The opinion
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
______________________________
)
BRISTOL-MYERS SQUIBB COMPANY )
and KOSAN BIOSCIENCES INC., )
)
Plaintiffs, )
)
v. ) Civ. No. 09-1330 (EGS)
) (consolidated with Civ. No 09-2420)
DAVID KAPPOS, in his official )
capacity as Under Secretary )
of Commerce for Intellectual )
Property and Director of the )
United States Patent and )
Trademark Office, )
)
Defendant. )
)
MEMORANDUM OPINION
Plaintiffs Bristol-Myers Squibb Company and Kosan
Biosciences Inc. filed this action on June 17, 2009 seeking
review of certain patent term adjustments granted by the
Director of the United States Patent and Trademark Office
(“PTO”). Plaintiffs alleged that all of the challenged PTO
patent term adjustment determinations relied on an erroneous
interpretation of 35 U.S.C. § 154(b) rejected by the United
States Court of Appeals for the Federal Circuit in Wyeth v.
Kappos, 591 F.3d 1364 (Fed. Cir. 2010). The Amended Complaint
identified twenty-one patents, set forth in twenty-one separate
counts, for which the PTO allegedly incorrectly determined the
patent term adjustment.
1
Of the twenty-one patents identified by plaintiffs in this
action, the Court has already ordered thirteen remanded to the
PTO for recalculation and adjustment of the disputed patent term
in accordance with Wyeth. Court’s Minute Order of June 23,
2010.1 The eight Counts remaining are Count Five, Count Six,
Count Eleven, Count Thirteen, Count Seventeen, Count Eighteen,
Count Nineteen, and Count Twenty.
In addition, Civil Action Number 09-2420, Bristol-Myers
Squibb Company v. Kappos, has been consolidated with this
action. One remaining Count is pending therein, namely Count
Four (United States Patent No. 7,514,430).2
Defendant has filed a motion to dismiss the remaining
claims, arguing that the plaintiffs failed to comply with 35
1
Those thirteen Counts were dismissed in the same June 23,
2010 Minute Order: Count One (United States Patent No.
7,517,991), Count Two (United States Patent No. 7,504,211),
Count Three (United States Patent No. 7,482,372), Count Four
(United States Patent No. 7,479,496), Count Seven (United States
Patent No. 7,459,562), Count Eight (United States Patent No.
7,455,835), Count Nine (United States Patent No. 7,453,002),
Count Ten (United States Patent No. 7,452,678), Count Twelve
(United States Patent No. 7,435,808), Count Fourteen (United
States Patent No. 7,432,271), Count Fifteen (United States
Patent No. 7,432,267), Count Sixteen (United States Patent No.
7,429,611), and Count Twenty-One (United States Patent No.
7,504,481).
2
The remaining counts of this action were similarly remanded
to the PTO for recalculation and adjustment of the disputed
patent terms: Count One (United States Patent No. 7,589,193),
Count Two (United States Patent No. 7,589,088), Count Three
(United States Patent No. 7,557,143), and Count Five (United
States Patent No. 7,491,725).
2
U.S.C. § 154(b)(4)(A), which requires an applicant dissatisfied
with a patent term adjustment determination made by the PTO to
file its appeal with the District Court “within 180 days after
the grant of the patent.” 35 U.S.C. § 154(b)(4)(A). Defendant
asserts that all remaining counts should therefore be dismissed
as untimely. Plaintiffs filed a cross-motion for summary
judgment, asserting that the action is timely filed and that the
disputed patent term adjustments should be remanded to the PTO
for recalculation.
The parties agree that the sole legal question remaining in
these cases is the timeliness of plaintiffs’ appeals. For the
reasons stated below, the Court finds that plaintiffs’ appeals
were timely filed. Accordingly, the Court hereby DENIES
defendant’s motion to dismiss and GRANTS plaintiffs’ cross-
motion for summary judgment. The remaining claims are hereby
REMANDED to the PTO for recalculation and adjustment of the
disputed patent terms in accordance with Wyeth v. Kappos, 591
F.3d 1364.
I. BACKGROUND
Patents are ordinarily granted “for a term beginning on the
date on which the patent issues and ending 20 years from the
date on which the application for the patent was filed in the
United States.” 35 U.S.C. § 154(a)(2). However, under 35
U.S.C. § 154(b)(1), a patent’s term may be extended if the PTO
3
causes certain delays in the process or if the patent takes
longer than three years to issue.3
After a patent application is filed, and “[i]f it appears
that applicant is entitled to a patent under the law,” the PTO
issues a “written notice of allowance of the application.”
