Index Systems v. Rea

7/29/2019 Index Systems v. Rea

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FILEDIN THE UNITED STATES DISTRICT COURTFORTHE EASTERN DISTRICTOFVIRGINIA, ALEXANDRIA DIVISION

2013 FE8 22 P * IqINDEX SYSTEMS, INC.KINGSTON CHAMBERSP.O. BOX 173ROAD TOWNTORTOLA,BRITISHVIRGIN ISLANDS

Plaintiff

HON. TERESA STANEK REAUnder Secretaryof Commerce forIntellectual Propertyand Directorof theUnited States Patent and Trademark OfficeOffice ofGeneral CounselUnited States Patent and Trademark OfficeP.O. Box 15667Arlington, VA 22215MadisonBuildingEast, Rm. 10B20600 Dulany StreetAlexandria, VA 22314

Defendant

CLERKUS DISTRICT COURTALEXANDRIA, VIRGINIA

Civil Ac tion No . Wia&im* *pg*

COMPLAINT

Plaintiff Index Systems, Inc. ("Index Systems"), forits complaint against theHonorable Teresa Stanek Rea, states as follows:

NATURE OF THE ACTION1. This is an actionby the assignee of United StatesPatentNo. 8,265,458 ("the

'458 patent," attached hereto as Exhibit A) seeking judgment, pursuant to 35U.S.C. 154(b)(4)(A), thatthepatent term adjustment forthe '458 patent be changed from 1694days toat least2254 days, subject to any disclaimer thatmay be filed.


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2. This action arises under 35 U.S.C. 154 and the Administrative ProcedureAct. 5 U.S.C. 701-706.

PARTIES

3. Plaintiff Index Systems is aBritish Virgin Islands corporation, having aprincipal place of business at Kingston Chambers, P.O. Box 173, Road Town, Tortola,British Virgin Islands.

4. Defendant Teresa Stanek Reais theUnder Secretary of Commerce forIntellectual Property andDirector ofthe United States Patent and Trademark Office("USPTO"), acting in his official capacity. The Director is the head of the USPTO and isresponsible for superintending or performing all duties required by law with respect tothe granting and issuing ofpatents. The Director is designated by statute as the officialresponsible for determining the period ofpatent term adjustment under 35 U.S.C. 154.

JURISDICTION AND VENUE5. This Court has jurisdiction to hear this action and isauthorized to issue the

relief sought pursuant to 28 U.S.C. 1331,1338(a), and 1361, 35 U.S.C. 154(b)(4)(A)and 5 U.S.C. 701-706.

6. Venue isproper in this judicial district under 35 U.S.C. 154(b)(4)(A).7. This Complaint is timely filed in accordance with 35 U.S.C. 154(b)(4)(A)

and Fed. R. Civ. P. 6(a)(3).BACKGROUND FACTS

8. Plaintiff Index Systems is the assignee of the '458 patent, asevidenced byassignment documents recorded at the USPTO. The entire right, title, and interest to the'458 patent, including the right to sue and recover for past infringement thereof, is


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assigned to and is owned by Index Systems. Index Systems is therefore the real party ininterest in this case.

9. Under 35 U.S. C. 154(a)(2), a successful patent applicant is entitled to a20-year patent term beginning on the date its application was first filed with the USPTO.Because this period starts to run with the filing ofthe application rather than with thegrant ofthe patent, any administrative delay by the USPTO in processing ofanapplication reduces the applicant's effective patent term.

10. To prevent such administrative delays from causing unfair losses ofpatentprotection, 35 U.S.C. 154(b) requires that the Director ofthe USPTO grant apatent termadjustment in accordance with the provisions ofsection 154(b). Specifically, 35 U.S.C.154(b)(3)(D) states that "[t]he Director shall proceed to grant the patent aftercompletion ofthe Director's determination ofa patent term adjustment under theprocedures established under this subsection, notwithstanding any appeal taken by theapplicant of such determination."

