`
`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