By Donald Zuhn --
Last week, Novartis AG and Novartis Vaccines and Diagnostics, Inc. filed a complaint against U.S. Patent and Trademark Office Director David Kappos, seeking review of the Office's patent term adjustment (PTA) determinations for eleven Novartis patents (see "Court Report," July 11, 2010). The eleven patents specified in the complaint are U.S. Patent Nos. 6,656,957, issued December 2, 2003; 6,878,721, issued April 12, 2005; 7,098,325, issued August 29, 2006; 7,112,673, issued September 26, 2006; 7,265,089, issued September 4, 2007; 7,348,353, issued March 25, 2008; 7,423,148, issued September 9, 2008; 7,470,709, issued December 30, 2008; 7,470,792, issued December 30, 2008; 7,534,890, issued May 19, 2009; and 7,576,221, issued August 18, 2009.
its complaint, Novartis asserts that "[the Director] consistently
calculated PTA for utility patent applications filed at least as early as May
29, 2000 that resulted in issued patents at least as late as March 1, 2010 in a
manner that incorrectly determined the overlap of A Delay [i.e., one-day extension of patent term for every day that
issuance of a patent is delayed by a failure of the USPTO to comply with
various enumerated statutory deadlines; see
§ 154(b)(1)(A)] and B Delay [i.e., one-day
extension of patent term for every day greater than three years after the
filing date that it takes a patent to issue; see § 154(b)(1)(B)]."
Novartis also asserts that "[the Director] had improperly contended
that the period of B Delay began to accrue from the filing date of the patent
application, rather than from three years after the filing date of the patent
application," and therefore, "had considered the overlap of A Delay
and B Delay to include any period of A Delay within the first three years after
filing a patent application."
As a result, "[the Director's] policy and practice in calculating
PTO delay was to grant PTA amounting to the greater of A Delay or B Delay,"
which Novartis contends deprived it of patent term to which it was entitled
under § 154(b) .
Following the Federal Circuit's decision in Wyeth v. Kappos, in which the appellate court determined that "[s]ection 154(b)'s language is clear, unambiguous, and intolerant of the PTO's suggested interpretation," and thus, "accord[ed] no deference to the PTO’s greater-of-A-or-B rubric," the USPTO announced that it would not seek further review of the Wyeth decision (see "USPTO and DOJ Will Not Seek Review of Wyeth v. Kappos"). One week later, the USPTO announced interim procedures for patentees to request PTA recalculation in light of Wyeth (see "USPTO Announces Interim Procedure for Requesting PTA Recalculations"). Novartis notes that "[t]hese interim procedures included an expedited, informal procedure for seeking recalculation of PTA solely on the basis of Wyeth, but extended that remedy only to patents issued on or after September 2, 2009." (In contrast with Novartis' recitation of a September 2, 2009 cutoff, the Office stated in a Federal Register notice published on February 1, 2010 that it would "deny as untimely any request for recalculation of patent term adjustment indicated on a patent that is not filed within 180 days of the day the patent was granted." Thus, according to our calculations, the interim procedure for requesting PTA recalculation applied to patents that issued after August 5, 2009 -- i.e., on or after Tuesday, August 11, 2009 -- rather than September 2, 2009 as indicated in Novartis' complaint.).
Regardless of the correct cutoff date, Novartis' action is unique in that it is the first to question the Office's interim procedures for requesting PTA recalculation in light of Wyeth. In its complaint, Novartis contends that "[the Director's] refusal to accord the benefits of Wyeth to [applications filed by May 29, 2000 and issued on or before September 1, 2009] is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law and in excess of statutory jurisdiction, authority or limitation." Arguing that each of the eleven patents at issue was filed on or after May 29, 2000 and issued on or before September 1, 2009, Novartis asserts that it was deprived of patent term on each patent under Wyeth and that it was precluded from recapturing this patent term under the Office's interim procedure.