Id. § 151. The notice of allowance specifies an issue fee that
the applicant must pay within three months. Id. The PTO is
required to make a determination of the period of any patent
term adjustment and “transmit a notice of that determination
with the written notice of allowance.” Id. § 154(b)(3)(B)(i).
The term of the patent, issued after the applicant pays the
issue fee, will include any patent term adjustment determined by
the PTO. If an applicant disagrees with the patent term
adjustment determined by the PTO, the statute provides that the
applicant is entitled to “request reconsideration of any patent
3
In the instant case, plaintiffs assert that the PTO
miscalculated the patent term adjustments for the disputed
patents. In particular, plaintiffs claim that two types of
patent term adjustments, known as the “A Delay” and the “B
Delay,” were miscalculated. Under Section 154(b)(1)(A), the “A
Delay,” one day is added to the patent’s term for each day the
PTO fails to meet certain specified deadlines. Under Section
154(b)(1)(B), the “B Delay,” the statute provides 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.” 35 U.S.C. § 154(b)(1)(B).
4
term adjustment determination made by the Director.” Id.
§ 154(b)(3)(B)(ii).
Furthermore, the statute permits the applicant to appeal
the patent term adjustment to a United States District Court.
Specifically, the statute provides:
An 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. Chapter 7 of title 5, shall apply to such
action. Any final judgment resulting in a change to
the period of adjustment of the patent term shall be
served on the Director, and the Director shall
thereafter alter the term of the patent to reflect
such change.
Id. § 154(b)(4)(A).4
In the instant case, the material facts are not in dispute.
Plaintiffs did not file their appeals with this Court until more
than 180 days after each of the remaining disputed patents had
been issued.5 However, with respect to each of the disputed
4
Effective September 16, 2011, the United States District
Court for the Eastern District of Virginia replaced the United
States District Court for the District of Columbia as the
appropriate court for any civil action commenced on or after
that date.
5
This action, Civil Action Number 09-1330, was filed on July
17, 2009. Each of the remaining eight disputed patents was
granted more than 180 days before this appeal was filed. Patent
Number 7,470,713 (Count Five) was issued on December 30, 2008;
Patent Number 7,470,712 (Count Six) was issued on December 30,
2008; Patent Number 7,446,196 (Count Nine) was issued on
November 4, 2008; Patent Number 7,432,373 (Count Thirteen) was
issued on October 7, 2008; Patent Number 7,429,604 (Count
5
patents, plaintiffs filed a request for reconsideration of the
patent term adjustment under 35 U.S.C. § 154(b)(3)(B)(ii) and 37
C.F.R. § 1.705(d) within the requisite two month time period
after the patent was granted. The sole question pending before
this Court is whether the timely filing of the petitions for
administrative reconsideration tolled the time within which
plaintiffs were required to appeal to this Court.
II. STANDARD OF REVIEW
Defendant moves to dismiss the remaining counts under Rule
12(b)(1) or, in the alternative, Rule 12(b)(6). On a motion to
dismiss for lack of subject-matter jurisdiction under Rule
12(b)(1), the plaintiff bears the burden of establishing that
the court has subject-matter jurisdiction. Lujan v. Defenders
of Wildlife, 504 U.S. 555, 561 (1992). “The court must address
the issue of jurisdiction as a threshold matter, because absent
jurisdiction the court lacks the authority to decide the case on
any other grounds.” Am. Farm Bureau v. EPA, 121 F. Supp. 2d 84,
91 (D.D.C. 2000). A motion to dismiss under Rule 12(b)(6) tests
the legal sufficiency of a complaint. Browning v. Clinton, 292
Seventeen) was issued on September 30, 2008; Patent Number
7,427,493 (Count Eighteen) was issued on September 23, 2008;
Patent Number 7,417,063 (Count Nineteen) was issued on August
26, 2008; Patent Number 7,417,040 (Count Twenty) was issued on
August 26, 2008. Similarly, the consolidated action (Civil
Action Number 09-2420) was filed on December 23, 2009, over 180
days after Patent Number 7,514,430 (Count Four) was issued on
April 7, 2009.
