by Dennis Crouch
Sawstop v. Vidal, — F.4th — (Fed. Cir. 2022)
This is a Patent Term Adjustment (PTA) case. Back before 1995, patents were awarded a term of 17-years following issuance. As part of an international negotiation and with some anti-submarine policy justifications, the US switched over to a 20-year term that starts counting days as of the application’s filing date. The 20-year term from filing date was seen as roughly equivalent to 17-years from issuance since most patent applications take about three years to issue. In the end, this kept overall patent term roughly the same. But, it also allowed for some major variability. Some patent applicants were concerned that delays by the USPTO due to backlogs or unreasonable examination practices might effectively cut into the patent term. Congress heard those concerns and created the PTA system that adds extra days to the patent term when those delays exist. 35 U.S.C. § 154(b). Unfortunately, the PTA statute is not a model of clarity and has been the subject of numerous court battles over various quirky elements.
The provision at issue in Sawstop has to do with PTA added for PTAB appeals and district court challenges. Under the law, added term is triggered by the following:
(iii) appellate review by the [PTAB] or by a Federal court in a case in which the patent was issued under a decision in the review reversing an adverse determination of patentability,
35 U.S.C. § 154(b)(1)(C)(iii).
I have written previously about Sawstop technology that covers a safety feature for power saws “that instantly stops the saw blade upon contact with flesh.” The appeal here is a consolidated appeal regarding two Sawstop patents. Sawstop is struggling because its patents are all expiring and competitors are hot-on-its-heels.
In the first case (‘476), the applicant had appealed an obviousness rejection by the examiner. The PTAB rejected the examiner’s decision, but simultaneously issued a new ground of rejection on obviousness. Thus, the ultimate conclusion was that the rejection was affirmed, albeit for different reasons. On remand, the claims eventually issued, but only after an RCE (which cut-off further PTA). After the patent issued, the owner asked for PTA associated with the PTAB appeal, but the PTO refused as did the district court.
In the appeal, the Federal Circuit has also sided against Sawstop. The rule quoted above is triggered by “a decision in the review reversing an adverse determination of patentability.” On appeal, the Federal Circuit found no reversal by the PTAB — although it did “cast aside the examiner’s basis for rejecting claim 11,” the Board simultaneously established reasoning for rejecting that same claim. The result was that the claim remained rejected. The Federal Circuit here focused on the substantive outcome — the patentee’s appeal was not successful and therefore there was no reversal.
The Federal Circuit also addressed a second element of the test — that the “patent was issued under a decision in the [appellate] review.” The court has interpreted that requirement as mandating that at least one claim considered by the PTAB have found its way into the issued patent without significant or substantive post-appeal amendments. Here, the patentee had amended the claims after the PTAB decision in order to achieve allowance. Thus, no Type-C PTA.
The second case (‘796) is a bit more complicated, the applicant had appealed rejections of claims 1 and 2 for anticipation a non-statutory double patenting (provisional). The Board issued a partial-reversal–holding that claim 1 was no good, but claim 2 was patentable. But Sawstop really wanted claim 1 and so filed a civil action with the DC District Court–and won that case. The one caveat is that the civil action focused only on anticipation and did not address non-statutory double patenting. Back at the Office, the PTAB maintained its double-patenting rejection and Sawstop was given a choice: (1) drop claim 1 or (2) file a terminal disclaimer. Sawstop chose the latter, and cancelled claim 1. But again, filed an RCE with several further amendments to other claims and the specification before eventual allowance.
The USPTO awarded PTA for the successful PTAB appeal, but refused any PTA for delay in getting the district court decision. On appeal, the Federal Circuit affirmed this analysis again on two grounds. First, although the district court did reverse the anticipation claim, it did not decide that claim 1 was “patentable.” As such, the court did not “revers[e] an adverse determination of patentability.” Sawstop had argued that – at the time – the OTDP rejection was only provisional and thus should not count. The Federal Circuit might have bought this argument if Sawstop also explained that it was somehow barred from including the issue in its Section 145 Civil Action, but Sawstop did not provide such an explanation. The second reason for agreeing with the PTO is that Claim 1 (the Subject of the District Court civil action) never issued in the patent. And, as discussed above, the court has interpreted the rule to only apply when the claim at issue in the ‘appeal’ ends up in the issued patent. Thus, no Type-C PTA for this one either.
Throughout this process, the Federal Circuit repeatedly justified its ruling as a plain language interpretation of the rule. I’ll note, however, that the court does not do so with the “appellate review” portion of the statute. A Section 145 civil action is not an appellate review of the PTAB decision, but rather separate action. See Kappos v. Hyatt, 566 U.S. 431 (2012). But, the court appears to have no trouble seeing it as an appeal in this context.
