IP Alerts

IP Alert
IP Alert: The Statute Tolls for Thee (Maybe)

November 17, 2014

On November 6, 2014, in Merck Sharp & Dohme Corp. v. Lee, the U.S. District Court for the District of Columbia held that the time limit for bringing a civil action under the patent term adjustment statute, 35 U.S.C. 154, can sometimes be subject to equitable tolling. The case is significant for patent applicants who may wish to bring suit against the U.S. Patent and Trademark Office (USPTO) to challenge the USPTO’s determination of patent term adjustment (PTA).

The USPTO is charged by statute with awarding PTA to patent applicants for certain delays during patent prosecution. Unfortunately, the statute is not a model of clarity, and the meaning and application of the statute have been litigated in a number of cases. An applicant that is dissatisfied with a PTA determination may bring a civil action against the Director of the USPTO “within 180 days” after the date of the Director’s decision.

In the Merck Sharp & Dohme case, the patentee sued the USPTO for correction of PTA, but the patentee did not bring suit until about two years after the patent issued. This was well outside the 180-day period enumerated by the statute. The patentee argued that this delay was justified because the lawsuit for correcting PTA was based on a change in the governing interpretation of the PTA statute engendered by the Federal Circuit’s decision in Wyeth v. Kappos. Notably, although the USPTO had instituted a special procedure after Wyeth for applicants to request recalculation of PTA (discussed in an earlier Fitch Even IP Alert here), the USPTO limited that special procedure to patents that had issued in the previous 180 days. The patentee in this case was unable to use the Wyeth special procedure because too much time had elapsed since the issuance of the patent.

Both the patentee and the USPTO moved for summary judgment. In considering these motions, the court addressed three issues: 1) whether the statutorily enumerated time limit was a jurisdictional restraint on the court’s power; 2) whether section 154 was subject to equitable tolling as a matter of law; and 3) if section 154 was subject to equitable tolling, whether this tolling was appropriate here.
In response to the first question, the court observed that the U.S. Supreme Court had “‘repeatedly held that filing deadlines ordinarily are not jurisdictional,’” and that the Court had “described them as ‘quintessential claim-processing rules.’” The court reasoned that the USPTO had offered no justification to depart from the Supreme Court’s reasoning in this regard.

Turning to the issue of whether section 154 is subject to equitable tolling, the court stated a non-jurisdictional federal statute of limitations is normally subject to a rebuttable presumption in favor of equitable tolling. Typically, the court explained, the federal courts should look to statutory language for explicit exceptions or limitations to determine whether the presumption has been rebutted. The court here held there was nothing in section 154 that would suggest that Congress did not intend for equitable tolling to apply.

The court then turned to the question of whether equitable tolling applied in the instant case. Notably, at a status hearing in the lawsuit, the USPTO had explicitly stipulated that the plaintiff met the factual requirements for equitable tolling. The USPTO chose to argue only that section 154 imposed a jurisdictional restraint and that the section was not subject to tolling as a matter of law. The court observed that every prior court that considered the issue of whether section 154 was equitably tolled by the patentee when filing a claim after the 180-day window has rejected this argument. Nonetheless, because the USPTO had conceded this point, it was bound by its concession.

It appears unlikely that the USPTO would concede in future such cases that equitable tolling would be applicable. Nonetheless, the Merck Sharp & Dohme court has left at least a little room for an argument for equitable tolling in subsequent lawsuits. The USPTO has the opportunity to appeal from this decision, and Fitch Even attorneys will provide the details of any appealed decision in a subsequent alert.

For more information, please contact Fitch Even partner Nicholas T. Peters.

Written by Fitch Even attorney Jonathan C. Hughley

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