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Actelion Pharmaceuticals Ltd. v. Lee

United States District Court, E.D. Virginia, Alexandria Division

January 13, 2016

ACTELION PHARMACEUTICALS LTD., Plaintiff,
v.
HON. MICHELLE K. LEE, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, Defendant.

MEMORANDUM OPINION

LIAM O'GRADY, District Judge.

This matter comes before the Court on a Motion to Stay filed by Defendant Michelle K. Lee, Director of the United States Patent and Trademark Office ("USPTO"). Dkt. No. 9. Defendant asks this Court to stay this case pending the decision of the U.S. Court of Appeals for the Federal Circuit in Pfizer Inc. v. Lee, No. 15-1265. Pfizer was argued before the Federal Circuit on November 2, 2015. Both cases involve the interpretation of the statute which provides for a patent term adjustment - the amount of time added to the life of a patent due to delays caused by the USPTO. Defendant argues this case should be stayed because the decision in Pfizer will govern the outcome in this case. Actelion opposes the Motion to Stay, arguing primarily that this case is factually distinct from Pfizer such that staying this case will not serve judicial economy.

I. Background

A. Statutory Framework [1]

The patent application process begins with an applicant filing a patent application with the USPTO. 35 U.S.C. § 111(a). The patent application undergoes a process of examination to determine whether the requirements for patentability have been met. Id. § 131. Often the first official action of the USPTO is the issuance of a restriction requirement. Id. § 132.

A restriction requirement is issued when a patent examiner determines that a patent application contains two or more independent and distinct inventions. Id. § 121. The restriction requirement divides the claims presented in the application into multiple groups. One group can be pursued in the application where the restriction requirement is made, while the other group(s) can be pursued by filing one or more divisional applications. Id.

A patent's enforceability begins on the issue date of the patent and ends twenty years from the patent application's effective filing date, which is the earliest filing date for which priority is claimed. 35 U.S.C. § 154(a)(2). Accordingly, when a divisional application results in a patent, its twenty year term is measured from the filing date of the parent patent application.

Because the examination process takes time, the enforceable lifetime of a patent is necessarily reduced by the amount of time it takes the USPTO to conduct the patent's examination. As such, Congress established patent term adjustments, or PTA, to compensate inventors for unreasonably long delays by the USPTO.

Prior to 1994, before adoption of the General Agreement on Tariffs and Trade, a patent term was seventeen years from the issue date. Novartis AG v. Lee, 740 F.3d 593, 595 (Fed. Cir. 2014). In 1994, Congress changed the effective term of a patent from seventeen years commencing from issuance to twenty years commencing from filing. See Uruguay Round Agreements Act, Pub.L. No. 103-465, § 532, 108 Stat. 4809, 4984 (1994). Under the seventeen-year regime, USPTO delays did not affect patent terms because a term commenced upon issuance rather than filing. Under the twenty-year regime, however, USPTO delays had the potential to consume the entirety of a patent's effective term. See Wyeth v. Kappos, 591 F.3d 1364, 1366 (Fed. Cir. 2010).

Most recently, in 1999, the American Inventors Protection Act ("AIPA") amended 35 U.S.C. § 154(b) to address this problem and protect patent terms from the effects of USPTO delay. "The new Act promised patent applicants a full patent term adjustment for any delay during prosecution caused by the PTO." Wyeth, 591 F.3d at 1366. Under the amended statute, the USPTO calculates patent term adjustments by considering three classes of USPTO delay: (i) an "A-Delay, " which awards PTA for delays arising from the USPTO's failure to act by certain examination deadlines; (ii) a "B-Delay, " which awards PTA for an application pendency exceeding three years; and (iii) a "C-Delay, " which awards PTA for delays due to interferences, secrecy orders, and appeals. The USPTO calculates PTA by adding the A-, B-, and C-Delays, subtracting any overlapping days, and then subtracting any days attributable to applicant delay. Wyeth, 591 F.3d at 1367.

A-Delay is applicable to this case. The relevant portion of the PTA Statute describing A-Delay provides as follows:

(A) Guarantee of prompt Patent and Trademark Office responses. - Subject to the limitations under paragraph (2), if the issue of an original patent is delayed due to the failure of the Patent and Trademark Office to -
(i) provide at least one of the notifications under section 132 or a notice of allowance under section 151 not ...

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