C delay days upon the filing of a reply brief or upon the expiration of the time to file a reply brief.

[00:00:54] Speaker 01:
The district court erred in finding that the C delay portion of the statute was ambiguous and erred in finding reasonable the PTO's regulations and decisions on this point.

[00:01:05] Speaker 01:
Second, the text of the C delay portion of the statute provides, providing, quote, a decision in the review reversing an adverse determination of patentability, end quote, is not limited to a decision of the PTAB.

[00:01:20] Speaker 01:
Instead, the language encompasses a decision of the examiner

[00:01:24] Speaker 01:
to reopen prosecution after a notice of appeal is filed.

[00:01:29] Speaker 01:
The USPTO errs in its decision and its regulations to exclude an examiner's reopening from being a decision in review under the statute.

[00:01:39] Speaker 03:
And the court errs.

[00:01:41] Speaker 03:
Mr. Wilma, this is Judge Trento.

[00:01:42] Speaker 03:
Can I ask a question that has, I guess, been hanging over my thinking about this case?

[00:01:49] Speaker 03:
Why is there not

[00:01:52] Speaker 03:
B delay, not C delay, but why is there not B delay for the 655 days that are at issue here?

[00:02:00] Speaker 03:
What's the obstacle to that?

[00:02:02] Speaker 03:
And I think of that, obviously, because as you discuss in your brief, the most recent or at least the 2012 regulatory activity in the Federal Register has the PTO saying we're going to

[00:02:21] Speaker 03:
trim back the availability of C delay.

[00:02:24] Speaker 03:
And the director there repeatedly says, at least in many circumstances, those days now trimmed out of C delay will be available in B delay.

[00:02:38] Speaker 03:
And I'm actually interested in both parties' views about what the obstacle is to these 655 days being eligible for B delay.

[00:02:52] Speaker 01:
Your Honor, thank you.

[00:02:53] Speaker 01:
I believe the issue here about B delays is that the B delays exclude time consumed by a continued examination of the application.

[00:03:08] Speaker 01:
In this case, prior to the final rejection from which the first notice of appeal was filed to the PTAB, prior to that, there was a request for continued examination.

[00:03:21] Speaker 01:
And that is where the B delays become unavailable.

[00:03:29] Speaker 01:
And we think that the government's, you know, I'm sorry, go ahead.

[00:03:40] Speaker 03:
No, no.

[00:03:41] Speaker 03:
I don't think there was a question.

[00:03:42] Speaker 03:
Why don't you continue?

[00:03:44] Speaker 01:
Oh, I'm sorry.

[00:03:45] Speaker 01:
So the B delays are unavailable for the time period that's at issue here.

[00:03:51] Speaker 01:
In this case, we had a final rejection.

[00:03:55] Speaker 01:
We had a notice of appeal.

[00:03:57] Speaker 01:
Then we had four reopenings where the examiner dropped a reference for 102 and 103 and added a new reference and then dropped two references for 102 and 103 rejections, dropped the 102 rejection entirely, brought up new references for 103, introduced

[00:04:20] Speaker 01:
new 112 and 101 rejections that were not previously made.

[00:04:25] Speaker 01:
Then at each point, Dr. Chuddick filed a notice of appeal and an appeal brief, and at each time then thereafter, there was a reopening, dropping the 112 rejection, and then again, a notice of appeal, and then a fourth reopening, dropping the 101 rejection.

[00:04:47] Speaker 01:
So in each case,

[00:04:48] Speaker 01:
we have a examiner reversing her decision and that was within the review under the statute because the review is pending when the notice of appeal is filed.

[00:05:08] Speaker 03:
The language... Just to be clear, you need to find error on two grounds.

[00:05:18] Speaker 03:
the ground that the only permitted reverser is the board under this seed delay provision and also that the review was underway even before as a regulatory matter the board's jurisdiction attached by the filing of the reply or the lapse of time for the reply.

[00:05:49] Speaker 03:
Those are two separate grounds on which, if you're wrong about either one, the district court's judgment would stand.

[00:05:57] Speaker 03:
Is that right?

