Court Opinion

ID: 2663018
Source: CourtListenerOpinion
Date Created: 2014-04-03 13:20:24.669238+00
Date Added: 2024-06-11T09:17:46.221210
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

     Plaintiffs Bristol-Myers 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”).   Plaintiffs 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.

                                  1
     Of the twenty-one patents identified by plaintiffs in this

action, the Court has already ordered thirteen remanded to the

PTO for recalculation and adjustment of the disputed patent term

in accordance with Wyeth.   Court’s Minute Order of June 23,

2010.1    The eight Counts remaining are 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-Myers

Squibb Company v. Kappos, has been consolidated with this

action.   One remaining Count is pending therein, namely Count

Four (United States Patent No. 7,514,430).2

     Defendant has filed a motion to dismiss the remaining

claims, arguing that the plaintiffs failed to comply with 35

1
     Those thirteen Counts were dismissed in the same June 23,
2010 Minute Order: Count One (United States Patent No.
7,517,991), Count Two (United States Patent No. 7,504,211),
Count Three (United States Patent No. 7,482,372), Count Four
(United States Patent No. 7,479,496), Count Seven (United States
Patent No. 7,459,562), Count Eight (United States Patent No.
7,455,835), Count Nine (United States Patent No. 7,453,002),
Count Ten (United States Patent No. 7,452,678), Count Twelve
(United States Patent No. 7,435,808), Count Fourteen (United
States Patent No. 7,432,271), Count Fifteen (United States
Patent No. 7,432,267), Count Sixteen (United States Patent No.
7,429,611), and Count Twenty-One (United States Patent No.
7,504,481).
2
     The remaining counts of this action were similarly remanded
to the PTO for recalculation and adjustment of the disputed
patent terms: Count One (United States Patent No. 7,589,193),
Count Two (United States Patent No. 7,589,088), Count Three
(United States Patent No. 7,557,143), and Count Five (United
States Patent No. 7,491,725).
                                 2
U.S.C. § 154(b)(4)(A), which requires an applicant dissatisfied

with a patent term adjustment determination made by the PTO to

file its appeal with the District Court “within 180 days after

the grant of the patent.”   35 U.S.C. § 154(b)(4)(A).   Defendant

asserts that all remaining counts should therefore be dismissed

as untimely.   Plaintiffs filed a cross-motion for summary

judgment, asserting that the action is timely filed and that the

disputed patent term adjustments should be remanded to the PTO

for recalculation.

       The parties agree that the sole legal question remaining in

these cases is the timeliness of plaintiffs’ appeals.   For the

reasons stated below, the Court finds that plaintiffs’ appeals

were timely filed.    Accordingly, the Court hereby DENIES

defendant’s motion to dismiss and GRANTS plaintiffs’ cross-

motion for summary judgment.   The remaining claims are hereby

REMANDED to the PTO for recalculation and adjustment of the

disputed patent terms in accordance with Wyeth v. Kappos, 591

F.3d 1364.

  I.     BACKGROUND

       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).   However, under 35

U.S.C. § 154(b)(1), a patent’s term may be extended if the PTO

                                  3
causes certain delays in the process or if the patent takes

longer than three years to issue.3

     After a patent application is filed, and “[i]f it appears

that applicant is entitled to a patent under the law,” the PTO

issues a “written notice of allowance of the application.”

Id. § 151.   The notice of allowance specifies an issue fee that

the applicant must pay within three months.   Id.   The PTO is

required to make a determination of the period of any patent

term adjustment and “transmit a notice of that determination

with the written notice of allowance.”   Id. § 154(b)(3)(B)(i).

The term of the patent, issued after the applicant pays the

issue fee, will include any patent term adjustment determined by

the PTO.   If an applicant disagrees with the patent term

adjustment determined by the PTO, the statute provides that the

applicant is entitled to “request reconsideration of any patent

3
     In the instant case, plaintiffs assert that the PTO
miscalculated the patent term adjustments for the disputed
patents. In particular, plaintiffs claim that two types of
patent term adjustments, known as the “A Delay” and the “B
Delay,” were miscalculated. Under Section 154(b)(1)(A), the “A
Delay,” one day is added to the patent’s term for each day the
PTO fails to meet certain specified deadlines. Under Section
154(b)(1)(B), the “B Delay,” the statute provides that “if the
issue of an original patent is delayed due to the failure of the
United States Patent and Trademark Office to issue a patent
within 3 years after the actual filing date of the application
in the United States . . . the term of the patent shall be
extended 1 day for each day after the end of that 3-year period
until the patent is issued.” 35 U.S.C. § 154(b)(1)(B).

