United States Court of Appeals
for the Federal Circuit
______________________
INTRA-CELLULAR THERAPIES, INC.,
Plaintiff-Appellant
v.
ANDREI IANCU, UNDER SECRETARY OF
COMMERCE FOR INTELLECTUAL PROPERTY
AND DIRECTOR OF THE UNITED STATES
PATENT AND TRADEMARK OFFICE,
Defendant-Appellee
______________________
2018-1849
______________________
Appeal from the United States District Court for the
Eastern District of Virginia in No. 1:17-cv-00776-CMH-
IDD, Senior Judge Claude M. Hilton.
______________________
Decided: September 18, 2019
______________________
THOMAS HOXIE, Hoxie & Associates, LLP, Millburn,
NJ, argued for plaintiff-appellant.
ANDREW SUN HAN, Office of the United States Attorney
for the Eastern District of Virginia, Alexandria, VA, argued
for defendant-appellee. Also represented by G. ZACHARY
TERWILLIGER; KAKOLI CAPRIHAN, THOMAS W. KRAUSE,
JOSEPH MATAL, BRIAN RACILLA, Office of the Solicitor,
2 INTRA-CELLULAR THERAPIES, INC v. IANCU
United States Patent and Trademark Office, Alexandria,
VA.
______________________
Before WALLACH, CHEN, and HUGHES, Circuit Judges.
CHEN, Circuit Judge.
Intra-Cellular Therapies, Inc. (Intra-Cellular) appeals
the summary judgment decision of the United States Dis-
trict Court for the Eastern District of Virginia affirming
the patent term adjustment (PTA) determination made by
the United States Patent and Trademark Office (Patent Of-
fice). During prosecution of Intra-Cellular’s patent appli-
cation, the Patent Office issued a final Office action
rejecting some claims and objecting to the others. A final
Office action, as opposed to a non-final Office action, marks
the end of formal prosecution of an application. On the
three-month deadline for responding to the final Office ac-
tion, Intra-Cellular filed its first response. While timely,
this initial response continued to argue the merits of the
examiner’s final rejections and failed to comply with the
Patent Office’s regulatory requirements for what consti-
tutes a proper “reply” to a final Office action. For that rea-
son, the Patent Office concluded that Intra-Cellular’s first
response did not prevent the accrual of applicant delay for
purposes of calculating PTA for the resulting patent.
Twenty-one days after filing its unsuccessful first response,
Intra-Cellular tried again by filing a second response. This
time, Intra-Cellular successfully overcame all outstanding
rejections and objections. Adopting all of the examiner’s
suggestions, the second response capitulated to all of the
examiner’s rulings by canceling or amending every rejected
or objected to claim based on the examiner’s positions. As
a result of these amendments, the Patent Office issued a
Notice of Allowance and concluded that this second re-
sponse stopped the accrual of any further applicant delay.
In calculating PTA, the Patent Office determined that the
extra 21 days it took Intra-Cellular to file a successful
INTRA-CELLULAR THERAPIES, INC v. IANCU 3
response after the three-month deadline for responding to
the final Office action constituted applicant delay. Because
we find that determination of applicant delay was based on
a permissible interpretation of statute and proper reading
of the regulations, we affirm the district court’s grant of
summary judgment in favor of the Patent Office.
BACKGROUND
I. Statutory Framework
Patent term constitutes the period of exclusivity in
which a patent is in effect. In 1994, Congress amended the
law to change the period of patent term from 17 years from
issuance to 20 years, measured from the earliest filing date
of the application for patent. See Pub. L. No. 103-465,
§ 532,
108 Stat. 4809, 4984 (1994) (codified as amended at
35 U.S.C. § 154(a)). Due to this change in the law, if the
Patent Office issued a patent two years after its filing date,
the resulting patent would enjoy 18 years of patent term.
But if a favorable patent examination took, say, seven
years to complete, then there would only be 13 years of pa-
tent term remaining after issuance, far less than the 17-
year term provided for under the prior law. To protect pa-
tent owners against loss of patent term due to agency delay
in the patent examination process, Congress amended
§ 154 in 1999 to restore patent term under certain circum-
stances. See Pub. L. No. 106-113, § 4402,
113 Stat. 1501,
1501A-557 (1999) (codified as amended at
35 U.S.C. § 154(b)) (PTA statute). Under the PTA statute,
the term of a patent can be extended to compensate for lost
patent term due to statutorily-defined agency delay.
See § 154(b)(1)(A)–(C). But, at the same time, PTA can be
reduced for delays caused by the applicant.
See § 154(b)(2)(C).
Section 154(b)(1) provides three types of statutorily-de-
fined delay caused by the Patent Office that will lead to
accrual of PTA for the resulting patent, outlined in
§ 154(b)(1)(A), (B), (C). “A Delay” accrues when the Patent
4 INTRA-CELLULAR THERAPIES, INC v. IANCU
Office fails to act by certain examination deadlines.
