By Chris Holman
Purdue Pharma L.P. v. Collegium Pharm., Inc., 2023 WL8043047 (Fed. Cir. Nov. 21, 2023)
Section 326(a)(11) of Title 35 (the Patent Act) provides that the PTO “shall prescribe regulations… requiring that the final determination in any post-grant review be issued not later than 1 year after [institution],” and that the time can be extended by up to six months for good cause or in the case of joinder (emphasis added). On its face, the statute seems to establish a statutory deadline of 18 months from institution (one year plus the six-month extension) for the PTAB to issue its Final Written Decision in a post-grant review (“PGR”) proceeding. In Purdue Pharma L.P. v. Collegium Pharm., Inc., the Federal Circuit answered a question that the court characterized as one of first impression, i.e., what recourse do the parties have if the PTAB fails to meet the statutory deadline? The Federal Circuit concluded that, because the statute does not specify any means for enforcing the PTAB’s compliance with the statutory deadline, the only recourse lies in a petition for a writ of mandamus.
The PTAB’s apparently unprecedented failure to issue its Final Written Decision within 18 months arose out of some unusual circumstances, including Purdue’s filing of a Notice of Bankruptcy Filing and Imposition of Automatic Stay and the Board’s resulting decision to stay the PGR, as well as some turnover on the panel that heard the case. In any event, after the PTAB issued its Final Written Decision finding Purdue’s claims to be unpatentable, Purdue appealed to the Federal Circuit, arguing that the Board lacked the authority to issue a Final Written Decision because it had failed to meet the 18 month deadline.
But the Federal Circuit sided with Collegium Pharma and the PTO, holding that the PTAB has authority to issue a Final Written Decision even after the deadline proscribed in the statute has passed. The court cited Supreme Court precedent for the proposition that “if a statute does not specify a consequence for non-compliance with statutory timing provisions, the federal courts will not in the ordinary course impose their own coercive sanction.” Responding to Purdue’s argument that the use of “shall” and “requiring” in section 326(a)(11) deprives the Board of authority to issue a Final Written Decision after the deadline, the Federal Circuit noted that in Brock v. Pierce Cnty. the Supreme Court held the “requirement that the Secretary ‘shall’ take action within 120 days does not, standing alone, divest the Secretary of jurisdiction to act after that time.”
The court found it significant that other provisions of the AIA use quite different language to bar action after the passage of a deadline. Section 315(b), for example, contains explicit language denying agency power after a time deadline, saying “[a]n inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner … is served with a complaint alleging infringement of the patent.” (emphasis added). See also section 321(c) (“A petition for a postgrant review may only be filed not later than the date that is 9 months after the date of the grant of the patent or of the issuance of a reissue patent” (emphasis added)). The Federal Circuit concluded that “[h]ad Congress meant to deprive the agency of power in section 326(a)(11), it knew how to do it, and, significantly, it did not use language in section 326(a)(11) similar to that used in other sections.”
The court found further support in the AIA’s legislative history, noting that “[i]f the Board could not issue a Final Written Decision, the parties would be forced to pursue the issue in district court litigation. This is the exact opposite of the purpose of the AIA, which is meant to create a more efficient alternative to district court litigation.”
The Federal Circuit goes on to state that Purdue’s appropriate remedy would have been a petition for writ of mandamus, which “is available immediately upon the deadline’s expiring, assuming that the other requirements for issuance of the writ are satisfied. There is no requirement to show unreasonable delay in the issuance of the decision—only that the deadline has passed.”
It remains to be seen whether the Federal Circuit’s decision will result in more Final Written Decisions being issued after the expiration of the 18 month statutory deadline, and whether mandamus will prove an effective remedy.
Speaking of missing deadlines, when I worked at the USPTO, there was a huge backlog of PCT cases that needed searches and written opinions. Back in those days, that work was done by Examiners instead of being outsourced like it is today.
