Exela Pharama Sciences, LLC v. Lee: PTO revival rulings are not subject to third party collateral challenge

Category: Administrative Law 
By: Jesus Hernandez, Blog Editor/Contributor 
TitleExela Pharama Sciences, LLC v. Lee, No. 2013-1206 (Fed. Cir. 26, 2015).
IssueThis appeal presents the question of whether a third party has the right to challenge, by way of the Administrative Procedure Act (APA), a ruling of the Patent and Trademark Office reviving a patent application that had become abandoned by failure to meet a filing schedule established by the Patent Cooperation Treaty and its implementing statute.
Exela Pharama Sciences, LLC, at *2.
HoldingWe affirm the dismissal, on the ground that PTO revival rulings are not subject to third party collateral challenge, thereby precluding review regardless of whether Exela’s claims were time-barred.
Id. at *3.

Procedural HistoryThe challengers are Exela Pharma Sciences, LLC; Exela Pharmsci, Inc.; and Exela Holdings, Inc. (collectively “Exela”). Exela petitioned the PTO to “reconsider and withdraw” its revival of the national stage application and to cancel the issued patent. The patent is United States Patent No. 6,992,218 (“the ’218 patent”), assigned to SCR Pharmatop. The PTO declined to consider Exela’s petition, stating that no law or regulation authorizes non-party challenge to a PTO ruling to accept a tardy filing. Exela then brought suit under the APA in the United States District Court for the Eastern District of Virginia, arguing that the PTO’s action was ultra vires and that Exela’s petition should have been considered and favorably decided. The PTO moved to dismiss Exela’s complaint on several grounds. The district court initially held that Exela was enti- tled to challenge the PTO’s decision under the APA, but on reconsideration and in view of new Fourth Circuit precedent, the district court dismissed Exela’s complaint for failing to meet the statute of limitations for claims filed against the United States, including APA claims.
Exela Pharama Sciences, LLC, at *2-3.


Legal Reasoning (Per Curiam)
Cause of DelayPatentee SCR Pharmatop filed its initial patent appli- cation in France on June 6, 2000 and, in conformity with the Patent Cooperation Treaty (PCT), filed an interna- tional patent application identifying the United States, among others, as a designated state on June 6, 2001. The PCT implementing statute, 35 U.S.C. §351 et seq., requires the applicant to fulfill certain United States documentary and fee requirements within 30 months after the filing of the foreign priority application, here by December 6, 2002. See 35 U.S.C. §371(c), (d); PCT art. 22. SCR Pharmatop did not file the required materials by December 6, 2002, and consequently the United States application was deemed abandoned. On January 2, 2003 SCR Pharmatop filed a petition to revive the application, stating that the delay was “unintentional,” using the form provided by the PTO for revival requests. The PTO granted the petition on April 25, 2003. The application was duly examined, and the ’218 patent issued on January 31, 2006.
Exela Pharama Sciences, LLC, at *3-4.
"unintentional delay"On November 30, 2011 Exela filed the subject petition in the PTO, under the APA and 37 C.F.R. §§1.181, 1.182, and 1.183, challenging the PTO’s revival of the patent application that led to the ’218 patent. Exela argued that “unintentional” delay was not an available ground for revival of a U.S. patent application claiming priority under the PCT-implementing statute as then in effect. Exela pointed out that 35 U.S.C. §371(d) limited the revival of such national stage applications to those in which the non-compliance was “unavoidable” […] Exela argued that the PTO erred in applying its general revival regulation, 37 C.F.R. §1.137 […] Exela asserted that a PTO regulation cannot override a statute, and therefore, the PTO lacked discretion to grant SCR Pharmatop’s revival petition for “unintentional” delay.
Id. at *3-5.
Challenging PTO Revival RulingThe question on this appeal is not whether a patent applicant may challenge a PTO revival ruling as to its application; that question was resolved in the affirmative by this court’s decision in Morganroth v. Quigg, 885 F.2d 843 (Fed. Cir. 1989). The issue here is whether a third party may collaterally challenge and obtain judicial review of a PTO revival ruling concerning an unrelated patent application. 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.”).
Id. at *7-8.
We conclude that PTO revival actions are not subject to third party challenge under the APA. On this ground, the dismissal of the Exela complaint is affirmed.
Exela Pharama Sciences, LLC, at *8.


