Japanese Found. for Cancer Research v. Rea, Civil Action No. 1:13-cv-412
| Decision Date | 26 July 2013 |
| Docket Number | Civil Action No. 1:13-cv-412 |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | JAPANESE FOUNDATION FOR CANCER RESEARCH Plaintiff, v. TERESA STANEK REA, Acting Under Secretary of Commerce for Intellectual Property and Acting Director of the United States Patent and Trademark Office, UNITED STATES PATENT AND TRADEMARK OFFICE, Defendants. |
(AJT/TRJ)
On October 11, 2011, a terminal disclaimer of U.S. Patent No. 6,194,187 was filed with the United States Patent and Trademark Office ("PTO") on behalf of the patent owner, plaintiff Japanese Foundation for Cancer Research (the "Foundation").1 After the disclaimer was filed, but before it was published on the PTO's website or in the PTO's Official Gazette, theFoundation requested that the PTO withdraw the disclaimer on the grounds that the Foundation had never authorized its filing. The PTO denied the Foundation's repeated requests to withdraw the terminal disclaimer, published it on its website (with a statement that it was being contested), and ultimately issued its Final Agency Decision ("FAD") on February 12, 2013, denying the Foundation's request. The PTO summarized its decision as follows:
On April 1, 2013, the Foundation filed this action seeking to reverse the FAD under the Administrative Procedure Act ("APA"), 5 U.S.C. § 551 on the grounds that the PTO's refusal to allow withdrawal of the terminal disclaimer, under the particular circumstances of this case was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." See 5 U.S.C. 706(2)(A). Presently pending before the Court are the parties' cross motions for summary judgment [Docs. No. 13, 22]. A hearing was held on those motions on May 10, 2013, following which the Court took the motions under advisement.
The PTO does not contest or challenge in its FAD that the disclaimer was filed without the Foundation's authorization.2 The Court therefore concludes that the PTO: (1) erred as a matterof law when it ruled that the Foundation was bound by an unauthorized filing of the terminal disclaimer and refused for that reason to withdraw the unauthorized disclaimer; (2) erred as a matter of law when it ruled that it was without inherent authority to withdraw the disclaimer under the circumstance of this case; and (3) abused its discretion when it ruled that it would not exercise any inherent authority it did have to withdraw the disclaimer. The Court will therefore GRANT the Foundation's motion, DENY the PTO's motion, and direct the PTO to withdraw the terminal disclaimer, absent a finding that the Foundation actually authorized its filing.
The Foundation is a non-profit entity, organized under the laws of Japan with its principal place of business in Tokyo, Japan. It was established in 1908 and was the first institute in Japan specializing in cancer research. Its work is funded, in part, through royalties collected from licensing its intellectual property.
On February 27, 2001, a patent entitled "Aptosis-inducing protein and gene encoding the same," U.S. Patent No. 6,194,187 (the "Cancer Treatment Patent"), was issued to its inventor and assigned to the Foundation. Doc. No. 25-3, 25-7. The Cancer Treatment Patent was scheduled to expire on April 17, 2017. Doc. No. 25-3. Following its issuance, the Foundation licensed rights to practice it to two pharmaceutical companies, Kyowa Hakko Kirin, Inc. ("KHK") and Carna Biosciences ("Carna") (collectively the "licensees"). The Foundation did not grant the licensees the right to disclaim the Cancer Treatment Patent, or any part of its term.
In 2011, KHK, one of the Foundation's licensees, acting through its in-house counsel, called KHK's outside Japanese counsel, Kyowa Patent and Law Office ("Japanese LicenseeCounsel),3 and inquired generally about the process of filing a terminal disclaimer under United States patent laws. Doc. 25-8, Saito Decl. ¶ 5. Based on that conversation, Japanese Licensee counsel believed that KHK's in-house counsel had orally requested that a terminal disclaimer of the Cancer Treatment Patent be filed on behalf of the Foundation. Doc. 25-8, Kinoshita Decl. ¶¶ 3, 6. Japanese Licensee Counsel did not seek any formal, written request or confirmation from KHK and did not attempt to contact the Foundation. Id. ¶ 7. Instead, on March 9, 2011, Japanese Licensee Counsel sent a fax to the American law firm Foley & Lardner LLP ("U.S. Counsel), which served as the Foundation's attorney of record with the PTO, instructing it to "abandon the captioned patent positively and invalidate this patent before the case lapses by non-payment of the next maintenance fees, which will be due on August 27, 2012." Doc. No. 25-8 at 16.
