ALAXALA Networks v. Rea

7/29/2019 ALAXALA Networks v. Rea

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IN THE UNITED STATES DISTRICT COURTFOR THE EASTERN DISTRICT OF VIRGINIA

Alexandria Division 2B13 MAR -U P h 58ALAXALA NETWORKS CORPORATION,Shinkawasaki Mitsui Building West Tower 13F1-1-2 Kashimada, Saiwai-ku, Kawasaki-shiKanagawa 212-0058, Japan,a Japanese company,

Plaintiff,

TERESA STANEK REA, ActingUnder SecretaryofCommerce for IntellectualPropertyandDirectorof the United StatesPatent and Trademark Office,Office of the General CounselUnited States Patent and Trademark OfficeMadison Building East, Room 10B20600 Dulaney Street,Alexandria, VA 22314

Defendant.

Civil Action No.

CLERK US DISTRICT COURTALEXANDRIA. VIRGINIA

C O M P L A I N T

Plaintiff,ALAXALANetworks Corporation (herein "Plaintiff'), for its complaint againstthe Teresa Stanek Rea (herein "Rea" or "Defendant"), states as follows:

N A T U R E OF T HE A C TIO N

1. This is an action by Plaintiff, the owner and assignee ofUnited States PatentNo. 8,259,714 (the '714 patent"), for review of the determination byDefendant, pursuantto,inter alia, 35U.S.C. 154(b)(3)(B),of the Patent Term Adjustmentof the '714 patent. Plaintiffseeksa judgmentthat the PatentTermAdjustment for the '714 patentbe changed from 177daysto 2,396 days.

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

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T H E PARTIES

3. Plaintiff is a corporation organized and existing under the laws of Japan, with itsprincipal place ofbusiness atShinkawasaki Mitsui Building West Tower 13F, 1-1-2 Kashimada,Saiwai-ku, Kawasaki-shi, Kanagawa 212-0058, Japan.

4. Reais theActing Under Secretary ofCommerce for Intellectual Property andDirector of the United StatesPatent and Trademark Office ("PTO"), acting in her officialcapacity. The Director is the head of the PTO and isresponsible for superintending orperforming all duties required by law with respect to the granting and issuing of patents. Assuch, Rea isdesignated by statute as the official responsible for determining the period ofPatentTermAdjustments under 35U.S.C. 154(b)(3)(B).

J U R IS D IC T IO N A N D V E N U E

5. ThisCourt hasjurisdictionto hear thisactionand is authorized to issuethe reliefsought pursuant to28U.S.C. 1331, 1338(a), 1361,2201, & 2202; 35U.S.C. 154(b); and 5U.S.C. 701-706.

6. Venueis proper in this districtby virtueof the Leahy-SmithAmericaInventsAct,Pub. L. No. 112-29, 9,125 Stat. 316 (2011).

7. ThisComplaint is beingtimely filed in accordance with 35U.S.C. 154(b)(4)(A)as in effectat the time that Plaintiffs opportunityto file a request for reconsideration under35U.S.C. 154(b)(3)(B)(ii) expired (November 4,2012).

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ALLEGATIONS COMMON TO ALL COUNTST he ' 71 4 P a te n t

8. Plaintiffis the assignee of all right, title, and interestin the '714 patent, asevidenced by records ondeposit with the PTO and the face ofthe '714 patent. As such, Plaintiffis the real party in interest in this case.

9. Masaki Yamada, etal., are the inventors of patent application number11/710,396("the '396application"), which commenced the National Stage under 35U.S.C. 371(b) onFebruary 26,2007 (the "Commencement Date"), based on International application JP-2006-186188 filed July 6,2006.

10. The '396 application claimspriorityto Japanese Application No. JP-2006-186188, filedJuly 6,2006 (the "Priority Date").

11. On June7,2010, Plaintiff filed a Request for ContinuedExaminationfor the '396application ("the RCE"). TheRCEwas filedmore than threeyears after the CommencementDate of the '396 application under 37 C.F.R. 1.703(b).

12. On June 16,2011, Plaintiff fileda second Request for ContinuedExamination inthe '396 application.

13. OnApril 30,2012 the PTOmailed a Notice of Allowance andFees Due for the'396 application (the "Notice ofAllowance"). Included in the Notice ofAllowance was aDetermination ofPatent Term Adjustment wherein the PTO indicated that the Patent TermAdjustment to date for the '396 application was 77 days.

