Bristol-Myers Squibb Company v. Doll , 891 F. Supp. 2d 135 ( 2012 )

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
This case is before the Court on defendant’s motion for
reconsideration of the Court’s January 27, 2012 Memorandum
Opinion and Order granting plaintiffs’ motion for summary
judgment and denying defendant’s motion to dismiss. Upon
consideration of the motion, the response and reply thereto, the
entire record, the applicable law, and for the reasons set forth
below, the defendant’s motion for reconsideration is DENIED.
I. INTRODUCTION
Plaintiffs Bristol-Meyers 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”). Plaintffs 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.
In June 2010, the Court ordered thirteen of the twenty-one
patents identified by plaintiffs in this action to be remanded
to the PTO for recalculation and adjustment of the patent terms
in accordance with Wyeth. Court’s Minute Order of June 23,
2010. Eight counts remained as of January 27, 2012. 1 The
parties agreed that the timeliness of plaintiffs’ appeals for
the remaining Counts was the sole remaining legal question. See
id. at 3.
On January 27, 2012 the Court granted plaintiffs’ cross-
motion for summary judgment and denied defendant’s motion to
dismiss, finding that plaintiffs’ appeals of certain patent term
adjustments were timely filed because the statute of limitations
1
Those counts were 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-Meyers Squibb Company v. Kappos, was consolidated with
this action. Count Four was the remaining Count in that action
as of January 27, 2012. See January 27, 2012 Memorandum Opinion
(“Jan. 27 Op.”) at 2.
2
for filing such an action was tolled by plaintiffs’ request that
the PTO reconsider its patent term adjustment decisions. See
ECF No. 41. Defendant moved for reconsideration of the Court’s
decision on February 24, 2012 and the Court held oral argument
on the motion on July 10, 2012. The motion is now ripe for the
Court’s determination.
II. BACKGROUND 2
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). If the PTO causes
certain delays in the processing of the patent, however, a
patent’s term may be extended. 35 U.S.C. § 154(b)(1). The
statute provides for the adjustment and calculation of patent
terms as a result of several different categories of delay.
At issue in this case are two of those categories: “A
Delay” and “B Delay.” The “A Delay” is the delay of the PTO to
meet certain intermediate deadlines during the pendency of a
patent application. 35 U.S.C. § 154(b)(1)(A). The “B Delay” is
the delay caused by the PTO’s failure to issue the patent within
2
The factual and procedural background of this case has been
discussed more fully in the Court’s January 27, 2012 Opinion.
See ECF No. 41. Accordingly, the factual and procedural
background will be discussed herein only to the extent necessary
to resolve the pending motion for reconsideration.
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three years of the date of the filing of the patent application.
35 U.S.C. § 154(b)(1)(B).
After the PTO makes a determination that a patent
application will be granted, it issues a written notice of
allowance of the application. Id. § 151. Also issued with the
notice of allowance is an initial determination of the patent
term adjustment, if applicable. 35 U.S.C. § 154(b)(3)(B)(i)
(requiring the PTO to “make a determination of the period of any
patent term adjustment” and “transmit a notice of that
determination with the written notice of the allowance of the
application”). If an applicant disagrees with a patent term
adjustment determined by the PTO, it is entitled to request
reconsideration of the patent term adjustment. 35 U.S.C. §
154(b)(3)(B)(ii).
Because the patent term adjustment submitted with the
notice of allowance is issued months before the grant of the
patent, the patent term adjustment reflected in the notice of
allowance does not include “B delay,” because “B Delay”
continues to accrue until the grant of the patent. As the PTO
explained in its motion to dismiss:
Because the computer program that the USPTO uses to
calculate the PTA does not calculate “B Delay” until
the patent issue date is determined, this initial PTA
determination typically only includes the “A delay”
determined by the USPTO as of the date of the notice
of allowance. Thus, at this point, the applicant is
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only able to challenge the USPTO’s A-delay
determination.
Def.’s Mot. to Dismiss at 3, ECF No. 28. The regulations
provide that any requests for reconsideration of the patent
term adjustment indicated in the patent when it is granted
must be made within two months of the date that patent
issues. 37 C.F.R. § 1.705(d).
