MEMORANDUM OPINION
EMMET
G. SULLIVAN UNITED STATES DISTRICT JUDGE
I.
Introduction
Nippon
Shinyaku Company, Limited (“Nippon”) owns United
States Patent Nos. 7, 205, 302 and 7, 494, 997 (respectively,
“ ‘302 patent” and “ ‘997
patent”). The United States Patent and Trademark Office
(“USPTO”) issued the ‘302 patent in 2007
with a patent term adjustment (“PTA”) of 344
days, and the ‘997 patent in 2009 with a PTA of
ninety-nine days. In 2010, the USPTO adopted new methods for
calculating PTAs necessitated by the United States Court of
Appeals for the Federal Circuit's (“Federal
Circuit”) decision in Wyeth v. Kappos, 591
F.3d 1364 (Fed. Cir. 2010). Prior to adopting the final
procedure for such calculations, the USPTO established an
Interim Procedure for patentees seeking a recalculation of
their PTAs subject to certain time restrictions. Given its
untimely requests, however, Nippon was ineligible for a
recalculation. Nippon brings this action under the
Administrative Procedure Act (“APA”), 5 U.S.C.
§§ 701 et seq., against the Under
Secretary of Commerce for Intellectual Property and Director
of the USPTO. Nippon challenges the USPTO's Interim
Procedure, alleging that the Interim Procedure arbitrarily
ensures disparate treatment of two categories of patents and
leaves it without a remedy to correct the improper
calculations of the PTAs for the patents at issue.
Pending
before the Court are the parties' cross-motions for
summary judgment. Having carefully reviewed the motions,
oppositions and replies, and the entire record herein, the
Court concludes that the USPTO's Interim Procedure was
not arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law. Therefore, the Court
DENIES Nippon's motion for summary
judgment and GRANTS the USPTO's
cross-motion for summary judgment.
II.
Background
A.
Statutory and Regulatory Framework
A
patent term begins “on the date on which the patent
issues” and “end[s] 20 years from the date on
which the application for the patent was filed in the United
States[.]” 35 U.S.C. § 154(a)(2).[2] Many patent terms
became far shorter than Congress intended, however, due to
the USPTO's lengthy delays in examining patent
applications and issuing patents. See Novartis AG v.
Kappos (“Novartis I”), 904
F.Supp.2d 58, 61 (D.D.C. 2012), aff'd in part,
rev'd in part sub nom. Novartis AG v. Lee
(“Novartis II”), 740 F.3d 593 (Fed. Cir.
2014). To address this problem, Congress enacted the Patent
Term Guarantee Act of 1999 (“Act”), which
provides a guarantee of prompt USPTO responses. See
Pub. L. No. 106-113, §§ 4401-02, 113 Stat. 1501,
1501A-557 (1999) (codified as amended at 35 U.S.C. §
154(b)); see also 35 U.S.C. § 154(b)(1)(A).
Section 154(b)(1) also provides a “[g]uarantee of no
more than 3-year application pendency, ” see
35 U.S.C. § 154(b)(1)(B), and a guarantee of “1
day for each day of the pendency” of “deprivation
proceedings, secrecy orders, and appeals.” See
id. § 154(b)(1)(C).
Since
the prosecution of a patent application may take more than
three years, and to give each patent a term of at least
seventeen years, the Act allows the USPTO to adjust the terms
of a patent for certain delays during the examination
process. See Daiichi Sankyo Co., Ltd. v.
Rea (“Daiichi I”), 12 F.Supp.3d 8,
11-12 (D.D.C. 2013) (citations omitted), aff'd sub
nom. Daiichi Sankyo Co. v. Lee
(“Daiichi II”), 791 F.3d 1373 (Fed. Cir.
2015), cert. denied, 136 S.Ct. 1491 (2016). The
statute provides for the adjustment and calculation of patent
terms caused by different categories of delay.
Bristol-Myers Squibb Co. v. Kappos, 891 F.Supp.2d
135, 137 (D.D.C. 2012).
Nippon's
PTAs resulted from two of those categories: (1) “A
Delay” and (2) “B Delay.” See
generally Pl.'s Mot. for Summ. J.
(“MSJ”), ECF No. 46; Def.'s Mot. for Summ. J.
(“MSJ”) & Opp'n, ECF No.
48.[3]
The A Delay “is excluded from the calculation of the
patent term” and “extend[s] the term of the
patent one day for each day the [US]PTO does not meet certain
examination deadlines[.]” Daiichi I, 12
F.Supp.3d at 12 (citation omitted). The B Delay
“extends the term of the patent one day for each day
issuance is delayed due to the [US]PTO's failure
‘to issue a patent within 3 years after the actual
filing date of the application in the United
States.'” Wyeth, 591 F.3d at 1367 (quoting
35 U.S.C. § 154(b)(1)(B)).
1.