§ 154(b)(1)(A). “B Delay” accrues when the Patent Office
fails to “issue a patent within 3 years after the actual filing
date of the application.” § 154(b)(1)(B). “C Delay” accrues
during the pendency of interferences, secrecy orders, and
appeals. § 154(b)(1)(C).
On the other hand, when applicant conduct causes de-
lay in the examination process, any PTA that has accumu-
lated is reduced by that amount of applicant delay. See
§ 154(b)(2)(C); Gilead Scis., Inc. v. Lee,
778 F.3d 1341,
1344–45 (Fed. Cir. 2015). Under § 154(b)(2)(C)(i) of the
PTA statute, a patent’s PTA “shall be reduced by a period
equal to the period of time during which the applicant
failed to engage in reasonable efforts to conclude prosecu-
tion of the application.”
Section 154(b)(2)(C)(ii) provides an instance of what
constitutes “fail[ure] to engage in reasonable efforts” based
on how long it takes for an applicant to respond to certain
Office actions. In particular, “an applicant shall be deemed
to have failed to engage in reasonable efforts to conclude
processing or examination of an application for the cumu-
lative total of any periods of time in excess of 3 months that
are taken to respond to a notice from the [Patent] Office
making any rejection, objection, argument, or other re-
quest, measuring such 3-month period from the date the
notice was given or mailed to the applicant.”
§ 154(b)(2)(C)(ii).
Section 154(b)(2)(C)(iii) authorizes the Patent Office to
promulgate regulations providing further details and ex-
amples of what constitutes “fail[ure] to engage in reasona-
ble efforts.” This regulation provides that the “Director
shall prescribe regulations establishing the circumstances
that constitute a failure of an applicant to engage in rea-
sonable efforts to conclude processing or examination of an
application.” § 154(b)(2)(C)(iii).
INTRA-CELLULAR THERAPIES, INC v. IANCU 5
II. Regulatory Framework
Pursuant to its congressional authority, the Patent Of-
fice promulgated regulations for determining PTA reduc-
tion due to applicant delay. Relevant to this appeal is
37 C.F.R. § 1.704(b), which closely tracks the language in
§ 154(b)(2)(C)(ii). This regulation provides that “an appli-
cant shall be deemed to have failed to engage in reasonable
efforts to conclude processing or examination of an applica-
tion for the cumulative total of any periods of time in excess
of three months that are taken to reply to any notice or ac-
tion by the [Patent] Office making any rejection, objection,
argument, or other request . . . .” § 1.704(b) (emphases
added). In other words, if an applicant takes longer than
three months to file a “reply” to an Office action, applicant
delay will accrue. Applicant delay begins accruing from the
day after the three-month deadline for responding to an Of-
fice action and stops accruing the “date the reply was filed.”
§ 1.704(b). But § 1.704(b) itself does not define what con-
stitutes a proper “reply” for cutting off applicant delay.
Section 1.704(b) was promulgated against a backdrop
of long-existing regulations governing patent prosecution
practices. One fundamental principle that pervades these
regulations is that a “final” Office action marks the end of
normal prosecution as of right. See
37 C.F.R. § 1.113(a),
(c); § 1.114(b) (“Prosecution in an application is closed as
used in this section means . . . that the last Office action is
a final action . . . .”); MPEP § 714.12 (“Once a final rejection
that is not premature has been entered in an application,
applicant or patent owner no longer has any right to unre-
stricted further prosecution.”). Before a final Office action
is issued, an applicant has more leeway to argue its case
and amend its claims in a reply. To properly respond to a
non-final Office action, a “bona fide attempt to advance the
application” is required. See
37 C.F.R. §§ 1.111(b),
1.135(c). Once examination proceeds into after-final Office
action territory, however, § 1.113(a) restricts the options
that are available to the applicant, and the patent
6 INTRA-CELLULAR THERAPIES, INC v. IANCU
examiner is not obligated to engage in further examination
and review of the patent application or applicant argu-
ments. Each of the applicant’s options, discussed below, is
subject to its own requirements and potential PTA conse-
quences.
One option is to file a § 1.113(c) reply. § 1.113(a). Pur-
suant to § 1.113(c), a “[r]eply to a final rejection or action
must include cancellation of, or appeal from the rejection
of, each rejected claim. If any claim stands allowed, the
reply to a final rejection or action must comply with any
requirements or objections as to form.” Thus, filing a
§ 1.113(c) reply is an action an applicant can take to con-
clude prosecution before the examiner, but importantly, no
claim amendments or arguments are allowed, as prosecu-
tion “is closed” once a final Office action has issued.
§ 1.114(b). It is undisputed that filing a § 1.113(c) reply
will cut off accrual of applicant delay under § 1.704(b).
A second option for the applicant when confronted with
a final Office action is to file a Request for Continued Ex-
amination (RCE) under § 1.114. § 1.113(a). An RCE in-
volves filing a “submission” and paying additional fees.
