Vertex Pharmaceuticals v. Rea

7/28/2019 Vertex Pharmaceuticals v. Rea

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In th e United States District CourtFor The Eastern District o f Virginia

F/LED

M MAY 31 Pfc3|VERTEX PHARMACEUTICALSINCORPORATED., a Massachusettscorporation,!30WaverlyStreetCambridge,MA 02139 Civil Action No..

l'/3cjfeffPlaintiff,

TERESA STANEK REA,Acting UnderSecretary of Commerce forIntellectual Property andActingDirectorofthe United States Patent and TrademarkOffice,Office of th e General CounselUnited States Patent and Trademark OfficeP.O. Box 15667, Arlington,VA 22215Madison BuildingEast, Room 10B20600DulanyStreet, Alexandria, VA 22314

Defendant ./

COMPLAINT

PlaintiffVertexPharmaceuticals Incorporated ("Vertex"or "Plaintiff'), for its complaintagainst Teresa Stanek Rea (hereinafter "Stanek Rea" or "Defendant"), states as follows:

NATURE OF THE ACT ION1. This is an action by Vertex, the owner and assignee of United States Patent No.

8,324,242 (the '242 patent") for review of thedetermination byDefendant, pursuant to, inter alia, 35U.S.C. 154(b)(3)(B), of the Patent Term Adjustmentof the '242 patent. Vertex seeks a judgment


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that the patent term for the '242 patent be changed from 663 days to 772 days. Vertex furthermoreseeks ajudgment that 37 C.F.R. 1.703(b)(1) is invalid, unconstitutional, and contrary to law.

2. This action arises under 35 U.S.C. 154, the Fifth Amendment ofthe Constitution ofthe United States, and the Administrative Procedure Act, 5U.S.C. 701-706.

THE PARTIE S

3. Vertex is acorporation organized and existing under the laws of theCommonwealthofMassachusetts, with its principal place of business at 130 Waverly Street, Cambridge, MA 02139.

4. Stanek Rea is the Acting Under Secretary ofCommerce for Intellectual Property andActing Director ofthe United States Patent and Trademark Office ("PTO"), acting in her officialcapacity. The Acting Director is the head ofthe PTO and is responsible for superintending orperforming all duties required by law with respect to the granting and issuing of patents. As such,Stanek Rea isdesignated by statute as the official responsible for determining the period ofPatentTerm Adjustments under 35U.S.C. 154(b)(3)(B).

JUR ISDI CT ION AND VENUE

5. This Court hasjurisdiction tohearthis action and isauthorized to issue the reliefsought pursuant to28 U.S.C. 1331, 1338(a), 1361, 2201, &2202; 35 U.S.C. 154(b); and5U.S.C. 701-706.

6. Venue is proper in thisdistrict by virtue of theLeahy-Smith America Invents Act,Pub. L. No. 112-29, 9, 125 Stat. 316 (2011).

7. ThisComplaint is being timely filed in accordance with35 U.S.C. 154(b)(4)(A).

ALLEGATIONS COMMON TO ALL COUNTS


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The '242 Paten t1. Vertex is the assignee ofall right, title, and interest in the '242 patent, as evidenced

by records on deposit with the PTO and the face of the '242 patent. As such, Vertex is the real partyin interest in this case.

2. Sara Hadida Ruah, Anna Hazelwood, Peter D. J.Grootenhuis, Fredrick Van Goor,Ashvani Singh, Jinglan Zhou and JasonMcCartney are the inventors of patent application number12/351,447 ("the '447 application") which was filed on January 9,2009 (the "Filing Date"). The '447application is adivision ofU.S. application number 11/165,818, filed on June 24,2005, now PatentNo. 7,495,103, which claims priority to June24,2004 (the "Priority Date").

3. The '242 patent issubject toa terminal disclaimer toU.S. Pat. No. 7,553,855.4. OnJune27,2011, thePTOmailed a Restriction/Election Requirement as to the '447

application (the "Restriction Requirement"). Vertex responded to the Restriction Requirement onSeptember 27,2011.