                                 4
term adjustment determination made by the Director.”   Id.

§ 154(b)(3)(B)(ii).

     Furthermore, the statute permits the applicant to appeal

the patent term adjustment to a United States District Court.

Specifically, 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 within 180 days after the grant of the
     patent. Chapter 7 of title 5, shall apply to 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.

Id. § 154(b)(4)(A).4

     In the instant case, the material facts are not in dispute.

Plaintiffs did not file their appeals with this Court until more

than 180 days after each of the remaining disputed patents had

been issued.5   However, with respect to each of the disputed

4
     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
     This action, Civil Action Number 09-1330, was filed on July
17, 2009. Each of the remaining eight disputed patents was
granted more than 180 days before this appeal was filed. Patent
Number 7,470,713 (Count Five) was issued on December 30, 2008;
Patent Number 7,470,712 (Count Six) was issued on December 30,
2008; Patent Number 7,446,196 (Count Nine) was issued on
November 4, 2008; Patent Number 7,432,373 (Count Thirteen) was
issued on October 7, 2008; Patent Number 7,429,604 (Count
                                 5
patents, plaintiffs filed a request for reconsideration of the

patent term adjustment under 35 U.S.C. § 154(b)(3)(B)(ii) and 37

C.F.R. § 1.705(d) within the requisite two month time period

after the patent was granted.   The sole question pending before

this Court is whether the timely filing of the petitions for

administrative reconsideration tolled the time within which

plaintiffs were required to appeal to this Court.

  II.   STANDARD OF REVIEW

     Defendant moves to dismiss the remaining counts under Rule

12(b)(1) or, in the alternative, Rule 12(b)(6).   On a motion to

dismiss for lack of subject-matter jurisdiction under Rule

12(b)(1), the plaintiff bears the burden of establishing that

the court has subject-matter jurisdiction.    Lujan v. Defenders

of Wildlife, 504 U.S. 555, 561 (1992).   “The court must address

the issue of jurisdiction as a threshold matter, because absent

jurisdiction the court lacks the authority to decide the case on

any other grounds.”   Am. Farm Bureau v. EPA, 121 F. Supp. 2d 84,

91 (D.D.C. 2000).   A motion to dismiss under Rule 12(b)(6) tests

the legal sufficiency of a complaint.    Browning v. Clinton, 292

Seventeen) was issued on September 30, 2008; Patent Number
7,427,493 (Count Eighteen) was issued on September 23, 2008;
Patent Number 7,417,063 (Count Nineteen) was issued on August
26, 2008; Patent Number 7,417,040 (Count Twenty) was issued on
August 26, 2008. Similarly, the consolidated action (Civil
Action Number 09-2420) was filed on December 23, 2009, over 180
days after Patent Number 7,514,430 (Count Four) was issued on
April 7, 2009.
                                 6
F.3d 235, 242 (D.C. Cir. 2002).   A complaint must present

“enough facts to state a claim to relief that is plausible on

its face” and “above the speculative level.”   Bell Atlantic

Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007).   In considering

a 12(b)(6) motion, the Court must construe the complaint

“‘liberally in the plaintiff’s favor,’ ‘accept[ing] as true all

of the factual allegations’” alleged in the complaint.

Aktieselskabet AF 21 November 2001 v. Fame Jeans Inc., 525 F.3d

8, 15 (D.C. Cir. 2008) (alteration in original) (quoting Kassem

v. Wash. Hosp. Ctr., 513 F.3d 251, 253 (D.C. Cir. 2008)).

Indeed, a plaintiff is entitled to “the benefit of all

inferences that can be derived from the facts alleged.”      Kowal

v. MCI Commc’ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994).

     Plaintiffs have filed a cross-motion for summary judgment.