§ 1.114(a). Such a “submission” includes, but is not limited
to, “amendment[s] to the written description, claims, or
drawings,” and “new arguments.” § 1.114(c). An RCE
“withdraw[s] the finality of any Office action” and re-opens
normal prosecution, once again requiring the examiner to
engage in a substantive examination of the application, but
this time in light of the applicant’s RCE submission. Id. In
return for this extended substantive examination, the fil-
ing of an RCE stops the accrual of B Delay, thereby cutting
off a potential significant source of PTA if the patent is ul-
timately granted. See § 154(b)(1)(B)(i); Novartis AG v. Lee,
740 F.3d 593, 601 (Fed. Cir. 2014). Thus, unlike a
§ 1.113(c) reply, an RCE permits much more flexibility in
responding on the merits to a final Office action, but at the
cost of losing PTA.
INTRA-CELLULAR THERAPIES, INC v. IANCU 7
A third option is to file a
37 C.F.R. § 1.116 amendment.
§ 1.113(a). Under § 1.116, three types of amendments are
permitted. § 1.116(b)(1)–(3). First, an applicant is permit-
ted to file a limited amendment “canceling claims or com-
plying with any requirement of form expressly set forth in
a previous Office action.” § 1.116(b)(1). Second, an appli-
cant is permitted to file an “amendment presenting re-
jected claims in better form for consideration on appeal.”
§ 1.116(b)(2). And third, an “amendment touching the mer-
its of the application . . . may be admitted upon a showing
of good and sufficient reasons why the amendment is nec-
essary and was not earlier presented.” § 1.116(b)(3). Thus,
§ 1.116 permits an applicant to file certain minor amend-
ments after a final Office action; a substantive amendment
requiring a substantive examination is permitted only in
exceptional circumstances. Importantly, the filing of a
§ 1.116 amendment will not alone “save the application
from abandonment.” § 1.116(c). “The admission of, or re-
fusal to admit, any amendment after final rejection . . . will
not operate to save the application from abandonment.”
§ 1.135(b). Only a “complete and proper reply” to the final
Office action within the statutory time period to act will
save the application from abandonment. Id. Thus, per the
Patent Office’s regulations, the acceptance of any after-fi-
nal amendment by itself is not regarded as a “complete and
proper reply.” Id.
III. Prosecution History
Intra-Cellular is the owner and assignee of
U.S. Patent
No. 8,648,077 (’077 patent). On September 10, 2010, Intra-
Cellular filed the application leading to the ’077 patent. On
October 9, 2012, the Patent Office issued a non-final Office
action. The non-final Office action raised various issues
with the application, including rejections under
35
U.S.C. § 103 and § 112 and objections due to various infor-
malities. In response, Intra-Cellular argued against the
§ 103 rejections without amendment and attempted to
8 INTRA-CELLULAR THERAPIES, INC v. IANCU
overcome the other rejections and objections through
amendment.
On April 17, 2013, the Patent Office mailed a final Of-
fice action. No claims were allowed. Unpersuaded by In-
tra-Cellular’s arguments against the § 103 rejections, the
examiner repeated the same § 103 rejections from the prior
non-final Office action. The examiner also found that In-
tra-Cellular’s amendments did not successfully overcome
the other rejections and objections raised in the non-final
Office action but instead introduced new informalities
leading to new objections. On July 17, 2013, Intra-Cellular
responded to the final Office action by filing a submission
entitled “Amendments and Response Under
37 C.F.R. 1.116.” 1 This submission was filed three months
after the final Office action issued, marking the last day for
Intra-Cellular to file a “reply” to the final Office action
without accruing applicant delay. See § 1.704(b); see also
§ 154(b)(2)(C)(ii). In this after-final response, Intra-Cellu-
lar continued to dispute the § 103 rejection using the same
arguments that were previously found unpersuasive by the
examiner, and amended claims to address other objections
and rejections. Intra-Cellular also added a new claim.
On July 26, 2013, the Patent Office mailed an “Advi-
sory Action” indicating that Intra-Cellular’s July 17, 2013
after-final submission overcame some of the previous § 112
rejections and formality objections but failed to overcome
the § 103 rejection for the prior “reasons of the record.” J.A.
204. To “place the application in better condition for
1 We note that despite being labeled as an amend-
ment “Under 37 C.F.R. 1.116,” Intra-Cellular’s July 17,
2013 submission does not appear to comply with any of the
permitted amendments under § 1.116(b)(1)–(3), at least be-
cause this submission continued arguing the § 103 rejec-
tion repeated in the final Office action from the non-final
Office action without amendment.
INTRA-CELLULAR THERAPIES, INC v. IANCU 9
allowance,” the examiner suggested “amend[ing] or cancel-
ling” certain claims to overcome the outstanding § 103 re-
jection and amending other claims based on specific
suggestions proposed by the examiner to overcome the out-
standing § 112 rejections and new formality objection.
J.A. 205. Intra-Cellular complied. On August 7, 2013,
choosing to no longer resist the § 103 rejections, Intra-Cel-
lular filed its second after-final submission adopting all of
the examiner’s suggestions for overcoming the outstanding
rejections and objections. This second after-final submis-
sion led directly to a Notice of Allowance, which was mailed
on August 20, 2013. The application subsequently issued
as the ’077 patent.
