Court Opinion

ID: 2662912
Source: CourtListenerOpinion
Date Created: 2014-04-03 13:07:55.961343+00
Date Added: 2024-06-11T11:17:09.331959
License: Public Domain

IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA
Alexandria Division

JANSSEN PHARMACEUTICA, N.V.,

Plaintiff,
l:llCv969 (LMB/IDD)

V.

DAVID J. KAPPOS, et al.,

-._.-._._-._.-\..__~_.-\._,_-._.-.__~»_~

Defendants.

MEMORANDUM OPINION

Plaintiff Janssen Pharmaceutica, N.V. (“Janssen"), a
Belgian corporation that is the assignee of U.S. Patent No.
7,74l,356 (“the patent” or “the ‘356 patent”), has sued the
United States Patent and Trademark Office and its director,
David J. Kappos, seeking a 98-day increase to the term of the
‘356 patent (“patent term” or “PTA"), Before the Court is
defendants' Motion to Dismiss, in which they argue that the
Court does not have jurisdiction over this action, because when
the complaint was filed on September 9, 201l, the applicable
statute, 35 U.S.C. § l54(b)(4)(A), vested exclusive jurisdiction
over such actions in the United States District Court for the

District of Columbia.1 Defendants also argue that under the same

1 On September l6, 20ll, President Obama signed into law the

Leahy~Smith America Invents Act, Pub. L. No. 112-29, 125 Stat.
284 (20l1), which replaced the United States District Court for
the Eastern District of virginia as the exclusive venue for
civil actions brought under 35 U.S.C. § 154(b}{4)(A). The

 

statute plaintiff's claim is barred by the applicable statute of
limitations. For the reasons discussed below, defendants'

motion will be granted to the extent that this civil action will
be transferred to the United States District Court for the

District of Columbia.

I. BACKGROUND
A. StatutorX and RegulatorX Context

After a patent application is submitted, a patent examiner
with the United States Patent and Trademark Office (“USPTO”)
determines whether the asserted invention meets the requirements
for patentability. If the patent examiner determines that the
invention in the application is entitled to patent protection,
the USPTO sends the applicant a notice of allowance. The notice
of allowance specifies the required issue fee, which must be
paid within three months of issuance of the notice. 37 C.F.R.
§ 1.3l1; Manual of Patent Examining Procedure (“MPEP") § l.3l1.
The notice of allowance also includes the USPTO's calculation of
the patent term adjustment, that is, the time period for which
the patent will remain in effect. §§§ 35 U.S.C.

§ 154(b)(3)(B)(i). Once the issue fee is timely paid, the USPTO

will issue the patent. MPEP § 1.314.

 

amended provision applies “to any civil action commenced on or
after” September 16, 2011. See id. § 9(b).

2

reconsideration can be made after a patent issues. For example,

under 37 C.F.R. § 1.705(d),

If there is a revision to the patent term adjustment
indicated in the notice of allowance, the patent will
indicate the revised patent term adjustment. 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 issuedm.
Furthermore, 37 C.F.R. § l.18l provides that a “[p]etition may
be taken to the Director” to “invoke the supervisory authority
of the Director in appropriate circumstances.” Under either
provision, an agency may issue its decision after the patent’s
issuance and, in plaintiff's view, such administrative review
that occurs after issuance is not a “determination made by the
Director under paragraph (3)” and therefore § l54(b)(4)(A)’s
restrictions do not apply.

Defendants agree that paragraph (3) refers to pre-issuance
procedures, see Defs.' Reply at 3, but persuasively argue that
the USPTO's determination as to the appropriate amount of PTA-
whether made pursuant to mandatory pre~issuance procedures or
optional post-issuance review-is a single question subject to
the forum and timing limitations of § l54(b)(4)(A). The Court
agrees and holds that, in a case in which a patentee is

challenging the number of days of PTA calculated by the USPTO,

whether that calculation occurred before the patent was issued

ll

or afterwards, such a decision is governed by §§ l54(b)(3) and
(b)(4)(A). In other words, any challenge to a PTA determination
is governed by § l54(b)(4)(A).