11. Accordingly, the USPTO must grant successful applicants upwardadjustments oftheir patent terms to compensate for three categories ofprocessing delayby the USPTO. Those three categories, set forth in 35 U.S.C. 154(b)(1)(A), (B), and(C) are known as "A delays," "B delays" and "C delays", respectively. Only Bdelays areat issue in this case.

12. Bdelays occur when the USPTO fails to issue a patent within 3 years of thefiling ofthe patent application, excluding certain specified periods ofdelay. 35 U.S.C. 154(b)(1)(B). The statute provides for a day-for-day patent term adjustment to


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compensate for any Bdelays: "the term ofthe patent shall be extended by 1day for eachday after the end ofthat 3-year period until the patent is issued." Id.

13. Under 35U.S.C. 132(b), an applicant may make a request for continuedexamination ("RCE") after the prosecution ofan application is closed. 37C.F.R. 1.114.

14. The dispute in this case concerns the proper interpretation of the statutegoverningBdelays when an applicant has filed an RCE more than three years after theapplication was filed.

15. Inparticular, the USPTO has taken the position that 35 U.S.C. 154(b)(1)(B)allows the USPTO to reduce the patent term adjustment ("PTA") by the time attributableto an RCE where the RCE is filed afterthe expiration of the three yearguarantee periodspecified by the statute.

16. This Court rejected the USPTO's interpretation of 35 U.S.C. 154(b)(1)(B)mExelixis, Inc. v. Kappos^o. I:12cv96, 2012U.S. Dist. LEXIS 157762 (E.D. Va.Nov.1,2012). In Exelixis, the Court granted summary judgment against the USPTO, holdingthattheUSPTO's patent term adjustment calculation methodology was erroneous as amatterof lawand inconsistent with the plainandunambiguous language of 35U.S.C. 154(b)(1)(B). Id. at *20-21. Specifically, inExelixis, the Court held that 35 U.S.C. 154(b)(1)(B) "clearly provides no basis for any RCE's to reduce PTA; instead, RCE'soperate only to toll the three year guarantee deadline, if, and only if, they are filed withinthree yearsof the application filing date." Id. at *20.

17. The correctpatenttermadjustment methodology identified in thepriorExelixis action governs theUSPTO's calculation of PTAforPlaintiffs '458 patent.


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18. 35U.S.C. 154(b)(4)(A) provides that "[a]napplicantdissatisfied withadetermination madeby theDirectorunderparagraph (3) shall have remedy by a civilaction against theDirector filed intheUnited States District Court fortheEastern DistrictofVirginia within 180 days after the grant ofthepatent. Chapter 7 of title 5 shall applyto such action."

THE COUNT: U.S. PATENT NO. 8.265.45819. The allegations ofparagraphs 1-18 are incorporated in this claimfor reliefas

if fully set forth.20.GaryHelmstetter is the inventor of U.S. PatentApplication No. 10/901,684

("the '684 application"), entitled "SYSTEM AND METHOD FOR GENERATINGVIDEO TAPINGREMINDERS." The '684applicationwas filed on July 29,2004, andissued as the '458 patent onSeptember 11,2012. On March 2,2011, the applicant filedwith the USPTO an RCE of the '684 application.

21. When the USPTO issued the '458 patent on September 11,2012, iterroneously calculated the entitled PTA forthe '458 patent as 1694 days.

22.Thedetermination of the 1694-day PTAis in error because it fails to includean adjustment, as required by35U.S.C. 154(b)(1)(B), forthe time from three yearsafter the filing dateof the '684 application to the date thepatent issued, including theperiod of time following Plaintiffs RCE (i.e., including the period of time between theMarch 2,2011 filing of theRCE, and the September 11,2012grant ofthepatent). Thenumber ofdays inthe period from July29,2007 (three years afterthe filing date of the'684 application) until September 11, 2012 (the day thepatent was granted) is 1871 days.Therefore, thecorrect PTAfor the '458 patent, including the 713-day perioddeterminedbytheUSPTO attributed to A delays (i.e., USPTO examination delay under 35U.S.C.