Summary judgment is appropriate “if the movant shows that there

is no genuine dispute as to any material fact and the movant is

entitled to judgment as a matter of law.”   Fed. R. Civ. P.

56(a); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

(1986).   Though the Court must draw all justifiable inferences

in favor of the non-moving party in deciding whether there is a

disputed issue of material fact, “[t]he mere existence of a

scintilla of evidence in support of the [non-movant]’s position

will be insufficient; there must be evidence on which the jury

                                  7
could reasonably find for the [non-movant].”     Anderson, 477 U.S.

at 252.

  III. ANALYSIS

          A. The Tolling Rule

     Judicial review of agency actions is ordinarily tolled

until the agency action is final.     See, e.g., Clifton Power

Corp. v. FERC, 294 F.3d 108, 110 (D.C. Cir. 2002) (“The time for

filing the petition for [judicial] review is tolled until all

proceedings before the agency have been completed.” (citing

Interstate Commerce Comm’n v. Bhd. of Locomotive Eng’rs, 482

U.S. 270, 284 (1987))).    This is because “[a] request for

administrative reconsideration renders an agency’s otherwise

final action non-final with respect to the requesting party.”

Id. (citing United Transp. Union v. Interstate Commerce Comm’n,

871 F.2d 1114, 1116 (D.C. Cir. 1989)).    In the absence of a

final agency action, this Court lacks jurisdiction.

     As the Supreme Court in Interstate Commerce Commission v.

Brotherhood of Locomotive Engineers, 482 U.S. 270, explained:

     [W]here a petition for reconsideration has been filed
     within a discretionary review period specifically
     provided by the agency (and within the period allotted
     for judicial review of the original order) . . . the
     petition tolls the period for judicial review of the
     original order, which can therefore be appealed to the
     courts directly after the petition for reconsideration
     is denied.

                                  8
Id. at 279; see also Riffin v. Surface Transp. Bd., 331 F. App’x

751, 752 (D.C. Cir. 2009) (“By filing a timely petition to

reopen, [plaintiff] rendered the Board’s decision nonfinal . . .

.”); Columbia Falls Aluminum Co. v. EPA, 139 F.3d 914, 919 (D.C.

Cir. 1998) (“A party’s pending request for agency

reconsideration renders ‘the underlying action nonfinal . . .

.’”(quoting Wade v. FCC, 986 F.2d 1433, 1434 (D.C. Cir. 1993))).

     Plaintiffs argue that their appeal is not barred by the

180-day limitations period contained in Section 154(b)(4)(A)

because the limitations period was tolled by the filing of their

petitions for reconsideration of the patent term adjustments.

Defendant, on the other hand, argues that because the statute

explicitly states that an applicant must file an appeal with the

courts “within 180 days after the grant of the patent,” the

tolling rule of Locomotive Engineers does not apply.

     The tolling rule set forth by the Supreme Court in

Locomotive Engineers has been nearly universally applied.     The

one exception identified by defendant is Stone v. INS, 514 U.S.

386 (1995).   In Stone, the Supreme Court held that the tolling

rule did not apply to the Immigration and Nationality Act (INA).

Plaintiff, a Canadian citizen present in the United States on a

visa, was ordered deported by an Immigration Judge.    Id. at 389.

The plaintiff filed administrative appeals, all of which were

denied.   Plaintiff then filed an action in the Court of Appeals

                                 9
for the Sixth Circuit seeking review of both the original

deportation order, as well as the subsequent agency order

denying reconsideration.   The question before the Supreme Court

in Stone was “whether the filing of a timely motion for

reconsideration of a decision by the Board of Immigration

Appeals tolls the running of the 90-day period for seeking

judicial review of the decision.”    Id. at 388.

     The Stone Court concluded that the petition for

reconsideration did not toll the period of limitations for

seeking judicial review of the deportation order because certain

provisions within the INA “reflect[ed] Congress’ expectation

that in the particular context of INS deportation orders the

normal tolling rule will not apply.”    Id. at 398.   The Court

distinguished the Immigration and Nationality Act from the

ordinary situation, explaining that:

     By its terms, § 106(a)(6) [of the INA] 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. The
     statute, in fact, directs that the motion to reopen or
     reconsider is to be consolidated with the review of
     the order, not the other way around. This indicates to
     us that the action to review the underlying order
     remains active and pending before the court. 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.

