Intra-Cellular Therapies, Inc v. Iancu, 938 F.3d 1371

Background

Intra‑Cellular prosecuted the application that issued as U.S. Patent No. 8,648,077; the USPTO issued a final Office action rejecting claims and raising objections.
On the last day of the three‑month statutory response period to the final action, Intra‑Cellular filed an after‑final submission that continued to argue the merits of the examiner’s §103 rejections and did not comply with the requirements for a final‑action reply under 37 C.F.R. §1.113(c).
Twenty‑one days later Intra‑Cellular filed a second after‑final submission that adopted the examiner’s suggestions, canceled or amended all rejected/ objected claims, and directly led to allowance.
The PTO determined the first submission was not a proper “reply” under 37 C.F.R. §1.704(b) and therefore attributed 21 days of applicant delay (reducing the patent‑term adjustment by 21 days).
The Eastern District of Virginia granted summary judgment for the PTO, applying Chevron deference to the agency’s interpretation; the Federal Circuit affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the PTA statute plainly answers whether an after‑final submission that continues to argue merits constitutes a “failure to engage in reasonable efforts” so applicant delay accrues	Intra‑Cellular: any bona fide submission that addresses all rejections/objections is a reasonable effort and thus a "reply" stopping applicant delay	PTO: statute is silent on final‑action context; existing regulations govern what qualifies as a reply to a final action	Court: statute does not directly answer the precise question (Chevron Step 1)
Whether the PTO permissibly interpreted §154(b)(2)(C) via 37 C.F.R. §1.704(b) to require that a reply to a final action comply with §1.113(c) (or §1.114) to stop applicant‑delay accrual	Intra‑Cellular: treating a continuing merits argument as non‑reply is impermissible; relies on non‑final reply standards	PTO: longstanding regulatory scheme distinguishes non‑final vs final replies; §1.113 limits replies to cancellation/appeal or compliance with §1.114/§1.116; a mere after‑final merits argument does not qualify	Court: PTO’s construction is permissible; an after‑final merits reply that fails to comply with §1.113/§1.114 can be a failure to engage in reasonable efforts (Chevron Step 2)
Whether precedent (e.g., Gilead, Pfizer) bars the PTO’s conduct‑oriented finding of applicant delay here	Intra‑Cellular: Gilead shows focus must be on conduct not result; Pfizer limits agency attribution of delay	PTO: decision is consistent with Gilead (focus on conduct) and Pfizer is inapposite because a final action ends prosecution as of right	Court: Gilead supports agency’s conduct focus; Pfizer does not apply to after‑final conduct
Whether the PTO’s reading of “reply” was an unfair surprise or inconsistent with agency practice	Intra‑Cellular: §1.704(b)’s generic “reply” did not put applicants on notice that §1.113(c) compliance is required; after‑final pilot programs show flexibility	PTO: other regulations distinguish replies to non‑final vs final actions; regulatory context gave fair notice; pilot programs not used here	Court: no unfair surprise; context and related regs support PTO’s interpretation

Key Cases Cited

Chevron U.S.A., Inc. v. Natural Resources Def. Council, Inc., 467 U.S. 837 (agency deference framework)
Gilead Sciences, Inc. v. Lee, 778 F.3d 1341 (Fed. Cir.) (PTA applicant‑delay analysis focuses on applicant conduct)
Novartis AG v. Lee, 740 F.3d 593 (Fed. Cir.) (RCE consequences for PTA/B‑delay)
Pfizer, Inc. v. Lee, 811 F.3d 466 (Fed. Cir.) (distinguishing typical prosecution back‑and‑forth from other delay)
Supernus Pharmaceuticals, Inc. v. Iancu, 913 F.3d 1351 (Fed. Cir.) (APA review of PTO PTA decisions)
Roberto v. Department of Navy, 440 F.3d 1341 (Fed. Cir.) (use of related regulations in construing agency rules)
Christopher v. SmithKline Beecham Corp., 567 U.S. 142 (agency interpretation fairness/unfair surprise considerations)