Actelion Pharmaceuticals Ltd. v. Kappos

UNITED STATES DISTRICT COURT
FoR THE DISTRICT oF CoLUMBIA
ACTELIoN PHARMACEUTICALS LTD., )
Piainrirf, §
v. § civil case No. 10-01145 (RJL)
HoN. nAvID J. KAPPos, §
)
FILED
Defendant. )
43 SEP 2 3 2013
MEMORANDU OPINION
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Plaintiff Actelion Phannaceuticals Ltd. ("Actelion" or "plaintiff") brought this suit
against defendant David J. Kappos in his official capacity as Under Secretary of
Commerce for Intellectual Property and Director of the United States Patent and
Trademark Office ("USPTO"). Plaintiff claims that USPTO improperly determined the
amount of patent term adjustment to which it is entitled. Before the Court are plaintiff s
Motion for Summary judgment and defendant’s Cross-Motion for Summary Judgment.
Upon consideration of the pleadings, record, and relevant law, plaintiff’s motion is
DENIED and defendant’s motion is GRANTED.
BACKGROUND
Patents are issued by USPTO for a term ending 20 years from the date the patent
application was filed, as opposed to the date the patent is issued. 35 U.S.C. § 154(a)(2).
As a result, delays by USPTO in examining a patent application can reduce the effective
term of that patent. See Wyeth v. Kappos, 591 F.3d 1364, 1366 (Fed. Cir. 2010). To
address this issue, Congress provided that a patent term will be extended to account for
certain delays. See id.; 35 U.S.C. § 154(b).
The procedures for determining such a "patent term adjustment" ("PTA") are
governed by § l54(b)(3). Several types of delay can figure into calculating the overall
PTA, two of which are relevant for plaintiff in this case. First, so-called "A Delay" days
accrue if USPTO fails to take certain specified actions within certain time periods, such
as failing to respond to a patent application within 14 months of its filing. See §
l54(b)(l)(A). Second, "B Delay" days accrue if USPTO fails to issue a patent within
three years of the filing of the application. See § l54(b)(l)(B). After determining the
proper amounts of A and B Delay, USPTO determines the extent of any overlap between
the two types of delay to arrive at the overall PTA. See § l54(b)(2)(A).
USPTO makes an initial PTA determination prior to patent issue and includes it
with the written "n0tice of allowance" informing an applicant that he is entitled to a
patent. See 35 U.S.C. § l54(b)(3)(B)(i); 37 C.F.R. § l.705(a) (2006). The applicant must
pay an issue fee within three months; once payment occurs, USPTO issues the patent and
determines the final P'l``A as of the date of the patent grant, noting this determination on
the face ofthe patent. See 35 U.S.C. § 151; 37 C.F.R. § l.705(d) (2006). Ifthe applicant
disagrees with the PTA, the statute entitles hirn to "one opportunity to request
reconsideration of any [PTA] determination made by the Director." 35 U.S.C. §
l54(b)(3)(B)(ii).
Further, the statute permits the applicant to appeal USPTO’s PTA determination to
a federal district court. Specifically, the statutory provision, entitled "Appeal of patent
term adjustment determination," provides:
An applicant dissatisfied with a determination made by the Director under
paragraph (3) [Procedures for patent term adjustment determination] shall
have remedy by a civil action against the Director filed in the United States
District Court for the District of Columbia within 180 days after the grant
of the patent. Chapter 7 of title 5 [5 U.S.C. §§ 701-706] shall apply to such
action . . .
§ l54(b)(4)(A) (2010).'
On January 7, 2010, in Wyeth v. Kappos, 591 F.3d 1364 (Fed. Cir. 2010), the
Federal Circuit rejected USPTO’s method for determining A and B Delay overlap,
finding that USPTO had relied on an erroneous interpretation of 35 U.S.C. § l54(b).2
Following the Wyeth decision, USPTO changed its method for making future PTA
determinations to align with the court’s holding. In addition, USPTO created an "Interim
Procedure," effective February l, 20l0, that permitted patentees to request a PTA
recalculation from USPTO so long as their patent was issued prior to March 2, 2010 and
their request for recalculation was filed within 180 days of the patent grant. See Interim
Procedure, 75 Fed. Reg. 5043, 5043 (Feb. l, 2010). Thus, in effect, only patents granted
' Effective September 16, 201 l, the U.S. District Court for the Eastem District of Virginia now has
jurisdiction for civil actions brought under this statute. See Pub. L. 112-29 at § 9(a), 125 Stat. 284, 3 l6.
