Novartis Ag v. Kappos, 904 F. Supp. 2d 58

Background

Novartis filed suit in the D.D.C. challenging PTO patent term adjustments (PTA) for multiple patents under 35 U.S.C. § 154 and the APA.
The dispute centers on (i) A Delay/B Delay overlap calculations (Wyeth interpretation) and (ii) time attributed to continued examination activity and RCEs (Requests for Continued Examination).
PTO promulgated rules interpreting B Delay (not including RCE time) and the overlap rules; Wyeth v. Kappos mandated the post-Wyeth approach for overlap, affecting some pre-Wyeth patents.
Novartis seeks recalculation of PTA for several patents; the court must determine timeliness under § 154(b)(4)(A) and whether tolling or discovery rules apply.
The court consolidated several Novartis cases and addresses four timely petitions and nineteen untimely petitions, plus challenges to Wyeth-based overlap and RCE timing.
The court ultimately adopts Exelixis-like interpretation that post-three-year RCE timing does not negate day-for-day PTA and that Wyeth must be applied to applicable patents; it also finds the PTO’s determinations improper in key respects.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Timeliness under § 154(b)(4)(A)	§ 154(b)(4)(A) applies to all PTA determinations (pre- and post-issuance).	Only pre-issuance determinations fall under § 154(b)(3); 180-day clock begins at grant for issuance determinations.	§ 154(b)(4)(A) governs all PTA determinations; timely review applies to issuance determinations.
Equitable tolling applicability	Untimely complaints should be equitably tolled due to Wyeth and Abbott-law developments and reliance on PTO practice.	Equitable tolling does not apply; change in law is not extraordinary; application would be inequitable.	Equitable tolling does not apply to the nineteen untimely complaints.
RCE time and B Delay interpretation	Time consumed by an RCE should be included in B Delay calculations if filed after the three-year window; the 'not including' clause does not bar day-for-day PTA.	RCE time is always excluded from B Delay, regardless of timing, per § 1.703(b).	PTO’s exclusion of RCE time after the three-year window is contrary to the statute; time consumed by post-three-year RCE should count toward B Delay.
Wyeth calculation of A/B Delay Overlap for pre/post- Wyeth patents	PTO must apply the post-Wyeth A/B Delay Overlap method to all applicable patents, including those issued before Wyeth if timely reconsideration was sought.	Wyeth limit applies only to timely reconsiderations within 180 days; pre-Wyeth patents should not be recalculated unless timely.	PTO must apply Wyeth-based A/B Delay Overlap to the patents within scope, including the ’792 patent, and recalculate where appropriate.

Key Cases Cited

Wyeth v. Dudas, 580 F. Supp. 2d 138 (D.D.C. 2008) (PTO interpretation of B Delay incorrect; Wyeth decision announced the proper approach)
Wyeth v. Kappos, 591 F.3d 1364 (Fed. Cir. 2010) (A/B Delay Overlap should be aggregated without double counting)
Janssen Pharmaceutica N.V. v. Kappos, 844 F. Supp. 2d 707 (E.D. Va. 2012) (§ 154(b)(4)(A) exclusive means for judicial review of PTA determinations)
Exelixis, Inc. v. Kappos, 2012 WL 5398876 (E.D. Va. 2012) (cites similar interpretation on RCE timing to support invalid PTO view (WL reporter))
Clifton Power Corp. v. FERC, 294 F.3d 108 (D.C. Cir. 2002) (tolling during agency reconsideration identified)
Commc’ns Vending Corp. of Arizona, Inc. v. FCC, 365 F.3d 1064 (D.C. Cir. 2004) (petition tolling and review principles)
Bristol-Myers Squibb Co. v. Kappos, 841 F. Supp. 2d 238 (D.D.C. 2012) (tolling rule applies to § 154(b)(4) review; statutory timing issues)
Kisser v. Cisneros, 14 F.3d 615 (D.C. Cir. 1994) (arbitrary and capricious review standards; Skidmore deference context)
AT&T Corp. v. FCC, 220 F.3d 607 (D.C. Cir. 2000) (arbitrary and capricious standard and rational connection)
Motor Vehicle Mfrs. Ass’n v. State Farm, 463 U.S. 29 (U.S. 1983) (arbitrary and capricious standard framework)