Opinion ID: 2814134
Heading Depth: 1
Heading Rank: 3

Heading: daiichi’s challenge under the apa

Text: Daiichi argues that the PTO’s denials of its requests for reconsideration of the patent term adjustments were an abuse of the agency’s discretion. Daiichi argues that the PTO’s view that § 154(b)(4) prevents it from recalculating patent term adjustments more than 180 days after a patent is granted is erroneous. Daiichi contends this error is evidenced by the language of the final decisions denying its requests for reconsideration, where the PTO reasoned that the 180-day period represented the “outer limit” of PTO authority to conclude patent term adjustment determinations. Oral Arg. at 8:15–8:27, available at http://oralarguments.cafc.uscourts.gov/ default.aspx?fl=2014-1280.mp3. Daiichi provides two reasons to support its position that the PTO is incorrect that 180 days is the outer limit of its authority. First, the statute does not suggest that Congress intended that the period for judicial review should also apply to administrative review. Second, Daiichi asserts that Congress provided the PTO with authority to correct its own mistakes, “[w]henever a DAIICHI SANKYO COMPANY v. LEE 11 mistake in a patent, incurred through the fault of the Patent and Trademark Office, is clearly disclosed by the records of the Office.” Appellant’s Br. 20 (quoting 35 U.S.C. § 254) (emphasis omitted). In other words, Congress has not limited the time for the PTO to correct mistakes in patent term adjustment determinations. Daiichi contends the only rationale advanced in the denials was that 180 days was the outer limit of the PTO’s authority. Therefore, Daiichi claims, the agency relied entirely on an erroneous view of the law, rendering the decisions “arbitrary and capricious, and an abuse of discretion, as a matter of law.” Id. at 22. The government argues in response that, at the relevant time in 2010, the law offered Daiichi two separate avenues for challenging the patent term adjustments calculation. First, Daiichi could have requested reconsideration of the patent term adjustments within two months of the patent’s issuance under 37 C.F.R. § 1.705(d). Second, Daiichi could have filed suit in the federal district court within 180 days of issuance under § 154(b)(4)(A). Having failed to take advantage of either option, Daiichi should not be permitted to do so now. The government notes that the PTO noted that Daiichi cannot rely on the Wyeth decision to establish extraordinary circumstances warranting a waiver of the regular twomonth administrative filing period because Daiichi could have made a timely challenge, as Wyeth did. Appellee’s Br. 23. Regarding the agency’s adoption of the 180-day period for administrative review, the government argues that this selection was logical because it lengthened the period for administrative review to match the period for seeking judicial review. Id. at 25. Additionally, the government points to the abbreviated period of judicial review as evidence of Congress’ intent that questions regarding patent term adjustments be “decided quickly and soon after the issuance of the patent.” Id. at 26. Hence, any 12 DAIICHI SANKYO COMPANY v. LEE extension of the period for administrative review beyond 180 days would be contrary to the statute. Finally, the government contends that to consider any recalculation request regardless of how long after issuance it was filed—as Daiichi claims is appropriate under 35 U.S.C. § 254—would run contrary to the PTO’s authority to adopt regulations governing the procedures for requesting reconsideration of patent term adjustments. Id. at 28 (citing 35 U.S.C. § 154(b)(3)). Pursuant to the APA, an agency decision will be set aside if it is arbitrary, capricious, an abuse of discretion, or not in accordance with the law. 5 U.S.C. § 706. The scope of review under this standard is narrow, and the reviewing court may not “substitute its judgment for that of the agency.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983). An agency abuses its discretion when its decision is based on an erroneous interpretation of the law. See Burandt v. Dudas, 528 F.3d 1329, 1332 (Fed. Cir. 2008) (citation and quotation omitted). “Otherwise, an agency acts arbitrarily or capriciously only if the decision was not based on the relevant factors or it fails to ‘examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.’” Japanese Found. for Cancer Research v. Lee, 773 F.3d 1300, 1304 (Fed. Cir. 2014) (quoting Motor Vehicle Mfrs., 463 U.S at 43)). Here, we agree with the government that the PTO has not erroneously interpreted the law. Rather, the agency acted within its discretion under the statute to “prescribe regulations establishing procedures for the . . . determination of patent term adjustments,” 35 U.S.C. § 154(b)(3), in adopting the 180-day period as part of the Interim Procedure. Similarly, the PTO acted within its discretion in denying Daiichi’s requests for reconsideration of the patent DAIICHI SANKYO COMPANY v. LEE 13 term adjustment determinations. Both decisions provide ample reasoning for considering only requests filed within 180 days of the patent grant. The PTO points to the 180day statutory judicial review period and notes that it is shorter than the normal six-year statute of limitations for administrative challenges under the APA. The PTO explains that this brief period for judicial review indicates Congress’ intent that it resolve patent term adjustment issues more expeditiously than allowed under the full administrative challenge period. The PTO also reasoned that it was unlikely that Congress intended for the period for administrative review to extend beyond the period in which that administrative review could be challenged in the district court. See J.A. 3121–22, 3382. The PTO’s decisions are consistent with the law in effect at the time of the decisions, including all of § 154’s provisions. 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). As such, we find that the PTO did not abuse its discretion by determining not to accept petitions for administrative review filed more than 180 days after the patent grant.