2 Prior to the Wyeth decision, USPTO interpreted the "period of delay" for B Delay to include the
entire time between the filing of an application and the issuance of a patent more than three years later. If
USPTO took longer than three years to issue a patent, therefore, any A Delay that occurred during the
pendency of the application necessarily overlapped with the period of B Delay, and was not credited to
the patentee’s total PTA. Under this rubric, USPTO used either the greater of the A Delay or B Delay to
determine the appropriate adjustment, but did not combine the two. Wyeth, 591 F.3d at l368. In Wyeth,
the Federal Circuit found USPTO’s interpretation of the overlap provision to be erroneous, and held that
A Delay and B Delay should be aggregated so long as that aggregation would not require counting the
same calendar day twice. See z``a’. at ]369-70,
within the 180 days prior to February 1, 2010, were eligible for a PTA recalculation using
the new post- Wyeth interpretation of A and B Delay overlap.
The material facts are not in dispute in the instant case. Plaintiff, a pharmaceutical
company, holds U.S. Patent No. 7,094,781 (the "‘781 Patent"). Compl. [Dkt. # 1] 1111 3, 9.
The application for the ‘781 Patent was filed on May 27, 2003. Ia’. 11 8. USPTO issued
the ‘781 patent on August 22, 2006, with a PTA of 312 days using its pre-Wyez‘h method
of calculating A and B Delay overlap. Id. 11 ll; Pl.’s Mot. Summ. J. and Mem. Supp.
[Dkt. # 9] ("Pl.’s Mot.") at 4. Plaintiff never filed a request for reconsideration of its
PTA with USPTO. Def.’s Cross-Mot. Summ. J. and Mem. Supp. [Dkt. # 10] ("Def.’s
Mot.") at 2. And Plaintiff filed this civil action on July 6, 2010-more than 180 days
after the August 22, 2006 patent grant. See Compl.
STANDARD OF REVIEW
Summary judgment is appropriate when the record shows that there is no genuine
dispute as to any material fact and the moving party is entitled to judgment as a matter of
law. Fed. R. Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The court
will accept as true the evidence of the non-moving party, and draw "all justifiable
inferences" in his favor. Ana'erson v. Liberly Lobby, Inc. 477 U.S. 242, 255 (1986)
(citation omitted). A genuine dispute about a material fact only exists if "the evidence is
such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248.
ANALYSIS
Plaintiff moves for summary judgment, seeking a recalculation of its PTA based
on the post-Wyeth methodology for computing A and B Delay overlap.3 Plaintiff
attempts to achieve this result by bringing three claims. First, plaintiff claims USPTO
improperly calculated its PTA and directly appeals that calculation under 35 U.S.C. §
154(b)(4)(A). Compl. 1111 18-24; Pl.’s Mot. at 11-l3. Next, plaintiff argues USPTO’s
implementation of its post-Wyeth methodology and its failure to provide plaintiff the
remedy of recalculating its PTA under that new methodology violated the Administrative
Procedure Act ("APA"), 5 U.S.C. § 551 et seq. Compl. 1111 25-28; Pl.’s Mot. at 13-15.
Lastly, plaintiff argues USPTO’s failure to correct its PTA was a "taking" of property
without due process or just compensation in violation of the Fifch Amendment of the
Constitution. Compl. ‘|H[ 29-30; Pl.’s Mot. at 16-18. Defendant cross-moves for
summary judgment, arguing that plaintiffs appeal under that statute is untimely, and that
its APA and "taking" arguments are meritless.‘l See generally Def.’s Mot. Because all
material facts in this case are undisputed, and for the reasons discussed below, summary
judgment in favor of defendant is appropriate.