On October 11, 2011, U.S. Counsel filed the terminal disclaimer with the PTO and forwarded a copy to Japanese Licensee Counsel. Doc. No. 25-7 at 170-71. Japanese Licensee Counsel forwarded a copy to KHK. On November 30, 2011, after receiving the copy of the terminal disclaimer, KHK's in-house patent counsel contacted Japanese Licensee Counsel and informed them that KHK had not requested the disclaimer. Doc. No. 25-8, Okubo Decl. ¶¶ 5-7. For these reasons, KHK instructed Japanese Licensee Counsel to take the necessary steps to withdraw the terminal disclaimer. Id. ¶ 10. On November 30, 2011, Japanese Licensee Counsel sent to U.S. Counsel a fax marked "EXTREMELY URGENT' requesting that U.S. Counsel take the proper steps to withdraw the disclaimer. U.S. Counsel proposed filing a petition to withdraw with the PTO and, on December 1, 2011, Japanese Licensee Counsel directed U.S. Counsel toprepare the petition. Id. ¶ 10. On December 9, 2011, U.S. Counsel sent Japanese Licensee Counsel a draft petition, which was approved on December 13, 2011. That same day, U.S. Counsel filed its first "Petition under 37 C.F.R. § 1.182 to Withdraw the Statutory Disclaimer." Doc. No. 257 at 176-78.4
After this first petition was filed, but before the PTO took any action on it, the PTO posted the terminal disclaimer on its internet website portal known as "PAIR", an acronym for Patent Application Information Retrieval, thereby making it electronically accessible to the public for the first time. Then, on January 17, 2012, the PTO dismissed the December 13, 2011, petition, essentially on the grounds that the PTO did not have statutory authority to withdraw the terminal disclaimer.5 In response, U.S. Counsel filed a series of petitions on behalf of the Foundation, citing authority it believed demonstrated that the PTO had discretion to withdraw the disclaimer. The first of these subsequent petitions, filed on February 27, 2012, and styled"Petitions under 37 C.F.R. § 1.182 and § 1.183," sought to withhold the terminal disclaimer from publication in the Official Gazette.6 Doc. No. 25-7 at 206-08.
The PTO did not respond to this petition, and on March 16, 2012, the Foundation filed an additional petition, together with sworn declarations, styled "Request for Reconsideration of Decision on Petition or, in the Alternative, Petition under 37 C.F.R. §§ 1.182 and 1.183 to Invoke the Discretion of the Director and Suspend the Rules." Doc. No. 25-7 at 209; see also Doc. No. 25-8 at 12-21. For several months, the PTO took no action with respect to these petitions. On August 7, 2012, U.S. Counsel met with the Director of the Office of Petitions and the attorney in that office assigned to the case. Doc. No. 25-8 at 24. Following that meeting, on August 30, 2012, U.S. Counsel filed a "Supplemental Petition for Reconsideration," requesting that the PTO exercise its inherent authority to set aside the "invalid" terminal disclaimer. Id. at 25-26.
Nearly six months later, on February 22, 2013, the PTO issued its FAD, in which it denied all of the Foundation's requests for relief and ordered publication of the terminal disclaimer in the Official Gazette. Doc. No. 25-8 at 40-50. On March 14, 2013, the Foundation filed a petition styled "Request to Withhold Recordation and Publication of the Notice of Unauthorized Disclaimer in the Official Gazette, Pending Judicial Review of the Agency's Decision, or in the Alternative, Petitions Under 37 C.F.R. §§ 1.182 and 1.183 to Invoke the Discretion of the Director and Suspend the Rules." On March 21, 2013, the PTO denied the Foundation's request not to publish the disclaimer in the Official Gazette, but later agreed topreserve the status quo pending judicial review.7 On April 1, 2013, the Foundation appealed the FAD pursuant to the APA.
Summary judgment should be granted where the record 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); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). Entry of summary judgment is appropriate "against a party who fails to make a showing sufficient to establish the existence of an element essential...
To continue reading
Request your trial