To accept plaintiff's argument, that the availability of
post-issuance administrative review frees the corresponding
USPTO determination from the strictures of § l54(b)(4)(A), would
eviscerate the very limitations on judicial review Congress
included in the patent statute. Under plaintiff's
interpretation, a patentee could pursue multiple rounds of
lengthy post-issuance administrative review, with the result of
side-stepping the exclusive forum requirement and the short
statute of limitations prescribed by Congress in the patent
statute.‘ Such results are entirely inconsistent with the
Congressiona1 intent plain on the face of the statute-to
strictly limit the forum and timing for seeking judicial review
of these very specific USPTO decisions. For these reasons, the
Court agrees with defendants' contention that it would be absurd
for Congress to “impose limitations on the specific statutory

judicial review mechanisms (i.e., § 154(b)(4)(A)) when it

simultaneously intended to allow a patentee to seek generic APA

review of the very same guestion, (i.e., the number of days of

6 In contrast to the 180-day limitations period of

§ 154(b)(4)(A), actions brought under the APA are subject to a
six-year statute of limitations. 28 U.S.C. § 2401(a).

12

PTA to which the ‘356 patent is entitled) without any of those
same restrictions.” Defs.' Reply at 5 (emphasis in original).
Defendants also argue that the venue and timing

requirements in § 154(b)(4)(A) preempt generic APA remedies,
whereas plaintiff maintains that the two remedial structures can
co-exist. Defendants cite extensive authority to support their
argument that “a precisely drawn, detailed statute pre-empts
more general remedies." Defs.' Mem. at 12 (quoting Brown v.
§§§, 425 U.S. 830, 834 (1976)). In Block v. North Dakota, 461
U.S. 273 (1983), the Supreme Court easily dismissed the argument
that the general remedy of an officer's suit could be used in
lieu of a specific statutory scheme that included a statute of
limitations and other restrictions. The Court explained that if
it adopted the contrary view, “all of the carefully crafted
provisions of the [Quiet Title Act] deemed necessary for the
protection of the national public interest could be averted. It
would require the suspension of disbelief to ascribe to Congress
the design to allow its careful and thorough remedial scheme to

be circumvented by artful pleading.” Block, 461 U.S. at 284-85

(quOting BI`Own v. GSA, 425 U.S. 820, 833 (1976)) (il'lternal

quotation marks omitted). Preemption of a general remedy by a
tailored one is especially appropriate “when resort to a general

remedy would effectively extend the limitations period for the

13

specific one.” EC Term of Years Trust v. United States, 550
U.S. 429, 434 (2007).

Defendants also point to Franchi v. Manbeck, 972 F.2d 1283
(Fed. Cir. 1992), in which the Federa1 Circuit addressed another
provision of the Patent Act, 35 U.S.C. § 32. At the time, § 32
required all actions challenging a USPTO decision regarding

suspension or exclusion from the Patent Bar to be brought in the
United States District Court for the District of Columbia,
“under such conditions and upon such proceedings as it by its
rules determines.” That court's rules required such a petition
to be filed within thirty days of the issuance of the challenged
order. §§§ Franchi, 972 F.2d at l288, 1289 n.7 (quoting D.C.
Ct. R. Ann. 213). The Franchi Court held that the District of
Columbia court was the exclusive forum for review of a USPTO
decision taken under § 32 and accordingly, a plaintiff could not
file a general mandamus action in another district court after
the thirty-day filing period expired, characterizing such action
as “an attempt to subvert the orderly administrative mechanism
for review of the Commissioner's decision under 35 U.S.C. § 32.”
§g; at 1288 (internal quotation marks omitted).

Plaintiff contests defendants' reliance on Franchi and

Block, arguing that neither case involved motions for

reconsideration nor did the plaintiffs in those cases seek

reconsideration before the expiration of the filing period.

14

Pl.'s Opp'n at 13-l4. That procedural difference does not make
the reasoning of those cases inapplicable. The relevant
question here is whether a specific statutory scheme such as
that prescribed in § 154(b)(4)(A) is exclusive and supplants
generic APA procedures, or whether plaintiff may still resort to
the more generous provisions applicable to APA challenges so as
to avoid the patent statute's restrictions. The simple answer
is that the exclusivity question is unaffected by the status of
a request for reconsideration.

