Henderson v. Shinseki, 131 S. Ct. 1197 (Mar. 01, 2011) (Henderson)

On March 1, 2011, the U.S. Supreme Court held that compliance with the 120-day deadline for filing a notice of appeal with the U.S. Court of Appeals for Veterans Claims (Veterans Court) under section 7266(a) of the Veterans’ Judicial Review Act (VJRA), 102 Stat. 4105 (codified, as amended, in various sections of 38 U.S.C. (2006 ed. and Supp. III)), is not a jurisdictional prerequisite for an appeal to the Veterans Court. Henderson, 131 S. Ct. at 1206. Although Henderson addressed the procedure for challenging decisions of the Department of Veterans Affairs (VA), the Court’s holding and discussion of the distinction between jurisdictional and filing deadline “claim-processing” rules may prove helpful to patent holders seeking to challenge the U.S. Patent and Trademark Office’s (USPTO) patent term adjustment (PTA) calculations for patents issued more than 180 days ago. The decision may be particularly helpful for patent holders whose 180-day post-patent issuance filing deadline expired prior to the January 7, 2010 decision of the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) in Wyeth v. Kappos, 591 F.3d 1366 (Fed. Cir. 2010) (Wyeth).

Patent Term Adjustment Background

In 1994, the United States changed the effective patent term from seventeen years from patent issuance to twenty years from the filing of the patent application. Under the original seventeen-years-from-issuance patent rule, any delay in patent examination did not diminish the resulting term of the patent because the term would not begin until issue, i.e., after the delay. A twenty-years-from-filing patent term, however, can be reduced by prolonged patent prosecution because the patent term runs during prosecution.

The American Inventors Protection Act (“AIPA”) of 1999 (codified at 35 U.S.C. § 154) addresses this problem by adjusting the patent term for three types of patent examination delays:

  • “A Delays” arising from the failure of the USPTO to comply with various statutory deadlines (e.g., failing to mail a first office action within fourteen months of the patent application filing date under 35 U.S.C. § 111(a)); 
  • “B Delays” arising from the failure of the USPTO to grant a patent within three years of the patent application filing date; and   
  • “C Delays” arising from certain administrative actions (e.g., interferences, secrecy orders, and appeals).  

The relationship between A Delays and B Delays is governed by 35 U.S.C. § 154(b)(2)(A), which states that “[t]o the extent that periods of delay attributable to grounds specified in paragraph (1) overlap, the period of any adjustment granted under this subsection shall not exceed the actual number of days the issuance of the patent was delayed.”

Under 35 U.S.C. § 154(b), the notice of allowance includes notification of any PTA. See 37 C.F.R. § 1.705(b). The Applicant may then challenge the USPTO’s PTA determination with respect to A Delays by filing an application for PTA under 37 C.F.R. § 1.705(b) with or before paying the issue fee. Id. The USPTO’s decision regarding the § 1.705(b) petition and the USPTO’s determination with respect to B Delays will appear on the face of the issued patent. See 37 C.F.R. § 1.705(d). The Applicant may further challenge this PTA determination by filing a petition under 37 C.F.R. § 1.705(d) requesting reconsideration of the PTA indicated on the patent within two months of the patent’s issue date. Id. Finally, if dissatisfied with the USPTO’s determination regarding the § 1.705(d) petition, the Applicant may file a civil action against the Director of the USPTO in the U.S. District Court for the District of Columbia within 180 days after patent grant. 35 U.S.C. § 154(b)(4)(A).

Wyeth v. Kappos, 591 F.3d 1366 (Fed. Cir. 2010) (Wyeth)

Initially, the USPTO interpreted the “double-counting” provision of 35 U.S.C. § 154(b)(2)(A) as meaning that the A and B Delays started at the same time and, therefore, patentees were only eligible for patent term adjustment for the larger of the two delays. For example, if a patent subject to twenty days of A Delay issued twenty days after the three-year anniversary of filing, the patent would be eligible for twenty days of patent term adjustment under the interpretation that the Patent Office followed.

This interpretation was dramatically upended in Wyeth. The Federal Circuit affirmed the U.S. District Court for the District of Columbia’s decision holding that the periods of A and B Delays do not overlap unless the delays occur on the same day. Wyeth, at 1372. Thus, the District Court held that the proper formula for patent term adjustment under 35 U.S.C. § 154 is:

  • the number of days of A Delay, plus 
  • the number of days of B Delay, less   
  • the number of days of overlap between the A Delay and the B Delay, and less   
  • the number of days of applicant delay.  