= = =
Judge Linn wrote the decision here joined by Judges Newman and Chen. Sawstop was represented by Jared Newton and his team from Quinn Emanuel as well as David Fanning, SawStop’s inhouse counsel. Hugham Chan the E.D. Va. US Attorney’s Office argued for the Gov’t. Chan & Newton both graduated from GWU Law in 2010 & 2011 respectively. Chan is a former clerk of Judge Chen; Newton is a former patent examiner.
Re: “Unfortunately, the PTA statute is not a model of clarity and has been the subject of numerous court battles over various quirky elements.”
Indeed. But as byzantine as the U.S. patent term extension statute is, it could have been even worse. My recollection is of a last minute Congressional drafting scramble with little or no public review or input to draft PTA language to satisfy objections of CA Congressman Rohrbach that was holding up passage of the whole bill?
[Yet there has been no serious subsequent effort to substitute simpler and clearer language.]
When dealing with the USPTO, no matter that you win, you will lose.
Whenever the examiners do something where they act like they’re doing you a favor, you can be sure it’s going to work against you some way.
A bit cynical. Many applicants are most happy to have me make a proposal.
Depends on the proposal. The other week during an interview with a junior examiner and SPE, they proposed that I amend the claims in a certain way to overcome anticipation rejections. I asked if that would put the claims in condition for allowance and they wouldn’t promise that, is I told them I’m happy to amend claims to put them in condition for allowance but I’m not inclined to amend claims that would, to them, only overcome the rejection, and they’ll only come back with new rejections. This was a telephone call after an after final response and denial of AFCP. My takeaway feeling was that they weren’t sure the rejections would hold up on appeal based on the AF arguments and they wanted another bite at the apple.
When I was an Examiner, if you suggested an amendment, you did so with the goal of allowance.
Eh it’s easy enough to suggest an amendment to just get around one grounds of rejection. But I admit, it usually works against the examiner just riding the gravy train so I might have to stop. It’s good for getting counts to let them flail and fail to overcome one reference. I’m pretty sure this is where a lot of the people that “lol spend 2-3 hrs on each amendment” are getting that ability. They just point out that the amendment fails to overcome and repeat, or make slight variation and collect counts. Such bs that the office sets up prosecution to reward that.
“My takeaway feeling was that they weren’t sure the rejections would hold up on appeal based on the AF arguments and they wanted another bite at the apple.”
If you were the one that called then that would be the wrong takeaway. Derp. They’re just giving you a suggestion as to one way to proceed in prosecution. And that btw, is what a large percentage of a lot of my apps actually wants on a whole lot of occasions if the prosecution is likely to be a harder/longer one, esp if its just a slight variation of wording proposed by them. Sometimes they even literally want to take it one reference at a time explicitly.
PPO has a point if the Examiner arranged the interview. What’s your view if that’s the case?
With all due deference to your own past experience as an examiner, ipguy, I disagree.
It does not matter who initiated the interview.
All action should be geared to Finalizing prosecution (either allowance or abandonment).
“Stringing someone along” goes expressly against that policy, and further, giving this a “wink and a nod” only reinforces the BAD behavior of Examiner Gravy Train treatment.
Full examination (in every instance) means exactly that.
My question was directed to obtaining 6’s view if the Examiner had arranged the interview. As I said on the record at 9.1.1.1, when I was an Examiner, if you suggested an amendment, you did so with the goal of allowance. That remains my view.
“PPO has a point if the Examiner arranged the interview. What’s your view if that’s the case?”
In an ordinary case and ordinary interview he would definitely be correct. Though right at appeal time, it might be appropriate to offer the applicant something that would at least allow him to avoid the appeal (and maybe save $$$). As you know, best case all that happens in an appeal is you overcome the rejections you’re currently facing, if there’s still going to be more to need to prosecute through then yeah, you may want to just get around those rejections and move on to others (for example moving past any known 102’s to just needing to overcome 103’s for instance is quite popular). But even those cases would be rare even among already rare appeals imo.
“(and maybe save $$$)”
Thank you for your response. It’s awfully decent of you if saving the Applicant some money is a concern to you. However, in my experience, the vast majority of Examiners do not share that concern and could give a hoot as to how much money the Applicant has to spend.
Well, the best case is that you overcome the rejections AND the Examiner allows the case because the Examiner gave their best effort (a la compact prosecution) and the PTAB said that effort was not good enough. A reversal by the PTAB should not be a signal to the Examiner to find new prior art. To take the post-PTAB reversal route of new prior art and new rejections demonstrates the policy of “compact prosecution” to be nothing more than a lie.