3 Plaintiff asserts that such a recalculation would increase its PTA from 312 days to 361 days.
Compl. 11 l.
4 1 agree with defendant that plaintiffs "taking" argument is meritless, and thus summarily dispose
of it here, because plaintiff has proffered no legal support for the proposition that a patent term is a
constitutionally protected property interest. See, e.g., United States v. Wz'llow Rz``ver Power Co., 324 U.S.
499, 503 (1945) (threshold inquiry for Fifth Amendment taking claim is whether the interest is a property
right).
I. Statutory Claim
Challenges to USPTO’s determination of a PTA are governed by 35 U.S.C. §
l54(b)(4)(A), which specifically provides that such appeals must be filed with this
District Court "wz``thin 180 days after the grant of the patent." § l54(b)(4)(A) (emphasis
added). Plaintiff filed the instant action on July 6, 2010, well over 180 days-in fact,
nearly four years-after the ‘781 Patent was granted on August 22, 2006. The plain
language of the applicable statute therefore renders plaintiffs complaint untimely. The
only question, then, is whether the 180-day filing deadline should not apply to plaintiff
for some reason.
Plaintiff argues that the time limit in § 154(b)(4)(A) is not jurisdictional and is
instead a "claim-processing rule," and therefore it should be equitably tolled to allow
plaintiffs suit due to the change in the law effectuated by Wyeth. See Pl.’s Mot. at ll-l3;
Hollana' v. Floricla, 130 S. Ct. 2549, 2560 (2010) (non-jurisdictional statutes of limitation
may be equitably t0lled). Defendant counters that § 154(b)(4)(A)’s time limit is
jurisdictional and thus bars plaintiffs claim because jurisdictional filing deadlines are not
susceptible to equitable tolling. See Def.’s Mot. at 5-10; D0lan v. United States, 130 S.
Ct. 2533, 2538 (2010) (court may not extend a jurisdictional deadline for equitable
reasons). In the alternative, defendant argues that, even if the time limit is non-
jurisdictional, plaintiff does not warrant the extraordinary remedy of equitable tolling.
See Def.’s Mot at 10-16.
Thus, as an initial matter, this Court must decide whether the statute is
jurisdictional See Henderson ex. rel. Hena’erson v. Shz``nseki, 131 S. Ct. 1197, 1202
6
(201 l) ("federal courts have an independent obligation to ensure that they do not exceed
the scope of their jurisdiction, and therefore they must raise and decide jurisdictional
questions that the parties either overlook or elect not to press"); Obaya'ullah v. Oba)na,
688 F.3d 784, 788 (D.C. Cir. 2012). For the following reasons, l find that the 180-day
time limit for seeking judicial review is, in fact, jurisdictional, and because plaintiff filed
suit after that deadline, plaintiffs statutory claim under § 154(b)(4)(A) is untimely and
this Court lacks subject matter jurisdiction to hear it.
For threshold requirements to bringing suit, such as the time limit at issue here, the
Supreme Court has drawn a distinction between "jurisdictional" rules and "claim-
processing rules." A jurisdictional rule is one that "governs a court’s adjudicatory
capacity, that is, its subject-matter or personal jurisdiction." Hena’erson, 131 S. Ct. at
1202; see also Kontrick v. Ryan, 540 U.S. 443, 455 (2004). By contrast, non-
jurisdictional "claim-processing rules" are "rules that seek to promote the orderly
progress of litigation by requiring that the parties take certain procedural steps at certain
specified times." Hena'erson, 131 S. Ct. at 1203.
The distinction between jurisdictional conditions and claim-processing rules is,
most unfortunately, less clear than this simple formulation might suggest.$ In order to
5 "While perhaps clear in theory, the distinction between jurisdictional conditions and claim-
processing rules can be confusing in practice. Courts--including [the Supreme Court]_have sometimes
mischaracterized claim-processing rules or elements of a cause of action as jurisdictional limitations."