IV. Determination of PTA by the Patent Office
On January 9, 2017, the Patent Office issued a “Final
Agency Decision” determining that the ’077 patent was en-
titled to 264 days of PTA. This number was computed by
subtracting total delay attributed to the applicant from to-
tal delay attributed to the agency. Of the total applicant
delay, the Patent Office attributed 21 days of applicant de-
lay to the time it took Intra-Cellular to file its second after-
final submission after the three-month deadline for re-
sponding to the final Office action. Though Intra-Cellular’s
first after-final submission was filed right on the three-
month mark, the Patent Office found that it did not consti-
tute a proper “reply” under § 1.704(b). The Patent Office
justified this determination based on two independent rea-
sons. First, the Patent Office found that Intra-Cellular’s
first submission “fail[ed] to comply with
37 C.F.R. § 1.113.”
J.A. 242. Second, the Patent Office alternatively found
that the first submission constituted a “[s]ubmission of a
reply having an omission (§ 1.135(c))” under
37 C.F.R.
§ 1.704(c)(7). 2 J.A. 242–43. Because the Patent Office
2 The Patent Office’s alternative reliance on
§ 1.704(c)(7) to justify accrual of applicant delay resulting
10 INTRA-CELLULAR THERAPIES, INC v. IANCU
determined that Intra-Cellular’s first after-final submis-
sion was not a proper after-final reply, the clock on appli-
cant delay started ticking the day after the three-month
deadline. The Patent Office stopped that clock when Intra-
Cellular filed its second after-final submission 21 days
later. Unlike its first after-final submission, this second
submission capitulated to each of the examiner’s objections
and rejections to the claims set forth in the final Office ac-
tion and directly led to allowance.
V. District Court Proceedings
On July 7, 2017, Intra-Cellular filed a complaint in the
United States District Court for the Eastern District of Vir-
ginia seeking judicial review of the Patent Office’s PTA de-
termination. The district court granted summary
judgment in favor of the Patent Office.
The district court considered the Patent Office’s PTA
determination to involve a question of statutory interpre-
tation performed by the agency and applied Chevron,
U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467
from an improper reply to a final Office action is question-
able. Section 1.704(c)(7) appears to apply only to replies to
non-final Office actions. According to § 1.704(c)(7), a
“[s]ubmission of a reply having an omission (§ 1.135(c))”
constitutes a “circumstance[] that constitute[s] a failure of
the applicant to engage in reasonable efforts to conclude
processing or examination of an application” under
§ 1.704(c). But § 1.135(c) only addresses omissions made
in a reply to a “non-final Office action.” § 1.135(c) (referring
to a situation where a “reply by the applicant is a bona fide
attempt to advance the application to final action, and is
substantially a complete reply to the non-final Office ac-
tion, but consideration of some matter or compliance with
some requirement has been inadvertently omitted” (em-
phasis added)).
INTRA-CELLULAR THERAPIES, INC v. IANCU
11
U.S. 837 (1984). The district court framed the question at
issue to be “whether a submission filed after a final Office
action that fails to place the application in condition for al-
lowance (such as the [first after-final] submission) consti-
tutes a ‘fail[ure] to engage in reasonable efforts to conclude
prosecution’” under § 154(b)(2)(C). J.A. 9–10. At Step 1 of
Chevron, the district court rejected Intra-Cellular’s conten-
tion that the plain language of the statute answered this
question. The court noted that “nothing in the plain lan-
guage of the statute indicates that ‘reasonable efforts to
conclude prosecution’ should be read to include an incom-
plete submission which fails to place the application in con-
dition for allowance, but in some manner advances it closer
to allowance.” J.A. 10.
At Step 2 of Chevron, the district court upheld the
agency’s interpretation under applicable regulations. In
attributing the 21-day period to applicant delay, the Patent
Office found that Intra-Cellular’s first after-final submis-
sion did not constitute a valid “reply” that stopped accrual
of applicant delay under § 1.704(b). To determine whether
Intra-Cellular’s first after-final submission was a valid “re-
ply” to a final Office action, the Patent Office applied
§ 1.113(c), which sets forth the requirements for replying
to a final (as opposed to non-final) Office action. Thus, the
Patent Office effectively interpreted “reply” under
§ 1.704(b) to be a “reply” compliant with § 1.113(c). Be-
cause Intra-Cellular’s first after-final submission did not
cancel or appeal every rejected claim per § 1.113(c), the Pa-
tent Office determined that the first after-final “submission
was not a proper reply under § 1.113(c),” and therefore not
a “reply” under § 1.704(b). J.A. 13–14. Ultimately, the dis-
trict court held that the Patent Office’s determination that
Intra-Cellular’s first after-final submission constituted a
“fail[ure] to engage in reasonable efforts to conclude pro-
cessing or examination” under § 1.704(b) “was based on a
permissible construction of the relevant statutes, and
12 INTRA-CELLULAR THERAPIES, INC v. IANCU
therefore should be afforded deference” under Chevron.