[00:06:00] Speaker 01:
Your Honor, that's correct.

[00:06:02] Speaker 01:
We need a decision in the review reversing an adverse determination and dependency of the review begins at the notice of appeal.

[00:06:12] Speaker 01:
So those are the two things, the two places where the district court and the PTO error

[00:06:17] Speaker 01:
that we believe clearly the statute provides contrary.

[00:06:22] Speaker 01:
So yes, those two errors need to be corrected.

[00:06:30] Speaker 01:
The PTO's position that the seed delays beginning later at the reply brief rather than at the Notice of Appeal is contrary to the fundamental purpose of the statute as this Court recognized

[00:06:44] Speaker 01:
on another provision in Suburnus where the court said the USPTO's interpretation of the statute unfairly penalizes applicants and went on to say that it fails to protect the applicant's full patent term.

[00:06:59] Speaker 01:
As I mentioned earlier, the back and forth, the four reopenings in this case spanned a period of about three and a half years and the amount of time

[00:07:09] Speaker 01:
that we think should be available from the notices of appeals to the reopenings in each case is 753 days.

[00:07:20] Speaker 01:
And that is a substantial amount of time.

[00:07:25] Speaker 01:
And the process of going back and forth many times, that's not something that would be acceptable in this court.

[00:07:34] Speaker 01:
And if the applicants are required to be subjected to

[00:07:39] Speaker 01:
essentially an almost unending changing of position when the applicant wants to undertake an appeal, at least they should be compensated as Congress intended by the restoration of days that were consumed in that time when all of that time was not caused by Dr. Chuddick.

[00:08:06] Speaker 01:
It was entirely caused by the patent office.

[00:08:14] Speaker 03:
Just to be clear about this, and all of the time that's in dispute, would you think actually be excluded from B delay because it was, quote, consumed by continued examination under 132B?

[00:08:34] Speaker 01:
Your Honor, that's my understanding at this moment that the time there is, that's why the office hasn't awarded it.

[00:08:45] Speaker 01:
But even, you know, the issue about, you know, whether it's here or there, the statute, you know, contemplates that there might be some overlap between essentially A, B, or C delays.

[00:09:00] Speaker 01:
If you look at B2,

[00:09:02] Speaker 01:
It talks about, well, if there's any overlaps, at least the period shall not exceed the actual numbers of delays of the issue in terms of the patent.

[00:09:15] Speaker 01:
So Congress sought to address the issue of overlaps, if there are any, and because Congress has already addressed the issue of overlap,

[00:09:31] Speaker 01:
we should be focused on the language of section, the C delays of the statute.

[00:09:39] Speaker 01:
You know, even if delays, sections might be, you know, delays, other delays might be added because Congress, you know, provided a way to resolve that.

[00:09:51] Speaker 01:
In the district court, the district court says that, quote, the actual process of – that the review in the statute could refer to the, quote, actual process of substantive review rather than the period initiated procedurally.

[00:10:07] Speaker 01:
And the government, at its brief on page 31, says – refers to this as, quote, the point when the PTAP actually starts evaluating the lower decision, but actually PTAP

[00:10:19] Speaker 01:
The PTO doesn't limit C delays to only the time judges spend reviewing briefs or considering their decisions.

[00:10:26] Speaker 01:
Instead, you know, we've all picked a time when the briefing is complete, but the delays under the patent term adjustment statute are for delays.

[00:10:37] Speaker 01:
They're for the delays, whether we're waiting for a decision, whether the PTAB is actually working on it.

[00:10:43] Speaker 01:
or for other reasons, you know, that follow the beginning of the review period that starts on the notice of appeal.

[00:10:52] Speaker 01:
And my time has gotten to the end, so I will reserve the balance for rebuttal.

[00:10:57] Speaker 01:
Thank you.

[00:10:58] Speaker 01:
Thank you.

[00:11:00] Speaker 03:
We'll hear from Ms.

[00:11:01] Speaker 03:
Yang.

[00:11:03] Speaker 00:
Thank you.

[00:11:04] Speaker 00:
Good morning, and may it please the court.