NEWMAN, Circuit Judge, concurring. Exela Pharama Sciences, LLC, Newman Op., at *1.
General Grounds for ConcurranceI write separately to address the concerns raised in Judge Dyk’s concurring opinion, in which he criticizes the court’s ruling in Aristocrat Technologies Australia Pty Ltd. v. International Game Technology, 543 F.3d 657 (Fed. Cir. 2008). With all respect to my colleague, I do not share the view that Aristocrat was wrongly decided.
Exela Pharama Sciences, LLC, Newman Op., at *2.
PTO ProceduresThe Patent Act is explicit as to the grounds for challenges to issued patents; these grounds do not include challenge to PTO discretionary actions in revival of deemed-abandoned applications. A PTO decision to excuse a tardy filing is not a statutory ground of invalidity or defense to infringement under 35 U.S.C. §282, nor is it a ground on which third persons can initiate and participate in post-issuance disputes, see Chapter 30 (prior art citations and requests for reexamination), Chapter 31 (inter partes review), and Chapter 32 (post-grant review). Rather, it is an irregularity in prosecution that “becomes irrelevant after the patent has issued.”
Id. at *2.
Addressing J. Dyk ConcurrenceJudge Dyk correctly points out that there are areas in which “a non-listed defense has been recognized by courts,” conc. op. at 4, citing cases in which antitrust violation, patent misuse, and shop right have been recog- nized as defenses to patent infringement. With all re- spect, my colleague errs in stating that such major substantive issues, each of which is a traditional defense, “cannot be so easily distinguished” from an excuse for a missed filing date. Conc. Op. at 5. If judges cannot easily distinguish the significance of antitrust violation from a missed date, we must try harder.
Id. at *3-4.



DYK, Circuit Judge, concurring. Exela Pharama Sciences, LLC, Dyk Op., at *1.
General Grounds for ConcurranceThe heart of Exela’s argument to the contrary is that it is entitled to proceed under the APA because there is a “strong presumption that Congress intends judicial review of administrative action,” Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667, 670 (1986), and because, since our precedent in Aristocrat Technologies Australia Pty Ltd. v. International Game Technology, 543 F.3d 657 (Fed. Cir. 2008), barred review of improper revival as a defense in infringement actions, the only available route to review is under the APA.
Exela Pharama Sciences, LLC, Dyk Op., at *2.
Aristocrat PrecedentIn Aristocrat, this court held that a defendant in an infringement action could not assert improper revival of an abandoned patent application as a defense in that action. See 543 F.3d at 660–61. We need not decide here whether Aristocrat was correctly decided. Whether it was or not, the Patent Act is inconsistent with third party APA review. However, I write separately to explain why I think our decision in Aristocrat was problematic.
Id. at *2.
Grounds for Reconsidering AristocratThere are four aspects of the Aristocrat opinion that in my view warrant its reconsideration. First, Aristocrat did not discuss the presumption of judicial review of agency action. […] As we hold today, there is no APA review for improper revivals and no alternative mechanism for review, so an invalidity defense would be the only route available for judicial review. Second, contrary to the suggestion in Aristocrat and by my colleague in her concurrence, this is not a case involving a minor procedural error in the PTO process. […] Here, Congress thought the issue of timely filing to be sufficiently important that it provided that a patent would be treated as abandoned for noncompliance, and it allowed the PTO to reinstate the patent only when specific criteria were satisfied. […] Third, in Morganroth v. Quigg, 885 F.2d 843, 846 (Fed. Cir. 1989), we held that review of the PTO’s refusal to revive a patent application was available under the APA. That case is not cited in Aristocrat, and it is indeed difficult to understand why a third party facing liability for infringement of the patent cannot seek judicial review of a revival decision if the patent applicant can do so, even though the patent applicant and accused infringer must pursue different avenues for review (a defense for the accused infringer and review under the APA for the patent applicant). Fourth, Aristocrat failed to recognize that Quantum was hardly the only example of situations in which a non-listed defense has been recognized by courts. Obviousness-type double patenting, for example, is a well- established defense that is not specified in the statute.
Id. at *3-4.



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