By its own terms, the APA does not apply “to the extent

that...statutes preclude judicial review.” 5 U.S.C. §

701(a)(l); see also id; § 702 (“Nothing herein...affects other
limitations on judicial review” or “confers authority to grant
relief if any other statute that grants consent to suit
expressly or impliedly forbids the relief which is sought”). As
defendants correctly argue, § 154(b)(4)(A) itself incorporates
elements of the APA by specifying that the APA applies to civil
actions brought in district court under that section.
Importantly, however, § 154(b)(4)(A) references the APA in the
context of the patent statute's specific forum requirement and
180-day statute of limitations, clearly indicating that these
specific requirements supplant the more generous provisions
applicable to general APA challenges. The Court therefore reads

§ l54(b)(4)(A) as establishing a 180-day statute of limitations

15

beginning from the date a patent issues, regardless of whether
any request for reconsideration of PTA is pending before the
USPTO, and exclusive venue in the United States District Court
for the District of Columbia for complaints filed before
September 16, 2011, and in this district for complaints filed on
or after September l6, 2011, By referencing the APA, the patent
statute provides that the APA will govern all other aspects of
the district court's review of a PTA determination including,
for example, the standard of review to be applied and the
deference owed to the agency. This reading allows the two
statutes to co-exist while respecting the strict time and venue
limitations of the patent statute specifically tailored to
review of PTA determinations.7
Plaintiff has not shown a “good countervailing reason” for

the Court to decline to apply “the better fitted statute” in
this action. EC Term of Years Trust, 550 U.S. at 434. For
these reasons, the Court holds that plaintiff cannot avoid the
venue and timing requirements of § l54(b)(4)(A) by resorting to

the APA and, as such, this action cannot go forward in this

7 Section 154(b)(4)(A)'s explicit reference to and incorporation

of the APA completely undermines plaintiff's argument that
defendants' reading repeals the APA by implication. The patent
statute merely imposes an exclusive forum requirement and a
statute of limitations on civil actions that, in all other
respects, must proceed pursuant to APA procedures.

16

district because it could only have been brought in the United
States District Court for the District of Columbia.

C.Transfer to the United States District Court for the
District of Columbia

Recognizing that if § 154(b)(4)(A) is found to apply, it
has filed this civil action in the wrong district, plaintiff
requests that the complaint be transferred to the United States
District Court for the District of Columbia. when a court finds
that it lacks jurisdiction, “in the interest of justice” it may
transfer an action “to any other such court in which the action
or appeal could have been brought at the time it was filed or
noticedm.” 28 U.S.C. § 1631. As discussed above, in addition
to requiring that this civil action be brought in the District
of Columbia, § 154(b)(4)(A) also requires that a patentee file
its civil action within 180 days of the issuance of the patent.
Because the patent was issued on June 22, 2010, this lawsuit,
commenced on September 9, 2011, is clearly time-barred unless
the 180-days-from-issuance statute of limitations is tolled.
Relying on Interstate Commerce Commission v. Brotherhood of
Locomotive Engineers, 482 U.S. 270 (l987), which holds that if a
timely request for reconsideration is presented to the
administrative agency, the statute of limitations for seeking

judicial review does not begin to run until the request is

17

decided by the agency;° plaintiff asserts that its complaint is
timely because it was filed within 180 days of the USPTO’s

Decision II. Pl.'s Opp'n at 19-20.° During oral argument and in

their pleadings, defendants argue that Locomotive Engineers does
not apply to actions brought under § 154(b)(4)(A), primarily
because the statute of limitations begins to run from the date

the patent is issued, not from the date of the agency’s final

PTA determination.
After oral argument on the pending motion, the United

States District Court for the District of Columbia ruled in

another action that tolling does apply to actions brought under

§ 154(b)(4)(A). See Bristol-Myers Sguibb Co. v. Kappos, Civ.

No. 09-1330 (EGS) (D.D.C. Jan. 27, 20l2), Under that precedent,
the complaint in this action may have been timely filed.