The Wyeth Decision and its Implementation
On
April 22, 2004, the USPTO promulgated regulations explaining
the methodology for calculating the “A/B
Overlap.” See Daiichi I, 12 F.Supp.3d at 12
(citing Revision of Patent Term Extension and PTA Provisions,
69 Fed.Reg. 21704-01 (Apr. 22, 2004)). Interpreting 35 U.S.C.
§ 154(b), the USPTO used the greater of the A Delay or B
Delay to determine the proper PTA rather than combining the
two delays. See Wyeth v. Dudas, 580 F.Supp.2d 138,
140 (D.D.C. 2008), aff'd sub nom.
Wyeth, 591 F.3d at 1368. In Wyeth, the
district court rejected this interpretation because the
USPTO's “construction [could not] be squared with
the language of § 154(b)(1)(B), which applies ‘if
the issue of an original patent is delayed due to
the failure of the [USPTO] to issue a patent within 3
years.'” 580 F.Supp.2d at 142 (emphasis in
original) (quoting 35 U.S.C. § 154(b)(1)(B)). The court
explained that B Delay “begins when the [US]PTO has
failed to issue a patent within three years, not
before.” Id. (emphasis added). The
Federal Circuit upheld the district court's determination
that the USPTO's methodology in calculating the A and B
Delay overlap was contrary to the plain language in Section
154(b) because “it effectively counts B delay before it
occurs.” Wyeth, 591 F.3d at 1375.
Consistent
with the Wyeth decision, after the USPTO decides
that a patent application will be granted, it issues a
written notice of allowance of the application. See
35 U.S.C. § 151(a). This notice includes the USPTO's
initial determination of the PTA, if applicable. 35 U.S.C.
§ 154(b)(3)(B)(i) (requiring the USPTO to “make a
determination of the period of any [PTA]” and
“transmit a notice of that determination no later than
the date of issuance of the patent[.]”). The PTA
reflected in the notice of allowance does not include the B
Delay. See Bristol-Myers Squibb Co., 891 F.Supp.2d
at 137.
The
USPTO determines the proper amount of the A Delay when it
issues notice to the patent applicant and before the patent
is granted. Daiichi I, 12 F.Supp.3d at 12. The USPTO
does not determine the proper amount of the B Delay until the
patent is granted because the B Delay continues to accrue
until the patent is granted. Id. After determining
the proper amounts for the A Delay and the B Delay, the USPTO
determines “the extent of any overlap between the two
types of delay.” Id. (citation omitted).
“To the extent that periods of [A Delay and B Delay]
overlap, any [PTA] shall not exceed the actual number of days
the issuance of the patent was delayed.” Id.
(quoting 35 U.S.C. § 154(b)(2)(A)). “Because the
overlap determination depends on the amount of B Delay, it is
also done at the time the patent is granted.”
Id. (citation omitted). “The final
determination of PTA-which factors in A Delay, B Delay, and
A/B Overlap-is done at the time the patent is granted.”
Id. (citation omitted).
2.
Administrative and Judicial Review of PTAs
A
patent applicant dissatisfied with PTA determinations may
seek administrative and judicial review. Id. at
12-13. The patent applicant may “request
reconsideration of any [PTA] determination made by the
Director, ” 35 U.S.C.§ 154(b)(3)(B)(ii),
“within two months of the date the patent issued,
” 37 C.F.R. § 1.705(d) (2012) (“Rule
1.705(d)”). Daiichi I, 12 F.Supp.3d at 13. A
patentee dissatisfied with the USPTO's response to the
request for reconsideration may seek further administrative
review of the USPTO's decision under Rule 1.705(d) by
submitting a petition under 37 C.F.R. § 1.181(f)
(“Rule 1.181(f)”) “within two months of the
mailing date of the action or notice from which relief is
requested[.]” 37 C.F.R. § 1.181(f) (2012).
“[O]n petition of the interested party, ” the
two-month limitation “may be suspended or waived by the
Director or the Director's designee” in “an
extraordinary situation, when justice requires[.]” 37
C.F.R. § 1.183 (2013).
Finally,
the patent applicant may seek judicial review in federal
district court. 35 U.S.C. § 154(b)(4)(A). At the time
that Nippon's patents were issued, a civil action for
judicial review of a PTA determination had to be “filed
in the United States District Court for the District of
Columbia within 180 days after the grant of the
patent.” Id.[4]
3.