[00:11:05] Speaker 00:
This is Assistant United States Attorney Katherine Yang on behalf of the Director of the Patent and Trademark Office.

[00:11:12] Speaker 00:
Mr. Trudick seeks C-delay under 35 USC 154 C-3 for the time spent in his appeals to the PTAB.

[00:11:21] Speaker 00:
However, and crucially, Mr. Trudick undisputedly never received a decision by the PTAB that reversed the examiner's adverse determination.

[00:11:30] Speaker 00:
That places him entirely outside the textually narrow scope of the C-delay provision.

[00:11:36] Speaker 03:
This is Judge Toronto.

[00:11:40] Speaker 03:
I want to actually turn back to this B question because I guess that's where my puzzlement lies.

[00:11:50] Speaker 03:
I do understand that in this case, Mr. Chudik did not ask for B delay.

[00:11:59] Speaker 03:
If you can put that out of your mind for a minute, can you help me understand why

[00:12:04] Speaker 03:
B delay would not be available here, and then there's a natural follow-up to that, which is there seems to be an extensive period of delay caused by the PTO that is unaccounted for by the combination of the C delay restriction and the restriction on B, if indeed there is a restriction on B. Certainly, Your Honor.

[00:12:32] Speaker 00:
The answer to your question of why there's no fee delay in this particular case is because by statute, the time following a request for continued examination is excluded from fee delay.

[00:12:46] Speaker 00:
And that's also what this court has held in the Novartis case.

[00:12:50] Speaker 00:
Had Mr. Cudick immediately appealed his final rejection in 2010 to the PTAB, then he would have been compensated for any examiner reopening in the form of fee delay.

[00:13:02] Speaker 00:
And as Your Honor noted, that's exactly the reasoning that was given in the PTO's rulemaking, that an examiner's reopening isn't appellate reviewed by the PTAB, but that it can be compensated with additional fee delay.

[00:13:15] Speaker 00:
However, in this case, Mr. Trudick

[00:13:17] Speaker 00:
made the choice to file an RCE instead.

[00:13:20] Speaker 00:
And again, by statute and this court's precedent, that mandates that whatever time is spent in continued examination is then subtracted from B-delay.

[00:13:30] Speaker 03:
Can you help me understand just why at the level of what's the, why does it make sense to combine

[00:13:43] Speaker 03:
the restriction on C, the dual restriction that you've asserted here and that the district court found here with an exclusion for continued examination.

[00:13:57] Speaker 03:
I'm not familiar enough with the details of continued examinations to understand why that would make sense since it leaves

[00:14:11] Speaker 03:
in this case, I mean, almost two years of unaccounted for time?

[00:14:19] Speaker 00:
Certainly.

[00:14:19] Speaker 00:
The answer, I think, is in the statute itself, specifically that in the B-delay provision, one of the other exclusions is that it also excludes time consumed by appellate review by the PTAB, or the federal court, but for purposes here today, by the PTAB.

[00:14:36] Speaker 00:
And so there is that identical language in the exclusion in

[00:14:39] Speaker 00:
the B delay provision as well as the C delay provision such that even though under the C delay provision an applicant would not be compensated for an examiner's reopening, that same time would be compensated in the B delay, in the form of B delay, and that only the time

[00:15:03] Speaker 00:
that after jurisdiction passed to the board, would that time not be counted for purposes of B delay?

[00:15:08] Speaker 00:
So I think the first answer to Your Honor's question lies directly in the statute.

[00:15:13] Speaker 00:
The second response to Your Honor's question and going to the period that you mentioned is uncompensated is that

[00:15:23] Speaker 00:
Yes, the PTA statute is designed to compensate delays by the PTO.

[00:15:28] Speaker 00:
However, it only compensates applicants for certain types of enumerated PTO delays that Congress legislated.

[00:15:37] Speaker 00:
And those enumerated types are each reflected in each of the A, B, and C delay provisions.

[00:15:43] Speaker 03:
Let me just try to ask, I guess, this version of the question.

[00:15:50] Speaker 03:
did the request for continued examination do?