Without expressing an opinion as to whether this Court would

8 Technically, the Locomotive Engineers holding, which describes
when a statute of limitations starts to run, does not actually

provide for tolling a statute of limitations. See Cochran v.
Holder, 564 F.3d 3l8, 321 n.2. However, the Court will use the

terminology of the Supreme Court, see Stone v. INS, 514 U.S.
386, 392 (1995), and the United States District Court for the

District of Columbia, see Bristol-Myers Sguibb Co. v. Kappos,

Civ. No. 09-1330 (EGS) (D.D.C. Jan. 27, 20l2), and refer to it
as a “tolling" decision.

9 It is unclear why plaintiff relies on Decision II instead of
Decision III as the date from which the statute of limitations
began to run. Nevertheless, because Decision II was issued on
March l5, 2011, more than 180 days after the patent issued, the

Locomotive Engineers ruling would have to apply for the
complaint to be timely filed.

18

find that the 180-day statute of limitations starts when all
administrative review is complete or can otherwise be tolled,
the Brist0l-Myers decision provides a sufficient basis upon
which to transfer this action to the United States District

Court for the District of Columbia.

I I I . CONCLUS ION

For the foregoing reasons, the Court finds that the
challenged USPTO decision is governed by 35 U.S.C.
§ l54(b)(4)(A) and, as a result, this action had to have been
brought in the United States District Court for the District of
Columbia. According1y, defendants' motion to dismiss this
complaint will be granted as to the improper venue argument and
denied without prejudice as to the argument that the complaint
is time-barred, and this civil action will be transferred to the
District of C0lumbia court by an Order to accompany this
Memorandum Opinion.

_ ‘L'!.
Entered this /0 day of February, 2012.

Alexandria, Virginia

kv
Leonie M. Brinkema
United States District Judge

19

Under the current version of the patent statute, a patent's
term is limited to 20 years, measured from the date the patent
application is filed with the USPTO. 35 U.S.C. § 154(a)(2).

The number of days during which an application is pending in the
USPTO will therefore decrease the patent's ultimate term. To
address the concern that the duration of a patent could be
significantly shortened due to administrative delay, 35 U.S.C.

§ 1S4(b) provides that the term of a patent may be adjusted to
account for various delays that occur between the time a patent
application is filed and when the patent is ultimately issued.
Among other adjustments, 35 U.S.C. § l54(b)(l)(A) provides for a
day-for-day extension of a patent term for each day that the
USPTO does not provide a notification pursuant to 35 U.S.C.

§ 132 or a notice of allowance under § 151, beyond fourteen
months from the date the patent application was filed. This
delay is known as “A Delay.” Subsection (1)(B) provides for a
patent term adjustment when a patent issuance is delayed due to
the USPTO's failure to issue a patent within three years of the
application being filed (“B Delay”).2

The Director must “prescribe regulations establishing

procedures for the application for and determination of patent

2 See Wyeth v. Kappos, 591 F.3d l364, 1367 (Fed. Cir. 20l0) for a
summary of the types of delay underlying patent term
adjustments,

term adjustments.” 35 U.S.C. § 154(b)(3)(A). Pursuant to such

procedures, the Director shall

(i) make a determination of the period of any patent term
adjustment under this subsection, and shall transmit a
notice of that determination with the written notice of
allowance of the application under section 15l; and

(ii) provide the applicant one opportunity to request
reconsideration of any patent term adjustment determination
made by the Director.
Id. § l54(b)(3)(B). The regulations promulgated by the USPTO
provide that “[a]ny request for reconsideration of the patent
term adjustment indicated in the notice of allowance, except as
provided in paragraph (d)...must be by way of an application for
patent term adjustment.” 37 C.F.R. § 1.705(b). The request

must be filed no later than the date when the applicant pays the

issue fee, which is due no later than three months from the

notice of allowance. §d;; Pl.'s Opp'n Ex. 1 (MPEP § l306,
regarding timing of issue fee). A patentee may also seek
reconsideration of a revised patent term adjustment that is
reflected in the patent itself, or a revision that should have
been reflected in the patent, within two months of the date the

patent issued. 37 C.F.R. § 1.705(d). Such a request will be
considered untimely as to issues that were raised or could have
been raised before the patent issued. l§;

