Novartis AG v. Lee: Appeal of Pre-AIA Patent Term Adjustment Determination

Category: Administrative Law
Fountain of Youth
By: Jesus Hernandez, Blog Editor/Contributor
TitleNovartis AG v. Lee, No. 2013-1160, -1179 (Fed. Cir. Jan. 15, 2014).
[1] [With regards to some of the asserted patents,] Novartis argues that the 180-day period [for challenging the Director's determination in a civil action] is not applicable to its challenges to the final patent term adjustment determinations because, it says, the Director did not make those determinations under paragraph (b)(3) [which governs request for reconsideration before the Director].
Novartis AG at *9 (text added).
[2] Novartis argues that, once three calendar years from the application-filing date have come and gone, time spent in the PTO after that date must be added to the patent term even if it is time spent on a continued examination [RCE] requested after that date.
Id. at *13 (text added).
[3] [T]he PTO contends that any time up until the patent issues, even after allowance, should be excluded from the adjustment awarded to the patentee.
Id. at *15.
[1] The applicable version of paragraph (b)(3)—the whole of which subparagraph (b)(4)(A) refers to—addresses all patent term adjustment determinations, not just some. Subparagraph (b)(3)(A) broadly declares that “[t]he Director shall prescribe regulations establishing procedures for the application for and determination of patent term adjustments under [(b)].”
Novartis AG at *9-10.
[2] [T]he patent term adjustment time should be calculated by determining the length of the time between application and patent issuance, then subtracting any continued examination time (and other time identified in (i), (ii), and (iii) of (b)(1)(B)) and determining the extent to which the result exceeds three years. Such a reading ensures that applicants recover for any “delay[s] due to the failure of the [PTO],” without allowing the applicant to recover for “any time consumed by continued examination,” as the statute requires. […]
Id. at *14 (internal citations omitted, text added).
[3] We reject the PTO’s view that the time after allowance, until issuance, is “time consumed by continued examination” and so is excluded from adjustments given to the patentee. Such time from allowance to issuance undisputedly would count toward the PTO’s three-year allotment in a case not involving a continued examination.
Id. at *15.
Procedural HistoryNovartis AG, Novartis Vaccines and Diagnostics, Inc., and Novartis Corporation (collectively, Novartis) filed suits that challenged the determinations by the Patent and Trademark Office of how much time to add, under 35 U.S.C. § 154(b), to the otherwise-applicable term of various Novartis patents. Of the eighteen patents before us, the district court dismissed Novartis’s claims regarding fifteen as untimely asserted. For the other three, the court rejected the PTO’s construction of the statutory provision that governs patent term adjustment here.
Novartis AG at *2.
Legal Reasoning (Newman, Dyk, Taranto)
[1] No PTA Distinction between § 154(b)(3) and § 154(b)(4)
PTA Interplay between § 154(b)(3) and § 154(b)(4)In 35 U.S.C. § 154(b)(3) & § 154(b)(4), Congress provided administrative and judicial remedies for applicants who are dissatisfied with the PTO Director’s determination of a patent term adjustment. First, under § 154(b)(3)(B)(ii), an applicant must have “one opportunity to request reconsideration of any patent term adjustment determination made by the Director.” Second, under § 154(b)(4)(A), in the version applicable here (before recent revisions), “[a]n applicant dissatisfied with a determination made by the Director under paragraph (3) 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.” Id. The PTO has interpreted the 180-day statute of limitations to apply to all patent term adjustment determinations, including those made under § 154(b)(1)(B)(i).
Novartis AG at *5.
No Distinction between the two ProvisionsSubparagraph (b)(3)(A) broadly declares that “[t]he Director shall prescribe regulations establishing procedures for the application for and determination of patent term adjustments under [(b)].” That breadth of application is reinforced by the breadth of at least clause (b)(3)(B)(ii) and subparagraph (b)(3)(D), both of which plainly cover the final adjustment announced at issuance, not just a provisional adjustment announced at allowance.
Id. at *9-10.
No Equitable Tolling of PTA under CircumstancesThis court has held that a litigant cannot secure equitable tolling based on the argument “not that it lacked sufficient facts on which it could sue, but rather it did not know the legal theory on which its refund claim might succeed.” […]
Id. at *12 (internal citations omitted).
No taking under 5th Amend.It is sufficient for us to say that the Fifth Amendment does not “compensate the owner for the consequences of his own neglect” in preserving its rights. United States v. Locke, 471 U.S. 84, 107 (1985). For the patents as to which it did not timely file suit under § 154(b)(4), it was only Novartis’s failure to comply with reasonable filing deadlines that prevented it from securing any patent term adjustment authorized by Wyeth. Novartis thus cannot challenge the application of the timing rule as an uncompensated taking.
Id. at *12
[2] RCEs not Factored in Determining Extensions
This construction is supported by the statutory purpose and other aspects of the statutory structure. The evident policy behind the three enumerated exclusions is that certain delays are not attributable to the PTO— delays not “due to the failure of” the PTO to move the process along, § 154(b)(1)(B)—and so should not count against the three years before adjustments begin. That focus on PTO responsibility or its absence does not distinguish continued examinations according to when they were initiated.
Novartis AG at *14.
[3] Time Between Notice of Allowance and Issuance of Patent factored into PTA
Prosecution ends at allowanceThe language of “examination” used in § 154(b)(1)(B) reflects that underlying principle. An “examination” presumptively ends at allowance, when prosecution is closed and there is no further examination on the merits in the absence of a special reopening.
Novartis AG at *15.
Reopening Prosecution after Allowance addressed seperately in PTAThe PTO identifies several circumstances in which affirmative action is taken to resume examination after allowance, perhaps based on new information submitted by applicants in fulfillment of their continuing duty to disclose information material to patentability […] But such circumstances are exceptional, and an appropriate adjustment can be made when they occur. For none of the three applications at issue does the PTO identify any “continued examination of the application” that occurred after the notice of allowance was mailed. The possible existence of these exceptional cases does not support a general rule excluding time between allowance and issuance.
Id. at *15 (internal citations omitted).
For the foregoing reasons, we affirm the dismissal of Novartis’s claims with respect to fifteen patents as un- timely, partly reverse the judgment as to patent term adjustment for the ’155, ’518, and ’631 patents, and re- mand for redetermination of the proper adjustments in accordance with this opinion.
Novartis AG at *16.
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