16. On July 27,2012, Plaintiffpaid the issue fee for the '396 application, satisfyingall outstanding requirements for issuance ofa patent.

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17. On August 15,2012, the PTO mailed an Issue Notification for the '396application. Included in the Issue Notification was aDetermination ofPatent Term Adjustmentin which the PTO indicated that the Patent TermAdjustment for the '396 applicationwas 177days.

18. OnSeptember 4,2012, the '396application issued as the '714patent, reflecting aPatent Term Adjustment of 177 days. A true and correct copy of the '714 patent isattachedhereto as ExhibitA .

19. OnNovember 1,2012, this Court issued a Memorandum Opinion in the case ofExelixis, Inc. v. Kappos, Civil Action No.: l:12-CV-00096-TSE-TCB ("Exelixis") which rejectedtheUSPTO's interpretation of B delayunder35 U.S.C. 154(b)(1)(B), as set forth in37CFR1.703(b), as "not in accordance with law", andordered an extensionof the patenttermadjustment accordingly.

Patent Term Guarantee

20. The Patent Term Guarantee Act of 1999, a part of the American InventorsProtection Act ("AIPA"), amended35 U.S.C. 154(b) to address concerns that delays by thePTO during theprosecution of patent applications could result in a shortening ofthe effectivelife of the resulting patents to less than seventeen years.

21. Amended 35U.S.C. 154(b)broadenedthe universeof cognizableadministrativedelays by the PTO that could retroactively yield an extension of the patent term to compensateforsuch prosecution delays ("Patent Term Adjustment"or "PTA").

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

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23. In calculating PTA, Defendant must take into account PTO delays under 35U.S.C. 154(b)(1), any overlapping periods in the PTO delays under 35 U.S.C. 154(b)(2)(A),andany applicant delays under35 U.S.C. 154(b)(2)(C).

24. Under35 U.S.C. 154(b)(1)(A), an applicant is entitledto PTAfor the PTO'sfailure tocarry out certain acts during processing and examination within defined deadlines ("ADelay").

25. Under 35U.S.C. 154(b)(1)(B), and37C.F.R. 1.702(b), an applicant is entitledto additionalPTA attributable to the PTO's failure to issue a patent within three years after theFiling Date orCommencement Date oftheapplication in the United States, but not including"any time consumed byContinued Examination of the application requested by the applicantunder section 132(b)" ("B Delay").

26. 35 U.S.C. 154(b)(2)(A) provides that "to the extentthat periodsof delayattributable to grounds specified in paragraph [154(b)(1)] overlap, theperiod ofanyadjustmentgranted under this subsection shall not exceed the actual number of days the issuance of thepatent was delayed."

27. On January 7,2010, the CourtofAppeals forthe Federal Circuit in Wyeth v.Kappos, 591 P.3d 1364 (Fed. Cir.2010) ("Wyeth") affirmed the District Court ruling inWyeth v. Dudas, 580F. Supp. 2d 138 (D.D.C. 2008)that the correctmethod for calculatingoverlap ofA DelayandB Delay is to aggregate A DelayandB Delay,except to the extentthat such aggregationwould amount to counting the same calendar days twice.

28. Section 154(b)(2)(C)(i) of 35U.S.C.also directs that "the periodof adjustment ofthe termofa patentunder paragraph [154(b)(1)] shallbe reducedby a periodequal to the period

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of time during which the applicant failed to engage in reasonable efforts to conclude prosecutionof the application" ("C Reduction").

29. Pursuant to HR6621, signed into lawby PresidentObamaon January 14,2013,35U.S.C. 154(b)(4)(A) was amended to provide that"an applicant dissatisfied with theDirector's decision on the applicant's request for reconsideration under paragraph (3)(B)(ii) shallhave exclusive remedy bya civilaction against theDirector filed in theUnited States DistrictCourt for the Eastern Districtof Virginiawithin 180daysafter the dateof the Director's decisiononthe applicant's request for reconsideration. Chapter 7 of title 5 shall apply to such action...."

30. At the time that HR 6621 took effect, Plaintiffs window ofopportunity to file arequest for reconsideration under 35U.S.C. 154(b)(3)(B)(ii) already hadexpired.

