United States District Court, E.D. Virginia, Alexandria Division
MEMORANDUM OPINION
T.S.
ELLIS, III UNITED STATES DISTRICT JUDGE
This is
an appeal from a decision by the United States Patent &
Trademark Office (“PTO”), calculating the patent
term adjustment for United States Patent No. 8, 114, 874 (the
“'874 Patent”), owned by plaintiff ARIAD
Pharmaceuticals (“ARIAD”). Specifically, the PTO
determined that the three month period, beginning with the
PTO's erroneous conclusion that ARIAD had abandoned its
patent application and ending when the PTO rescinded the
notice of abandonment, constituted “time consumed by
continued examination” pursuant to 35 U.S.C. §
154(b)(1)(B). Accordingly, the PTO excluded this four-month
period from the patent term adjustment calculation. ARIAD
argues that the PTO erred in excluding this four-month time
period from its adjustment calculation because the continued
examination had not yet commenced. This dispute has been
fully briefed and argued and is now ripe for disposition.
I.
Congress
in the past quarter century has significantly altered the
patent law landscape in a manner particularly pertinent to
this appeal. Thus, a brief description of this new landscape
provides useful context and aids the analysis.
The
patent process begins when an applicant seeking a United
States patent files an application with the PTO. See
35 U.S.C. § 111. The PTO then conducts an examination of
that application, reviewing the application first for
procedural requirements and then referring the application to
an examiner to determine whether the invention meets
substantive patentability requirements. Id.
§§ 101, 112, 103, 131. If the examiner determines
the application does not meet patentability requirements and
issues a final rejection, the applicant may file a request
for continued examination (“RCE”) of the
application pursuant to 35 U.S.C. § 132(b). See
37 C.F.R. § 1.114. When an RCE is filed, the
“Technology Center” assigned to the application
initially processes the request and verifies that all the
threshold requirements for continued examination are
satisfied. See Manual of Patent Examining Procedure
(“MPEP”) § 706.07(h). If the requirements
are not satisfied, the applicant is notified and afforded the
opportunity to enter amendments. Id. Once the
requirements are satisfied, the PTO will withdraw the
finality of the preceding rejection and forward the RCE to
the patent examiner for review. See 37 C.F.R. §
1.114(d).
If, at
the end of this process, a patent issues, the patent term
will last for twenty years from the date the initial patent
application was filed. Prior to 1994, patent terms were
seventeen years from the date the patent issued. In 1994,
Congress changed the patent term to twenty years from the
date the application was first filed. In changing the start
date of the patent term to the date when the application was
first filed, Congress noted that PTO delays in the processing
of applications would now consume some portion of the patent
term. Accordingly, to account for these delays, Congress
passed the American Inventors Protection (“AIPA”)
of 1999, requiring the PTO to grant several patent term
adjustments based on delays in the application processing
attributable to the PTO. See 35 U.S.C. §
154(b). Specifically, there are three types of delays for
which patentees are entitled to term adjustments: “A
Delay;” “B Delay;” and “C
Delay.” “A Delay” extends the patent term
one day for each day the PTO fails to meet prescribed
deadlines for certain events during the processing and
prosecution of the patent application, including deadlines
for mailing notices of allowance, responding to replies under
§ 132, and issuing the patent after payment of the
required fees. See 35 U.S.C. § 154(b)(1)(A).
“B Delay” provides a guarantee of no more than
three-years of application pendency from the time the
application is filed to issuance of the patent. Id.
§ 154(b)(1)(B). “C Delay” extends the patent
term one day for each day of the pendency of an interference
proceeding, a secrecy order, or successful appellate review
by the Board, or a Federal court. Id. §
154(b)(1)(C). Most relevant to this case is the PTO's
calculation of “B Delay.” As described above,
“B Delay” accounts for delays “due to the
failure of the [PTO] to issue a patent within [three] years
after the actual filing date of the application . . . “
Id. § 154(b)(1)(B). The statute excludes
certain time periods from the calculation of that three-year
period of time, including “any time consumed by
continued examination of the application requested by the
applicant under section 132(b).” Id. §
154(b)(1)(B)(i).
In
addition to establishing these categories of delay, the
statute delegates to the PTO Director the authority to
“prescribe regulations establishing procedures for the
application for and determination of patent term adjustments
. . . .” Id. § 154(b)(3)(A). Pursuant to
this authority, the PTO promulgated a rule calculating the
“time consumed by continued examination requested by
the applicant” in 35 U.S.C. § 154(b)(1)(B)(i) to
include:
(1) The number of days, if any, in the period beginning on
the date on which any request for continued examination of
the application under 35 U.S.C. 132(b) was filed and ending
on the date of mailing of the notice of allowance under 35
U.S.C. 151; 37 C.F.R. § 1.703(b)(1). At the same time,
the PTO promulgated a regulation enabling the Director to
suspend or waive “[i]n an extraordinary situation, when
justice requires, any requirement of the regulations in this
part which is not a requirement of the statutes …
.” 37 C.F.R. § 1.183.