Section 154 permits the applicant to appeal the patent term
adjustment to a United States District Court. 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 3 within 180 days after the grant of the
patent. Chapter 7 of title 5 shall apply to any 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.
35 U.S.C. § 154(b)(4)(A).
In its January 27, 2012 Opinion, the Court addressed the
remaining issue of whether the plaintiffs’ appeals of the patent
term adjustments were timely filed. The Court discussed the
general tolling rule as applied to agency decisions and the
Supreme Court’s decision in Interstate Commerce Commission v.
3
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
Brotherhood of Locomotive Engineers, 482 U.S. 270 (1987). The
Court also explained the basis of the tolling rule, which is
that “[a] request for administrative reconsideration renders an
agency’s otherwise final action non-final with respect to the
requesting party.” Clifton Power Corp. v. FERC, 294 F.3d 108,
110 (D.C. Cir. 2002) (citing United Transp. Union v. Interstate
Commerce Comm’n, 871 F.2d 1114, 1116 (D.C. Cir. 1989)). If the
agency action is non-final, the district court lacks
jurisdiction to review it, and the time to challenge that agency
decision in court must be tolled.
The Court explained that the tolling rule set forth in
Locomotive Engineers has been nearly universally applied, and
the Court noted that defendant conceded that the rule would
apply in this case unless the patent statute would be “expressly
contravened by the tolling rule.” Jan. 27 Op. at 11 (quoting
Def.’s Combined Opp’n at 8). The Court discussed one case in
which tolling was found not to apply, Stone v. INS, 514 U.S. 386(1995). The Court summarized the facts and holding of Stone,
which found that the tolling rule did not apply to an action
challenging a deportation order under the Immigration and
Nationality Act (“INA”). Finding that “[n]othing in the patent
statute is comparable to the INA language that prevented the
application of the general tolling rule in Stone,” this Court
held that the tolling rule applied to plaintiffs’ motions for
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administrative reconsideration of the patent term adjustments,
and therefore, plaintiffs’ appeals in this Court were timely
filed. The Court further explained that the application of the
tolling rule in this case is not only consistent with the
statutory language, but also the function of the tolling rule
itself, which seeks to conserve judicial resources.
III. STANDARD OF REVIEW
Federal Rule of Civil Procedure 59(e) allows a party to
file a Motion for Reconsideration, but such motions “are
disfavored and relief from judgment is granted only when the
moving party establishes extraordinary circumstances.”
Niedermeier v. Office of Baucus, 153 F. Supp. 2d 23, 28 (D.D.C.
2001) (citing Anyanwutaku v. Moore, 151 F.3d 1053, 1057 (D.C.
Cir. 1998). A motion for reconsideration is not a second
opportunity to present argument upon which the court has already
ruled. W.C. & A.N. Miller Cos. v. United States, 173 F.R.D. 1,
3 (D.D.C. 1997). “A Rule 59(e) motion is discretionary and need
not be granted unless the district court finds that there is an
intervening change of controlling law, the availability of new
evidence, or the need to correct a clear error or prevent
manifest injustice.” Firestone v. Firestone, 76 F.3d 1205, 1208
(D.C. Cir. 1996) (internal citations omitted). In addressing
the claims of a party on a motion for reconsideration, the Court
is free to expand upon or clarify the reasons supporting its
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prior ruling. Dage v. Johnson, 537 F. Supp. 2d 43, 49 (D.D.C.
2008); see Payne v. District of Columbia, 808 F. Supp. 2d 164,
172-73 (D.D.C. 2011).
