In a decision issued January 27, 2012, in Bristol Meyers Squibb Co. v. Kappos, the U.S. District Court for the District of Columbia found that the statutory deadline for bringing a civil action to challenge the Patent Term Adjustment (PTA) awarded by the USPTO is tolled when the patentee pursues reconsideration of the agency decision. This ruling is significant, because the 180-day statutory period often occurs before the USPTO issues its final decision on a request for reconsideration.

Patent Term Adjustment

The PTA statute (35 U.S.C. § 154) extends the term of a patent beyond its base 20-year term (which is measured from its earliest U.S. priority date) to compensates for USPTO delays during prosecution. The statute provides “guarantees” against three different types of PTO delay:

A Delay: when the USPTO fails to act in accordance with set timeframes (such as issuing a first office action within 14 months, issuing a second action or allowance within 4 months of a response, and issuing a patent within 4 months of the Issue Fee payment).

B Delay: when the USPTO fails to issue a patent within three years of the actual filing date of the patent application.

C Delay: when the application is involved in an interference or appeal, or is subject to a secrecy order.

The USPTO provides its preliminary PTA calculation with the Notice of Allowance, and provides its final PTA calculation when the patent issues.

The statute provides for two different avenues of review of a PTA award.:

(b)(3) PROCEDURES FOR PATENT TERM ADJUSTMENT DETERMINATION.-
(A) The Director shall prescribe regulations establishing procedures for the application for and determination of patent term adjustments under this subsection.
(B) Under the procedures established under subparagraph (A), 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 151; and
(ii) provide the applicant one opportunity to request reconsideration of any patent term adjustment determination made by the Director. . . . .

(b)(4) APPEAL OF PATENT TERM ADJUSTMENT DETERMINATION.-
(A) 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 District of Columbia 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.

The USPTO rules (37 CFR § 1.705) require that a request for reconsideration under § 154(b)(3) must be filed no later than the Issue Fee payment or within two months of the patent grant date (depending on the ripeness of the PTA issue at allowance).  When the USPTO issues its decision on a request for reconsideration, a patentee usually has two months to request reconsideration of the decision. It is usually the decision on that (second) request for reconsideration that is designated as a “final” agency decision. Indeed, the PTA award and/or rationale often changes between the first decision and the second decision.

The BMS Case

The BMS case stemmed from the PTA issue resolved in Wyeth v. Kappos, regarding the calculation of “B” delay. BMS had a number of patents for which the 180-day period for bringing a civil action had expired by the time the Wyeth case was resolved, but which had not received a “final” USPTO determination of PTA (e.g., the requests for reconsideration still were undergoing agency review).  When BMS brought a civil action to correct the PTA awards consistent with Wyeth, the USPTO moved to dismiss the complaint with regard to the patents for which the 180-day period had expired.  In response, BMS argued that the the 180-day period should be tolled until the USPTO issues its final agency decision. (I wrote previously about the tolling issue for patents in similar situations.)

The District Court Decision

The district court agreed with BMS, applying the “general rule” that

Judicial review of agency actions is ordinarily tolled until the agency action is final.

Indeed, the court noted that, “In the absence of a final agency action, this Court lacks jurisdiction.” The court considered the “fixed deadline” set forth in the statute, but concluded that “[p]recedent from this Circuit . . . 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.” Rather:

“The time for filing the petition for review is tolled until all proceedings before the agency have been completed.”

The court explained as a practical matter:

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.”

Not Just A Wyeth Issue

Although the Wyeth case triggered a number of PTA civil actions, the court’s decision here is not limited to cases filed in the wake of Wyeth. To the contrary, this case will keep the courtroom doors open for any patent holder who disagrees with the USPTO’s PTA award, but wants to try to resolve the dispute with the USPTO in the first instance.