II.[1]
Plaintiff
in this case, ARIAD Pharmaceuticals (“ARIAD”), is
a Delaware corporation and the owner of the United States
Patent No. 8, 114, 874 (the “'874 Patent”),
relating to an invention designed to treat abnormal protein
kinase activity. ARIAD filed the application that culminated
in the issuance of the ‘894 patent on December 22,
2006, ARIAD filed United States patent application number
11/644, 849 (“'849 Application”), the patent
application for what would become the '874 Patent. After
reviewing the application, on August 3, 2009, the PTO sent
ARIAD a final Office action rejecting the '849
Application. Thereafter, on February 3, 2010, ARIAD filed a
timely request for continued examination pursuant to 35
U.S.C. § 132(b), along with the required fee. PTO
received the request for examination on February 12, 2010 but
failed to process the request at the time it was received.
Instead, one week later-on February 19, 2010-the PTO sent
ARIAD a notice of abandonment in error, suggesting that
because the PTO had not received a response from ARIAD, ARIAD
had abandoned its application. ARIAD subsequently filed a
petition to withdraw the notice of abandonment on February
25, 2010, arguing that ARIAD had, in fact, timely filed a
request for continued examination. Three months later, on May
13, 2010, the PTO granted ARIAD's request and withdrew
the notice of abandonment. Specifically, the PTO concluded
the notice of abandonment was issued in error because a
“review of Office records reveal[ed] that the Office
received the reply on February 12, 2010.”
Administrative Record 418 (Petition Decision (05-13-10)). The
PTO also stated in the decision withdrawing the notice of
abandonment that the application “will be referred to
Technology Center Art Unit 1624 for processing of the reply,
and for continued examination in the normal course of
business.” Id. at 419 (Petition Decision
05-13-19). Accordingly, on June 10, 2010, the PTO issued a
notice of rescinded abandonment, entered the RCE, and
forwarded the application to an examiner. Id. at 3
(PTA summary document of ARIAD's ‘849 Application).
The PTO
subsequently mailed a notice of allowance on October 13,
2011, and issued the “'874 Patent” on
February 14, 2012 with a calculated patent term adjustment of
0 days under 35 U.S. § 154(b). In 2014, the Federal
Circuit held that “time consumed by continued
examination” does not include time between the notice
of allowance and issuance. Novartis v. Lee, 740 F.3d
593, 602 (Fed. Cir. 2014). Accordingly, the PTO recalculated
the period of “B Delay” to exclude the time from
the filing of the RCE until the notice of allowance, not the
time from the filing of the RCE until issuance of the patent.
Despite this recalculation, the PTO again concluded that the
patent term adjustment was 0 days. Specifically, the PTO
determined that the time consumed by continued examination
was 609 days, beginning on February 12, 2010 when ARIAD filed
its RCE and ending on October 13, 2011 when the PTO mailed
the notice of allowance. Accordingly, the PTO excluded that
time from the “B Delay” calculation, which
yielded a total “B Delay” of 175
days.[2] In other words, the PTO determined that
“time consumed by continued examination” included
time when the PTO erroneously considered the patent
application to be abandoned. The PTO also added 203 days of
“A Delay” for the time beyond four months that it
took the PTO to respond to ARIAD's request for continued
examination, resulting in a total “A” and
“B” delay of 378 days. Because the PTO determined
the amount of delay attributable to the applicant was 463
days, the PTO determined that the amount of “A, ”
“B, ” and “C” delay did not exceed
the number of days attributable to applicant delay and
awarded 0 days of adjustment to the patent.
ARIAD
subsequently sought reconsideration of this “B
Delay” calculation, and on March 9, 2017, the PTO
upheld its decision reasoning that the applicant was not
entitled to “B Delay” during the pendency of an
RCE. After exhausting its administrative appeals, ARIAD filed
the instant action on June 26, 2017, pursuant to 35 U.S.C.
§ 154 and the Administrative Procedure Act
(“APA”), contending that the PTO's
calculation of ARIAD's “B Delay” was based on
an improper construction of the statute. Specifically, ARIAD
alleges that the total “B Delay” should be 293
days, not 175 days, and accordingly, that ARIAD should
receive a patent term adjustment of 33 days, not 0 days.
The
parties subsequently filed the cross-motions for summary
judgment at issue here. The PTO contends that “time
consumed by continued examination” includes any time
after the filing of an RCE, which occurred in February 2010,
and as such, the time from February to June was properly
excluded. ARIAD counters by arguing that time during which
the PTO erroneously considered the application abandoned and
therefore did not ...