IV. DISCUSSION
In its motion for reconsideration, the PTO alleges that the
Court misapprehended a “critical distinction” regarding the
difference between the patent term adjustment statute and other
statutes in which courts have found Locomotive Engineers tolling
to apply. Def.’s Mem. in Supp. of Mot. for Recons. (“Def.’s
Br.”) at 2, ECF No. 42. Defendant cites from the text of its
initial briefing on the issue:
Tellingly, Congress departed from the standard form
statutory limitation period when it drafted §
154(b)(4)(A). Instead of triggering the start of the
limitations period for judicial review on the date of
the agency action for which review is sought—which
must be final to be judicially reviewable—the
limitation period of § 154(b)(4)(A) begins to run on a
fixed date that is unchanged by a petition for
reconsideration or any event that might affect the
finality of the action subject to review.
Def.’s Br. at 5 (citing Def.’s Combined Opp’n to Pls.’ Mot. for
Summ. J. and Reply in Supp. of Mot. to Dismiss, ECF No. 35, at 9
(emphasis added)). Defendant claims that the Court focused on
the “fixed date” language and did not address defendant’s point
that setting the time limit as running from the grant of the
patent does not fix the commencement of the limitations period
to any particular determination of a patent term adjustment.
8
Defendant argues that the clear and unambiguous language of the
statute shows that Congress intended the 180-day limit to apply
regardless of any pending motions for reconsideration. On this
point, defendant cites 35 U.S.C. § 154(b)(3)(D), which states
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, notwithstanding any appeal taken by the applicant of
such determination.” Defendant argues that “[b]ecause the
court’s ruling contravenes the plain and unambiguous language of
35 U.S.C. § 154(b)(4)(A), it constitutes clear error that
justifies reconsideration.” Def.’s Reply in Supp. of Mot. for
Recons. (“Def.’s Reply”) at 2, ECF No. 44.
A. Timing of Patent Term Adjustment Determinations
As an initial matter, the Court finds that the PTO’s
argument rests on a flawed premise. Specifically, the PTO
argues that the grant of a patent is an event distinct from the
PTA determination. Def.’s Br. at 4. The Court finds that, to
the contrary, the patent itself embodies the agency’s final
patent term adjustment determinations, encompassing the
calculations for the various categories of delay. Although
notice of the patent term adjustment is provided to the
applicant before the grant of the patent, not all patent term
adjustment determinations are final until the patent is granted.
9
In particular, B delay, which compensates the applicant for any
time the application was pending over three years prior to the
grant of the patent, is not finalized until the patent is
granted. See Def.’s Mot. to Dismiss at 3, ECF No. 28. When the
patent is granted, therefore, the various intermediate decisions
made by the PTO regarding which patent term adjustments are
appropriate are embodied within the patent. Rather than
decoupling the final agency action (the PTA determination) from
the trigger for the limitation period (the grant of the patent),
the time period for appeal runs specifically from the PTO’s
final definitive statement on the PTA determinations: the
patent. 4
The Court finds that defendant’s attempts to distinguish
the cases cited in the Court’s prior Opinion are not persuasive.
In one case, the Circuit Court found that tolling applied to a
90-day limitation period that ran from the date of “promulgation
or denial” of a regulation. See Columbia Falls Aluminum Co. v.
Envtl. Prot. Agency, 139 F.3d 914 (D.C. Cir. 1998). In the
other case, the Circuit Court found that tolling applied to a
30-day limitation period that ran from the date “public notice
4
This relationship between the grant of the patent and the PTA
determination is further supported in the regulations. See,
e.g., 37 C.F.R. § 1.705(d) (“If the patent indicates or should
have indicated a revised patent term adjustment, any request for
reconsideration of the patent term adjustment indicated in the
patent must be filed within two months of the date the patent
issued . . . .”).
10
is given” of the decision or order complained of. See Los
Angeles SMSA Ltd. P’ship v. FCC, 70 F.3d 1358 (D.C. Cir. 1995).
Defendant argues that there is a “critical distinction” between
the statutes in those cases and the patent term adjustment
statute. Specifically, defendant argues that in this case, the
limitations period runs from a date that is independent of the
agency’s decision on the patent term adjustment because it runs
from the date of the grant of the patent. In the two cases
cited above, the limitations period runs from notice or
promulgation of the underlying action being challenged.