Daiichi also contends that the PTO’s disparate treatment of patents issued on August 5, 2009 (the earliest day on which a patent could issue and still qualify for the optional procedure) and the previous day was arbitrary and capricious. According to Daiichi, the issuance of Wyeth is no less of an extraordinary circumstance for patents issued before August 5, 2009 than it is for patents issued on or after that day. Daiichi contends the PTO has treated similarly situated patentees differently because one has a remedy and the other does not. 14 DAIICHI SANKYO COMPANY v. LEE The government argues that Daiichi is not similarly situated with patentees whose patents issued during the period for which the Optional Interim Procedure was available. Rather, Daiichi was similarly situated with all patentees whose patents issued before the Interim Procedure’s cutoff date. The government asserts that since the PTO did not consider the petitions of any patentees like Daiichi who failed to show extraordinary circumstances, Daiichi’s disparate treatment argument fails. We conclude that Daiichi has not shown that the PTO treated any requests for reconsideration of patent term adjustments filed for patents issuing before August 5, 2009 differently than Daiichi’s petitions. All other similar requests were denied by the agency, showing that the PTO acted consistently with respect to similarly situated patentees. Accordingly, the PTO did not act arbitrarily or capriciously based on its treatment of reconsideration requests submitted by similarly situated patentees. Through post-argument submission, Daiichi points the court to Merck Sharp & Dohme Corp. v. Lee, No. 101110, 2014 WL 5775749 (D.D.C. Nov. 6, 2014). In Merck, the government conceded before the district court that the facts of the case justified equitably tolling the 180-day judicial review period for a patent issued prior to the availability of the Optional Interim Procedure. Submission of Supplemental Authority, Daiichi Sankyo Co. v. Lee, No. 14-1280 (Fed. Cir. Jan. 16, 2015). Thereafter, the district court tolled the statute and remanded to the PTO to adjust the term of the patent. Daiichi argues that, under Merck, the government acts arbitrarily whenever it opposes a patentee that seeks recalculation under the agency’s new calculation method for patents issued prior to the Optional Interim Procedure’s earliest qualifying date. We disagree. In Merck, the government contested equitable tolling on legal grounds, when it should have done so on factual grounds. The Supreme Court has held that the government will “not be bound by the mistaken DAIICHI SANKYO COMPANY v. LEE 15 representations of an agent unless it were clear that the representations were within the scope of the agent’s authority.” Office of Pers. Mgmt. v. Richmond, 496 U.S. 414, 419–20 (1990) (collecting cases supporting holding) (citations omitted). There is no indication that the government, in Merck, intended its concession to have any effect beyond that particular case. Further, there is no indication that counsel was acting with authority to bind the government so as to prevent it from ever disputing that a patent issuing before the earliest qualifying date for the Optional Interim Procedure is not entitled to a recalculation under the new calculation method. We must also consider whether the agency’s choice to grant extensions of the administrative review period for some patents to match the judicial review period for all patents was arbitrary and capricious. As discussed above, the statute provides for the Director’s ability to prescribe the timeframe for a petition at the PTO. Daiichi was treated identically to all other patentees whose patents had issued more than 180-days prior to the deadline for filing a petition and who were unable to show extraordinary circumstances. Our decision in Wyeth did not obligate the PTO to create the Optional Interim Procedure. Indeed, all patentees who could take advantage of the Optional Interim Procedure could still challenge their patent term adjustment in the district court under the statute. The PTO simply provided an alternative, and more cost-effective, mechanism at the agency for attaining the same result. Choosing an administrative filing deadline that mirrors the judicial filing deadline, especially when it lengthens that deadline for some patentees, is neither arbitrary nor capricious. In sum, we do not find that the PTO’s consistent treatment of all patents issuing prior to the availability of the Optional Interim Procedure, the government’s concession in Merck, or its selection and use of the 180-day 16 DAIICHI SANKYO COMPANY v. LEE administrative review period amount to arbitrary and capricious action by the government.