Court Opinion

ID: 2661823
Source: CourtListenerOpinion
Date Created: 2014-04-03 11:22:19.118034+00
Date Added: 2024-06-11T12:36:44.100493
License: Public Domain

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.

                                    3
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

                                  4
     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

                                 6
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

                                 7
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

                                  11
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

                                  12
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

                                 18