In Exela Pharma Sciences, LLC v. Lee, the Federal Circuit held that the USPTO’s decision to revive a patent application “is not subject to third party collateral challenge” under the Administrative Procedures Act (APA). In so doing, it affirmed the district court’s dismissal of Exela’s action challenging the revival of Cadence’s patent application, but on different grounds.

The Patent At Issue

The patent at issue was U.S. 6,992,218, which is listed in the Orange Book for Cadence’s Ofirmev® injectable acetaminophen product. Exela filed an Abbreviated New Drug Application seeking approval of a generic version of Cadence’s product, which triggered patent litigation under the Hatch-Waxman Act. While that litigation was pending, Exela filed a petition in the USPTO collaterally challenging the USPTO’s decision to revive the application.

The Missed Deadline and Revival

The ‘218 patent stems from a U.S. national stage application of a PCT application that claimed priority to a French application. According to the Federal Circuit decision, the applicant originally failed to file the U.S. national stage application within the 30 month window of 35 USC § 371. Less than one month after the missed deadline, the applicant filed a petition to revive the application, asserting that the delay in satisfying the filing requirements was “unintentional”. The USPTO granted the petition, the application was examined, and the patent was granted in due course.

The Revival Challenge 

Exela challenged this patent application revival, asserting that the USPTO did not have authority to revive the application after “unintentional” delay, because the governing statute only permitted revival after “unavoidable” delay. Indeed, 35 USC § 371(d) provided:

The requirements … shall be complied with by the date of the commencement of the national stage or by such later time as may be fixed by the Director. …. 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.

On the other hand, the USPTO permitted application revival under either an “unintentional” standard or an “unavoidable” standard. See 37 CFR § 1.137(a), (b).

The USPTO dismissed Exela’s petition seeking review of the revival, “stating that no statute or regulation authorizes third party challenge to a PTO ruling concerning revival of a patent application.” Exela pursued a district court action under the APA, which was dismissed on the ground that the statute of limitations had run, since the implementing regulation at issue was enacted in 1982.

The Federal Circuit Decision

The Federal Circuit decision was rendered by Judge Newman and Judge Dyk, and issued as a “per curiam” decision, with each of Judge Newman and Judge Dyk also issuing concurring opinions. (Now-retired Judge Rader was the third member of the original panel)

The per curiam decision reasons:

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 at the behest of particular persons through particular procedures” demonstrate that third party challenge of PTO revival rulings under the APA is not legislatively intended. Pregis Corp. v. Kappos, 700 F.3d 1348, 1357 (Fed. Cir. 2012) (“[A] third party cannot sue the PTO under the APA to challenge a PTO decision to issue a patent.”).

We conclude that PTO revival actions are not subject to third party challenge under the APA.

The Concurring Opinions

Judge Dyk’s concurring opinion addresses the 2008 Federal Circuit decision in Aristocrat Technologies Australia Pty Ltd. v. International Game Technology, where the court refused to entertain a revival challenge raised as a defense in an infringement action. Judge Dyk expresses his views that Aristocrat is “problematic” and cites “four aspects of the Aristocrat opinion that … warrant its reconsideration.”

Judge Newman’s concurring opinion addresses Judge Dyk’s discussion of Aristocrat, and explains why she does “not share the view that Aristocrat was wrongly decided.”

Agency Deference?

When reading the per curiam decision in light of the concurring opinions, it is clear that this decision is based on legislative intent and statutory scheme, not agency deference. Although Judge Newman would excuse a missed prosecution deadline in a revived application as “an irregularity in prosecution that ‘becomes irrelevant after the patent issues,'” Judge Dyk would be more critical of an agency rule that appears to be more permissive than the statute allows.

I remember being tripped up by the different language used in § 371(d) and the USPTO rules when I first encountered it. This decision does not cast doubt on the validity of U.S. national stage applications revived under the “unintentional” standard when this version of § 371(d) was in effect, but Judge Dyk’s concurring opinion may give owners of such patents cause for concern.