Federal Circuit Upholds USPTO Post-Wyeth Patent Term Adjustment Procedures

Foley & Lardner LLP

In Daiichi Sankyo Co. v. Lee, the Federal Circuit upheld the USPTO’s post-Wyeth Patent Term Adjustment (PTA) procedures, and found that the USPTO did not abuse its discretion when it limited the Interim Procedures to petitions filed within 180 days of the patent’s grant date. This decision highlights the deferential standard of review applied to USPTO procedures implemented under its rule-making authority.

The Patents at Issue

The patents at issue were U.S. Patent 7,342,014 (granted March 11, 2008) and U.S. Patent 7,365,205 (granted April 29, 2008). Also relevant to the underlying facts was U.S. Patent 7,576,135 (granted August 18, 2009).

The ‘135 patent was terminally disclaimed over the ‘014 and ‘205 patents, which were terminally disclaimed over each other. Thus, by operation of the terminal disclaimers filed in each of the underlying applications, all three patents would expire on the earliest expiration date of any of the three patents.

The Patent Term Adjustment Problem

I first wrote about this case here, after the district court rendered its decision in 2013. As explained in that article, Daiichi Sankyo filed suit against the USPTO in February of 2010 to obtain additional PTA for the ‘135 patent under the Federal Circuit’s Wyeth decision, which was issued in early 2010. Daiichi Sankyo prevailed in that case, but could not benefit from the additional PTA because of the terminal disclaimers filed against the ‘014 and ‘205 patents. Thus, in November of 2010, Daiichi Sankyo filed an amended complaint seeking addition PTA for the ‘014 and ‘205 patents, also under Wyeth.

The district court granted summary judgment in favor of the USPTO, upholding the USPTO’s determinations that Daiichi Sankyo’s attempts to obtain additional PTA for the ‘014 and ‘205 patents were untimely.

The USPTO’s Post-Wyeth Procedures

After Wyeth, the USPTO implemented “Interim Procedures” for requesting reconsideration of PTA awards under Wyeth, and made those procedures available to any patent issued within 180 days of the request. In effect, the Interim Procedures extended the normal 2 month post-grant time period for requesting reconsideration to 180 days for Wyeth issues. The USPTO had justified this 180 day time period as corresponding to the statutory time period for bringing a civil action to challenge PTA. In particular, the PTA statute in effect at the time required a patentee “dissatisfied with a [PTA] determination made by the Director [of the USPTO]” to bring a civil action “within 180 days after the grant of the patent.”

The Federal Circuit Decision

The Federal Circuit Decision was authored by Judge Reyna and joined by Judges Moore and Taranto.

The Federal Circuit focused on the propriety of the USPTO’s post-Wyeth procedures. Daiichi Sankyo argued that the time period for judicial review should not be read as limiting the time period for administrative review, and that the statute governing certificates of correction (35 USC § 254) reflected Congressional intent to permit the USPTO to correct its own mistakes at any time.

The Federal Circuit noted that the Administrative Procedure Act calls for a deferential review of an agency decision like the one at issue, and found that the USPTO had “acted within its discretion under the statute to ‘prescribe regulations establishing procedures for the . . . determination of patent term adjustments,'” as set forth in 35 USC § 154(b)(3). The court found no abuse of discretion in the USPTO’s handling of the patents at issue, finding that “[t]he PTO’s conclusion that its authority to conduct administrative reviews extends no further than the period for judicial review is … consistent with the statute, which expressly authorizes the PTO to make regulations governing the procedures of patent term adjustment reconsiderations.”

The Federal Circuit also rejected the argument that the Interim Procedures resulted in disparate treatment of Daiichi Sankyo’s patents that could not benefit from them, because “[a]ll other similar requests were denied by the agency, showing that the PTO acted consistently with respect to similarly situated patentees.”

[T]he PTO did not act arbitrarily or capriciously based on its treatment of reconsideration requests submitted by similarly situated patentees.

So the USPTO can act arbitrarily or capriciously as long as it does so towards a broad swath of patents?

The Federal Circuit rejected Daiichi Sankyo’s other arguments as having been rejected in Novartis AG v. Lee, which I wrote about here. Thus, the court affirmed the district court’s decision.

Deferential Review of USPTO Decisions

Reading this opinion, I was struck at how little analysis was provided in support of the decision that the Interim Procedures were not arbitrary and capricious. This sentence seems particularly circular:

The PTO’s conclusion that its authority to conduct administrative reviews extends no further than the period for judicial review is also consistent with the statute, which expressly authorizes the PTO to make regulations governing the procedures of patent term adjustment reconsiderations. 35 U.S.C. § 154(b)(3)(A).

Doesn’t this say that the USPTO’s determination that the statute limits its authority to conduct administrative review later than 180 days after grant is supported by the statute’s delegation of authority to the USPTO to decide how to conduct administrative review?

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