Daiichi Sankyo Co. v. Rea

• Decision Date: 03 December 2013
• Docket Number: Civil Action No. 10-215 (RWR)
• Parties: DAIICHI SANKYO COMPANY, LIMITED, Plaintiff, v. TERESA STANEK REA, Defendant.
• Court: U.S. District Court — District of Columbia

DAIICHI SANKYO COMPANY, LIMITED, Plaintiff,
v.
TERESA STANEK REA, Defendant.

Civil Action No. 10-215 (RWR)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

SIGNED: December 3, 2013

MEMORANDUM OPINION

Plaintiff Daiichi Sankyo Company, Limited ("Daiichi") brings suit under 35 U.S.C. § 154(b)(4)(A) and the Administrative Procedure Act, 5 U.S.C. § 501 et seq., against the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office ("USPTO")¹ alleging that the USPTO improperly calculated the patent term adjustments ("PTA") for Daiichi's United States Patent Nos. 7,365,205 ("'205 patent"), 7,342,014 ("'014 patent"), and 7,576,135 ("'135 patent"). Daiichi and the USPTO cross-move for summary judgment. Because Daiichi did not timely file its challenge to the USPTO's PTA determinations, the USPTO's cross-motion for summary judgment will be granted and Daiichi's cross-motion for summary judgment will be denied.

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BACKGROUND

I. LEGAL BACKGROUND

In the United States, patents are granted "for a term beginning on the date on which the patent issues and ending 20 years from the date on which the application for the patent was filed in the United States." 35 U.S.C. § 154(a)(2). "However, the prosecution of a patent application may take more than three years. In order to ensure that all patents have terms of at least seventeen years," the Patent Act allows the Director of the USPTO to adjust the term of a patent to account for certain delays that may occur during patent prosecution (i.e., to make a PTA determination). Janssen Pharmaceutica, N.V. v. Rea, 928 F. Supp. 2d 102, 103 (D.D.C. 2013); see also 35 U.S.C. § 154(b).

One category of delay that is excluded from the calculation of the patent term, known as "A delay," "extend[s] the term of the patent one day for each day the PTO does not meet certain examination deadlines[.]" Wyeth v. Kappos (Wyeth II), 591 F.3d 1364, 1367 (Fed. Cir. 2010) (citing 35 U.S.C. § 154(b)(1)(A)). This delay is excluded because the Patent Act guarantees "prompt Patent and Trademark Office responses." 35 U.S.C. § 154(b)(1)(A). "The PTO notifies the patentee of the amount of A Delay that has been awarded when it issues the Notice of Allowance. Because the Notice of Allowance is sent well before a patent is actually granted, the determination of A Delay is known

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as a Pre-Issuance Determination." Novartis AG v. Kappos, 904 F. Supp. 2d 58, 61 (D.D.C. 2012).

A second category of excludable delay, known as "B delay," "extends the term of the patent one day for each day issuance is delayed due to the PTO's failure 'to issue a patent within 3 years after the actual filing date of the application in the United States.'" Wyeth II, 591 F.3d at 1367 (quoting 35 U.S.C. § 154(b)(1)(B)). This delay is excluded because the Patent Act guarantees "no more than [a] 3-year application pendency." 35 U.S.C. § 154(b)(1)(B). "Because B Delay accrues until the actual date of issuance, the PTO does not determine the proper amount of B Delay until the patent is granted." Novartis, 904 F. Supp. 2d at 61.

"After determining the proper amount of A and B Delay, the PTO must determine the extent of any overlap between the two types of delay." Id. at 62. "To the extent that periods of [A delay and B delay] overlap, any [PTA] shall not exceed the actual number of days the issuance of the patent was delayed." 35 U.S.C. § 154(b)(2)(A). "Because the overlap determination depends on the amount of B Delay, it is also done at the time the patent is granted." Novartis, 904 F. Supp. 2d at 62.

In 2004, the USPTO issued a regulation explaining its methodology to calculate A/B Overlap. See Revision of Patent Term Extension and Patent Term Adjustment Provisions, 69 Fed.

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Reg. 21706-01 (Apr. 22, 2004) ("2004 Notice"). On September 30, 2008, in Wyeth v. Dudas (Wyeth I), 580 F. Supp. 2d 138, 141-42 (D.D.C. 2008), the district court found that the USPTO's A/B Overlap methodology, as described in the 2004 Notice, was contrary to the plain language of § 154(b). The USPTO appealed the decision, and the Federal Circuit affirmed the district court's decision in Wyeth II. Wyeth II, 591 F.3d at 1369-70.