5. OnDecember7,2011, the PTOmaileda Non-Final Action as to the '447 application(the "First Office Action"). Vertex responded to the First Office Action onFebruary 6,2012.

6. OnApril 16,2012, the PTO mailed aNotice ofAllowance andFees Due for the '447application (the "Notice ofAllowance"). On July 16, 2012, Vertex filed amendments to the claimsfor the purpose ofclarity and aRequest forContinued Examination asto the '447 application (the"RCE").

7. OnAugust 17, 2012, thePTO mailed a second Notice ofAllowance andFeesDueforthe '447 application (the"second Notice ofAllowance"). Included intheNotice ofAllowance was aDeterminationof PatentTerm Adjustment wherein the PTO indicated that the PatentTermAdjustment to date for the '447 application was 475 days.

8. On October 8, 2012, Vertex paid the issue fee for the '447 application, therebysatisfying all outstandingrequirements for issuanceof a patent.


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9. On November 14,2012, the PTO mailed an Issue Notification for the '447application. Included in the Issue Notification was aDetermination of Patent Term Adjustment inwhich the PTO indicated that the Patent Term Adjustment for the '447 application was 663 days.The PTO calculated 475 days of"ADelay" and 188 days of"B Delay."

10. On December 4,2012, the '447 application issued as the '242patent, reflecting aPatent Term Adjustment of 663 days. Atrue and correct copy ofthe '242 patent is attached hereto asExhibi t A.

11. On February 1, 2013, Vertex filed with the PTO aPatent Term Adjustment Petitionrequesting that the PTO change its Patent Term Adjustment for the '242 patent (the "PTA Petition").

Patent Term Guarantee12. ThePatentTermGuarantee Actof 1999, a part of theAmerican Inventors Protection

Act ("AIPA"), amended 35 U.S.C. 154(b) to address concerns that delays by the PTO during theprosecution ofpatent applications could result in a shortening of the effective life ofthe resultingpatents to less than seventeen years.

13. Amended 35 U.S.C. 154(b) broadened the universe of cognizable administrativedelays by the PTO that could retroactively yield anextension ofthepatent term to compensate forsuch prosecution delays ("Patent TermAdjustment" or "PTA").

14. Patent Term Adjustment applies to original utility patent applications (includingcontinuations, divisionals, and continuations-in-part) filed on or after May 29,2000.

15. Incalculating PTA,Defendant musttake intoaccount PTOdelays under 35U.S.C. 154(b)(1), anyoverlapping periods in the PTOdelays under35U.S.C. 154(b)(2)(A), andanyapplicantdelaysunder35 U.S.C. 154(b)(2)(C).

16. Under 35 U.S.C. 154(b)(1)(A), an applicant is entitled toPTA for the PTO's failureto carry outcertain actsduring processing andexamination within defined deadlines ("ADelay").


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17. Under 35 U.S.C. 154(b)(1)(B), an applicant isentitled toadditional PTAattributable to the PTO's "failure .. . to issue apatent within 3years after the actual Filing Date oftheapplication in the United States," but not including "any time consumed by Continued Examinationofthe application requested by the applicant under section 132(b)" ("B Delay").

18. 35 U.S.C. 154(b)(2)(A) provides that "to the extent that periods ofdelayattributable to grounds specified in paragraph [154(b)(1)] overlap, the period of any adjustmentgranted under this subsection shall not exceed the actual number of days the issuance of the patentwas delayed."

19. On January 7,2010, the Court ofAppeals for the Federal Circuit inWveth v. Kappos.591 F.3d 1364 (Fed. Cir. 2010) ("Wyeth"), affirmed the District Court ruling inWveth v. Dudas. 580F. Supp. 2d 138 (D.D.C. 2008), that the correct method for calculating overlap ofADelay and BDelay is to aggregate ADelay and BDelay except to the extent that such aggregation would amountto counting the samecalendar days twice.

20. 35U.S.C. 154(b)(2)(C)(i) also directs that "theperiod of adjustment of the termof apatent under paragraph [154(b)(1)] shall be reduced by a period equal to the period of time duringwhich the applicant failed to engage in reasonable efforts toconclude prosecution of the application"("C Reduction").

