Federal Circuit No 2013-1206

The Federal Circuit in Exela Pharma Sciences LLP v. Lee Fed. Cir. (March 26, 2015) held that a third party challenge of a PTO revival ruling under the Administrative Procedure Act (“APA”) is not legislatively intended. SCR Pharmatop filed a PCT application designating the U.S. but missed the 30-month date for entering the national phase in the U.S. SCR Pharmatop later filed a petition to revive, stating that the delay was “unintentional.” The PTO granted SCR Pharmatop’s petition. 

Exela then filed a petition in the PTO challenging the PTO’s revival of SCR Pharmatop’s application that matured into U.S. Patent No. 6,992,218 (“the ‘218 patent”). Exela argued that an “unintentional” delay is not an available ground for revival of a U.S. patent application claiming priority under the PCT-implementing statute, 35 U.S.C. § 371(d): “Failure to comply with these requirements shall be regarded as abandonment of the application by the parties thereof, unless it be shown to the satisfaction of the Director that such failure to comply was unavoidable…” (emphasis added). Under 37 C.F.R. § 1.137, revival is provided for in cases of unavoidable or unintentional delay, but SCR Pharmatop argued that the PTO regulation cannot override 35 U.S.C. § 371(d), and therefore the PTO lacked the discretion to grant SCR Pharmatop’s petition.

Exela’s petition was dismissed by the PTO, which noted that no statute or regulation authorizes a third party challenge to a PTO ruling concerning the revival of a patent application. Exela filed an action under the APA in the U.S. District Court for the Eastern District of Virginia, asking the court to compel the PTO to vacate its revival decision. The District Court, applying Hire Order, Ltd. v. Marianos, held that Exela’s action was time barred by six-year period of limitations, which started to accrue when the regulation was adopted in 1982. 

Exela appealed to the Court of Appeals for the Federal Circuit. On appeal, the Federal Circuit considered whether a third party has the right to challenge, by way of the APA, a ruling of the PTO reviving a patent application that had become abandoned by failure to meet a filing schedule established by the PCT and its implementing statute. The Federal Circuit affirmed the dismissal of Exela’s complaint, holding that there is no authority for third parties to collaterally challenge the correctness of PTO revival rulings. Thus, even if dismissal is not appropriate on the limitations grounds, the merits should be decided in favor of the PTO. The Federal Circuit noted that the Patent Act’s “intricate scheme for administrative and judicial review of PTO patentability determinations,” and “the Patent Act’s careful framework for judicial review and the behest of particular persons through particular proceedings” demonstrate that third party challenge of PTO revival rulings under the APA is not legislatively intended, citing regis Corp. v. Kappos (Fed. Cir. 2012).