J.A. 14–15.
Intra-Cellular timely filed this appeal. We have juris-
diction pursuant to
28 U.S.C. § 1295(a)(1).
STANDARD OF REVIEW
We review a district court’s grant of summary judg-
ment under the law of the regional circuit. See Mohsen-
zadeh v. Lee,
790 F.3d 1377, 1381 (Fed. Cir. 2015). Under
Fourth Circuit law, we review the grant of summary judg-
ment de novo. Gallagher v. Reliance Standard Life Ins.
Co.,
305 F.3d 264, 268 (4th Cir. 2002). Patent Office PTA
decisions “are reviewed in accordance with the Administra-
tive Procedure Act” (APA). Supernus Pharm., Inc. v. Iancu,
913 F.3d 1351, 1356 (Fed. Cir. 2019); § 154(b)(4)(A). Under
the APA, we set aside the Patent Office’s actions only if
they are “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.”
5 U.S.C. § 706(2)(A), (C). When reviewing an agency’s stat-
utory interpretation, we apply the two-step framework es-
tablished in Chevron. Gilead, 778 F.3d at 1346.
DISCUSSION
In dispute is whether a particular period of 21 days,
following the three-month deadline for responding to a fi-
nal Office action, counts as applicant delay. The Patent
Office determined it was, finding that Intra-Cellular’s first
after-final submission constituted a “fail[ure] to engage in
reasonable efforts to conclude prosecution.”
§ 154(b)(2)(C)(i). We now discuss whether the district court
erred in upholding the agency’s determination, which
hinges in part on an interpretation of statutory text, under
Chevron.
INTRA-CELLULAR THERAPIES, INC v. IANCU 13
I. Chevron Step 1: The PTA Statute Does Not Answer
the Precise Question.
At Step 1 of Chevron, we “ask whether the statute’s
plain terms ‘directly addres[s] the precise question at is-
sue.’” Nat’l Cable & Telecomms. Ass’n v. Brand X Internet
Servs.,
545 U.S. 967, 986 (2005) (quoting Chevron, 467 U.S.
at 843). We begin with the language of the statute itself.
United States v. Hohri,
482 U.S. 64, 69 (1987). “Absent a
clearly expressed legislative intention to the contrary, [the
statute’s plain] language must ordinarily be regarded as
conclusive.” Consumer Prod. Safety Comm’n v. GTE Syl-
vania, Inc.,
447 U.S. 102, 108 (1980). When “deciding
whether the language is plain, the Court must read the
words ‘in their context and with a view to their place in the
overall statutory scheme.’” King v. Burwell,
135 S. Ct.
2480, 2483 (2015) (quoting FDA v. Brown & Williamson
Tobacco Corp.,
529 U.S. 120, 133 (2000)).
The precise question at issue is whether an applicant
submission, filed after a final Office action, that continues
to argue the merits of the examiner’s rejection, without
good cause, constitutes a “fail[ure] to engage in reasonable
efforts to conclude prosecution” such that applicant delay
would accrue under the PTA statute. See § 154(b)(2)(C)(i).
Because its first after-final submission addressed each out-
standing objection and rejection to the claims made in the
final Office action, Intra-Cellular argues that this submis-
sion was a bona fide attempt to advance prosecution, thus
constituting “reasonable efforts to conclude prosecution”
under a plain reading of the PTA statute. While, in a vac-
uum, this reading may be one plausible interpretation of
“reasonable efforts,” nothing in the plain language of the
statute or its overall structure commands that outcome for
understanding what constitutes “reasonable efforts” by an
applicant when responding to a final Office action. Moreo-
ver, Intra-Cellular’s reading appears to be in tension with
the fact that it no longer had the right to continue debating
14 INTRA-CELLULAR THERAPIES, INC v. IANCU
the merits of the rejection once the final Office action is-
sued in this case.
When read in the context of the overall statutory
scheme, we conclude that the language of the PTA statute
does not answer the question of what type of action by an
applicant constitutes “reasonable efforts to conclude prose-
cution” for purposes of responding to a final Office action.
The PTA statute does not shed any additional light as to
the meaning of this phrase in addressing this question.
The PTA statute was passed against a backdrop of existing
regulations that regulate applicant responses to final Of-
fice actions much more restrictively than responses to non-
final Office actions. To properly respond to a non-final Of-
fice action, regulations require a “bona fide attempt to ad-
vance prosecution,” which entails addressing each and
every outstanding objection and rejection. § 1.135; § 1.111.
