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Arqule, Inc v. Hon. David J. Kappos

June 22, 2011

ARQULE, INC., PLAINTIFF,
v.
HON. DAVID J. KAPPOS, UNDER SECRETARY OF COMMERCE FOR INTELLECTUAL PROPERTY & DIRECTOR OF THE UNITED STATES PATENT & TRADEMARK OFFICE, DEFENDANT.



The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge

MEMORANDUM OPINION

Plaintiff ArQule, Inc., a Delaware corporation with its principal place of business in Massachusetts, has sued David J. Kappos, the Under Secretary of Commerce for Intellectual Property and the Director of the U.S. Patent and Trademark Office ("PTO"), in his official capacity. Plaintiff brings this suit under 35 U.S.C. § 154 and the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701-706, claiming that defendant erroneously charged plaintiff with one day of applicant delay in its calculation of the patent term adjustment on United States Patent No. 7,713,969 ("the '969 patent") because defendant misinterpreted 35 U.S.C. § 154(b)(2)(C)(ii). Before the Court are defendant's motion for summary judgment and plaintiff's cross motion for summary judgment. For the reasons set forth below, defendant's motion will be denied and plaintiff's cross motion will be granted.

BACKGROUND

I. LEGAL FRAMEWORK

When a patent issues, the patentee has "the right to exclude others from making, using, offering for sale, or selling the invention" "for a term beginning on the date on which the patent issues and ending 20 years from the date on which the application for the patent was filed." 35 U.S.C. § 154(a)(1)-(2). That twenty-year term, however, is subject to a patent term adjustment that factors in several actions that might have caused delay during the patent process. See 35 U.S.C. § 154(b). Four of those adjustments are relevant to this case. The first adjustment, "A delay," favors the patentee by counting those days attributable to delay in the PTO's examination of the patent. 35 U.S.C. § 154(b)(1)(A). The second adjustment, "B delay," favors the patentee by creating a stopgap measure that counts those days attributable to delay in the issuance of a patent beyond three years of the application filing date. 35 U.S.C. § 154(b)(1)(B). The third adjustment discounts any redundant days between A delay and B delay so that the patentee is not rewarded with more days than the patent was actually delayed. 35 U.S.C. § 154(b)(2)(A). Finally, the fourth adjustment, "applicant delay," disfavors the patentee by discounting those days during which the applicant did not make reasonable efforts to "conclude processing or examination of an application," which is defined as any period of time beyond three months. 35 U.S.C. § 154(b)(2)(C).

II. FACTUAL HISTORY

Chiang J. Li, Mark A. Ashwell, Jason Hill, Magdi M. Moussa, and Neru Munshi invented a method to treat cancer entitled "Compositions and Methods for Treatment of Cancer" that was initially filed on February 9, 2006, as United States Patent Application No. 11/350,335, and issued as the '969 patent on May 11, 2010. (Complaint ["Compl."] at ¶¶ 8, 16, & Ex. A.) Plaintiff is the assignee of the '969 patent and the real party in interest. (Id. at ¶ 9.)

When it issued on May 11, 2010, the '969 patent was granted a patent term adjustment of 1,127 days. (Id. at ¶ 15, & Ex. A at 1.) The adjustment was determined by adding 675 days of A delay and 456 days of B delay while subtracting 3 days of overlap and 1 day of applicant delay. (Id. at ¶¶ 17-20.) The PTO determined that the '969 patent was subject to one day of applicant delay because the applicant responded to an August 11, 2009 PTO office action on November 12, 2009, three months and one day after the August 11 action. (Id. at ¶ 20.) The day defendant contends the response was due, Wednesday, November 11, 2009,*fn1 was Veterans Day, which is a federal holiday when the PTO is closed. (Pl.'s Cross Mot. at 3 & Ex. A.)

Before the patent issued, plaintiff filed a Patent Term Adjustment Petition on March 15, 2010, arguing in part that the calculation of applicant delay was incorrect because the three-month deadline fell on a federal holiday. (Compl. at ¶ 12 & Ex. B at 4-6.) In a letter dated July 8, 2010, the PTO denied plaintiff's request to reduce applicant delay from one day to zero. (Id. at ¶ 12 & Ex. C.) On August 6, 2010, plaintiff filed a Request for Reconsideration of Patent Term Adjustment that was denied by the PTO on November 19, 2010. (Id. at ¶ 12 & Ex. D; Defendant's Motion for Summary Judgment ["Def.'s Mot."] at Ex. B.)

III. PROCEDURAL HISTORY

Plaintiff filed its Complaint in federal district court on November 5, 2010. (Compl. at 1.) Attached to the Complaint were the '969 patent, the Patent Term Adjustment Petition, the PTO's response to that Petition, and the Request for Reconsideration of Patent Term Adjustment. (Id. at Exs. A-D.) Defendant filed its Answer on January 1, 2011. (Answer at 1.) Defendant subsequently filed a Motion for Summary Judgment on March 15, 2011. (Def.'s Mot at 1.) Attached to the motion were the electronic receipt for plaintiff's electronic submission of its November 12, 2009 response; the November 19, 2010 PTO letter denying plaintiff's Request for Reconsideration of Patent Term Adjustment; and a copy of the Federal Register containing the final rule promulgated to implement the change in the patent term adjustment for twenty-year terms, which is entitled "Changes to Implement Patent Term Adjustment Under Twenty-Year Patent Term," 65 Fed. Reg. 56,366, 56,366-94 (Sept. 18, 2000) (codified at 37 C.F.R. pt. 1). (Def.'s Mot. at Exs. A-C.)

Plaintiff filed a Cross Motion for Summary Judgment on April 14, 2011. (Plaintiff ArQule, Inc.'s Cross-Motion for Summary Judgment ["Pl.'s Cross Mot."]). Attached to the Cross Motion were the PTO's August 11, 2009 office action; an itemized Patent Term Adjustment Summary; the same November 19, 2010 PTO letter denying reconsideration; and a November 9, 2009 PTO notice detailing changes in the calculation of patent term adjustment for international applications. (Id. at Exs. A-D.) On May 11, 2011, defendant filed an Opposition to plaintiff's Cross Motion and a Reply to plaintiff's Opposition to its Motion. (Defendant's Consolidated Opposition to Plaintiff's Cross-Motion for Summary Judgment & Reply to Plaintiff's Opposition to Defendant's Motion for Summary Judgment ["Def.'s Opp."].) On May 31, 2011, plaintiff filed a Reply to defendant's Opposition. (Plaintiff's Reply Memorandum of Points & Authorities in Support of Plaintiff's Cross-Motion for Summary Judgment ["Pl.'s Rep."].) Attached to plaintiff's Reply were several sections of the PTO's Manual of Patent Examining Procedure. (Id. at Exs. E-H.)

ANALYSIS

I. LEGAL STANDARDS

A. Judicial Review of Patent Term Adjustments

The APA provides judicial review of an agency action to a party who has suffered a legal wrong because of that action. 5 U.S.C. §702. The laws governing patent term adjustment outline the judicial review process, allowing aggrieved applicants to seek review of the decision in the U.S. District Court for the District of Columbia:

An applicant dissatisfied with a determination made by the Director [during the patent term adjustment process] 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. . . . Any final judgment resulting in a change to the period of adjustment of the patent term shall be served on the Director, and the Director shall thereafter alter the term of the patent to reflect such change.

35 U.S.C. ยง 154(b)(4)(A). Further, this Court has "original jurisdiction of any civil action arising under any Act of Congress relating ...


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