21. Under 35 U.S.C. 154(b)(4)(A), "an applicant dissatisfied with a determinationmadeby the Director under paragraph (3) shall have remedy by a civil action against the Director filed inthe UnitedStates DistrictCourt for the Eastern District of Virginia within 180days after the grant ofthe patent. Chapter 7 of title5 shallapply to such action."

Defendant ' s Abrogation of the Patent Te rm Gua ran te e


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22. Defendant has improperly calculated PTA in amanner that deprives patentees ofBDelay due to an incorrect interpretation of the effect of the Continued Examination procedure under35U.S.C. 132(b) within the context of 35U.S.C. 154(b)(1)(B).

23. Defendant has inappropriately promulgated and relied upon 37 C.F.R. 1.703(b)(1)to support its flawed interpretation of 35 U.S.C. 154(b)(1)(B) thatBDelay permanently ceases toaccrue upon the filing ofanRCE by anapplicant.

24. Instead, 35U.S.C. 154(b)(l)(B)(i) merely requires the exclusion of "any timeconsumed by Continued Examination ofthe application requested by the applicant under 35 U.S.C. 132(b)" when calculating whether the PTO has satisfied the three-year pendency guarantee.

25. When properly construed, if the PTO fails tomeet this three-year pendencyguarantee, the applicant is entitled to the full remedy afforded by 35 U.S.C. 154(b)(1)(B): "the termofthe patent shall be extended 1day for each day after the end of that 3-year period until the patent isissued," subject only to thespecific limitations set forth in35U.S.C. 154(b)(2).

26. None of the limitations included within 35 U.S.C. 154(b)(2) reduce or otherwiseaffect thePTA remedy in35U.S.C. 154(b)(1)(B) onthe basis of timeconsumed byexaminationafter filing of an RCE.

27. The PTO alsopromulgatedregulations pursuantto 35 U.S.C. 154(b)(2)(C)specifying applicant actions thatwill result ina reduction of theadditional patent term availableunder 154(b)(1)(B). These regulations, set forth at 37 C.F.R. 1.704, likewise do not includeanyreduction or limitation based upon timeconsumedbyexaminationafter the filingof an RCE.

28. Accordingly, the plain languageof 35U.S.C. 154(b)(1)(B) dictatesthat if anRCEis not filed within three years after the actual FilingDate of a patent application, the filingof theRCEhas noeffectuponthe accrualof B Delay for that patent.Under suchcircumstances, theapplicant is entitledto BDelayfromthedayafter the three-year pendency period through thedateof


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issuance of the patent, the explicit remedy set forth in 35 U.S.C. 154(b)(1(B), subject only to thespecific limitations set forth at35 U.S.C. 154(b)(2).

29. To the extent that 37 C.F.R. 1.703(b)(1) conflicts with the straightforward andunambiguous language of 35 U.S.C. 154(b)(1)(B), this subsection of the regulation is invalid.

30. In the alternative, even iftheremedy afforded under 35U.S.C. 154(b)(1)(B)somehow can be construed tobe limited by "any time consumed by Continued Examination of theapplication requested by the applicant under section 132(b)," the PTO still has improperly calculatedPTA in amanner that deprives patentees ofBDelay due to its incorrect interpretation ofthe effect offiling an RCE.

31. The only time properly "consumed by Continued Examination" is the period from thedate the applicant files an RCE through the date the PTO thereafter mails aNotice ofAllowance, anevent that concludes theContinued Examination. Theperiodencompassed bymailing a NoticeofAllowance to issuance of a patent occurs inallcases where a patent issues andis not unique tosituations where anRCEwasfiled and thus shouldnot properly be included in the limitation on time"consumed by Continued Examination". Accordingly, anapplicant isentitled toaccrue BDelay forthe period from the date of the mailing ofaNotice ofAllowance through the date of issuance of thepatent.