Under the statute, “[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 [§ 154(b)(3)], notwithstanding any appeal taken
by the applicant of such determination.” 35 U.S.C.
§ 154(b)(3)(D). The statute also sets forth the mechanism under
which “[a]n applicant dissatisfied with a determination made by
the Director under paragraph (3)” may seek judicial review.
Section 154(b)(4)(A) states that such an applicant

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 [the Administrative Procedure Act],

shall apply to such action.3

B.Factual Background

Patent Application No. 11/079,647, which ultimately issued
as the ‘356 patent, was filed on March 14, 2005. The USPTO
issued its first office action concerning the application on
April 9, 2007. That office action was rescinded and replaced by
a different office action on July l6, 2007. §§§ Pl.'s Opp'n Ex.
3 (July l6, 2007 office action). Both the first and second
office actions occurred more than 14 months after the
application was filed, entitling the applicant to an extension

of the patent term for A Delay. when the USPTO mailed the

applicant a notice of allowance on October 14, 2008, the notice

3 See supra note 1 (explaining the amendments to the patent
statute and the applicability of the pre-amendment venue

provision).

stated that the application would receive 207 days of PTA, based
on the April 9, 2007 date of the first office action. Compl. T
l2. Had the July 16, 2007 “rescind and replace” date been used,

the applicant would have received 98 additional days of PTA.

See Compl. Ex. B.

On January l3, 2009, after receiving the notice of

allowance but before the patent issued, plaintiff submitted its

first Request for Reconsideration pursuant to 37 C.F.R.

§ l.705(b), in which it argued that the PTA calculation should
have been based on the July 16, 2007 “rescind and replace”
office action and, accordingly, the patent term should be
extended by an additional 98 days due to A Delay. §§§ Compl.
Ex. B. The USPTO dismissed plaintiff's Request for
Reconsideration on May l8, 2010 (“Decision I”), explaining that

the subsequent mailing of a communication by the examiner
altering the previous action does not negate the fact that
the Office took action in this application within the
meaning of § 1.702(a)(1) on April 9, 2007. The examiner
does not have the authority to vacate, rescind, or withdraw
an Office action. Unless vacated by the Technology Center
Director, for purposes of calculating patent term
adjustment, the action originally mailed by the examiner on
April 9, 2007 will be used to calculate the amount of

Office delay.

Compl. Ex. C at 3. The ‘356 Patent was issued on June 22, 20l0,

reflecting a total PTA of 1009 days, including 330 days of USPTO

“A Delay" based on the April 9, 2007 first office action. Id. 1

15.‘

On July 19, 2010, plaintiff filed a petition pursuant to 37
C.F.R. § 1.18l (“Rule 181 Petition”), seeking review of Decision
I by the Director and again arguing that the patent term should

be extended by an additional 98 days due to A Delay. See Compl.

Ex. D. The Ru1e 181 Petition was dismissed on March 15, 2011
(“Decision II”) in an opinion issued by a senior USPTO attorney.

See Compl. Ex. E. The USPTO explained that

[t]he fact that the Office later set aside the restriction
requirement of April 9, 2007 does not negate the fact that
the Office responded within the meaning of 35 U.S.C. §
154(b)(1)(A)(i) and 37 cFR 1.7o2(a)(1) on Apri1 9, 2007.
Unless expunged from the record (which is not warranted in
this situation), for purposes of calculating patent term
adjustment, the Office action entered by the examiner on
April 9, 2007 was properly used to determine whether the
USPTO delayed the issuance of the above-identified patent
by failing to provide a notification under 35 U.S.C. § 132
within 14 months after the date on which the application
was filedm.

Id. Plaintiff sought reconsideration of Decision II on April

15, 20ll. The USPTO denied reconsideration on September 6, 2011
(“Decision III”). See Compl. Exs. F, G. Decision III stated
that it was “a final agency action within the meaning of 5

U.S.C. § 704 for the purposes of seeking judicial review.”