6
F.3d 235, 242 (D.C. Cir. 2002). A complaint must present
“enough facts to state a claim to relief that is plausible on
its face” and “above the speculative level.” Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007). In considering
a 12(b)(6) motion, the Court must construe the complaint
“‘liberally in the plaintiff’s favor,’ ‘accept[ing] as true all
of the factual allegations’” alleged in the complaint.
Aktieselskabet AF 21 November 2001 v. Fame Jeans Inc., 525 F.3d
8, 15 (D.C. Cir. 2008) (alteration in original) (quoting Kassem
v. Wash. Hosp. Ctr., 513 F.3d 251, 253 (D.C. Cir. 2008)).
Indeed, a plaintiff is entitled to “the benefit of all
inferences that can be derived from the facts alleged.” Kowal
v. MCI Commc’ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994).
Plaintiffs have filed a cross-motion for summary judgment.
Summary judgment is appropriate “if the movant shows that there
is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). Though the Court must draw all justifiable inferences
in favor of the non-moving party in deciding whether there is a
disputed issue of material fact, “[t]he mere existence of a
scintilla of evidence in support of the [non-movant]’s position
will be insufficient; there must be evidence on which the jury
7
could reasonably find for the [non-movant].” Anderson, 477 U.S.
at 252.
III. ANALYSIS
A. The Tolling Rule
Judicial review of agency actions is ordinarily tolled
until the agency action is final. See, e.g., Clifton Power
Corp. v. FERC, 294 F.3d 108, 110 (D.C. Cir. 2002) (“The time for
filing the petition for [judicial] review is tolled until all
proceedings before the agency have been completed.” (citing
Interstate Commerce Comm’n v. Bhd. of Locomotive Eng’rs, 482
U.S. 270, 284 (1987))). This is because “[a] request for
administrative reconsideration renders an agency’s otherwise
final action non-final with respect to the requesting party.”
Id. (citing United Transp. Union v. Interstate Commerce Comm’n,
871 F.2d 1114, 1116 (D.C. Cir. 1989)). In the absence of a
final agency action, this Court lacks jurisdiction.
As the Supreme Court in Interstate Commerce Commission v.
Brotherhood of Locomotive Engineers, 482 U.S. 270, explained:
[W]here a petition for reconsideration has been filed
within a discretionary review period specifically
provided by the agency (and within the period allotted
for judicial review of the original order) . . . the
petition tolls the period for judicial review of the
original order, which can therefore be appealed to the
courts directly after the petition for reconsideration
is denied.
8
Id. at 279; see also Riffin v. Surface Transp. Bd., 331 F. App’x
751, 752 (D.C. Cir. 2009) (“By filing a timely petition to
reopen, [plaintiff] rendered the Board’s decision nonfinal . . .
.”); Columbia Falls Aluminum Co. v. EPA, 139 F.3d 914, 919 (D.C.
Cir. 1998) (“A party’s pending request for agency
reconsideration renders ‘the underlying action nonfinal . . .
.’”(quoting Wade v. FCC, 986 F.2d 1433, 1434 (D.C. Cir. 1993))).
Plaintiffs argue that their appeal is not barred by the
180-day limitations period contained in Section 154(b)(4)(A)
because the limitations period was tolled by the filing of their
petitions for reconsideration of the patent term adjustments.
Defendant, on the other hand, argues that because the statute
explicitly states that an applicant must file an appeal with the
courts “within 180 days after the grant of the patent,” the
tolling rule of Locomotive Engineers does not apply.
The tolling rule set forth by the Supreme Court in
Locomotive Engineers has been nearly universally applied. The
one exception identified by defendant is Stone v. INS, 514 U.S.
386 (1995). In Stone, the Supreme Court held that the tolling
rule did not apply to the Immigration and Nationality Act (INA).
Plaintiff, a Canadian citizen present in the United States on a
visa, was ordered deported by an Immigration Judge. Id. at 389.
The plaintiff filed administrative appeals, all of which were
denied. Plaintiff then filed an action in the Court of Appeals
9
for the Sixth Circuit seeking review of both the original
deportation order, as well as the subsequent agency order
denying reconsideration. The question before the Supreme Court
in Stone was “whether the filing of a timely motion for
reconsideration of a decision by the Board of Immigration
Appeals tolls the running of the 90-day period for seeking
judicial review of the decision.” Id. at 388.