The Proper Calculation o fPTA fo r the '242 Patent32. Under 35 U.S.C. 154(b)(l)(A)(i), Vertex is entitled to an adjustment of the term of

the '242 patent fora period of 475 days. ThisADelay period is attributable to thePTO's failure tomail an action under 35 U.S.C. 132 not later than 14months from the actual Filing Date of theapplication. Thisperiod consists ofthe period from March 9, 2010 (14 months after the Filing Date)through June 27,2011 (themailing date of the Restriction Requirement).


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33. Under 35 U.S.C. 154(b)(1)(B), Vertex is entitled to an additional adjustmentoftheterm of the '242 patent for aperiod of 330 days. ThisBDelay period consists of the period fromJanuary 9,2012 (three years after the Filing Date) through December 4,2012 (the issue date of the'242 patent). Under 35 U.S.C. 154(b)(2)(C)(i), 33 days of delay is attributable to Vertex. ThisApplicant Delay is prescribed by the Director under 37 C.F.R. 1.704(c)(10) for the submission ofanamendment or otherpaperafter a noticeof allowance.

34. In the alternative, under 35 U.S.C. 154(b)(1)(B), Vertex isentitled toan additionaladjustment of the term of the '242 patent for aperiod of 297 days. This BDelay period consists ofthe period from January 9,2012 (three years after the Filing Date) through July 16,2012 (filing ofthe RCE) and the period from August 17, 2012 (mailing of the Notice ofAllowance) throughDecember4,2012 (the issue date of the '242 patent).

35. There isno overlap ofADelay and BDelay for the '242 patent pursuant to35 U.S.C. 154(b)(2)(A).

36. ThecorrectPTAforthe '242 patent is772 days: the sumof the475 days of ADelayand the330days ofBDelay, minus the33 days of Applicant Delay.

37. In the alternative, the correctPTA for the '242 patent is 772days: the sumof the475daysof ADelayand the 297daysof B Delay.

CLA IMS FOR REL IEF

COUNT ONE(Patent Term AdjustmentUnder 35U.S.C. 154)

38. Theallegations of paragraphs 1-46are incorporated inthis claim for relief as iffullyset forth herein.


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39. The PTO's calculation ofBDelay for the '242 patent was based upon a flawedinterpretation of 35 U.S.C. 154(b)(1)(B) that wrongly excluded all otherwise compensable PTOdelay that accrued after Vertex filed the RCE.

40. Vertex filed an RCE during prosecution of the '447 application more than three yearsafterthe actual Filing Dateof that application.

41. Vertex's filing ofthe RCE during prosecution ofthe '447 application has no effectupon theaccrual ofBDelay for the '242 patent.

42. In thealternative, thePTO's calculation of BDelay for the '242 patent was basedupon an interpretation of 35 U.S.C. 154(b)(1)(B) that improperly excluded PTO delay that was not"consumed by continuingexamination."

43. Continued examination of the '447 application bythe PTOconcluded on thedatethePTO mailed to Vertex the second Notice of Allowance.

44. The '242patent accrued BDelay for the period from the date the PTO mailed toVertex the Notice ofAllowance through the date of issuanceof that patent.

45. The PTO's erroneous interpretation of 35U.S.C. 154(b)(1)(B) resultedin anincorrect calculation BDelay for the '242 patent that deprived Vertex of the appropriate PTA for thispatent.

46. Vertex is entitled to additional patenttermfor the '242 patentsuch that the 663 daysofPTAgranted by the PTOshouldbe changedto772 days.

COUNT TWO(Violation of the Fifth Amendment of the

Constitution of the United States)47. The allegations of paragraphs 1-55are incorporated inthis claim for relief as iffully

set forth herein.


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48. The Fifth Amendment of the Constitution of the United States provides in relevantpart, "[N]or shall private property be taken for public use, without just compensation."

49. Vertex enjoys asubstantial and cognizable private property right in the full andcompletetermof the '242 patent.

50. Vertex has not failed to pay any necessary maintenance fees to the PTO required tomaintain its rights in the '242 patent.

51. Defendant's promulgation of37 C.F.R. 1.703(b)(1), the regulatory subsectioninterpreting 35 U.S.C. 154(b)(l)(B)(i), and reliance upon this regulatory subsection in improperlycalculating BDelay when determining PTA for the '242 patent permanently deprived Vertex ofpatent term towhich itwas entitled under 35 U.S.C. 154(b).