On February 1, 2010, the USPTO issued an Interim Procedure setting forth its procedure for recalculating PTAs using the correct A/B Overlap methodology. See Interim Procedure for Patentees to Request a Recalculation of the Patent Term Adjustment, 75 Fed. Reg. 5043-01 (Feb. 1, 2010). The Interim Procedure established that the USPTO would recalculate the PTA for any patent that had been issued in the 180 days before the announcement of the Interim Procedure -- that is, any patent issued on or after August 5, 2009. Id. at 5044.

The final determination of PTA -- which factors in A Delay, B Delay, and A/B Overlap -- is done at the time the patent is granted. Novartis, 904 F. Supp. 2d at 62. If the patent applicant disagrees with the PTA determination, the applicant may "request reconsideration of any patent term adjustment determination made by the Director," id. § 154(b)(3)(B)(ii), "within two months of the date the patent issued," 37 C.F.R. § 1.705(d) (2012). "[O]n petition of the interested party,"

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("Rule 183 petition") the two-month limitation "may be suspended or waived by the Director or the Director's designee" "[i]n an extraordinary situation, when justice requires." 37 C.F.R. § 1.183 (2013).

II. FACTUAL BACKGROUND

Daiichi is the assignee of the '205, '014, and '135 patents. 2d Am. Compl. ¶ 8. Patent Application Serial No. 10/481,262 issued as the '205 patent on April 29, 2008. Id. ¶ 9. The patent issued with a notice that its term would be extended by 504 days under 35 U.S.C. § 154(b) (i.e., the final PTA determination is 504 days) subject to the patentee's terminal disclaimer over the '014 patent.² Id. ¶¶ 9, 31.

Patent Application Serial No. 10/773,344 issued as the '014 patent on March 11, 2008. Id. ¶ 10. The patent issued with a notice that its term would be extended by 357 days under 35 U.S.C. § 154(b) subject to the patentee's terminal disclaimer over the '205 patent. Id. ¶¶ 10, 33.

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Patent Application Serial No. 10/540,259 issued as the '135 patent on August 18, 2009. Id. ¶ 11. The patent issued with a notice that its term would be extended by 86 days under 35 U.S.C. § 154(b) subject to the patentee's terminal disclaimer over the '014 and '205 patents. Id. ¶¶ 11, 35. In other words, Daiichi disclaimed the part of the '135 patent term that extended beyond the expiration date of the '014 and '205 patents. Thus, in effect, the '135 patent expires on the same day as the '014 and '205 patents expire.

On February 2, 2009, Daiichi requested that the Director reconsider her March 11, 2008 and April 28, 2008 PTA determinations for the '014 and '205 patents respectively and filed Rule 183 petitions seeking a waiver of the two-month limit for filing a request for reconsideration. Id. ¶ 43. The USPTO denied Daiichi's Rule 183 petitions and denied its requests for reconsideration as untimely. Def.'s Cross-Mot. & Opp'n, Exs. 3-4.

On February 12, 2010, Daiichi filed suit against the USPTO alleging that the USPTO improperly calculated the PTA for the '135 patent. Daiichi asserted that the correct PTA for the '135 patent is 504 days. Compl. ¶ 1. In April 2010, the matter was "remanded to the USPTO for recalculation and adjustment of plaintiff's patent term [for the '135 patent] in accordance with [Wyeth II]." Order, entered 4/20/10. On remand, the USPTO

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recalculated the PTA for the '135 patent and issued a Certificate of Correction stating that "[s]ubject to any disclaimer, the term of the ['135] patent is extended or adjusted under 35 U.S.C. § 154(b) by 503 days." Def.'s Cross-Mot. & Opp'n, Ex. 1. However, because the '135 patent is terminally disclaimed by the '014 and '205 patents, any part of the term of the '135 patent that extends beyond the terms of the earlier '014 and '205 patents is disclaimed. "Accordingly, although the USPTO has reinstated the term it denied the '135 patent at issuance, the reinstatement has no practical effect" because the terms of the '014 and '205 patents expire before the amended term of the '135 patent expires. See Pl.'s Mot. for Summ. J., Mem. of P. & A. in Supp. of Pl.'s Mot. for Summ. J. ("Pl.'s Mem.") at 4.

On November 9, 2010, Daiichi filed an amended complaint alleging that the USPTO also incorrectly calculated the PTA for the '014 and '205 patents.

The parties now cross-move for summary judgment.

DISCUSSION

"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a).

In a case involving review of a final agency action under the APA, . . . [the court has a] limited role of . . . reviewing the administrative record. The function of the district court is to determine whether or not as a matter

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of law the evidence in the administrative record permitted the agency to make the decision it did. Summary judgment thus serves as the mechanism for deciding, as a matter of law, whether the agency action is supported by the administrative record and otherwise

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