[00:16:00] Speaker 03:
Right, you indicated that I think that the delay would have been available had the appeal been taken from the final office action and no request for continued examination been filed.

[00:16:12] Speaker 03:
So what did the request for continued examination

[00:16:16] Speaker 03:
ask the examiner to do, authorize the examiner to do, that somehow changes the concrete situation that the applicant faced.

[00:16:31] Speaker 00:
I confess I'm not familiar with the intricacies of the content of the RCE and how that changed concretely the case for the application.

[00:16:46] Speaker 00:
However, it is true that Mr. Chudik received a final rejection in 2010, at which point immediately he could have appealed to the PTAP and any examiner reopening after that period would have been compensated by additional

[00:17:09] Speaker 00:
The request for continuing examination simply just allowed the examination to continue rather than stopping the strategic in his tracks at that particular point.

[00:17:24] Speaker 00:
But again, I would also sort of loop back to the earlier answer that I gave, Your Honor, which is that the back and forth between an applicant and an examiner isn't

[00:17:37] Speaker 00:
isn't properly considered PTO delay.

[00:17:39] Speaker 00:
But again, the statute only compensates applicants for certain types of enumerated PTO delay.

[00:17:45] Speaker 00:
That back and forth between an examiner and an applicant is just part of the regular process of patent prosecution, as this court has held in the Pfizer case.

[00:17:57] Speaker 00:
And so these are the reasons why a fee delay normally would be available to compensate an applicant for any time consumed by an examiner's reopening.

[00:18:07] Speaker 00:
It just so happens that under the prosecution choices that Mr. Trudyck made in this case and as a result of the statute and this court's precedent interpreting that statute, that additional time cannot compensate him here in the form of fee delay.

[00:18:26] Speaker 00:
In terms of the plain language and the context of the statute, we've, I think, explained this extensively in our brief, so I won't belabor the point.

[00:18:35] Speaker 00:
But the plain language and the context conditions the threshold of entitlement to see the lay on two interrelated requirements.

[00:18:42] Speaker 00:
There has to be one, the existence of a decision in the appellate review by the PTAB, and two, one that reverses an adverse determination.

[00:18:50] Speaker 00:
The plain language of the term appellate review means a higher authority's examination of a decision below, which then affirms or reverses.

[00:18:59] Speaker 00:
And the statute also tells us at Section 6 that the very role of the PTAB is to review adverse decisions of examiners.

[00:19:08] Speaker 00:
And so if there were any doubt about what the meaning of reversing an adverse determination is, that would be resolved by the very statute itself, which tells us that the PTAB is the one that reviews adverse decisions.

[00:19:20] Speaker 00:
Taken together, this means that it is not enough that the examiner reopened prosecution to entitle him to see the land in the first place.

[00:19:30] Speaker 00:
This is also consistent with what this court has held in the Hyatt case, where the court held that an examiner's reopening of prosecution is completely separate from appellate review by the PTAB.

[00:19:41] Speaker 00:
And it's consistent with the statute, because by statutory definition, an examiner is not a member of the PTAB, does not conduct appellate review,

[00:19:50] Speaker 00:
and does not reverse herself.

[00:19:53] Speaker 00:
Mr. Ciotek's only textual argument, which he repeated again here today, is that appellate review means the beginning of the appeal and somehow signifies the pendency of the appeal.

[00:20:03] Speaker 00:
But the term appellate review is different and has to be different from the mere taking of an appeal.

[00:20:09] Speaker 00:
And we know this because the PTA statute and other sections refers specifically to the taking of an appeal.

[00:20:18] Speaker 00:
And so because Congress decided to use distinct language in the C-delay provision with the specific phrase appellate review, as opposed to taking an appeal, that distinction has to mean something under regular rules of statutory construction.

[00:20:34] Speaker 00:
Rather than addressing the issue of entitlement, Mr. Chudik focuses on this secondary issue of

[00:20:44] Speaker 00:
how the PTO calculates seat delay.

[00:20:46] Speaker 00:
In other words, referring again to the pendency of the review and the seat delay on the date the jurisdiction passes to the board.

