District Court Again Rejects Equitable Tolling for Patent Term Adjustment Case

In Daiichi Sankyo Co. v. Rea (D. D.C. Dec. 3, 2013), the U.S. District Court for the District of Columbia rejected the plaintiff’s arguments that equitable tolling should apply to permit its claim for additional Patent Term Adjustment (PTA) under Wyeth. In so doing, the court followed much of the reasoning in Novartis AG v. Kappos (D. D.C. 2012), which is on appeal at the Federal Circuit. Although the court held that equitable tolling is available in principle, it found that the patentee had not established the required extraordinary circumstances.

The Patents at Issue

The patents at issue were U.S. Patent 7,342,014 (granted March 11, 2008) and U.S. Patent 7,365,205 (granted April 29, 2008). Also relevant to the underlying facts was U.S. Patent 7,576,135 (granted August 18, 2009).

The ’135 patent was terminally disclaimed over the ’014 and ’205 patents, which were terminally disclaimed over each other. Thus, by operation of the terminal disclaimers filed in each of the underlying applications, all three patents would expire on the earliest expiration date of any of the three patents.

The Patent Term Adjustment Issues

In February of 2010, Daiichi Sankyo filed suit against the USPTO to obtain additional PTA for the ’135 patent under the Federal Circuit’s Wyeth decision, which was issued in early 2010. Although Daiichi Sankyo prevailed, it could not benefit from the additional PTA because of the ‘terminal disclaimers filed against the ’014 and ’205 patents. Thus, in November of 2010, Daiichi Sankyo filed an amended complaint seeking addition PTA for the ’014 and ’205 patents, also under the Federal Circuit’s decision in Wyeth. 

The Timeliness Issue

The statute in effect at the time provided that “[a]n applicant dissatisfied with a determination made by the Director under paragraph (3) shall have remedy by a civil action against the Director filed in the United States District Court for the District of Columbia within 180 days after the grant of the patent.” The USPTO moved for summary judgment that the complaint should be dismissed as untimely, because it was filed much later than 180 days after the ’014 and ’205 patents had granted. Daiichi Sankyo argued that the statutory provision at issue did not apply to the PTA award at issue or, alternatively, that the 180-day period should be tolled under the doctrine of equitable tolling.

The Statutory Argument

Daiichi Sankyo argued that the provision quoted above (35 USC § 154(b)(4)(A)) only applies to challenges of PTA awarded for type “A” delays, because this paragraph refers to “paragraph (3)” which relates to the PTA award provided with a Notice of Allowance, which reflects type “A’ delays but not type “B” delays. The court rejected that argument:

The plain meaning of a “paragraph (3)” determination is any determination that could be made under § 154(b)(3). This includes any PTA determination made under the regulations the Director promulgated under § 154(b)(3)(A), which includes A Delay, B Delay, and A/B Overlap, as well as the Director’s A Delay determination referred to in § 154(b)(3)(B). This interpretation of “paragraph 3″ includes the entirety of the determinations that could be made under § 154(b)(3) and does not construe “paragraph (3)” to mean only “paragraph (3)(B).” …. The plain meaning of the statute is that the 180-day limitations period applies to any determination made under § 154(b)(3)—including the final PTA determination.

The court also cited the district court decisions in Novartis and Janssen Pharmaceutica v. Kappos (E. D. Va. 2012), which rejected similar arguments.

This issue was raised on appeal to the Federal Circuit in the Novartis case, where oral arguments were held in early November. A decision is expected soon.  

The Equitable Tolling Arguments

Daiichi Sankyo also argued that the time for challenging the PTA awards for the patents at issue should be tolled under the doctrine of equitable tolling. The court determined that the provisions of § 154(b)(4)(A) are not jurisdictional such that they are, in principle, subject to equitable tolling, but found that Daiichi Sankyo had not shown that “extraordinary circumstances” justified equitable tolling in this case.

Daiichi Sankyo presented two grounds for equitable tolling:

• that it reasonably relied on the correctness of the USPTO’s methodology for calculating A/B Overlap … and thus, did not challenge the USPTO’s PTA determination for the ’014 and ’205 patents [such that] the 180-day limitations period should be equitably tolled until the district court decided Wyeth I in September 2008.
• that Wyeth I was a change in law that justifies equitable tolling.

With regard to the first argument, the court explained that while an agency’s incorrect advice regarding a limitations period can justify equitable tolling, an agency’s misinterpretation of substantive provisions cannot.

With regard to the second argument, the court found that Daiichi Sankyo “has not shown that it was unable to pursue its rights” until the Wyeth decisions were issued. Paraphrasing similar language from Novartis, the court noted that “Daiichi possessed all the facts necessary to challenge the USPTO’s PTA determinations before Wyeth I was decided,” and so “‘was free to raise the issues that Wyeth … raised.’”

A United Front

As noted above, several issues raised in this case are pending before the Federal Circuit in the Novartis case. Although it is possible that the Federal Circuit could reverse the district court’s decision on the bulk of Novartis’ equitable tolling claims, the fact that so many district court judges have determined that the change in law effected by the Wyeth decision does not in and of itself justify equitable tolling suggests that that the Federal Circuit is likely to reach the same conclusion.