Reea' Elsevier, Inc. v. Muchnick, 559 U.S. 154, 161 (2010). As a result of "profligate" use of the term
"jurisdictional" by courts, Arbaugh v. Y&H Corp., 546 U.S. 500, 510 (2006), the Supreme Court has
endeavored to narrow the meaning of "jurisdictional" in an attempt to "bring some discipline to the use of
this term." Henderson, 131 S. Ct. at l202; see Gonzalez v. Thaler, 132 S. Ct. 641, 648 (20l2). In
particular, the Supreme Court has focused the relevant inquiry on Congress’ intent and emphasized that
rules should be presumed to be non-jurisdictional absent a clear intent otherwise.
7
determine whether a given rule is jurisdictional, therefore, a court must look to Congress’
intent. See z°a’. at 1203 (the court must "1ook to see if there is any ‘clear’ indication that
Congress wanted the rule to be ‘jurisdictional"’).6 In turn, to ascertain Congress’ intent, a
court must examine the "‘condition’s text, context, and relevant historical treatment."’
Chevron Minz``ng, Inc. v. NLRB, 684 F.3d 1318, 1328 (D.C. Cir. 2012) (quoting Reea’
Elsevz``er, Inc. v. Muchnick, 559 U.S. 154, 166 (20l0)); see also Henderson, 131 S. Ct. at
1204-06 (examining text of the time limit provision, its placement within the statute, and
"the singular characteristics of the review scheme that Congress created" to ascertain
Congress’ intent). In the absence of such a clear intent, a court should presume that a
rule is not jurisdictiona1. See Arbaugh v. Y&H Corp., 546 U.S. 500, 515-16 (2006); Reed
Elsevier, Inc., 559 U.S. at 161; Henderson, 131 S. Ct. at 1202.
ln the instant case, the Court’s inquiry starts and ends with the text of the statutory
provision because its language clearly indicates Congress’ intent for the 180-day time
limit to be jurisdictional See Gonzalez v. Thaler, 132 S. Ct. 641, 648 (2012) (rule is
jurisdictional if Congress "clearly states that a threshold limitation on a statute’s scope
shall count as jurisdictional" (quoting Arbaugh, 546 U.S. at 515)); see also Menomz``nee
Ina’z``an Tribe of Wz``sconsz``n v. United States, 614 F.3d 519, 524 (D.C. Cir. 2010) (if
Congress "clearly stated" the limitation is jurisdictional, "our inquiry is over"). Section
154(b)(4)(A) places jurisdiction in a particular forum-the U.S. District Court for the
District of Columbia-~for review of particular claims_appeals of USPTO PTA
6 In Henderson_in the specific context of statutory time limits for review of administrative agency
decisions_the Supreme Court expressly disclaimed applying "a categorical rule regarding review of
administrative decisions." Henderson, 131 S. Ct. at 1204. lnstead, the Court reiterated that ascertaining
Congress’ intent is the relevant inquiry.
determinations filed within 180 a’ays of the patent grant. The statute thus "speak[s] in
jurisdictional terms," Arbaugh, 546 U.S. at 515, because it defines and limits the subject
matter jurisdiction of this particular District Court: Congress clearly identified not only
which court could hear these claims, but when. See Bowles v. Russell, 551 U.S. 205, 210-
13 (2007) (holding statute-based time limit in 28 U.S.C. § 2l07(c) is jurisdictional and
stating, "[b]ecause Congress decides whether federal courts can hear cases at all, it can
also determine when, and under what conditions, federal courts hear them"). There can
be no doubt that if plaintiff had filed its claim in a different federal District Court, that
court would have had no difficulty in concluding it lacked subject matter jurisdiction.
