Allstate Insurance Company v. Rea

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Alexandria Division

Z0I3 MAR 20 P !: 38


2775 Sanders Road, Suite A2 Northbrook, IL 60062, Plaintiff,

Civil Action No.: I •' 13 <W 3 (* I


Acting Under Secretary of Commerce for Intellectual Property and Acting Director of the
United States Patent and Trademark Office Office of General Counsel United States Patent and Trademark Office P.O. Box 1450

Madison Building East, Rm. 10B20 600 Dulany Street
Alexandria, VA 22314,


Plaintiff Allstate Insurance Company ("AIC"), for its Complaint against the Honorable
Teresa S. Rea, states as follows:


This is an action by AIC, the applicant and owner of United States Patent No.

8,275,637 ("the '637 patent") for review of the determination by Defendant, pursuant to 35

U.S.C. § 154(b)(3)(B), of the patent term adjustment of the '637 patent. AIC seeks a judgment,
pursuant to 35 U.S.C. § 154(b)(4)(A), that the patent term adjustment for the '637 patent be
changed from 732 days to 1,202 days.


This action arises under 35 U.S.C. § 154(b)(4)(A) and the Administrative

Procedure Act, 5 U.S.C. §§ 701-706.


AIC is a corporation organized under the laws of Illinois, with its principal place

of business at 2775 Sanders Road, Suite A2, Northbrook, IL 60062.


Defendant Teresa S. Rea is the Acting Under Secretary of Commerce for

Intellectual Property and Acting Director of the United States Patent and Trademark Office ("PTO"), acting in her official capacity. Pursuant to 5 U.S.C. § 3345(a)(1), the Acting Director
of the PTO shall perform the functions and duties of the office of Director temporarily in an
acting capacity. Thus, the Acting Director is the head of the PTO and is responsible for
superintending and performing all duties required by law with respect to the granting and issuing
of patents, and is designated by statute as the official responsible for determining the period of patent term adjustments under 35 U.S.C. § 154(b). The Acting Director is also the proper defendant in a suit seeking review of such determinations. See 35 U.S.C. § 154(b)(4)(A).


This Court has jurisdiction to hear this action and is authorized 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.


Venue is proper in this district by virtue of 35 U.S.C. § 154(b)(4)(A).


This Complaint is being timely filed in accordance with 35 U.S.C. § 154(b)(4)(A).


AIC is the assignee of all right, title, and interest in the '637 patent, as evidenced

by the records in the PTO, and is the real party in interest in the case.


Anson J. Glacy, Jr., Ronald C. Davidson, Cynthia S. MacDonald, Alan A.

Schecher, and Kurt J. Stump are the inventors of U.S. Patent Application Number 11/847,089
("the '089 application").


The '089 application was filed on August 29, 2007, and issued on September 25,

2012, as the '637 patent, entitled "Earnings at Risk Method and System."
11. On March 29, 2010, the PTO mailed the first notification under 35 U.S.C. § 132

("the Restriction Requirement") as to the '089 application.
12. On June 16, 2011, AIC filed a request for continued examination pursuant to 35

U.S.C. § 132(b) ("RCE"). 13. On November 3, 2011, the PTO mailed a notification under 35 U.S.C. § 132 in

response to the June 16,2011 RCE.
14. On September 25, 2012, and pursuant to 35 U.S.C. § 154(b)(3), the '637 patent

issued with a patent term adjustment of 732 days listed on the face of the patent. 15. Section 154 of 35 U.S.C. requires that the Director of the PTO grant a patent term

adjustment in accordance with the provisions of section 154(b), which set forth a "[gjuarantee of prompt Patent and Trademark Office responses" and a "[gjuarantee of no more than 3-year
application pendency."


Subsection 154(b)(3)(D) provides that "[t]he Director shall proceed to grant the

patent after completion of the Director's determination of a patent term adjustment under the
procedures established under this subsection." 17. In calculating the patent term adjustment, the Director must take into account

PTO delays under 35 U.S.C. § 154(b)(1)(A) and (B), any overlapping periods in the PTO delays

under 35 U.S.C. § 154(b)(2)(A), any disclaimer of patent term by the applicant under 35 U.S.C.
§ 154(b)(2)(B), and any applicant delays under 35 U.S.C. § 154(b)(2)(C).
18. Under 35 U.S.C. § 154(b)(4)(A), "[a]n applicant dissatisfied with a determination

made by the Director under paragraph (3) shall have remedy by a civil action against the Director
filed in the United States District Court for the Eastern District of Virginia within 180 days after
the grant of the patent."


This action against the Acting Director is timely filed within the 180 day period

after grant of the patent, under 35 U.S.C. § 154(b)(4)(A).


The allegations of paragraphs 1-19 are incorporated in this claim for relief as

though fully set forth herein.


The patent term adjustment for the '637 patent, as determined by the Director

under 35 U.S.C. § 154(b) and listed on the face of the '637 patent, is 732 days. 22. The Director's determination of the 732 day patent term adjustment is in error

because the PTO did not properly calculate and allow an adjustment for the delays that occurred
pursuant to 35 U.S.C. § 154(b)(1)(B). The correct patent term adjustment for the '637 patent is
1,202 days.


