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IP Alert: No Collateral Attack on USPTO’s Revival Decision

March 27, 2015

Yesterday, in Exela Pharma Sciences, LLC v. Lee, the Court of Appeals for the Federal Circuit rejected Exela’s collateral challenge to a ruling of the U.S. Patent and Trademark Office (USPTO). The USPTO had revived an abandoned patent application, and the Federal Circuit affirmed that Exela, a third party, could not lodge an agency challenge to this ruling. This decision is of interest on the specific revival question raised before the court, and it is also of more general interest to parties involved in challenging third-party patents and applications in the USPTO. 

In 2001, the patentee, SCR Pharmatop, filed a Patent Cooperation Treaty (PCT) application that identified the United States, among others, as a designated state. Under the provisions of the PCT and the implementing U.S. legislation and rules, the patentee was required to complete certain acts to enter the U.S. national stage by a certain deadline to secure examination in the USPTO. The patentee failed to meet this deadline, causing the PCT application to become abandoned. Shortly thereafter, though, the patentee successfully petitioned to revive the application on the grounds that the abandonment was “unintentional.” The application was duly examined and ultimately issued in 2006. 

In 2011, the patentee sued Exela for infringement of the issued patent. Exela asserted that the USPTO’s revival of the application as improper. But an earlier case, Aristocrat Technologies Australia Pty Ltd. v. International Game Technology, had held that a defendant in a patent infringement action could not assert improper revival of an abandoned patent application as a defense in that action. Exela therefore filed a petition in the USPTO to challenge the USPTO’s revival of the patent application. In its petition, Exela argued that the revival of the PCT application on “unintentional” grounds was not an available remedy under the PCT-implementing statute then in effect. 

The USPTO declined to consider Exela’s petition on the grounds that, as a third party, Exela lacked standing to challenge the USPTO’s action. Exela then sued the USPTO under the Administrative Procedure Act (APA) in the District Court for the Eastern District of Virginia. The USPTO moved to dismiss on a number of grounds. After initially denying the USPTO’s motion, the court subsequently granted a motion to dismiss, holding Exela’s action time-barred by the applicable six-year period of limitations.

On appeal, the Federal Circuit concluded that Congress did not intend to permit judicial review under the APA for challenges such as the one brought by Exela. Characterizing the issue as whether a third party may collaterally challenge and obtain judicial review of a USPTO revival ruling, the court concluded that the answer was no. Because the Patent Act provides an “intricate scheme for administrative and judicial review of PTO and patentability determinations” and because the Patent Act provides other procedures for judicial review of USPTO action “at the behest of particular persons through particular procedures,” the court concluded that third-party challenges of USPTO revival rulings under the APA were “not legislatively intended.” Accordingly, declining to reach the statute of limitations issue, the court affirmed the dismissal of Exela’s challenge.

Interestingly, the Federal Circuit panel consisted of Judges Newman, Dyk, and Rader. Judge Rader has since retired from the Federal Circuit and did not participate in the decision. The court’s decision was entered “per curiam,” which signified that Judges Newman and Dyk, the remaining judges on the panel, agreed with the decision. Nonetheless, each judge issued a concurring opinion. Judge Dyk wrote to express his concern that the Aristocrat case may have been wrongly decided, while Judge Newman’s opinion expressed that the Aristocrat case had been decided correctly. 

After Exela, it is not clear how a third party would directly challenge the allegedly improper revival at the USPTO of a patent application. Perhaps more fundamentally, Exela may have broader applicability to other third-party collateral attacks on USPTO decisions. Fitch Even attorneys will report on subsequent case law in this area in future alerts.

If you have any questions regarding the Exela case, please contact Fitch Even partner Allen E. Hoover, the author of this alert.


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