The Stone Court concluded that the petition for
reconsideration did not toll the period of limitations for
seeking judicial review of the deportation order because certain
provisions within the INA “reflect[ed] Congress’ expectation
that in the particular context of INS deportation orders the
normal tolling rule will not apply.” Id. at 398. The Court
distinguished the Immigration and Nationality Act from the
ordinary situation, explaining that:
By its terms, § 106(a)(6) [of the INA] contemplates
two petitions for review and directs the courts to
consolidate the matters. The words of the statute do
not permit us to say that the filing of a petition for
reconsideration or reopening dislodges the earlier
proceeding reviewing the underlying order. The
statute, in fact, directs that the motion to reopen or
reconsider is to be consolidated with the review of
the order, not the other way around. This indicates to
us that the action to review the underlying order
remains active and pending before the court. We
conclude that the statute is best understood as
reflecting an intent on the part of Congress that
deportation orders are to be reviewed in a timely
fashion after issuance, irrespective of the later
filing of a motion to reopen or reconsider.
10
Id. at 394.
The tolling rule established by Locomotive Engineers is the
“normal tolling rule.” Stone, 514 U.S. at 398; see also United
Transp. Union, 871 F.2d at 1116 (“We think it plain that a
pending petition for rehearing must render the underlying agency
action nonfinal (and hence unreviewable) with respect to the
filing party.”).
As defendant concedes, this general tolling rule applies
unless the statute would be “expressly contravened by the
tolling rule.” Def.’s Combined Opp’n at 8. The question for
this Court in the instant case is therefore whether Congress
intended that the ordinary tolling rule of Locomotive Engineers
not apply to Section 154(b)(4)(A).
B. Whether the General Tolling Rule is Inapplicable to
Section 154(b)(4)(A)
Defendant makes several arguments in support of his
assertion that Congress intended the limitations period of
Section 154(b)(4)(A) to be exempt from the ordinary tolling
rule. Defendant first argues that because “the limitation
period of § 154(b)(4)(A) begins to run on a fixed date,” it is
“abundantly clear that [Congress] did not intend for the tolling
rule to apply.” Def.’s Combined Opp’n at 9. In response,
plaintiffs assert that the text of Section 154(b)(4)(A)
“provides no indication that Congress sought to depart from the
11
Locomotive Engineers rule.” Pls.’ Cross Mot. for Summ. J. at
20.
Defendant’s argument is flawed. Section 154(b)(4)(A) does,
as defendant correctly states, provide that the 180-day
limitations period starts to run from the date the patent is
granted. Also true is defendant’s assertion that, accordingly,
the statute sets a “fixed date” from which the limitation period
runs. However, a statutory provision setting the limitations
period is not incompatible with a tolling rule. While
Section 154(b)(4)(A) requires that an applicant file an appeal
of a patent term adjustment “within 180 days after the grant of
the patent,” case law from this Circuit makes clear that such a
requirement is not violated by the general tolling rule.
For instance, this Circuit applied the general tolling rule
in Columbia Falls, 139 F.3d 914, concluding that the relevant
90-day period of limitations, namely 42 U.S.C. § 6976(a)(1),
would be tolled by a request for agency reconsideration. Id. at
919. Like Section 154(b)(A)(4) in the instant case, 42 U.S.C. §
6976(a)(1) provides for a fixed date, stating that any petition
for judicial review “of action of the Administrator in
promulgating any regulation . . . or denying any petition for
the promulgation . . . shall be filed within ninety days from
the date of such promulgation or denial[.]” 42 U.S.C. §
12
6976(a)(1) (emphasis added). The court nonetheless held that
the tolling rule applied. Columbia Falls, 139 F.3d at 919.
Similarly, in Los Angeles SMSA Limited Partnership v. FCC,
70 F.3d 1358 (D.C. Cir. 1995), the court applied the general
tolling rule to a statute requiring that the judicial appeal “be
taken by filing a notice of appeal with the court within thirty
days from the date upon which public notice is given of the
decision or order complained of.” 47 U.S.C. § 402(c) (emphasis
added). The Circuit explained:
The filing of a petition for rehearing . . . will
suspend the running of the period within which an
appeal may be taken, and . . . this period begins to
run anew from the date on which final action is taken
on the petition or motion, whether it be denied or
granted. . . . This rule applies even though a statute
fixes a time within which appeal may be taken as a
definite period from the entry of judgment.
Los Angeles SMSA Ltd. P’ship, 70 F.3d at 1359 (quoting Saginaw
Broad. Co. v. FCC, 96 F.2d 554, 558 (D.C. Cir. 1938))(emphasis
added).
