The Patient Survives: Third Party Challenge to PTO Revival of Patent Application Barred under the Administrative Procedures Act

The Federal Circuit Court of Appeals recently held that a third party may not challenge a decision by the United States Patent and Trademark Office (“PTO”) to revive an application under the Patent Cooperation Treaty and enabling statutes (“PCT”) through the Administrative Procedures Act (“APA”). See Excela Pharma Sciences, LLC v. Lee, No. 13-1206 (Fed. Cir. Mar. 26, 2015). In combination with the Federal Circuit’s prior holding in Aristocrat Technologies Australia Pty Ltd. v. International Game Technology, 543 F.3d 657 (Fed. Cir. 2008), this holding puts such decisions beyond the reach of third parties, whether affirmatively attacked under the APA or defensively raised in a later infringement action.

Here, SCR Pharmatop filed an application for a patent in France in 2000, and filed an international patent application under the PCT identifying the United States as one of the designated states on June 6, 2001. In the United States, SCR Pharmatop missed a December 6, 2002 deadline to submit certain documents and fees in accordance with provisions of 35 U.S.C. § 371, and was deemed to have abandoned its application. SCR Pharmatop petitioned the PTO to revive the application on January 2, 2003, stating that the abandonment was “unintentional;” the PTO granted the petition and, following examination, United States Patent No. 6,992,218 (the ‘218 patent) issued on January 31, 2006.

In 2011, Exela Pharma Sciences, LLC, Excela Pharmsci, Inc., and Exela Holdings, Inc. (collectively, “Exela”), filed an Abbreviated New Drug Application and Paragraph IV Certification relating to an injectable acetaminophen drug sold by SCR Pharmatop and its exclusive sublicensee Cadence Pharameceuticals, Inc. (collectively, “Pharmatop”). Pharmatop brought an infringement suit against Exela and Exela subsequently filed a petition with the PTO, challenging under the APA the revival of the application leading to the ‘218 patent.

Exela argued that, under then applicable law, an applicant had to claim “unavoidable” delay in complying with the provisions of 35 U.S.C. § 371 as proper grounds for a revival, while the applicant, SCR Pharmatop, had only indicated the noncompliance was “unintentional,” a standard later adopted for PCT applications in accordance with general revival regulations under 37 C.F.R. § 1.137. The PTO rejected the petition, stating that third parties had no statutory authorization to challenge such a decision. Exela appealed this decision to the District Court for the Eastern District of Virginia, seeking review of the rejection. The PTO moved to dismiss the complaint for lack of standing, time-bar, and because a PTO revival ruling is not subject to judicial review at the request of a third party challenger. The district court dismissed the action as time-barred.

Earlier in 2008, the Federal Circuit held that the PTO’s decision to revive a patent application under the PCT cannot provide grounds for an invalidity defense. Aristocrat, 543 F.3d at 663. Mindful of this decision, the plaintiff in the present Exela action argued that the strong presumption in favor of review of administrative decisions should permit third parties to challenge these types of PTO actions through the APA. Unconvinced, the Federal Circuit held that, while patent applicants may challenge a PTO revival decision, the APA does not authorize and Congress did not intend to provide an avenue for third parties to mount such collateral challenges under the statute.

Judges Newman and Dyk concurred, in disagreement over the continued viability of the Federal Circuit’s decision in Aristocrat. Judge Newman supported the reasoning in Aristocrat and the result, while Judge Dyk argued that Aristocrat had been poorly decided and misstates the limits of defenses available under the Patent Act.