The '089 application was filed on March 12, 2004, and the '637 patent was issued

on September 25, 2012.


AIC is entitled to an adjustment of the term of the '637 patent under 35 U.S.C. §

154(b)(1)(A) in the amount of 534 days, which is the number of days attributable to PTO

examination delay during prosecution of the '089 application ("A" Delay). The "A" Delay
period of 534 days is pursuant to 35 U.S.C. § 154(b)(l)(A)(i) due to the PTO's failure to mail an

action under 35 U.S.C. § 132 not later than 14 months from the actual filing date of the

application, and pursuant to 35 U.S.C. § 154(b)(l)(A)(ii) due to the PTO's failure to respond to a
reply under 35 U.S.C. § 132 within 4 months. This period consists of (i) the length of time
inclusive of October 30, 2008 (one day after 14 months after the filing date of the '089

application), to March 29, 2010 (the date ofmailing ofthe Restriction Requirement by the PTO);
and (ii) the length of time inclusive of October 17, 2011 (one day after 4 months after the filing
of the RCE) to November 3,2011 (the date of mailing of the Office Action following the RCE).
25. AIC is also entitled to an additional adjustment of the term of the '637 patent

under 35 U.S.C. § 154(b)(1)(B) in the amount of 758 days, which is the number of days the

issuance of the '637 patent was delayed beyond three years from the actual filing date of the '089
application ("B" Delay).


35 U.S.C. § 154(b)(1)(B) states that "if the issue of an original patent is delayed

due to the failure of the United States Patent and Trademark Office to issue a patent within

3 years after the actual filing date of the application in the United States ... the term of the
patent shall be extended 1 day for each day after the end of that 3-year period until the patent is issued." For the '637 patent, the "B" Delay is the period beginning August 30, 2010 (the day

after the 3-year period ended) to September 25,2012, the issue date of the '637 patent. 27. The total period of PTO delay was 1,292 days, which is the sum of the "A" Delay

(534 days) and the "B" Delay (758 days).


The '637 patent is not subject to a disclaimer of term. Therefore, the period of

patent term adjustment is not limited under 35 U.S.C. § 154(b)(2)(B). 29. The total period of term adjustment is reduced under 35 U.S.C. § 154(b)(2)(C) by

the period of applicant delay, which the Defendant calculated for the '637 patent as 92 days.


Accordingly, the correct patent term adjustment to which AIC is entitled under 35

U.S.C. § 154(b)(1) and (2) is 1,200 days, which is the total period of PTO delay (534 days + 758

days = 1,292 days) less the period of applicant delay (1,292 days - 92 days = 1,200 days).
31. The Director erred in the determination of the patent term adjustment for the '637

patent by erroneously tolling the period of "B" Delay upon the filing of the RCE on June 16,

2011. In particular, the Director incorrectly calculated a "B" Delay of 290 days (beginning on
the date which was three years from the actual filing date and ending the day before the RCE was filed). By this erroneous calculation, the Director has deprived AIC of the full patent term adjustment to which it is entitled (calculated above as 1,200 days).
32. On November 1, 2012, in Exelixis v. Kappos, Case No. 1:12-cv-00096-TSE-TCB,

2012 WL 5398876, at *6-*8 (E.D. Va. Nov. 1, 2012), this Court explained the proper construction and application of the provisions of 35 U.S.C. § 154(b) for determining patent term adjustment. As this Court explained, subparagraph (B) requires that the time devoted to an RCE tolls the running of the three year clock if the RCE is filed within the three year period. However, an RCE has no impact on patent term adjustment if filed after the three year period has

33. The Director's allowance of only 290 days of "B" delay for the '637 patent is

arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law and in

excess of the jurisdiction and authority conferred by and the limitations imposed by statute.

WHEREFORE, AIC respectfully prays that this Court:

1This Court reached a contrary result in Exelixis, Inc. v. Kappos, Case No. 1:12-cv-00574-LMB-TRJ, 2013 WL
314754, at *5-*9 (E.D. Va. Jan. 28, 2013). This judgment has been appealed to the United States Court of Appeals
for the Federal Circuit.


Issue an Order changing the period ofpatent term adjustment for the '637 patent from 732

days to 1,200 days, and requiring Defendant to alter the term of the '637 patent to reflect the
1,200-day patent term adjustment; and


Grant such other and further reliefas the nature of the case may admit or require and as

maybe just and equitable.

Respectfully submitted,

Dated: *e* *>, 2*?
Christopher B. Roth (VA Bar No. 44499) Brian J. Brisnehan (VA Bar No. 75690)
BANNER & WITCOFF, LTD. 1100 13th Street, NW, Suite 1200

Washington, DC 20005-4051 Telephone: 202.824.3000
croth(5>, [email protected],

Attorneysfor PlaintiffAllstate Insurance Company

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