Precedent from this Circuit therefore makes clear that
merely because the statute “fixes a time within which appeal may
be taken,” such a provision does not exempt the statute from the
ordinary tolling rule. “The time for filing the petition for
review is tolled until all proceedings before the agency have
been completed.” Clifton Power Corp., 294 F.3d at 110.
13
Furthermore, none of the other statutory provisions cited
by defendant support a conclusion that Congress intended for the
ordinary tolling rule not to apply to Section 154(b)(4)(A).
Defendant argues, for example, that 35 U.S.C. § 154(b)(3)(D) is
evidence of such Congressional intent. Section 154(b)(3)(D)
provides that the “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, notwithstanding any appeal taken by the applicant of
such determination.” Id. Defendant argues that “the statute
expressly contemplates that such an appeal may be initiated
before the patent issues.” Def.’s Mot. to Dismiss at 4. The
Court disagrees.
While defendant would have this Court conclude that
Section 154(b)(3)(D) renders the general tolling rule
inapplicable, similar to the INA at issue in Stone, the Court
finds otherwise. In Stone, the Court concluded that “Congress
chose to depart from the ordinary judicial treatment of agency
orders under reconsideration.” Stone, 514 U.S. at 393. The
Stone Court came to this conclusion based upon a 1990 amendment
to the INA specifically requiring the judiciary to consolidate
two separate appeals by a petitioner. Finding such language
irreconcilable with the normal tolling rule, the Court stated
that “the words of the statute do not permit us to say that the
14
filing of a petition for reconsideration or reopening dislodges
the earlier proceeding reviewing the underlying order.” Id. at
394.
Nothing in the patent statute is comparable to the INA
language that prevented the application of the general tolling
rule in Stone. Defendant’s reliance on Section 154(b)(3)(D),
requiring the Director to “proceed to grant the patent after
completion of the Director’s determination of a patent term
adjustment under the procedures established under this
subsection, notwithstanding any appeal taken by the applicant of
such determination,” is not persuasive. That language does not
direct this Court to take any action inconsistent with the
normal tolling rule.6
The application of the Locomotive Engineers tolling rule in
this case is not only consistent with the statutory language,
but also with the function of the tolling roll. The purpose of
the tolling rule is to conserve judicial resources by putting
only a final agency action before the Court. As this Circuit
has explained, “[w]hen the party elects to seek a rehearing
6
Nor, contrary to defendant’s assertions, does the language
of 35 U.S.C. § 154(b)(4)(B) contravene the general tolling rule.
Dealing only with the ability of third parties to appeal or
challenge the grant of a patent, it provides that “[t]he
determination of a patent term adjustment . . . shall not be
subject to appeal or challenge by a third party prior to the
grant of the patent.” Id. Such a provision does not contravene
the tolling rule.
15
there is always a possibility that the order complained of will
be modified in a way which renders the complained of judicial
review unnecessary.” United Transp. Union, 871 F.2d at 1117
(quoting Outland v. Civil Aeronautics Bd., 284 F.2d 224, 227-28
(D.C. Cir. 1960)). By the use of the “bright line test” of the
general tolling rule, would-be plaintiffs are “discourage[d
from] the filing of petitions for review until after the agency
completes the reconsideration process.” TeleSTAR, Inc. v. FCC,
888 F.2d 132, 134 (D.C. Cir. 1989).
In the instant case, once the plaintiffs filed their
petitions for reconsideration with the PTO, it would have been a
“pointless waste of judicial energy for the court to process any
petition for review before the agency . . . acted on the
request for reconsideration.” Id.
Accordingly, the Court concludes that the general tolling
rule applies to the instant case and plaintiffs’ claims were
timely filed.
IV. CONCLUSION
For the foregoing reasons, defendant’s motion to dismiss is
DENIED. Plaintiff’s motion for summary judgment is GRANTED.
Accordingly, the Court hereby REMANDS the remaining counts to
the United States Patent and Trademark Office for recalculation
and adjustment of the disputed patent terms in accordance with
the decision of the United States Court of Appeals for the
16
Federal Circuit in Wyeth v. Kappos, 591 F.3d 1364. In view of
this remand, plaintiffs’ remaining claims are hereby DISMISSED
without prejudice subject to a motion for reconsideration for
good cause shown upon completion of the agency’s recalculation
and adjustment. An appropriate Order accompanies this
Memorandum Opinion.
SIGNED: Emmet G. Sullivan
United States District Court Judge
January 27, 2012
17