Defendant argues that in those cases, the “reconsideration
request, by removing the finality of the agency action,
deactivates the limitation-period triggering event, and thus
changes the date on which the limitation period starts.” Def.’s
Reply at 4. Defendant argues that, in contrast, a “request for
reconsideration of a PTA determination would not deactivate the
Patent statute’s limitation triggering event because that date –
the patent’s grant date – is not affected by the finality of the
PTA determination.” Id. The Court does not find that there is
any meaningful distinction between these two points,
particularly in light of the Court’s finding that PTO’s final
determinations as to the patent term adjustments are embodied in
the patent itself. Thus, the filing of a motion for
reconsideration would indeed “deactivate” the agency’s final
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determinations as to the challenged patent term adjustments
embodied within that patent. Challenging a patent term
adjustment need not “dislodge” or invalidate the entire patent,
as the defendant appears to argue, in order for the tolling rule
to apply to reconsideration of the PTO’s patent term adjustment
determinations. Defendant has cited no case law that would
suggest otherwise.
B. Congressional Intent
The Court also disagrees with the PTO’s main argument: that
the “plain and unambiguous language” of 35 U.S.C. § 154(b)(4)(A)
indicates that Congress intended for the tolling rule not to
apply to the reconsideration of patent term adjustment
decisions. Specifically, the PTO claims that the statute
reflects Congress’s intent for two events to occur prior to the
issuance of a patent: (1) the Director’s determination of a
patent term adjustment; and (2) the commencement of the time for
seeking reconsideration of any such determination. See Def.’s
Reply at 2.
As the Court explained in its prior Opinion, this case is
easily distinguishable from Stone v. INS, the only case the PTO
has brought to the Court’s attention in which the tolling rule
was found not to apply. See 514 U.S. 386 (1995). In that case,
the Sixth Circuit Court of Appeals had dismissed as untimely a
petition for review of a deportation order. The court found
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that the petitioner’s filing of a motion for reconsideration
with the Immigration and Naturalization Service (“INS”) did not
toll the running of the 90-day filing period for judicial review
of deportation orders established by the Immigration and
Nationality Act (“INA”).
The Supreme Court affirmed, finding that Congress intended
to depart from the tolling rule in the context of deportation
orders. In so ruling, the Court considered two provisions of
the INA. First, the Court considered Section 106(a)(1), which
provides an alien with 90 days to petition for review of a final
deportation order. Second, the Court considered Section
106(a)(6), which provides that “whenever a petitioner seeks
review of an order under this section, any review sought with
respect to a motion to reopen or reconsider such an order shall
be consolidated with the review of the order.” The Court found
that
[b]y its terms, Section 106(a)(6) 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. . . . 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.
Stone, 514 U.S. at 395.
13
In this case, the patent term adjustment statute does not
indicate a Congressional intent to depart from the normal
tolling rule. As explained above, not all patent term
adjustment determinations become final prior to the issuance of
a patent. In particular, B delay does not become final until
the patent is granted. Accordingly, the Court finds it unlikely
that Congress intended that the commencement of the time for
seeking reconsideration of a patent term adjustment for B delay
would begin prior to the issuance of the patent when the
calculation of B delay does not become final until the patent is
issued. In this context, the “notwithstanding” clause in 35
U.S.C. § 154(b)(4)(A) is more easily understood as ensuring that
the issuance of a patent will not be delayed solely because a
party is challenging an A delay calculation prior to the
issuance of a patent.
Indeed, as argued by the plaintiffs during oral argument,
the statute indicates that Congress affirmatively intended for
the tolling rule to apply to judicial review of patent term
adjustment determinations. July 10, 2012 Hr’g Tr. at 36.
Specifically, the statute states that “Chapter 7 of title 5
shall apply” to any action for judicial review of the patent
adjustment period. 35 U.S.C. § 154(b)(4)(A). The referenced
provision of the APA includes 5 U.S.C. § 704, which states that
14
[e]xcept as otherwise expressly required by statute,
agency action otherwise final is final for the
purposes of this section [entitled ‘Actions
Reviewable’] whether or not there has been presented
or determined an application for . . . any form of
reconsiderations, or, unless the agency otherwise
requires by rule and provides that the action
meanwhile is inoperative, for an appeal to superior
agency authority.