Defendant's Abrogation o f the Patent Term Guarantee31. Defendanthas improperlycalculatedPTA in a mannerthat deprivespatenteesof

BDelay Adjustment dueto an incorrect interpretation of theeffectof theContinued Examinationprocedure under35 U.S.C. 132(b)within thecontextof 35U.S.C. 154(b)(1)(B).

32. Defendant has inappropriately promulgated and relied upon 37 C.F.R. 1.703(b)(1) to support its flawed interpretationof35 U.S.C. 154(b)(1)(B) that B Delaypermanently ceasesto accrueupon the filingof anRCE by an applicant.

33. Instead, 35 U.S.C. 154(b)(l)(B)(i) merely requires the exclusion of "any timeconsumedbyContinuedExaminationof the applicationrequestedby the applicantunder35U.S.C. 132(b)"when calculating whether the PTOhas satisfied the three-year pendencyguarantee.

34. When properly construed, if the PTO fails to meet this three-year pendencyguarantee, the applicant is entitledto the full remedyafforded by 35U.S.C. 154(b)(1)(B): "the

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term ofthe patent shall be extended 1day for each day after the end ofthat 3-year period untilthe patent is issued," subject only to the specific limitations set forth in35 U.S.C. 154(b)(2).

35. 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 time consumed byexamination after filing of an RCE.

36. ThePTO alsopromulgated regulations pursuant to 35U.S.C. 154(b)(2)(C)specifying applicant actions thatwill result ina reduction of the additional patent term availableunder 154(b)(1)(B). These regulations, set forth at37C.F.R. 1.704, likewise donot includeany reduction or limitation based upon time consumed by examination after the filing ofanRCE.

37. Accordingly, the plain language of 35U.S.C. 154(b)(1)(B) and37C.F.R. 1.703(b) dictates that if an RCE is not filedwithin threeyears after the Commencement Dateunder35U.S.C. 371(b), the filing of theRCEhasno effect uponthe accrual of BDelay forthatpatent. Under such circumstances, the applicant is entitled to BDelay from thedayafter thethree-year pendency periodthroughthe date of issuance of the patent, the explicitremedy setforth in 35U.S.C. 154(b)(1)(B), subject only to the specific limitationsset forth at 35U.S.C. 154(b)(2).

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

The Proper Calculation o f P T A for the (714 Patent39. Under 35U.S.C. 154(b)(1)(B), Plaintiff is entitled to an additional adjustmentof

the term of the '714 patent for a period of2,319 days. This B Delay period consists of the periodfromApril 30,2006 (three years after the CommencementDate) through September4,2012 (the

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issue date ofthe '714patent). This differs from theBDelay period of 100 days as incorrectlydetermined byRea's PTA using the rationale rejected bythisCourt inExelixis by2,219 days.

40. Accordingly, becauseof the increase of 2,219days attributed to B Delaydue tothe PTO's improper calculations, calculating the correctPTAgivesa total of 2,396days,including 354 days ofADelay, 2,319 days ofBDelay, minus 277 days ofApplicant delay.Thus,the total PTAon the '714 patent, originally statedas 177days,shouldbe revised upwardlyby 2,219 days to 2,396 days.

C L A I M S F O R RELIEF

C O U N T O N E

(Patent Term Adjustment Under 35 U.S.C. 154)41. Theallegations of paragraphs 1-40 are incorporated in this claimfor reliefas if set

forth fully herein.42. The PTO's calculation of 100 days ofB Delay for the *714 patent was based upon

a flawed interpretationof 35 U.S.C. 154(b)(1)(B)thatwrongly excluded all otherwisecompensable PTO delay that accrued after Plaintiff filed the RCE.

43. Plaintiff filed an RCE during prosecution of the '396 application more than threeyears after the CommencementDate of that application pursuant to 37 C.F.R. 1.703(b).

44. In light of the opinion in Exelixis, and the plain language of 35U.S.C. 154(b)(1)(B), Plaintiffs filing of the RCEs during prosecution of the '396 application shouldhavehad no effect upon the accrual ofB Delay for the '714 patent, and the proper calculation ofaccrued B Delay was for the period from three years from the Filing Date to the Issue Date of the'714 patent.

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45. ThePTO's erroneous interpretation of 35U.S.C. 154(b)(1)(B) resulted in anincorrect calculation BDelayfor the '714 patentthat deprived Plaintiffof the appropriate PTAfor this patent.

46. Plaintiffis entitled to additional patent term of2,219 days for the '714 patent,suchthat the 177daysof PTAgrantedby the PTOshouldbe changedto 2,396days.