                                10
Id. at 394.

        The tolling rule established by Locomotive Engineers is the

“normal tolling rule.”     Stone, 514 U.S. at 398; see also United

Transp. Union, 871 F.2d at 1116 (“We think it plain that a

pending petition for rehearing must render the underlying agency

action nonfinal (and hence unreviewable) with respect to the

filing party.”).

        As defendant concedes, this general tolling rule applies

unless the statute would be “expressly contravened by the

tolling rule.”    Def.’s Combined Opp’n at 8.    The question for

this Court in the instant case is therefore whether Congress

intended that the ordinary tolling rule of Locomotive Engineers

not apply to Section 154(b)(4)(A).

          B. Whether the General Tolling Rule is Inapplicable to
             Section 154(b)(4)(A)

        Defendant makes several arguments in support of his

assertion that Congress intended the limitations period of

Section 154(b)(4)(A) to be exempt from the ordinary tolling

rule.    Defendant first argues that because “the limitation

period of § 154(b)(4)(A) begins to run on a fixed date,” it is

“abundantly clear that [Congress] did not intend for the tolling

rule to apply.”    Def.’s Combined Opp’n at 9.   In response,

plaintiffs assert that the text of Section 154(b)(4)(A)

“provides no indication that Congress sought to depart from the

                                  11
Locomotive Engineers rule.”     Pls.’ Cross Mot. for Summ. J. at

20.

        Defendant’s argument is flawed.   Section 154(b)(4)(A) does,

as defendant correctly states, provide that the 180-day

limitations period starts to run from the date the patent is

granted.    Also true is defendant’s assertion that, accordingly,

the statute sets a “fixed date” from which the limitation period

runs.    However, a statutory provision setting the limitations

period is not incompatible with a tolling rule.      While

Section 154(b)(4)(A) requires that an applicant file an appeal

of a patent term adjustment “within 180 days after the grant of

the patent,” case law from this Circuit makes clear that such a

requirement is not violated by the general tolling rule.

        For instance, this Circuit applied the general tolling rule

in Columbia Falls, 139 F.3d 914, concluding that the relevant

90-day period of limitations, namely 42 U.S.C. § 6976(a)(1),

would be tolled by a request for agency reconsideration.       Id. at

919.    Like Section 154(b)(A)(4) in the instant case, 42 U.S.C. §

6976(a)(1) provides for a fixed date, stating that any petition

for judicial review “of action of the Administrator in

promulgating any regulation . . . or denying any petition for

the promulgation . . . shall be filed within ninety days from

the date of such promulgation or denial[.]”      42 U.S.C. §

                                  12
6976(a)(1) (emphasis added).   The court nonetheless held that

the tolling rule applied.   Columbia Falls, 139 F.3d at 919.

     Similarly, in Los Angeles SMSA Limited Partnership v. FCC,

70 F.3d 1358 (D.C. Cir. 1995), the court applied the general

tolling rule to a statute requiring that the judicial appeal “be

taken by filing a notice of appeal with the court within thirty

days from the date upon which public notice is given of the

decision or order complained of.”       47 U.S.C. § 402(c) (emphasis

added).   The Circuit explained:

     The filing of a petition for rehearing . . . will
     suspend the running of the period within which an
     appeal may be taken, and . . . this period begins to
     run anew from the date on which final action is taken
     on the petition or motion, whether it be denied or
     granted. . . . This rule applies even though a statute
     fixes a time within which appeal may be taken as a
     definite period from the entry of judgment.

Los Angeles SMSA Ltd. P’ship, 70 F.3d at 1359 (quoting Saginaw

Broad. Co. v. FCC, 96 F.2d 554, 558 (D.C. Cir. 1938))(emphasis

added).

     Precedent from this Circuit therefore makes clear that

merely because the statute “fixes a time within which appeal may

be taken,” such a provision does not exempt the statute from the

ordinary tolling rule.   “The time for filing the petition for

review is tolled until all proceedings before the agency have

been completed.”   Clifton Power Corp., 294 F.3d at 110.