52. Defendant's purposeful and deliberate diminution of the patent term of the '242patent constitutes a taking ofVertex's property without just compensation, in violation ofthe FifthAmendment of the Constitution of the United States.

53. Vertex is entitled to additional patent termfor the '242 patent suchthat the663 daysofPTAgranted bythe PTOshould bechanged to772days.

COUNT THREE

(Declaratory Judgment Under The Administrative Procedures Act,5 U.S.C. 702 et seq.)

54. The allegations of paragraphs 1-62 are incorporated in this claim for relief asif fullyset forth herein.

55. Defendant's promulgation of 37C.F.R. 1.703(b)( 1), the regulatory subsectioninterpreting 35U.S.C. 154(b)(l)(B)(i), andits improper calculation ofBDelay when determiningPTA for the '242 patent were contrary to law.

56. Defendant's promulgation of37C.F.R. 1.703(b)(1)and determination of PTA forthe '242 patent are arbitrary, capricious, an abuse ofdiscretion, or otherwise not in accordance with

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law within the meaning of5U.S.C. 706(2)(A); contrary to Vertex's constitutional rights within themeaning of5U.S.C. 706(2)(B); and in excess of statutory authority within the meaning of5U.S.C. 706(2)(C).

57. Defendant's promulgation of37 C.F.R. 1.703(b)( I)and determination ofPTA forthe '242 patent were final agency actions that are reviewable by adistrict court in accordance with 5U.S.C. 704.

58. Vertex has adequately exhausted all of its available administrative remedies under 35U.S.C. 154 or, in the alternative, pursuit ofany further administrative remedies is futile.

59. Vertex has been afforded noadequate remedy at law for Defendant's promulgation of37C.F.R. 1.703(b)(1) anddetermination ofPTAfor the '242 patent.

60. Vertex will suffer irreparable injury if37C.F.R. 1.703(b)( 1) is not invalidated andDefendant is not directed to recalculate PTA for the '242 patent.

61. Anorder invalidating 37C.F.R. 1.703(b)( 1) anddirecting Defendant to recalculatePTA for the '242 patent would not substantially injure any other interested parties, and the publicinterest will be furthered by invalidation ofa regulatory subsection and recalculation ofPTA that iscontrary to law.

62. Vertex is entitled to additional patent termfor the '242 patent such thatthe663daysofPTA granted by the PTO should be changed to 772 days.

WHEREFORE, Vertex respectfully prays that this Court:A. Issuean Orderchangingthe periodof PTAfor the '242 patentfrom663 days to

772days andrequiring Defendant to alterthe term of the '242 patent to reflect such additionalPTA;

B.Declare pursuant to28 U.S.C. 2201 that37C.F.R. 1.703(b)(1) is invalid,

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unconstitutional andcontraryto law; andC.Grant such other and further relief as the nature of the case may admit or require

and asmaybe just and equitable.

Dated: May 31,2013 Respectfully submitted,STEPTOE & JOHNSON LLPRY- HjOuAxX^ H&iZM^Houda Morad (VA Bar No. 77943)Steptoe & Johnson, LLP1330 Connecticut Avenue, NWWashingtonDC 20036(202)429-5517(202) [email protected]

HONIGMAN MILLER SCHWARTZAND COHNLLP

J. Michael Huget(P39150)Deborah J. Swedlow (P67844)HonigmanMiller Schwartz and Cohn LLP130 South First Street, Fourth FloorAnn Arbor, MI 48104(734)418-4254(734)[email protected] P. O'Brien (P68364)HonigmanMiller Schwartz and CohnLLP350 East Michigan Avenue, Suite 300Kalamazoo, Michigan 49007-3800(269) 337-7704(269) [email protected] E. Day, Ph.D. (P69716)HonigmanMiller Schwartz and CohnLLP

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350EastMichiganAvenue, Suite300Kalamazoo, Michigan49007-3800(517) 377-0728(269) [email protected]

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