Exelixis, Inc. v. Kappos

919 F. Supp. 2d 689, 2013 WL 314754, 2013 U.S. Dist. LEXIS 11173
CourtDistrict Court, E.D. Virginia
DecidedJanuary 28, 2013
DocketNo. 1:12cv574 (LMB/TRJ)
StatusPublished
Cited by3 cases

This text of 919 F. Supp. 2d 689 (Exelixis, Inc. v. Kappos) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Exelixis, Inc. v. Kappos, 919 F. Supp. 2d 689, 2013 WL 314754, 2013 U.S. Dist. LEXIS 11173 (E.D. Va. 2013).

Opinion

MEMORANDUM OPINION

LEONIE M. BRINKEMA, District Judge.

Plaintiff Exelixis, Inc. (“Exelixis”) has sued David J. Kappos, the Director of the United States Patent and Trademark Office (“PTO”), under 35 U.S.C. § 154 and the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701 et seq., claiming that the PTO improperly determined the amount of patent term adjustment (“PTA”) to which one of Exelixis’s patents is entitled. Before the Court are the parties’ cross-motions for summary judgment. For the reasons discussed below, the PTO’s Motion for Summary Judgment [Dkt. No. 16] will be granted and Exelixis’s Motion for Summary Judgment to Correct the Patent Term Adjustment of U.S. Patent No. 8,067,436 [Dkt. No. 13] will be denied.

I. BACKGROUND

A Legal Background

An individual seeking to patent an invention must file a patent application with the PTO, which after a period of review determines whether to issue a patent or to reject the application by issuing a notice of rejection. See 35 U.S.C. §§ 111, 131-132. If an applicant continues to prosecute a rejected application, the PTO can make the rejection “final” upon a second examination. 37 C.F.R. § 1.113. The applicant then has the option to appeal the PTO’s decision as erroneous to the Board of Patent Appeals and Interferences,1 35 U.S.C. § 134, or to file a Request for. Continued Examination (“RCE”) in an attempt to overcome the final rejection. An RCE must include an accompanying fee and a “submission” such as “an-information disclosure statement, an amendment to the written description, claims, or drawings, new arguments, or new evidence in support of patentability,” but the RCE .cannot “introduce new matter into the disclosure of the invention.” 37 C.F.R. §§ 1.114(c), 1.17(e); 35 U.S.C. § 132(a).

If, upon receipt and examination of the RCE, the PTO concludes that the applicant’s claims are patentable, it sends a notice of allowance to the applicant, who has three months to pay an issue fee. 37 C.F.R. § 1.311. Once payment is received, the patent may issue. Id. § 1.314. In the notice of allowance, the PTO provides an estimate of the length of the term for which the allowed patent will be enforceable, once it issues. This calculation is known as patent term adjustment (“PTA”).

In 1994, Congress changed the effective term of a patent from 17 years starting from the date the patent was issued to 20 years starting from the date the patent application was filed. See Uruguay Round Agreements Act, Pub. L. No. 103-465, 108 Stat. 4809. Concerned that under the new regime, PTO-caused delays, in processing an application could consume significant amounts of the effective term of a patent, Congress addressed the problem in 1999 by allowing the term of a patent to be extended (or “adjusted”) when such delays occurred. See American Inventors Protec[692]*692tion Act of 1999, Pub. L. No. 106-113, §§ 4001-4008, 113 Stat. 1356. Under 35 U.S.C. § 154(b)(1), PTA “rebates” are available through three provisions; an “A-clause” requiring “prompt Patent and Trademark Office responses” by certain examination deadlines, a “B-clause” providing for “no more than [a] 3-year application pendency” between an application’s filing date and the issuance of the patent, and a “C-clause” awarding PTA “for delays due to interferences, secrecy orders, and appeals.”

The “B-clause” is the provision at issue in this litigation, and will be the focus of this Opinion. By its terms, the B-clause generally entitles a patent applicant to expect that the PTO will not take more than three years to examine and resolve a patent application. If PTO examination extends beyond the three years and the application is ultimately granted, the applicant may be entitled to an adjustment to the patent’s term. Such adjustment is based on a one-day extension for each day that the PTO exceeds the three-year deadline.

There are, however, some exceptions to the B-delay provision. Critical to this litigation is the provision under 35 U.S.C. § 154(b)(1)(B)(i), which states that “any time consumed by continued examination of the application requested by the applicant under section 132(b)” (via the filing of an RCE) does not count toward that three-year period.2 Pursuant to a congressional directive to “prescribe regulations establishing procedures for the application for and determination of patent term adjustments,” 35 U.S.C. § 154(b)(3)(A), the PTO interpreted that exception by engaging in notice-and-comment rulemaking and promulgating a regulation that became effective October 18, 2000. Under that regulation, the exception in § 154(b)(1)(B) signifies that once an RCE is filed, whether before or after the three-year “guaranteed” review period has passed, no further B-delay adjustment will be made to the term of the patent. 37 C.F.R. § 1.703(b);3 Changes to Implement Patent Term Adjustment Under Twenty-Year Patent Term, 65 Fed.Reg. [693]*69356,366, 56,369 (Sept. 18, 2000) (to be codified at 37 C.F.R. pt. 1). In other words, if an applicant files an RCE, and as a result, is successful in obtaining approval of the application, the patent’s term is not extended for the time from the filing of the RCE until the issuance of the patent.

B. Factual Background

Exelixis is the owner of United States Patent No. 8,067,436 (“the '436 patent”) entitled “C-Met Modulators and Methods of Use,” which covers compounds that inhibit and regulate enzymes associated with certain cancers.

The administrative record (“A.R.”) documents the events that led to the patent’s issuance, which are represented visually on the timeline4 below:

[[Image here]]

To summarize, the '436 patent application was filed on May 24, 2007, as a continuation of an abandoned 2006 application, which followed an abandoned 2004 application and several provisional applications dating as far back as September 2003. A.R. at 1. When it was filed in May 2007, the '436 patent application contained 54 independent claims and 16 dependent claims.5

Over the course of the next two years, Exelixis submitted four “Preliminary Amendments,” each of which amended or cancelled all of the original claims in its application and proposed dozens of new claims.

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Related

Mohsenzadeh v. Lee
5 F. Supp. 3d 791 (E.D. Virginia, 2014)
Exelixis, Inc. v. Focarino
550 F. App'x 894 (Federal Circuit, 2014)
Abraxis Bioscience, LLC v. Kappos
10 F. Supp. 3d 53 (District of Columbia, 2014)

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Bluebook (online)
919 F. Supp. 2d 689, 2013 WL 314754, 2013 U.S. Dist. LEXIS 11173, Counsel Stack Legal Research, https://law.counselstack.com/opinion/exelixis-inc-v-kappos-vaed-2013.