4 The 1009 days of PTA includes various calculations for delay
not at issue in this litigation. The only issue before this
Court is whether 98 additional days of PTA for A Delay should
have been allowed based on the July l6, 2007 office action as
the first office action. §§§ Compl. I 28.

7

Comp1. Ex. G at 1 n.l. In Decision III, the USPTO adhered to

its reasoning in Decision II, holding that

the vacatur of an Office action does not signify that the

vacated 0ffice action is void ab initio and is to be

treated as if the USPTO had never issued the Office action.
Id. at 5. P1aintiff filed the complaint in this action on

September 9, 2011, once again seeking a 98-day increase to the

patent's term. comp1. 11 22, 27.

II. DISCUSSION

A. Standard of Review

Federa1 district courts are courts of limited subject
matter jurisdiction and possess only the jurisdiction granted to
them by the United States Constitution and by federal statutes.

Exxon Mobi1 Corp. v. A11apattah Servs., Inc., 545 U.S. 546, 552

(2005) (citing Kokkonen v. Guardian Life Ins. Co. of Am., 511
U.S. 375, 377 (1994)). PurSuant to Fed. R. CiV. P. 12(b)(1),

the plaintiff must show by a preponderance of the evidence that

jurisdiction is proper in this Court. See United States ex rel.

Vuyyuru v. Jadhav, 555 F.3d 337, 347-48 (4th Cir. 2008); Adams
v. Bain, 697 F.2d 1213, 1219 (4th Cir. l982).
B. Applicability of 35 U.S.C. § l54(b)(4)(A)
Defendants argue that this action must be dismissed because
plaintiff has not complied with the requirements of 35 U.S.C. §
154(b)(4)(A), name1y, that this action when it was filed could

only be brought in the United States District Court for the

District of Columbia. Defendants also argue that the Court
should dismiss the complaint rather than transfer it to the
District of Columbia because as a matter of law the complaint is
time-barred under § 154(b)(4)(A). Plaintiff responds that the
venue and timing requirements of § 154(b)(4)(A) do not apply
because it seeks review of the USPTO's PTA determination under
the procedures set forth in the Administrative Procedure Act
(“APA"), 5 U.s.c. §§ 701-706.5

At the heart of this dispute is the question of whether the
specific venue and limitations period contained in the patent
statute govern this complaint or whether the more general venue
and timing provisions of the APA apply. To resolve this
question, the two statutes must first be construed. “As always,
the starting point in every case involving construction of a
statute is the language itself.” wyeth v. Kappos, 591 F.3d
1364, 1369 (Fed. Cir. 2010) (quoting United States v. Hohri, 482
U.S. 64, 68 (l987)) (internal quotation marks omitted). On its
face, § l54(b)(4)(A) applies to all PTA decisions made by the
Director applying the USPTO's own regulations before issuance of
a patent. See id. (“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

5 Defendant agrees that, if the APA controls, plaintiff's
complaint was timely filed. Defs.' Reply at 11.

9

United States District Court for the District of Columbia within
180 days after the grant of the patent.”). Plaintiff argues
that § 154(b)(4)(A) only applies to USPTO determinations made
before a patent is issued and, as such, its limitations are
inapplicable in a case where, as here, the USPTO's final PTA
decision was made after the patent was issued. Plaintiff
supports its position by pointing to language in § l54(b)(4)(A)
which states that the provision applies to “determination[s]
made by the Director under paragraph (3)." Plaintiff argues
that paragraph (3) applies only to determinations that occur
before the patent is granted. Specifically, paragraph (3)
instructs the Director to make a PTA determination, “transmit a
notice of that determination with the written notice of
allowance,” and “provide the applicant one opportunity to
request reconsideration of any patent term adjustment
determination made by the Director." It further requires that
the Director “proceed to grant the patent after completion of
the Director's determination of a patent term
adjustment...notwithstanding any appeal taken by the applicant
of such a determination.”
Here, the USPTO rendered Decision III considerably after

the patent was issued pursuant to administrative review
procedures not mandated by § 154(b)(3). The USPTO's rules

expressly contemplate that an agency decision on a request for

10