5


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154(b)(1)(A)) and this 1871-dayadjustmentunder 35U.S.C. 154(b)(l), less the 285-day periodattributedto applicant delaysand a 45-day periodof overlapbetweenA delaysand B delays under 35 U.S.C. 154(b)(2)(A), is at least 2254 days, as set forth inmoredetail in Paragraphs 23 - 28 below.

23. Under 35 U.S.C. 154(b)(1)(A), and according to the USPTO, the Plaintiff isentitled to an adjustment of the termof the '458 patentof a periodof 713 days, whichisthe number of days attributable to A delays.

24. Under 35 U.S.C. 154(b)(1)(B), because the RCE was filed on March 2,2011

which is after July 29,2007 (three years after the filing date of the '684 application), thePlaintiff is entitled to an additional adjustment of the term of the '458 patent of a periodof 1871 days, which is the numberofdays the issue date of the '458 patent exceeds threeyears from the filing date of the application, including the periodof time followingPlaintiffs RCE.

25. Section 35 U.S.C. 154(b)(2)(A) states that "to the extent... periods of [AandB delay] overlap, the periodof any adjustmentgranted under this subsection shall notexceed the actual number ofdays the issuance of the patent was delayed." For the '458patent, the periodsof A delay and B delayoverlap betweenJuly 29,2007 (three yearsfrom the filing date of the '684 application)and September 12, 2007 (the date the firstOffice Action was mailed in the '684 application), a period of 45 days. Therefore, the

total 45-day overlap period is to be deducted from the PTA calculation.26. Thus, the total period of USPTO delay is 2539 days, which is the sum of the

period ofA delays (713 days) and the period ofB delays (1871 days), less theperiod ofoverlap (45 days).


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27.Pursuantto 35U.S.C. 154(b)(2)(C), the total periodofUSPTOdelay isreduced bytheperiod of applicant delay, which is 285 days as determined bytheUSPTO.

28. Accordingly, the correct PTA under 35U.S.C. 154 isat least 2254 days,whichis thedifference betweenthe total periodof USPTO delay (2539 days) and theperiod of applicant delay (285 days).

29. TheDefendant's imposition of only 1694 daysof patent term adjustment forthe '458 patent is arbitrary, capricious, an abuse ofdiscretion, inconsistentwith thelanguage of35 U.S.C. 154 and related rules, orotherwise not inaccordance with lawand in excessof statutory jurisdiction, authority or limitation.

PRAYER FOR RELIEF

30. The allegations ofparagraphs 1-29 are incorporated in this prayer for relief asif fully set forth.WHEREFORE, IndexSystemsprays that theCourt:

A. Issue anOrder changing theperiod of patent termadjustment forthe '458patent from 1694 days to at least 2254 days, and requiring Defendant to alter the term ofthe '458 patent to reflect the at least 2254-day patent term adjustment; and


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B. Grantto IndexSystems suchother and further relief as the nature of thecasemay admitor require and as thisCourtdeemsjust and proper.

Respectfully submitted,

ByDated: February 22,2013 /^rmes R. Myers (Bar No.^4936)topes & Gray LLPOne Metro Center700 12th Street, NW, Suite 900Washington, D.C. 20005-3948Telephone: (202) 508-4647Facsimile: (202) 383-8349OfCounsel:Dalila Argaez WendlandtRopes & Gray LLPPrudential Tower800 Boylston StreetBoston, MA 02199-3600Telephone: (617) 951-7884Facsimile (617) 235-0551Jordan Michael RossenRopes & Gray LLPOne Me tro Center700 12th Street, NW, Suite 900Washington,D.C. 20005-3948Telephone: (202) 508-4759Facsimile: (202) 383-9853Attorneysfor Plaintiff,INDEX SYSTEMS, INC.

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Index Systems v. Rea