The Court finds that Congress’s inclusion of this reference,
which immediately follows the 180-day time period for filing for
judicial review of a patent term adjustment determination, is
significant. In Locomotive Engineers, the Supreme Court found
the language in 5 U.S.C. § 704 to be central to the tolling
rule. The Supreme Court stated that it “has long been construed
by this and other courts merely to relieve parties from the
requirement of petitioning for rehearing before seeking judicial
review (unless, of course, specifically required to do so by
statute . . .) but not to prevent petitions for reconsideration
that are actually filed from rendering the orders under
reconsideration non-final.” Locomotive Engineers, 482 U.S. at
284-85. This reading of 5 U.S.C. § 704 was cited again with
approval by the Supreme Court in Stone. See 514 U.S. at 391-92.
The Court finds that Congress’s explicit reference to Chapter 7
of Section 5, coupled with the absence of any specific provision
setting forth a separate process for judicial review,
demonstrates Congress’s intent for the tolling rule to apply to
reconsideration of patent term adjustments.
15
C. Policy Implications
The Court also finds that the application of the tolling
rule to patent term adjustment determinations is correct in
terms of policy and efficiency. Indeed, even the PTO agrees on
this point. Def.’s Reply at 1. As the Court noted in its
January 27, 2012 decision, the Court finds that defendant’s
proposed interpretation runs contrary to the purpose of the
tolling rule, which is to conserve judicial resources by putting
only a final agency action before the Court. The PTO asks the
Court to find that Congress affirmatively intended to impose a
rather inefficient and confusing process without having made
that process clear in the statute.
Under defendant’s proposed interpretation, a number of
inequitable scenarios are possible. If the PTO were to fail to
decide an applicant’s motion for reconsideration within 180 days
after the grant of the patent, the applicant would be forever
deprived of the opportunity to appeal that determination to a
court. If that were the rule, a prudent patent applicant would
then be forced to move to reconsider any patent term adjustments
while simultaneously appealing those patent term adjustments in
court, without providing the PTO an opportunity to first revisit
its initial patent term adjustment determination. 5 As this
5
The Court notes that this initial determination is made by a
computer program, rather than a person. Thus, the first time a
16
Circuit has noted, there is always the possibility that upon the
agency’s reconsideration of its initial decision, the decision
could be modified in a way that would obviate the need for
judicial intervention. See United Transp. Union v. Interstate
Commerce Comm’n, 871 F.2d 1114, 1117 (D.C. Cir. 1989).
Requiring the Court and the PTO to simultaneously consider the
patent term adjustments in the first instance would be an
inefficient use of judicial resources. See Telestar, Inc. v.
FCC, 888 F.2d 132, 134 (D.C. Cir. 1989) (stating that it is
“pointless waste of judicial energy for the court to process any
petition for review before the agency . . . act[s] on the
request for reconsideration”). Congress evidenced no intent to
impose such a process here. Indeed, in contrast to the statute
in Stone, there is much less need for an urgent, immediate
decision on the recalculation of the patent term adjustments
embodied within a patent than there would be in the case of a
deportation order, which has immediate repercussions on the
alien. Once a patent is granted, any adjustments to its term
become relevant only at the end of that term, which is somewhere
in the realm of seventeen years after the grant of the patent.
The Court sees no need to create a risk of duplicative review of
person would be reviewing the patent term adjustment would be
upon reconsideration. See Def.’s Mot. to Dismiss, ECF No. 28,
at 3.
17
patent term adjustments under these circumstances, particularly
in light of the lack of any such direction from Congress.
V. CONCLUSION
For the foregoing reasons, none of defendant’s arguments
have persuaded the Court that it committed error, much less
clear error. Accordingly, defendant’s motion for
reconsideration of the Court’s January 27, 2012 Memorandum
Opinion and Order is DENIED. An appropriate Order accompanies
this Memorandum Opinion.
SIGNED: Emmet G. Sullivan
United States District Court Judge
September 20, 2012
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