But the requirements for responding to a final Office action
are stricter. If the applicant wishes to keep arguing
against the examiner’s rejections, it must take those argu-
ments to the Patent Board on appeal or file an RCE to re-
open prosecution in front of the examiner. § 1.113(a);
§ 1.114. If the applicant wishes to make an amendment to
a claim, only certain types of amendments are allowed to
be admitted under § 1.116. See § 1.116(b)(1)–(3). Moreo-
ver, the regulation indicates that not all after-final amend-
ments constitute proper replies. As § 1.116(b) provides,
“[t]he admission of, or refusal to admit, any amendment af-
ter a final rejection . . . will not operate to relieve the appli-
cation . . . from its condition as subject to appeal or to save
the application from abandonment . . . .” Thus, none of
these regulations suggests that attempts to address all re-
jections and objections by continuing to argue the merits
are sufficient after-final replies. Against this pre-existing
regulatory backdrop, what may be “reasonable efforts” in
the context of responding to a non-final Office action can be
quite different from “reasonable efforts” for responding to
a final Office action. Because nothing in the language or
INTRA-CELLULAR THERAPIES, INC v. IANCU 15
structure of the PTA statute addresses what may be re-
garded as “reasonable efforts” on the part of an applicant
in responding to a final Office action, we proceed to an anal-
ysis under Chevron Step 2.
II. Chevron Step 2: The Patent Office’s PTA Determi-
nation Is Supported By a Permissible Construction
of the PTA Statute.
At Step 2, Chevron requires determination of whether
the Patent Office’s answer to the precise question at issue
is based on a “permissible construction of the statute.”
Chevron, 467 U.S. at 843. We have “long recognized that
considerable weight should be accorded to an [agency’s]
construction of a statutory scheme it is entrusted to admin-
ister, and the principle of deference to administrative in-
terpretations.” Id. at 844.
In attributing the 21-day period at issue to applicant
delay, the Patent Office determined that Intra-Cellular’s
first after-final submission constituted a “fail[ure] to en-
gage in reasonable efforts to conclude prosecution” under
the PTA statute because its after-final submission was not
a compliant “reply” under § 1.704(b), which is the Patent
Office’s implementing regulation for defining what consti-
tutes applicant delay. This determination is supported by
a permissible construction of the PTA statute. That is, we
hold that it is permissible to interpret an after-final sub-
mission that merely continues to argue the merits of an ex-
aminer’s final rejection as a “fai[lure] to engage in
reasonable efforts to conclude prosecution” such that such
an applicant submission would not stop the accrual of ap-
plicant delay under the PTA statute.
Section 1.704(b) provides that “an applicant shall be
deemed to have failed to engage in reasonable efforts to con-
clude processing or examination of an application for the
cumulative total of any periods of time in excess of three
months that are taken to reply to any notice or action by
the [Patent] Office making any rejection, objection,
16 INTRA-CELLULAR THERAPIES, INC v. IANCU
argument, or other request . . . .” § 1.704(b) (emphases
added). While § 1.704(b) does not explicitly define “reply,”
that does not mean that any type of submission by the ap-
plicant, no matter how flimsy or superficial, necessarily
qualifies as a “reply” for purposes of stopping accrual of ap-
plicant delay. Intra-Cellular does not dispute this. Oral
Arg. at 11:35–12:17. Thus, some standard of compliance
must be used, and the Patent Office already had longstand-
ing regulatory standards in place for a complete and proper
reply—one for replies to non-final Office actions (§ 1.111)
and one for replies to final Office actions (§ 1.113). Given
that the submission at issue was filed in response to a final
Office action, the Patent Office appropriately turned to pre-
existing regulatory requirements set forth in § 1.113 for re-
sponding to a final Office action, unchallenged here, in in-
terpreting whether Intra-Cellular’s after-final submission
qualified as a “reply” under § 1.704(b). See Roberto v. Dep’t
of Navy,
440 F.3d 1341, 1350 (Fed. Cir. 2006) (finding that
“[t]he rules of statutory construction apply when interpret-
ing an agency regulation,” and “[w]hen construing a regu-
lation or statute,” the court may “consider the language of
related regulations”); Strategic Housing Fin. Corp. v.
United States,
608 F.3d 1317, 1330 (Fed. Cir. 2010)
(“[C]ourts should interpret statutes with similar language
that generally address the same subject matter together,
‘as if they were one law’” (quoting Erlenbaugh v. United
States,
409 U.S. 239, 243 (1972))).
Section 1.113(a) sets forth limited ways for an appli-
cant to properly respond to a final Office action. It provides
that an applicant’s “reply is limited to appeal in the case of
rejection of any claim . . . or to amendment as specified in
§ 1.114 or § 1.116.” §1.113(a). It also states that a “[r]eply
to a final rejection or action must comply with § 1.114 or
paragraph (c) of this section.” Id. Thus, § 1.113(a) at min-
imum sets forth two ways to file a proper reply to a final
Office action—by either complying with § 1.114 (filing an
RCE) or § 1.113(c) (cancelation or appeal of rejected
INTRA-CELLULAR THERAPIES, INC v. IANCU 17
claims). While § 1.113(a) also indicates that a § 1.116
amendment can be filed, § 1.116 itself indicates that a
§ 1.116 amendment filed by an applicant, without more,
does not necessarily relieve the applicant’s responsibility to
timely reply to a final Office action. As § 1.116(c) provides,
the “admission of, or refusal to admit, any amendment af-
ter a final rejection, a final action, an action closing prose-
cution, or any related proceedings, will not operate to
relieve the application . . . from its condition as subject to
appeal or save the application from abandonment.”