Similarly, there is no reason why the 180-day time limit_which is part of the same and
only statutory grant of jurisdiction-should be construed any differently by this Court as
non-jurisdictional, Because the statutory provision both confers jurisdiction on this Court
and identifies the point at which that jurisdiction ends, Congress’ jurisdictional grant to
this Court is inextricably tied to that time limit. See United States v. McGaughy, 670
F.3d 1149, 1157-58 (10th Cir. 2012) (finding time limit set forth in Fed. R. Crim. P. 35 to
be jurisdictional because the Rule is incorporated by reference in 18 U.S.C. § 3582(c), the
statute granting courts authority to correct sentencing errors, and thus the time limit "is an
integral part of the statutory grant of authority"); cf Zipes v. Trans World Airlines, Inc.,
455 U.S. 385, 393-94 (holding Title VIl provision specifying time limit for filing charges
with Equal Employment ()pportunity Commission ("EEOC") is not jurisdictional, in part
because "it does not speak in jurisdictional terms or refer in any way to the jurisdiction of
the district courts” (emphasis added)). Indeed, this Court would not otherwise have
9
jurisdiction over a § 154(b)(4)(A) claim without the very statutory grant that contains the
time limit. Cf Scarborough v. Principi, 541 U.S. 401, 413-14 (2004) (holding statute-
based time restriction is not jurisdictional because "[it] relates only to postjudgment
proceedings auxiliary to cases already within that court’s adjudicatory authority"
(emphasis added)).
l\/loreover, a review of § l54(b)(4)(A)’s context_namely, its structure and the
placement of the time limit clause-further bolsters my conclusion that the time limit is
jurisdictional, The 180-day time limit is located not only in the same section of the
statute, but also in the same provision and the same sentence as the clause placing
jurisdiction in this Court. This placement clearly evinces Congress’ intent that the time
limit be jurisdictional, Cf Zipes, 455 U.S at 393-94 (holding Title VII provision
specifying time limit for filing charges with EEOC is not jurisdictional, in part because it
"appears as an entirely separate provision [from the Title VII jurisdiction provision
located in the same section of the statute]," while conversely, "[t]he provision granting
district courts jurisdiction . . . does not limit jurisdiction to those cases in which there has
been a timely filing with the EEOC" (emphasis added)); Arbaugh, 546 U.S. at 515-16
(holding employee numerosity requirement for bringing Title VII action is not
jurisdictional, in part because it is located in a separate provision in a separate section of
the statute from Title VII’s jurisdiction-granting provision); Reed Elsevier, Inc., 559 U.S.
at 163-65 (holding statute requiring litigant to register his copyright claim before bringing
an infringement action is not jurisdictional, in part because the requirement is located in a
separate provision in a dtjj”erent statute from the applicable jurisdiction-granting statutes).
10
And while "[m]ere proximity will not tum a rule that speaks in nonjurisdictional terms
into a jurisdictional hurdle," Gonzalez, 132 S. Ct. at 651, here the 180-day time limit is
not simply proximal to the jurisdiction-granting provision, it is an integral part of the
sentence itself.
Finally, as for relevant historical treatment, the Court is not aware of, nor have the
parties located, any precedent construing § 154(b)(4)(A).7 In the absence of prior
G
treatment of the particular provision, the Supreme Court’s "interpretation of similar
provisions in many years past, is relevant to whether a statute ranks a requirement as
jurisdictional."’ Gonzalez, 132 S. Ct. at 648 n.3 (quoting Reed Elsevier, Inc., 559 U.S. at
168 (2010)). Here, defendant argues that § 154(b)(4)(A) is structurally similar to the
statutes held to be jurisdictional in Gonzalez v. Thaler and John R. Sand & Gravel Co. v.
United States, 552 U.S. 130 (2008). See Def.’s Mot. at 8-9; Def.’s Reply to Pl.’s Opp’n
[Dkt. # 14] at 3-4. But the Court need not turn to comparing statutes to decipher
Congress’ intent in this case because the text of § 154(b)(4)(A) clearly indicates that
Congress meant for the 180-day time limit to be jurisdictional.g lt really is that simple!
Accordingly, defendant’s motion must be, and is, GRANTED.Q
7 Plaintiff argues that my colleague on this Court, Judge Sullivan, recently held that § 154(b)(4)(A)
is not jurisdictional and is subject to equitable tolling. Pl.’s Mot. at l1. But plaintiff is mistaken. In
Bristol-Myers Squibb Co. v. Kappos, 841 F. Supp. 2d 238 (D.D.C. 2012), the court held the statute was
subject to general tolling where the plaintiff had filed a timely request for reconsideration with USPTO.