See Wyeth v. Dudas, 580 F. Supp. 2d 138 (D.D.C. 2008). Following the Federal Circuit’s decision in Wyeth, commentators speculated concerning whether patent holders now might successfully file civil suits seeking PTA correction even after the deadline of 180 days following patent issuance had passed, based on equitable tolling principles. It was theorized that prior to Wyeth, patent holders had relied to their detriment on the USPTO interpretation that applicants were only entitled to the longer of an A or a B Delay period. Wyeth clarified that the USPTO interpretation was erroneous and that patent holders were entitled to a patent term adjusted for A and B Delay periods. Accordingly, it was theorized that patent holders should be entitled to file their civil suits to capture the maximum patent term adjustment even after the 180-day filing deadline, because the subsequent clarification of the law in Wyeth triggered the doctrine of equitable tolling. For example, pharmaceutical companies Bristol-Myers Squibb Company and Kosan Biosciences, Inc., and Schering Corporation and Merck & Co., Inc., filed suits challenging the USPTO PTA calculations for patents for which the 180-day post-patent issuance civil suit filing deadline occurred before the Federal Circuit’s Wyeth decision. See, e.g., Bristol-Myers Squibb Co. v. Kappos, No. 1:09-cv-01330-EGS (D.D.C. filed July 17, 2009) (Bristol-Myers Squibb); Schering Corp. v. Kappos, No. 1:11-cv-00457-JDB (D.D.C. filed Mar. 1, 2011).

Some commentators were pessimistic about the chances of success, however, citing Henderson v. Shinseki, 589 F.3d 1201 (Fed. Cir. 2009) (en banc), which held that the 120-day deadline under 38 U.S.C. § 7266(a) for filing an appeal to the Veterans Court was jurisdictional, and thus mandatory. Id. at 1220. See R.W. Ashbrook and D.M. Becker, Patent Term Adjustment After Wyeth v. Kappos, Law360 Portfolio Media Inc. (Jan. 28, 2010). This case was reversed by the U.S. Supreme Court in Henderson, discussed above.

How does U.S. Supreme Court decision in Henderson affect patent holders seeking PTA corrections?

In Henderson, after the VA regional office and the Board of Veterans’ Appeals (Board) both denied the plaintiff’s claims for supplementary benefits, the plaintiff filed an appeal with the Veterans Court, but missed the 120-day filing deadline under 38 U.S.C. § 7266(a) by 15 days. Henderson, 131 S. Ct. at 1201. The Veterans Court concluded that the deadline required jurisdictional treatment, and dismissed the appeal for lack of jurisdiction because the plaintiff failed to comply with the filing deadline. Id. at 1202. The Federal Circuit affirmed. Id. The U.S. Supreme Court granted certiorari to determine whether the filing deadline was indeed jurisdictional. Id.

The Court clarified that filing deadlines are “quintessentially claim–processing rules” which are not jurisdictional unless there is a “clear indication” that Congress intended otherwise. Id. at 1203. The Court stated that the Court’s recent decision in Bowles v. Russell, 551 U.S. 205 (2007) “did not hold categorically that every deadline for seeking judicial review in civil litigation is jurisdictional.” Id. Instead, the Court explained, Bowles specifically addressed the deadline for an appeal from one Article III court to another court. Id. at 1204.

The Court held that the 120-day deadline for seeking Veterans Court review does not have jurisdictional attributes. Id. at 1206. The Court considered the following factors when assessing Congressional intent:

  • The terms of the filing deadline provision, 38 U.S.C. § 7266(a), did not speak in jurisdictional terms or refer in any way to jurisdiction. Id. at 1204. 
  • The filing deadline provision, 38 U.S.C. § 7266(a), appears in the VJRA in a sub-chapter entitled “procedure” rather than in a sub-chapter entitled “jurisdiction.” Id. at 1205.   
  • Congress has exhibited a longtime solicitude for veterans. Id.   
  • The adjudication of veterans’ benefits contrasts with civil litigation. For example, there is not a fixed period after the onset of disability or separation of service for filing claims, the VA has the responsibility to assist veterans in the development of evidence and must give veterans the benefit of the doubt when evaluating evidence, and unsuccessful claims are entitled to de novo review by the Board and again by the Veterans Court. Id. at 1205-1206.  

The Court remanded the case to the Federal Circuit, but in a footnote stated that they expressed no view as to whether the deadline was subject to equitable tolling if not jurisdictional. Id. at 1206 n.4.

In at least one pending case, the plaintiffs have cited the recent decision in Henderson as support for their argument that their claims for PTA correction filed more than 180 days after the issuance of their patent are timely under principles of equitable tolling. See Notice of Recent Decision at 1, Bristol-Myers Squibb Co. v. Kappos, No. 1:09-cv-01330-EGS (D.D.C. Mar. 3, 2011). It remains to be seen how the courts will rule on such arguments.

Conclusion

The effect of Wyeth’s clarification of the law of PTA remains unclear with respect to suits filed more than 180 days after patent issuance. It continues to remain important that where patent term length is critical, patent owners are diligent in reviewing the PTA calculations performed by the USPTO and take appropriate action (e.g., requesting reconsideration and/or filing a civil action) within the statutory timelines.

Patent holders who wish to file PTA correction civil suits after 180 days following their patent issuance should recognize that the U.S. Supreme Court has focused on the issue of congressional intent when deciding whether a potentially analogous filing deadline related to appeals from an agency to a court is jurisdictional, but has not decided on whether such a deadline, if deemed non-jurisdictional, is subject to equitable tolling.

Moreover, owners of patents which issued prior to the January 7, 2010 Wyeth decision who wish to capture an increased patent term may wish to consider whether to file a PTA correction suit promptly in order to guard against later arguments by the USPTO that the patent owner did not act diligently after the Henderson decision, recognizing that such suits may be stayed pending resolution of the Bristol-Myers Squibb case pending before the U.S. District Court for the District of Columbia.