§ 1.116(c) (emphasis added); see also § 1.135(b) (“The ad-
mission of, or refusal to admit, any amendment after final
rejection . . . will not operate to save the application from
abandonment.”). Thus, the regulatory framework makes
clear that for purposes of responding to a final Office action
rejecting at least some of the claims, a proper “reply” must
either comply with § 1.113(c) or § 1.114. The Patent Office
properly read the term “reply” in § 1.704(b) in harmony
with those regulatory requirements for determining
whether an applicant’s response to a final Office action cuts
off accrual of applicant delay.
It is undisputed that Intra-Cellular’s first after-final
submission did not comply with § 1.113(c) or § 1.114. In-
tra-Cellular, in its initial response, could have pursued ei-
ther path for filing a proper reply to the final Office action,
but it chose not to. In that first after-final submission, In-
tra-Cellular continued to dispute the § 103 rejection with
the same arguments the examiner had previously found
unpersuasive in overcoming the same § 103 rejection in the
non-final Office action. Because prosecution was closed
and the examiner at that point was under no obligation to
reconsider arguments that had already been rejected in the
final Office action, such applicant conduct does not amount
to “reasonable efforts to conclude” prosecution under
§ 1.704(b). Until a compliant reply was filed, Intra-Cellu-
lar began accruing “applicant delay” once the three-month
deadline passed for responding to the final Office action.
18 INTRA-CELLULAR THERAPIES, INC v. IANCU
In filing the second after-final submission, Intra-Cellu-
lar ceased resisting the examiner’s objections and rejec-
tions and accepted the examiner’s positions, adopting all of
the examiner’s suggestions for canceling or amending
claims to overcome all rejections and objections of record.
This complete capitulation to the examiner’s final Office ac-
tion placed the application in condition for allowance and
directly led to a Notice of Allowance, concluding prosecu-
tion of the application. Because Intra-Cellular’s second af-
ter-final submission amended the application to conform
with all the requirements the examiner had set forth in the
Advisory Action, the Patent Office effectively determined
that this response constituted “reasonable efforts to con-
clude prosecution,” cutting off any further accrual of appli-
cant delay.
Intra-Cellular’s proposed interpretation of “reply” un-
der § 1.704(b) as any bona fide attempt to address all rejec-
tions and objections in an Office action is impermissible
because it incorrectly applies the standard for a compliant
“reply” to a non-final Office action as set forth in § 1.111 to
the reply to a final Office action at issue here. See
§ 1.111(b) (stating that a reply to a non-final Office action
“must reply to every ground of objection and rejection”). As
explained above, a separate regulation, § 1.113, defines a
proper “reply” to a final Office action, which is the relevant
standard for this case. Moreover, under Intra-Cellular’s
interpretation, an applicant would be allowed to continue
to liberally argue and make amendments without accruing
applicant delay as long as it addressed all outstanding is-
sues in the final Office action. But treating this type of
submission as a proper “reply” would give the applicant the
benefits of an RCE (which re-opens prosecution) without
the concomitant PTA reduction that comes with an RCE.
This clearly contravenes the structure of the existing PTA
statute, which prevents extension of PTA through B Delay
accrual for time consumed by an RCE. § 154(b)(1)(B)(i);
Novartis, 740 F.3d at 601 (“[A]ny time consumed by
INTRA-CELLULAR THERAPIES, INC v. IANCU 19
continued examination” under § 154(b)(1)(B)(i), “no matter
when initiated, does not count toward depleting the allot-
ment of three years the PTO has before any adjustment
time begins to accrue.”).
Intra-Cellular makes numerous arguments against the
permissibility of the Patent Office’s PTA determination,
but we find none of them to be persuasive. First, Intra-
Cellular argues that by focusing on the result of applicant’s
conduct (i.e., a failure to successfully overcome all out-
standing rejections and objections in the final Office action)
rather than the conduct itself (e.g., a bona fide attempt to
address all issues), the Patent Office’s PTA determination
violates our holding in Gilead. Appellant’s Br. at 24–26.
We disagree. In Gilead, the Patent Office found that an
applicant’s untimely filing of a supplemental Information
Disclosure Statement (IDS) still caused applicant delay to
accrue even though it did not result in actual prosecution
delay because it was filed before the first Office action had
issued. Gilead, 778 F.3d at 1345, 1349. Nevertheless, we
upheld the Patent Office’s applicant delay finding because
the “failure to engage in reasonable efforts” focused on an
applicant’s “conduct,” not results. Id. at 1349. Here, the
Patent Office’s applicant delay determination is entirely
consistent with Gilead’s conduct-oriented focus. In contin-
uing to dispute the merits of the § 103 rejection using ar-
guments that were previously considered and rejected by
the examiner, Intra-Cellular’s conduct not only had the po-
tential to, but actually did, result in prosecution delay. As
we stated in Gilead, it was reasonable to find that this type
of applicant behavior was the kind Congress intended to
sanction as a “failure to engage in reasonable efforts” under
the PTA statute. Id. at 1349 (“[T]his court finds that a rea-
sonable interpretation of the [PTA] statute is that Con-
gress intended to sanction not only applicant conduct or
behavior that result in actual delay, but also those having
the potential to result in delay irrespective of whether such
delay actually occurred.”).
