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Novartis AG v. Kappos
By Kathleen McGuinness – Edited by Jennifer Wong

Novartis AG v. Kappos, No. 10-cv-1138 (D.D.C. Nov. 15, 2012)
Slip opinion

In a lawsuit challenging the U.S. Patent and Trademark Office’s (“USPTO”) determination of patent term adjustments for twenty-three Novartis patents, the United States District Court for the District of Columbia granted partial summary judgment in Novartis’s favor on four patents. However, the court rejected tolling arguments that would have allowed challenges regarding the other nineteen patents to survive, granting partial summary judgment in favor of the USPTO on the remaining complaints.

Patent Docs explains the facts and holding of the case in more detail. PharmaPatents outlines the significant legal issues decided.

Novartis advanced two main claims. First, it argued that the USPTO acted improperly in refusing to apply the new standard for aggregating A Delay and B Delay patent term adjustments (“PTAs”) from Wyeth v. Kappos, 591 F.3d 1364 (Fed. Cir. 2010). Second, Novartis argued that the calculation of B Delay should not exclude time consumed by requests for continued examination (“RCEs”) initiated after the three-year window.

Before ruling on either claim, the court dealt with the issue of timeliness and tolling rules. Under the PTA statute, “[a]n applicant dissatisfied with a [PTA award] made by the Director . . . 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.” 35 U.S.C. § 154(b)(4)(A) (2012). Novartis argued that this 180-day limitation did not apply to B Delay determinations; the court disagreed, persuaded by the recent holding in Janssen Pharmaceutica N.V. v. Kappos, 844 F. Supp. 2d 707 (E.D. Va. 2012). Only three of Novartis’s complaints were filed within this period.

Next, the court considered tolling rules. The USPTO argued that the ordinary tolling rule—judicial review of agency actions is tolled during agency reconsideration—should not apply to §154(b)(4)(A). The court rejected this argument, holding that there was no indication that the statute was inconsistent with the normal tolling rule and allowing Novartis’s claims to survive with respect to one additional patent.

However, the court rejected Novartis’s argument that its complaints not timely filed should be equitably tolled. Novartis argued that it had no way to know that its Wyeth claims were viable until Wyeth was decided, and that it was unaware that its RCE claim was viable until Abbott Laboratories raised a similar claim in 2010. Complaint, Abbott v. Kappos, No. 10-cv-1853 (D.D.C. October 29, 2010). The court rejected this claim, both because a change in law is an insufficiently extraordinary circumstance to justify equitable tolling and because Novartis was free to raise the same issues addressed in Wyeth and in Abbott in its own claims. The court also rejected Novartis’s argument that the 180-day limitation should be permitted under the discovery rule—that Novartis could not discover it had been injured until a federal court had ruled on the merits of its legal claims—as a “rehash” of the equitable tolling argument. The court therefore granted partial summary judgment for the USPTO regarding the nineteen patent complaints that were not timely filed.

On the remaining four patent complaints, the court granted summary judgment for Novartis. First, because the USPTO failed to respond to the Wyeth claim, the court treated the argument as conceded. It also noted that the Wyeth method of calculating overlap should have been applied under the USPTO’s own policy, if normal tolling rules had been correctly applied. Second, the court concluded that the USPTO was incorrect to exclude time consumed by RCEs filed after the three-year window. The court was persuaded by the reasoning in Exelixis, Inc. v. Kappos, 2012 WL 5398876 (E.D. Va. Nov. 1, 2012), based on the plain language of 35 U.S.C. § 154(b)(1)(B) and the statute’s purpose.

Finally, Novartis had an additional Fifth Amendment claim, but the court disposed of it as time-barred or moot with respect to all patents.

As PharmaPatents explains, this case is only one of a number of post-Exelixis cases extending PTAs after RCE filings. Both Exelixis and Wyeth extend PTAs; Patently-O describes the significant potential increase in PTAs resulting from Exelixis. This case shows the court’s willingness to hold the USPTO to these new standards, which may help compensate for the USPTO’s current backlog of RCEs described by PharmaPatents.

Kathleen McGuinness is a 1L at Harvard Law School.

Posted On Dec - 2 - 2012 Comments Off

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