OT, but a good example of far more effective political patent law lobbying than mere complaints on this blog is this excerpt from a recent publication in a prestigious Harvard business journal urging political action.
*** “The wealthy investors who file these abusive lawsuits, and are often referred to as “patent trolls,” buy up portfolios of broad, unused patents that, in many cases, the ..USPTO .. never should have issued in the first place. They then assert the low-quality patents in lawsuits to accuse others of patent infringement … According to one study [uncited] , each year, patent trolls create $29 billion in direct, out-of-pocket costs from the companies they go after. Another study found that the companies that settle with patent trolls, or lose to them in court, wind up reducing investments in research and development by an average of more than $160 million over the next two years. Massive amounts of money … instead line the pockets of wealthy investors who are offering no goods or services of their own. The problem is especially threatening for progress in areas like the renewable energy sector..”
One notion that should be emphasized more (but is so often overlooked), is that this guarantee was meant to make the Office take a meaningful first action in time for applicants to decide whether or not to let their applications be published.
This is a critical aspect of the different Quid Pro Quo of the US system than most all other patent systems in the world: that Quid Pro Quo was NOT an exchange (to publish) for mere possibility of patent rights (that is, to BE examined, but the Quid WAS the turning of an inventor’s inchoate rights into a fully Legal basket of personal property rights FOR the Quo of sharing the contents of the application.
Hand in hand with this guarantee date was the notion of express abandonment that treated the application as having never existed — for anyone (and anything, including the legal fiction of the Person Having Ordinary Skill In The Art: I cannot stress the importance of this nuance enough).
OT, but another and precedential Fed. Cir. Arthrex appointments clause decision on remand from the Sup. Ct. [in addition to the first one not discussed on this blog]: It affirmed a PTAB finding of unpatentability of all challenged claims of Polaris Innovations Limited’s patents and denied Polaris’ motions to terminate.
Something does not make sense to me. If Sawstop win their civil case te: claim 1 and then it went back to the PTO and the PTO maintained the DP rejection of claim 2, and then Sawstop filed a TD to get claim 2 allowed, why would they then cancel claim 1 that they worked so hard to win in their civil action? Is it because Sawstop just wanted one patent and decided to add extra claims when the filed the RCE? A little more Explanation as to why they did that would have been nice to see in Dennis’ article. And if Sawstop got a patent eventually with the claim 1 they won at the civil action, shouldn’t they have gotten PTA just for that?
As Prof. C noted, Sawtop is worried that their patents are coming to an end. The whole point of the exercise was to get a patent with PTA that would keep the franchise alive, and filing a TD would have obviated that PTA. That is why they chose to cancel the rejected claim rather than to file the TD.
Oh yes, of course.
Thanks for that explanation.
But it still seems weird to me that if Sawstop won their civil case re: claim 1, and then just canceled claim 2 to get a patent, wouldn’t they have gotten all the PTA that they wanted? It just seems weird that they canceled claim 1 when the appl went back to the PTO, irrespective as to what else they did and did not do.
On the summary of the case provided here, I see neither error in the CAFC judgment, nor controversy.
One must clearly win on the merits to obtain the type of patent term adjustment at point, and such was clearly lacking.
“ Sawstop is struggling because its patents are all expiring and competitors are hot-on-its-heels.”
Awww, it’s always so sad when a business has to actually compete with another business.
Come on bro, that was a great invention. As a dude that’s been in the shop quite a bit and my fam has and many of their close folks have as well, I’m very glad they bothered themselves to make it.
The Federal Circuit also addressed a second element of the test — that the “patent was issued under a decision in the [appellate] review.” The court has interpreted that requirement as mandating that at least one claim considered by the PTAB have found its way into the issued patent without significant or substantive post-appeal amendments.
There is no support for this requirement — either textually or logically. Rather, the Court has rewritten “under a decision” as “as a direct result of a decision.”
Logically, if one prevails at the Board (or the Federal Circuit), then issuance of the patent was unnecessarily delayed by the USPTO. If, for example, a 10 year prosecution ensued in which 4 years were taken up by an appeal to the Board followed by one to the CAFC, in which Applicant prevailed, Applicant should get all of those 4 years back regardless of what happened before or after since it was the USPTO that delayed issuance of the patent — not Applicant.
[T]he Court has rewritten “under a decision” as “as a direct result of a decision.”
“As a direct result of a decision” is a perfectly reasonable way to construe the statutory phrase “under a decision.” When one considers the statutory words in view of the purpose that they are meant to serve, that hardly seems like “rewriting.”
“As a direct result of a decision” is a perfectly reasonable way to construe the statutory phrase “under a decision.”
Not when it directly conflicts with the intended purpose of the statute.