[00:20:52] Speaker 00:
To be clear, the court does not need to decide this issue because he is not entitled to any seat delay in the first place.

[00:21:02] Speaker 00:
There are other issues with this argument about calculation that are discussed fully in the red brief.

[00:21:09] Speaker 00:
So I won't belabor the point here, except to reiterate that

[00:21:12] Speaker 00:
the language in the last part of 154C regarding the pendency of the review.

[00:21:19] Speaker 00:
As a matter of statutory construction, it has to refer to the same appellate review by the PTAB that is in the preceding portion in C3.

[00:21:28] Speaker 00:
The PTAB's review does not start upon the moment of a notice of appeal, and so Mr. Trudy's argument, even about how the PTO calculates seed-alay, is flawed as a textual matter.

[00:21:42] Speaker 00:
Moving on, this case can and should be decided in the PTO's favor just based on the plain language alone, but if the court decides that the statute is ambiguous, it still should affirm because the PTO's regulations at 1.702 and 1.703E are reasonable constructions of the statute and are entitled to considerable deference.

[00:22:05] Speaker 00:
Again, starting with entitlement, both regulations require that there be a decision by the PTAB

[00:22:11] Speaker 00:
in the applicant's favor, and that is directly keyed off of the statutory language just discussed.

[00:22:17] Speaker 00:
The regulations are also the result of extensive notice and comment rulemaking that has repeatedly addressed and rejected the argument here that something other than a favorable decision by the PTAB can entitle an applicant to see the life that has been in the rule for more than 20 years

[00:22:33] Speaker 00:
It remains the rule because of extensive comments saying that's the better interpretation.

[00:22:38] Speaker 00:
And notably, Mr. Chudik doesn't actually challenge the propriety of that rulemaking.

[00:22:45] Speaker 00:
You know, with respect to the regulations, Mr. Chudik's arguments, again, complete the secondary issue of how PTO calculates seed delay with the threshold issue of whether he's entitled to it at all.

[00:22:58] Speaker 00:
and because he undefeatedly did not receive any decision by the PTAP under both the statute and the regulations, he's not entitled to any fee delay.

[00:23:10] Speaker 00:
Contrary to the argument I heard today that the regulations are inconsistent with the purpose of the statute, again, I reiterate that

[00:23:20] Speaker 00:
The purpose of this statute is to compensate applicants for certain types of enumerated PTO delays.

[00:23:28] Speaker 00:
It's not just any and all form of PTO delay in a specific category as laid out in sections A through C. And that purpose is fully fulfilled by this portion of the regulation that says

[00:23:48] Speaker 00:
that C-delay starts when jurisdiction passes to the board.

[00:23:55] Speaker 00:
That portion of the regulation was also promulgated pursuant to extensive notice and comment rulemaking, and it was adopted for the dual reasons of one, harmonizing the regulation with the board's procedures, with other parts of the PTA statute, and with frankly the realities of the patent review process, and two,

[00:24:15] Speaker 00:
In response to comments that doing so would give applicants the opportunity to receive additional B delay for the time between the notice of appeal and jurisdiction passing to the PTAB.

[00:24:27] Speaker 00:
So again, applicants can still be compensated for this time in the form of B delay in most cases.

[00:24:32] Speaker 00:
This is exactly the sort of reason rulemaking that is supposed to occur, that did occur here.

[00:24:39] Speaker 00:
And again, notably, Mr. Herciutak does not challenge the propriety of the rulemaking.

[00:24:46] Speaker 00:
If there are no other questions by the panel, I'll just ask that for these reasons and the reasons in our briefs that the court affirm on the basis of the plain language of the statute or if the court finds any ambiguity, then on the basis of the PTO's reasonable regulations.

[00:25:05] Speaker 03:
Thank you, Ms.

[00:25:06] Speaker 03:
Yang.

[00:25:07] Speaker 03:
Thank you.

[00:25:09] Speaker 03:
We'll hear rebuttal from Mr. Weltmeyer.

[00:25:14] Speaker 01:
Thank you, Your Honor.