COUNT T W O

(Violation of the Fifth Amendment of the Constitution of the United States)47. The allegations of paragraphs 1-46 are incorporated in this claim for relief as if set

forth fully herein.48. The Fifth Amendment of the Constitution of the United States provides in

relevantpart, "[N]or shall private propertybe taken for publicuse, withoutjust compensation."49. Plaintiffenjoys a substantialand cognizableprivate propertyright in the full and

complete term of the '714 patent.

50. Plaintiffhas not failed to pay any necessary maintenance fees to the PTO requiredto maintain its rights in the '714 patent.

51. Defendant's promulgation of37 C.F.R. 1.703(b)(1), the regulatory subsectioninterpreting35 U.S.C. 154(b)(l)(B)(i), and reliance upon this regulatory subsection inimproperly calculating B Delay when determining PTA for the '714 patent, permanentlydeprived Plaintiffofpatent term to which it was entitled under 35 U.S.C. 154(b).

52. Defendant's purposeful and deliberatediminution of the patent term of the '714patent constitutesa takingofPlaintiffs property without just compensation, in violation of theFifth Amendment o f the Consti tut ion o f t he Uni ted States.

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53. Plaintiff is entitled to additional patent term of2,219 days for the '714 patent suchthat the 177 days ofPTA granted by the PTO should be changed to 2,396 days.

C O U N T T H R E E

(Declaratory Judgment Under The Administrative Procedures Act,5 U.S.C.%702 etseq.)54. The allegations ofparagraphs 1-53 are incorporated in this claim for reliefas if set

forth fully herein.55. Defendant's promulgation of 37 C.F.R. 1.703(b)(1), the regulatory subsection

interpreting 35 U.S.C. 154(b)(l)(13)(i), and its improper calculation ofB Delay whendetermining PTA for the '714 patent were contrary to law as set forth in this Court's opinion inExelixis.

56. Defendant 's promulgation of 37 C.F.R. 1.703(b)(1) and determination ofPTAfor the '714 patent are arbitrary, capricious, an abuse of discretion, or otherwise not inaccordance with law within the meaning of 5 U.S.C. 706(2)(A); contrary to Plaintiffs

constitutional rights within the meaning of 5 U.S.C. 706(2)(B); and in excess of statutoryauthority within the meaning of 5 U.S.C. 706(2)(C).

57. Defendant's promulgation of 37 C.F.R. 1.703(b)(1) and determination of PTAfor the '714 patent were final agency actions that are reviewable by a district court in accordancewith 5 U.S.C. 704.

58. Plaintiffhas adequately exhausted all of its available administrative remediesunder 35 U.S.C. 154 or, in the alternative, pursuit of any further administrative remedies isfuti le.

59. Plaintiff has been afforded no adequate remedy at law for Defendant'spromulgation of 37 C.F.R. 1.703(b)(1) and determination ofPTA for the '714 patent.

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60. Plaintiffwill suffer irreparable injury ifDefendant is not directed to recalculatePTA for the'714 patent.

61. There is an actual controversy between the parties within this Court's jurisdiction.62. Anorderdirecting Defendantto recalculate PTA for the '714 patentwould not

substantially injureanyother interestedparties, and thepublicinterestwill be furthered byrecalculation ofPTA that is contrary to law.

63. Plaintiff is entitled to additional patent term of 2,219 days for the '714 patent suchthat the 177daysofPTA grantedby the PTO shouldbe changed to 2,396 days.

WHEREFORE, Plaintiff respectfully prays that this Court:A. Issue an Order changing the period of PTA for the '714 patent from 177days to

2,396 days and requiring Defendant to alter the term of the '714 patent to reflect such additionalPTA; and

B. Grantsuch other and further relief as the nature of the casemay admit or requireand as may be just and equitable.

Dated:March 4,2013 Respectfully submitted,STITES & HARBISON PLLC^ ^ l Robert E^Scully, Jr., Esq. (VSB # 19218)Emily Harwood Smith, Esq. (VSB # 65527)Juan Carlos A. Marquez, Esq.STITES & HARBISON PLLC1199 North Fairfax Street, Suite 900Alexandria, Virginia 22314(703) 739-4900 Telephone(703) 739-9577 [email protected] | [email protected] PlaintiffALAXALA NetworksCorporation

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ALAXALA Networks v. Rea