The Examiner issued a bad rejection that the Board reversed. That’s USPTO delay — not Applicant delay.
The Examiner issued a bad rejection that the Board reversed. That’s USPTO delay — not Applicant delay.
I agree with the intuition here, but I just cannot reconcile the statutory text with this outlook. I agree that PTA should be awarded when the PTAB reverses all pending rejections and then institutes new rejections, but if that is what Congress intended, why mention “issued under a decision in the review” at all? That sort of language is surplusage in your parsing of the statute. What role do you consider that this phrase is intended to serve?
Subsection (C)(iii) reads “appellate review by the Patent Trial and Appeal Board or by a Federal court in a case in which the patent was issued under a decision in the review reversing an adverse determination of patentability.”
However, subsection (C) begins “Guarantee of adjustments for delays due to derivation proceedings, secrecy orders, and appeals.—Subject to the limitations under paragraph (2), if the issue of an original patent is delayed due to—”
Any interpretation of (C)(iii) should be made consistent with the introduction of (C), which refers to “[g]uarantee of adjustments for delays due to … appeals.”
The proper reading of “under” should be “resulting from” — not “directing result from.”
Perhaps this language was added to exclude Continuation and Divisional applications from also getting the PTA as a result of the appeal. Regardless, the CAFC’s interpretation of subsection (C)(iii) conflicts with the plain language of subsection (C).
I think that the CAFC got this one correct as a matter of statutory construction, but I do not think that the outcome is altogether fair. If the examiner makes a righteous rejection, such that you lose on appeal, then it is only fair that you get no (C) time back for that appeal. Similarly, if the examiner makes a bogus rejection, such that you are completely vindicated on appeal and you get your allowance, then it is right and fair that the patent be extended with the (C) time that you had to take because of the examiner’s misjudgment.
The take-away here seems to be that you need to maneuver the examiner into giving you all possible rejections before you go to the PTAB, because if you triumph over all of the examiner’s rejections, but the PTAB makes some new ones, then no (C) time for you. It is not really possible, however, to force the examiner to make a rejection that neither you nor s/he believes righteous, merely so that you can avoid having the PTAB make it later. Besides, how can you know in advance that the PTAB will make an additional rejection.
If it is fair that you should get back the (C) time when your complete victory leads to allowance, then it is also fair that you should get back the (C) time when your complete victory leads to a re-opening of prosecution with new rejections. The thing for which you are being compensated is for the examiner’s having wasted your time with bogus rejections. That is just as applicable when the appeal ends with new rejections as when it ends with a notice of allowance.
I agree with the CAFC that the statute does not provide for (C) time when the appeals ends with new rejections. The statute should provide for (C) time in such circumstances, however.
“If it is fair that you should get back the (C) time when your complete victory leads to allowance, then it is also fair that you should get back the (C) time when your complete victory leads to a re-opening of prosecution with new rejections.”
What if not every rejection is appealed? Say the claims are rejected under 112 and 103, and applicant appeals only 112 and gets that fully reversed. After an RCE, applicants overcome the 103. Should they get C type PTA for their “complete” victory?
As a practical matter, I do not think that this is possible. If you take an appeal to the PTAB and address the 112 rejection while failing to mention the 103 rejection, the PTAB is still going to give you a decision that says “affirmed in part” because they will affirm the 103 that you never challenged. At that point, you do not have a “complete” victory to form the basis for your (C) PTA request.
In any event, there is no injustice in denying the (C) time to the patentee in that case. It was the patentee’s own fault that the 103 was not cleared up earlier. (C) time exists to compensate the patentee when the examiner has wasted the patentee’s term, not when the patentee has wasted the patentee’s term.
If you take an appeal to the PTAB and address the 112 rejection while failing to mention the 103 rejection, the PTAB is still going to give you a decision that says “affirmed in part” because they will affirm the 103 that you never challenged.
Only if there are claims covered by the 112 rejection and not the 103 rejection. Otherwise, it is an affirmance.
Should they get C type PTA for their “complete” victory?
They didn’t have a complete victory as a result of the appeal. The 103 rejection is still pending. Assuming that the 103 rejection covers all of the claims, the result of the appeal is an affirmance of the Examiner’s rejection.
>an affirmance of the Examiner’s rejection.
The examiner’s rejection was overturned. The board substituted it with a “new” 103 rejection. Note, I’m interpreting “new” to mean different art vs. merely different rationale (b/c they would have said “new rationale” in that case)
That said, the practice tip from this case probably is to always present a picture claim (and convince the client to pay the extra claim fee).
The examiner’s rejection was overturned.
I do not think that Wt is talking about the Sawstop case in his 1.1.2. Rather, he is responding to Ben’s 1.1 hypo.
Correct.
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