The Interim Procedure
Following
the Wyeth decision, on February 1, 2010, the USPTO
published notice of an Interim Procedure to “provid[e]
patentees with the ability to request a recalculation of
their [PTA] [consistent with the Wyeth decision]
without a fee as an alternative to the petition and fee
required by 37 CFR 1.705(d).” Interim Procedure for
Patentees To Request a Recalculation of the PTA To Comply
With the Federal Circuit Decision in Wyeth v. Kappos
Regarding the Overlapping Delay Provision of 35 U.S.C.
154(b)(2)(A) (“Interim Procedure” or
“procedure”), 75 Fed.Reg. 5043-01, 5043 (Feb. 1,
2010). According to the USPTO, this procedure would be in
effect until March 2, 2010, at which time the modifications
to the computer program used to calculate PTAs necessitated
by the Wyeth decision would be complete.
Id. at 5043. This procedure was available for only
two types of PTA requests for reconsideration based on the
Wyeth decision: (1) requests that could have been
timely made within 180 days of the patent decision as set
forth in 35 U.S.C. § 154(b)(4); or (2) requests that
could have been timely made within the two-month time period
set forth in Rule 1.181(f). Id. at 5043-44. The
USPTO explained that the statutory and regulatory framework
provides that requests for reconsideration by the USPTO of
the PTA must be filed within two months of the date the
patent was issued pursuant to Rule 1.705(d), and that
applicants dissatisfied with a determination made by the
Director of the USPTO could file a civil action within 180
days after the grant of the patent pursuant to 35 U.S.C.
§ 154(b)(4). Id. The USPTO also cited the
two-month deadline for reconsideration of a Rule 1.705(d)
decision pursuant to Rule 1.181(f). Id. at 5044. The
Interim Procedure therefore provided patentees who could
timely challenge the pre-Wyeth PTA determinations to
the USPTO pursuant to Rule 1.181(f) or the district court
pursuant to 35 U.S.C. § 154(b) with the opportunity to
request reconsideration from the USPTO. Id. As a
practical matter, the Interim Procedure was available for
patents that had been issued between August 5, 2009 and March
1, 2010 and for patentees who received the USPTO's
decision on a Rule 1.705(d) request for reconsideration on
December 1, 2009 or later. See Daiichi II, 791 F.3d
at 1375-76. Any petitions filed outside of these windows
would be denied as untimely by the USPTO. 75 Fed.Reg. at
5043-44.
B.
Factual and Procedural Background
The
material facts in this case are undisputed. See
Pl.'s MSJ, ECF No. 46 at 16-18, 20; see also
Def.'s MSJ, ECF No. 48 at 1, 10-11. Nippon is a foreign
corporation with its principal place of business in Kyoto,
Japan. Second Am. Compl., ECF No. 24 ¶ 4. Nippon is the
owner of the ‘302 patent, entitled “Heterocyclic
Compound Derivatives and Medicines, ” and the
‘997 patent, entitled “Amide Derivative.”
Pl.'s MSJ, ECF No. 46 at 16. The ‘302 patent was
issued on April 17, 2007 with a notice that its term would be
extended or adjusted by 344 days under 35 U.S.C. §
154(b). Administrative Record (“A.R.”), ECF No.
45-3 at 90. The ‘997 patent was issued on February 24,
2009 with a notice that its term would be extended or
adjusted by ninety-nine days under 35 U.S.C. § 154(b).
Id. at 3.
On July
6, 2010, before seeking administrative relief, Nippon filed
the initial complaint in this Court, alleging, inter
alia, that the USPTO's pre-Wyeth
determinations and calculations “of the [PTAs] for the
‘302 and ‘997 patents were arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with
law under 5 U.S.C. § 706(2)(A).” Compl., ECF No. 1
¶ 18. Nippon filed this civil action more than three
years (1, 176 days) after the issuance of the ‘302
patent and more than a year (497 days) after the issuance of
the ‘997 patent. See, e.g., id.
¶ 7; Def.'s MSJ, ECF No. 48 at 10.
Beginning
in August 2010, Nippon also sought administrative review of
the USPTO's PTA determinations in light of the
Wyeth decision. See A.R., ECF No. 45-3 at
142-43. On October 12, 2010, the USPTO denied Nippon's
August 30, 2010 request for the ‘302 patent, treating
it as a “request for reconsideration of [PTA]”
under Rule 1.705(d). Id. at 151. Because this
request was submitted outside of the “two months after
the date of issuance of the [‘302] patent, ” the
USPTO dismissed it as untimely under Rule 1.705(d).
Id. The record does ...