In a decision that sent The Medicines Company’s stock prices soaring, the District Court for the Eastern District of Virginia determined that the USPTO’s rejection of The Medicines Company’s application for Patent Term Extension was based on an incorrect—and unreasonable and unfair —interpretation of the governing statute. The patent at issue relates to Angiomax®, an anticoagulant that is generating revenue of about $100M per quarter. Unless the USPTO appeals, The Medicines Company patent will be extended to December 2014. (Without the extension, the patent will be expired as of March 23, 2010.) In addition to representing a significant victory for The Medicines Company, the decision strikes a blow against the USPTO’s policy of strictly and rigorously applying the statute, sometimes to the detriment of patent holders who miscalculated the filing deadline and suffered potential losses of millions of dollars.
The Medicines Company’s Application For Patent Term Extension
The Patent Term Extension (PTE) statute (35 USC § 156) extends patent term to compensate patent owners for commercialization delays due to regulatory review. For example, The Medicines Company’s patent was granted March 23, 1993, but the FDA did not approve Angiomax® for commercial marketing until December 2000.
The statute has a number of specific requirements, but the one at issue in this case is the deadline for filing a PTE application. The relevant portion of 35 USC § 156 states:
(d)(1) To obtain an extension of the term of a patent under this section, the owner of record of the patent or its agent shall submit an application to the Director. Except as provided in paragraph (5), such an application may only be submitted within the sixty-day period beginning on the date the product received permission under the provision of law under which the applicable regulatory review period occurred for commercial marketing or use.
The FDA faxed its approval letter to The Medicines Company on Friday, December 15, 2000, at 6:17 p.m. The USPTO counted December 15 as the first day of the 60-day period, and determined that the PTE application should have been filed by February 12, 2001. Because The Medicines Company did not file its application until February 14, 2001, it was rejected as untimely.
The Medicines Company argued that because the approval letter was not issued until after business hours, the first day of the 60-day period should be the next business day, Monday December 18, 2000. The USPTO rejected this argument, standing by its policy of applying the deadline strictly. As set forth in MPEP § 2754.01, the USPTO’s view is that "[t]he statutory time period is not extendable and cannot be waived or excused."
The District Court’s Decision
The district court considered the following undisputed facts when reaching its decision:
- FDA’s approval letter for Angiomax® was faxed to The Medicines Company at 6:17 p.m. on Friday, December 15, 2000.
- FDA treats a new drug application received after its normal business hours as being submitted on the next business day.
- The USPTO’s interpretation of the PTE statute would, under many different scenarios, deprive patent holders of the full 60-day application period intended by Congress.
The district court made the following legal conclusions in support of its decision:
- The USPTO’s interpretation of the statute in its "informal adjudications" of PTE applications is not entitled to Chevron deference.
- The statute is a remedial statue (offsetting the loss of effective patent life during the regulatory review period) and, as such, should be liberally construed.
- Prior USPTO decisions established that, to the extent that 35 USC § 156(d)(1) is ambiguous, it must be construed to further the statute’s remedial purpose.
- The statute focuses on the date approval is "received."
- Congress intended to provide a 60-day application period for PTE applications.
- The Federal Circuit decision in Unimed, Inc. v. Quigg, which held that FDA approval—not DEA approval—triggers the PTE application period, does not govern the issues raised by The Medicines Company.
The district court determined that the USPTO was advancing an interpretation of the statute "that is unreasonable even under the most deferential standard of review." The court noted the USPTO’s position that
the date stamped on the FDA approval letter starts the 60-day period . . . even if the FDA never sends the letter, sends it to the wrong address, delays in sending it, or sends it by means that would take multiple days to reach the applicant.
The court concluded that the USPTO’s failure to address these circumstances "renders the [USPTO's] decision arbitrary and capricious." The court explained further that "[a]n interpretation that imposes such drastic consequences when the government errs could not be what Congress intended." The court also found that the USPTO’s position was inconsistent with the Federal Rules of Civil Procedure, which include provisions that "recognize that time periods should not start to run until a party can reasonably be deemed to be on notice."
Thus, the court held that "the proper interpretation of 35 USC § 156(d)(1) is a business day construction of the phrase ‘beginning on the date.’" The court stated that a "business day" interpretation is consistent with the remedial nature of the statute, the notice function of the provision, and Congressional intent to provide a 60-day application period.
The court therefore granted The Medicines Company’s motion for Summary Judgment and remanded to the USPTO to consider the PTE application as timely filed.
Still a Trap for the Unwary
Although this decision may give PTE applicants more time to file an application if an FDA approval letter is sent out late in the day, it does not eliminate another dangerous trap for the unwary. As discussed in the district court decision, while The Medicines Company’s PTE application was pending, the USPTO adopted an interpretation of the statute that counts the date of the FDA approval letter as "day one" of the 60-day period. This is contrary to most deadline statutes, where "day one" usually is the first day after the triggering event.
The USPTO cites the "within the sixty-day period" language of 35 USC § 156(d)(1) as requiring this interpretation. The USPTO also has cited language in the Unimed decision as indicating that "the date that starts the 60-day period . . . is the date stamped on the FDA approval letter."
Now that the district court has pointed out that Unimed did not directly address the calculation of the 60-day application period, and in view of the district court’s holding that the statute should be interpreted liberally to serve its remedial purpose, the USPTO should revisit this interpretation of the statute as well. Until then, patent holders should be mindful of the relatively short time period for filing PTE applications, and may be advised to docket a "59-day" filing deadline to ensure that their applications are timely.