20 INTRA-CELLULAR THERAPIES, INC v. IANCU
Second, Intra-Cellular argues that the Patent Office’s
applicant delay determination is contrary to our reasoning
in Pfizer, Inc. v. Lee,
811 F.3d 466, 470 (Fed. Cir. 2016).
Appellant’s Br. at 40–43. We disagree. In Pfizer, we held
that the time it took for an examiner to correct a defective
restriction requirement did not count as delay attributed
to the Patent Office, because the examiner’s actions were
part of the typical “back and forth” process of prosecution.
Id. at 476. Here, the submission at issue was filed by an
applicant after a final Office action was issued. A final Of-
fice action marks the end of prosecution as of right. See,
e.g., § 1.114(b) (“Prosecution in an application is closed as
used in this section means . . . that the last Office action is
a final action . . . .”). As such, any delay caused by the ap-
plicant in after-final territory is not part of the typical
“back and forth” process of prosecution. Thus, the reason-
ing in Pfizer does not apply.
Third, Intra-Cellular argues that it was “unfair sur-
prise” for the Patent Office to require the generic recitation
of “reply” in § 1.704(b) to mean a “reply in compliance with
§ 1.113(c).” Appellant’s Br. at 11. Intra-Cellular points out
that when the Patent Office wants to impose compliance
with § 1.113(c), it will say so, as it did with the recitation
of “reply in compliance with § 1.113(c)” under § 1.703(a),
another regulation that addresses the computation of delay
attributed to the agency (rather than the applicant). We
disagree that the more specific recitation of “reply” in
§ 1.703(a) renders it impermissible to require “reply” under
§ 1.704(b) to be compliant with § 1.113(c) when filed in the
context of responding to a final Office action. Section
1.703(a) is in fact entirely consistent with our and the Pa-
tent Office’s reading of “reply” in § 1.704(b). The specific
reference to a “reply in compliance with § 1.113(c)” in
§ 1.703(a) reflects the Patent Office’s recognition that Of-
fice actions in response to replies to final Office actions and
Office actions in response to replies to non-final Office ac-
tions represent two different situations, both of which may
INTRA-CELLULAR THERAPIES, INC v. IANCU 21
separately give rise to agency delay. Indeed, § 1.703(a) spe-
cifically sets forth separate rules for computing agency de-
lay in the context of replies to non-final Office actions and
replies to final Office actions. Under § 1.703(a)(2), agency
delay accrues where an Office action is filed more than four
months after “a reply under § 1.111” is filed. Under
§ 1.703(a)(3), agency delay accrues where an Office action
is filed more than four months after “a reply in compliance
with § 1.113(c)” is filed. Given that the Patent Office’s con-
text-based reading of “reply” under § 1.704(b) is consistent
with the sensitivity to different types of replies in
§ 1.703(a) (replies to non-final versus final Office actions)
and the agency’s long-standing requirements treating
these replies differently (as evidenced by § 1.113 and
§ 1.111), we are unpersuaded that the Patent Office’s PTA
determination here was based on a reading that presented
an “unfair surprise.” Cf. Christopher v. SmithKline Bee-
cham Corp.,
567 U.S. 142, 156–58 (2012) (finding that “the
potential for unfair surprise [wa]s acute” where the agency
announced an interpretation that was preceded by the
agency’s decades-long practice signaling endorsement of a
contrary interpretation).
Intra-Cellular also argues that it is impermissible for
the Patent Office to rely on an interpretation that requires
compliance with § 1.113(c) because such an interpretation
conflicts with the Patent Office’s promotion of various af-
ter-final “pilot” programs that encourage applicants to en-
gage in further prosecution after a final Office action.
Appellant’s Reply Br. at 21–25. We need not address this
argument because it is waived. However, for completeness,
we note that none of these after-final pilot programs were
utilized in this case, and Intra-Cellular has not argued or
presented any evidence of how participation in these “pilot”
programs would affect, if at all, the computation of appli-
cant delay.
22 INTRA-CELLULAR THERAPIES, INC v. IANCU
CONCLUSION
We find that the Patent Office’s determination of appli-
cant delay is supported by a permissible reading of the PTA
statute. We have considered Intra-Cellular’s remaining ar-
guments and find them unpersuasive. Accordingly, we con-
clude that the district court did not err in granting
summary judgment in favor of the Patent Office. 3
AFFIRMED
COSTS
No costs.
3 We note that our decision upholding the Patent Of-
fice’s determination of PTA does not rely on deference to
the agency under Auer v. Robbins,
519 U.S. 452 (1997) be-
cause that doctrine is not necessary to understanding the
regulations and deciding this case.