                                   13
     Furthermore, none of the other statutory provisions cited

by defendant support a conclusion that Congress intended for the

ordinary tolling rule not to apply to Section 154(b)(4)(A).

Defendant argues, for example, that 35 U.S.C. § 154(b)(3)(D) is

evidence of such Congressional intent.   Section 154(b)(3)(D)

provides that the “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.”   Id.   Defendant argues that “the statute

expressly contemplates that such an appeal may be initiated

before the patent issues.”   Def.’s Mot. to Dismiss at 4.   The

Court disagrees.

        While defendant would have this Court conclude that

Section 154(b)(3)(D) renders the general tolling rule

inapplicable, similar to the INA at issue in Stone, the Court

finds otherwise.   In Stone, the Court concluded that “Congress

chose to depart from the ordinary judicial treatment of agency

orders under reconsideration.”    Stone, 514 U.S. at 393.   The

Stone Court came to this conclusion based upon a 1990 amendment

to the INA specifically requiring the judiciary to consolidate

two separate appeals by a petitioner.    Finding such language

irreconcilable with the normal tolling rule, the Court stated

that “the words of the statute do not permit us to say that the

                                 14
filing of a petition for reconsideration or reopening dislodges

the earlier proceeding reviewing the underlying order.”    Id. at

394.

       Nothing in the patent statute is comparable to the INA

language that prevented the application of the general tolling

rule in Stone.    Defendant’s reliance on Section 154(b)(3)(D),

requiring the Director to “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,” is not persuasive.   That language does not

direct this Court to take any action inconsistent with the

normal tolling rule.6

       The application of the Locomotive Engineers tolling rule in

this case is not only consistent with the statutory language,

but also with the function of the tolling roll.   The purpose of

the tolling rule is to conserve judicial resources by putting

only a final agency action before the Court.   As this Circuit

has explained, “[w]hen the party elects to seek a rehearing

6
     Nor, contrary to defendant’s assertions, does the language
of 35 U.S.C. § 154(b)(4)(B) contravene the general tolling rule.
Dealing only with the ability of third parties to appeal or
challenge the grant of a patent, it provides that “[t]he
determination of a patent term adjustment . . . shall not be
subject to appeal or challenge by a third party prior to the
grant of the patent.” Id. Such a provision does not contravene
the tolling rule.
                                 15
there is always a possibility that the order complained of will

be modified in a way which renders the complained of judicial

review unnecessary.”     United Transp. Union, 871 F.2d at 1117

(quoting Outland v. Civil Aeronautics Bd., 284 F.2d 224, 227-28

(D.C. Cir. 1960)).     By the use of the “bright line test” of the

general tolling rule, would-be plaintiffs are “discourage[d

from] the filing of petitions for review until after the agency

completes the reconsideration process.”     TeleSTAR, Inc. v. FCC,

888 F.2d 132, 134 (D.C. Cir. 1989).

     In the instant case, once the plaintiffs filed their

petitions for reconsideration with the PTO, it would have been a

“pointless waste of judicial energy for the court to process any

petition for review before the agency . . .    acted on the

request for reconsideration.”     Id.

     Accordingly, the Court concludes that the general tolling

rule applies to the instant case and plaintiffs’ claims were

timely filed.

  IV.     CONCLUSION

     For the foregoing reasons, defendant’s motion to dismiss is

DENIED.    Plaintiff’s motion for summary judgment is GRANTED.

Accordingly, the Court hereby REMANDS the remaining counts to

the United States Patent and Trademark Office for recalculation

and adjustment of the disputed patent terms in accordance with

the decision of the United States Court of Appeals for the

                                  16
Federal Circuit in Wyeth v. Kappos, 591 F.3d 1364.   In view of

this remand, plaintiffs’ remaining claims are hereby DISMISSED

without prejudice subject to a motion for reconsideration for

good cause shown upon completion of the agency’s recalculation

and adjustment.   An appropriate Order accompanies this

Memorandum Opinion.

SIGNED:   Emmet G. Sullivan
          United States District Court Judge
          January 27, 2012

                                17