Earlier this month, in Daiichi Sankyo Co. v. Lee, the Federal Circuit affirmed the decision by the District Court for the District of Columbia granting summary judgment to the Director of the U.S. Patent and Trademark Office with respect to Daiichi's challenges to patent term adjustment (PTA) determinations made by the Office for two of its patents.  In particular, the Court determined that the Office's denial of Daiichi's requests for reconsideration was not based on an erroneous view of the law or was otherwise arbitrary or capricious; that Daiichi was not entitled to relief on the basis that 35 U.S.C. § 154(b)(4)(A) only covers A Delay; and that Daiichi was not entitled to equitable tolling of the 180-day judicial review period under the statute.

At issue in the appeal were procedures for requesting patent term adjustments that were implemented by the Office following the Federal Circuit's decision in Wyeth v. Kappos.  In particular, the Office adopted an Interim Procedure, by which a patentee could request reconsideration within two months of the patent issuance date, and which also included an Optional Interim Procedure for patents that issued before March 2, 2010.  Under the Optional Interim Procedure, patentees could file a petition for reconsideration up to 180 days after a patent's issue date, provided that the sole basis for the request was that the patent term adjustment was made under the Office's pre-Wyeth adjustment calculation method.  As a result, the Optional Interim Procedure was available only for patents that issued between August 5, 2009 and March 1, 2010, and petitions filed for patents that issued prior to August 5, 2009 were dismissed by the Office as untimely.

The two Daiichi patents involved in the appeal (U.S. Patent Nos. 7,342,014 and 7,365,205) issued before August 5, 2009 and therefore did not qualify for the Optional Interim Procedure.  Daiichi contended that the term of each patent was shortened by at least 321 days under the pre-Wyeth calculation method.  Following the Wyeth decision, Daiichi requested reconsideration of the PTA determinations for both patents.  Because Daiichi's requests were filed more than two months after the patents had issued, and fell outside the two-month window specified in 37 C.F.R. § 1.705(d), the Office dismissed Daiichi's requests.

After the Office denied Daiichi's request for reconsideration of the dismissals, Daiichi filed suit against the Director seeking judicial review of the PTA determinations for both patents.  Daiichi alleged that the Office violated the Administrative Procedure Act and 37 C.F.R. § 154(b) by miscalculating the patent terms for its two patents and refusing to reconsider its patent term adjustments in light of Wyeth.  On summary judgment, Daiichi argued that (1) the 180-day period for seeking judicial review under 35 U.S.C. § 154(b)(4)(A) did not apply to challenges to final patent term adjustment determinations (i.e., those involving B Delay, which could not be calculated at the time a notice of allowance was mailed under the reconsideration procedures in place prior to enactment of the Leahy-Smith America Invents Act Technical Corrections Act); (2) even if the 180-day period applied, it should be equitably tolled because Daiichi relied on the Office's notice disclosing how it would calculate A and B Delay, and because Daiichi acted promptly to seek administrative and judicial review following the Wyeth decision; and (3) the Office's denial of its requests contravened the APA because 35 U.S.C. § 254 allows the Office to correct mistakes in a patent whenever they occur.  The District Court rejected each of Daiichi's arguments, finding that the plain meaning of the statute made clear that § 154(b)(4)(A) covered final determinations; Daiichi could have brought a lawsuit making the same arguments that Wyeth did within the 180-day period; and Daiichi was not entitled to relief under the APA because the Office's refusal to suspend the 180-day filing period for the two Daiichi patents was not arbitrary, capricious, and not in accordance with law.

In affirming the District Court's grant of summary judgment to the Office, the Federal Circuit determined that the Office acted within its discretion in denying Daiichi's requests for reconsideration of the patent term adjustment determinations.  In particular the Court stated that:

The PTO's decisions are consistent with the law in effect at the time of the decisions, including all of § 154's provisions.  The PTO's conclusion that its authority to conduct administrative reviews extends no further than the period for judicial review [i.e., 180 days] is also consistent with the statute, which expressly authorizes the PTO to make regulations governing the procedures of patent term adjustment reconsiderations.  35 U.S.C. § 154(b)(3)(A).

With respect to Daiichi's argument that the Office's disparate treatment of patents issued on August 5, 2009 and patents that issued one day earlier was arbitrary and capricious, the Court concluded that:

Daiichi has not shown that the PTO treated any requests for reconsideration of patent term adjustments filed for patents issuing before August 5, 2009 differently than Daiichi's petitions.  All other similar requests were denied by the agency, showing that the PTO acted consistently with respect to similarly situated patentees.  Accordingly, the PTO did not act arbitrarily or capriciously based on its treatment of reconsideration requests submitted by similarly situated patentees.

The Court also determined that the Office's decision to grant extensions of the administrative review period for some patents to match the judicial review period for all patents (under the Optional Interim Procedure) was not arbitrary and capricious.  In particular, the Court noted that:

Our decision in Wyeth did not obligate the PTO to create the Optional Interim Procedure.  Indeed, all patentees who could take advantage of the Optional Interim Procedure could still challenge their patent term adjustment in the district court under the statute.  The PTO simply provided an alternative, and more cost-effective, mechanism at the agency for attaining the same result.  Choosing an administrative filing deadline that mirrors the judicial filing deadline, especially when it lengthens that deadline for some patentees, is neither arbitrary nor capricious.

Finding that the Office's denial of Daiichi's requests for reconsideration was not based on an erroneous view of the law or was otherwise arbitrary or capricious, that Daiichi was not entitled to relief on the basis that § 154(b)(4)(A) only covers A Delay, and that Daiichi was not entitled to equitable tolling of the 180-day judicial review period, the Federal Circuit affirmed.

Daiichi Sankyo Co. v. Lee (Fed. Cir. 2015)
Panel: Circuit Judges Moore, Reyna, and Taranto
Opinion by Circuit Judge Reyna