The court did not reach the question of whether the statute was jurisdictional, nor did it address equitable
tolling. Further, to the extent Actelion’s pleadings could be construed as arguing that general tolling
should apply, it is clear that argument fails. Under general tolling principles, a request for administrative
reconsideration renders an agency’s action non-final and thus tolls any time limit for seeking judicial
review of that agency action. See Clzfton Power Corp. v. FERC, 294 F.3d 108, 110 (D.C. Cir. 2002).
Since Actelion never sought administrative reconsideration, general tolling does not apply in this case.
8 In reaching this decision, the Court is mindful of the nuances and complexities of the case law
addressing the legal character of threshold requirements. Threshold time limits, in particular, have
ll
CONCLUSION
Thus, for the foregoing reasons, the Court DENIES plaintiffs Motion for
Summary Judgment and GRANTS defendant’s Cross-Motion for Summary Judgment. A
separate Order consistent with this decision accompanies this Memorandum Opinion.
idea
RICHARDE..EoN
United States District Judge
elicited divergent treatment from courts. Compare Bowles v. Russell, 551 U.S. 205, 210-13 (2007)
(holding 28 U.S.C. § 2107(c)’s time limit for filing appeal is jurisdictional, and highlighting the Supreme
Court’s "longstanding treatment of statutory time limits for taking an appeal as jurisdictional") and
United States v. McGaughy, 670 F.3d 1149, 1156 (l0th Cir. 2012) ("[until Gonzalez v. Thaler,] Bowles
seemed to provide clear guidance to the lower courts--statutory time limits are jurisdictional, non-
statutory time limits are not") with Henderson, 131 S. Ct. at 1203 (stating "[f]iling deadlines, such as the
[statute-based] 120-day filing deadline at issue here, are quintessential claim-processing rules" and
rejecting the idea that Bowles held "categorically that every deadline for seeking judicial review in civil
litigation is jurisdictional") and Menominee Indian Tribe of Wisconsin v. United States, 614 F.3d 519, 523
(D.C. Cir. 2010) ("Filing deadlines, statutory or not, are generally nonjurisdictional"). Nonetheless, as I
have explained, Congress’ intent is sufficiently clear from the text of § 154(b)(4)(A) to resolve the
question here. See Henderson, 131 S. Ct. at 1203 ("Congress is free to attach the conditions that go with
the jurisdictional label to a rule that we would prefer to call a claim-processing rule").
9 Plaintiff also argues that USPTO’s implementation of Wyeth-its Interim Procedure for P'l``A
determinations that did not apply Wyeth retroactively to all patents_violated the APA because it (l) was
arbitrary and capricious, and (2) was not promulgated via notice-and-comment rulemaking pursuant to 5
U.S.C. § 553. See Pl.’s Mot. at 13-15. Neither argument is persuasive First, plaintiff is foreclosed from
using an APA claim to circumvent § 154(b)(4)(A)’s 180-day time limit to attain a PTA recalculation.
"The APA provides for a limited waiver of sovereign immunity for ‘[a] person suffering legal wrong
because of agency action . . . [h]owever, a plaintiff may not rely on this waiver ‘if any other statute that
grants consent to suit expressly or impliedly forbids the relief which is sought."’ Fraternal Order of
Police v. Gates, 562 F. Supp. 2d 7, ll (D.D.C. 2008) (citing 5 U.S.C. § 702). Here, a statute-35 U.S.C.
§ l54(b)(4)(A)~expressly waives sovereign immunity for appeals of PTA determinations and makes
them reviewable under the APA’s judicial review provisions, 5 U.S.C. §§ 701-706. Therefore, plaintiff
may not attempt an end-run around that statute’s time limit by seeking redress under the APA generally.
See id.; 5 U.S.C. § 704 (permittingjudicial review only for "[a]gency action made reviewable by statute
and final agency action for which there is no other adequate remedy" (emphasis added)). Second,
USPTO was not required to use notice-and-comment rulemaking to devise the Interim Procedure because
it is a procedural rule, not a substantive rule. See 5 U.S.C. § 553(b)(A); Chaml)er of Commerce of the
United States v. United States Dep 't ofLabor, 174 F.3d 206, 21 1 (D.C. Cir. 1999).
12