With respect to the timeliness of its complaint, Novartis argues that the complaint complies with the filing requirements of 35 U.S.C. § 154(b)(4)(A), or alternatively, is timely under the doctrine of equitable tolling or the discovery rule. Section 154(b)(4)(A) specifies that that "[a]n applicant dissatisfied with a [PTA] determination made by the Director . . . shall have remedy by a civil action against the Director filed in the United States District Court for the District of Columbia within 180 days after the grant of the patent." Thus, for the patents specified in Novartis' complaint, compliance with § 154(b)(4)(A) would have (seemingly) required Novartis to bring suit against the Director by the following dates:
US 6,656,957 -- May 30, 2004
US 6,878,721 -- October 9, 2005
US 7,098,325 -- February 25, 2007
US 7,112,673 -- March 25, 2007
US 7,265,089 -- March 2, 2008
US 7,348,353 -- September 21, 2008
US 7,423,148 -- March 8, 2009
US 7,470,709 -- June 28, 2009
US 7,470,792 -- June 28, 2009
US 7,534,890 -- November 15, 2009
US 7,576,221 -- February 14, 2010
Because Novartis filed its complaint on July 6, 2010, it would appear that the complaint did not comply with § 154(b)(4)(A). However, Novartis argues that "§ 154(b)(4)(A) applies to a re-determination of PTA by [the Director] under 'paragraph (3),' i.e., 35 U.S.C. § 154(b)(3)," and that "§ 154(b)(3), by its plain terms, governs a PTA determination by [the Director] only in conjunction with a notice of allowance of a patent application," and "does not cover a PTA determination by [the Director] in conjunction with the issuance of a patent." As a result, Novartis argues that the 180 day time limit is inapplicable to its claim.
Novartis also points to two other ways in which its complaint should be considered timely: pursuant to the doctrine of equitable tolling or the discovery rule. In February 2009, we discussed a case in which a patentee tried the first approach (see "More § 154(b)(4)(A) Actions Filed against Director"). In that case, General Hospital Corp. filed a complaint against the Director on January 16, 2009, requesting correction of a PTA determination with respect to U.S. Patent No. 7,367,341, which issued on May 6, 2008. For a patent issuing on that date, a complaint should have been filed by November 2, 2008. Thus, General Hospital missed the deadline for filing its complaint by 76 days. Nevertheless, General Hospital contended in its complaint that "[the District Court for the District of Columbia's] decision in Wyeth v. Dudas constituted a change in the law sufficient to invoke the doctrine of equitable tolling to allow for the filing of this complaint at this time." The doctrine of equitable tolling preserves a plaintiff's claims when strict application of the statute of limitations would be inequitable. A check of PACER shows that the District Court stayed General Hospital's case on March 30, 2009, pending the outcome of the Wyeth appeal, and that General Hospital voluntarily dismissed the action on April 29, 2010. As a result, the District Court never addressed the question of whether the doctrine of equitable tolling could be used to bypass the filing deadline set forth in § 154(b)(4)(A). In the instant case, Novartis contends that it "lacked knowledge and adequate notice of its claim . . . until [the Director's] announcement that the PTO would not appeal the Wyeth decision or, at the earliest, the date of the decision itself."
Novartis also contends that its complaint is timely in view of the discovery rule. Under the discovery rule, the statue of limitations specified in § 154(b)(4)(A) would not begin to run until the plaintiff "discovered" the harm. With respect to PTA determinations based on Wyeth B-delay, the harm would have been "discovered" (at the earliest) on January 7, 2010, when the Federal Circuit decided Wyeth v. Kappos, i.e., on July 6, 2010.
In addition to seeking additional patent term under § 154(b)(4)(A) (count 1), the doctrine of equitable tolling (count 2), and the discovery rule (count 3), Novartis also adds a fourth count alleging that "[the Director's] purposeful and deliberate diminution of the patent term of each of the Novartis Patents constitutes a taking of Novartis' property without just compensation, in violation of the Fifth Amendment of the Constitution of the United States," and a fifth count alleging a violation of the Administrative Procedures Act (i.e., that the USPTO's PTA determinations were "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law within the meaning of 5 U.S.C. § 706(2)(A); contrary to Novartis' constitutional rights within the meaning of 5 U.S.C. § 706(2)(B); and in excess of statutory authority within the meaning of 5 U.S.C. § 706(2)(C)").