[00:25:16] Speaker 01:
Dr. Chuddick does challenge the regulations.

[00:25:22] Speaker 01:
I mean, that's the point that the regulations are out of line with the clear statute.

[00:25:28] Speaker 01:
The issue about whether an examiner's reopening of the prosecution where the examiner reverses herself, which she did in four instances in this case, was a position that the USPTO itself

[00:25:44] Speaker 01:
proposed in the Federal Register where they said often that reveals a weakness in the adverse patentability determination from which the appeal was taken.

[00:25:56] Speaker 01:
And so in that Federal Register into 2012, the admission that a reopening could qualify as a decision in the review reversing an adverse determination of patentability

[00:26:11] Speaker 01:
You know, it uses the statutory language, and it just basically describes the examiner reversing herself.

[00:26:18] Speaker 01:
So the USPTO had completely agreed with Dr. Jadakir.

[00:26:24] Speaker 01:
It subsequently erred by not following through with that.

[00:26:28] Speaker 01:
But nevertheless, to say that, you know, it could only be limited to the decisions, you know, when it self-proposed to contouring the Federal Register, it just can't succeed in that.

[00:26:41] Speaker 02:
The proposal was not, I think, adopted.

[00:26:45] Speaker 02:
It died after having been proposed, right?

[00:26:52] Speaker 01:
That's right.

[00:26:53] Speaker 01:
It wasn't adopted.

[00:26:55] Speaker 02:
I'm not sure how much force you get from a proposal that was not ultimately promulgated as a regulation.

[00:27:07] Speaker 02:
Certainly, it wasn't adopted, but... ...about the problem, which was ultimately rejected, presumably, by the agency.

[00:27:16] Speaker 01:
And we believe wrongly rejected.

[00:27:19] Speaker 01:
So, the other issue I'd like to address is that the Council has suggested that the language review in the C delay portion means something different from the language of appeal taken

[00:27:35] Speaker 01:
which you'll find, I think, in the A delay section.

[00:27:39] Speaker 01:
But there's no significance to that.

[00:27:43] Speaker 01:
It's merely the structure of the C delay language where it says, the term of the patent shall be extended one day for each day of the penalty of the proceeding review, I mean, order or review.

[00:27:56] Speaker 01:
To use the word appeal taken in that sequence

[00:28:01] Speaker 01:
Grammatically, I think, would be difficult.

[00:28:04] Speaker 01:
I don't think there's any congressional indication that some shorter period should be provided in one or the other circumstance here.

[00:28:15] Speaker 01:
So I don't think this significance can attach to the words appeal taken versus review.

[00:28:24] Speaker 01:
The other issue that Council raised is that

[00:28:29] Speaker 01:
The examiner cannot reverse herself.

[00:28:32] Speaker 01:
And I think that's just not the case, as we can see from the examiner's actions in this case.

[00:28:40] Speaker 01:
In other circumstances, for example, a judge could reverse herself without higher authority, such as through a motion to reconsider or other means.

[00:28:50] Speaker 01:
So as what the examiner did here to reverse herself four times,

[00:28:56] Speaker 01:
clearly fits within the language of the statute and there's no qualification on who is reversing the decision, making the decision.

[00:29:06] Speaker 01:
If Congress thought to limit it, they could have specified a decision by the PTAB or by a federal court as the case may be in the review, but Congress did not provide that.

[00:29:16] Speaker 01:
Congress thought to have a broad basis for allowing time when there's essentially a favorable outcome

[00:29:25] Speaker 01:
after the appeal is started.

[00:29:28] Speaker 01:
And that's essentially what the language there provides.

[00:29:36] Speaker 01:
I see my time is up and we request reversal.

[00:29:39] Speaker 01:
Thank you.

[00:29:41] Speaker 03:
Thank you to both counsel.

[00:29:43] Speaker 03:
The case is submitted.

[00:29:45] Speaker 03:
And that concludes the argument session for this morning.

[00:29:51] Speaker 03:
The honor of the court is adjourned until tomorrow morning at 10 a.m.