One of the people in our TC was put in charge of getting the Art Units in our TC to work on the backlog. During a meeting, this person started got a little dramatic with assertions that we were in treaty violation for not timely processing these applications, etc. When I asked this person what the penalty was for this alleged “treaty violation”, they just gave me a blank look. They had absolutely no idea, and just re-iterated that we were in violation of the treaty. To this day, I never really got an answer what it means when there is a failure to timely perform PCT searches and written opinions.
The deadline is actually a regulatory one, not a statutory one. The statute requires that the USPTO promulgate regulations that set the 12-month deadline. Once the regulations are in place, the agency is in compliance with 35 USC 326(a)(11). The question at that point becomes, if the agency exceeds the deadline, what recourse is there under other laws such as the APA that would apply when an agency doesn’t comply with its own regulations?
Hmmm,
Apotu (here) and Paul (below) both reference yet a different posture of the case (in addition to my own posture that the CAFC may/should be bound by its own ‘law of the case’ in its own disposition of authority to the Bankruptcy Court).
If indeed we view this as regulatory (as opposed to statutory), and that the issue is instead one in which an administrative agency is simply not following its own regulations, then the CAFC case citations would NOT BE APPROPRIATE.
Not following one’s own regulatory restrictions may well then fall (and fall quickly) to violations of the APA under a capricious and arbitrary view – which could be in tandem to my point below at 1.1.1.
The idea that the language of “may not” and “may only” is somehow more strict than “shall” and “requiring” is ludicrous.
It seems fairly clear to me that Purdue decided to roll the dice on the belated decision either being favorable to it, or, if unfavorable, keeping the untimeliness argument under wraps until it eventually appealed. Not a terrible strategy I guess, but a risky one for sure, and in this case it didn’t pan out. Purdue was also probably worried that trying to mandamus the Board would just aggravate the APJs and make them more likely to decide against it.
Collegium may well have been planning to argue the exact same thing if the Board decision had gone the other way.
Except the details would not support such a plan.
The PTAB gave explicit directions if anyone wanted to challenge the ‘on hold” (which ended up violating the timing).
In fact, it could be pointed out that Collegium should have acted to preserve its fight under the timing constraints, and chose not to.
“ Purdue’s argument that the use of “shall” and “requiring” in section 326(a)(11) deprives the Board of authority to issue a Final Written Decision after the deadline”
This wasn’t even an “argument”. It was a Hail Mary and a silly one at that. Even the NY Jets know where to draw the line.
You really think it silly that words or requirement should have no effect….?
Or – as it is eminently more likely – this is merely Malcolm being against patents (and patent holders)…
Yeah, we both know what your animus really is.
And a mandamus to say what to PTAB? Follow the statutory deadline? Do your job? Generally speaking, you can’t get a court order to an agency to ‘do your job.’ A right without a remedy is no right at all.
I hear you.
I’m pretty sure mandamus happens for agencies all the time in this kind of situation, like when EPA, FEC, or even DEA sit around and fail to act on a petition, complaint, etc.
Yes, like G. Hyatt’s mandamus from the PTO delayed handling of some of his ancient applications. [But, if more timely, before the statue of limitations kicks in, it can be accomplished easier under the APA.]
The PTAB wasn’t trying to miss the deadline, so there is no reason to believe that the PTAB will start dragging its heels, if permitted to do so. Therefore, the most likely effect is that patentees simply won’t try to use stalling (by itself) as a viable strategy in a PGR.
As my pal Yoda would say, “Do, or do not. There is no Try.”
The law either has effect, or it does not.
Before DYK, HUGHES, and STOLL, Circuit Judges.
DYK, Circuit Judge.
As to comments of ‘gaming’ or ‘bad strategy,’ this:
“The Board advised that “Petitioner should seek any relief it deems appropriate from the Bankruptcy Court.” J.A. 868.
Neither party sought guidance from the bankruptcy court nor asked the bankruptcy court to lift the stay during the six-month extension period.”
That being said, the following from page 7 provides the ‘devil of details”
“The Supreme Court has established that “if a statute does not specify a consequence for non-compliance with statutory timing provisions, the federal courts will not in the ordinary course impose their own coercive sanction.”
United States v. James Daniel Good Real Prop., 510 U.S. 43, 63 (1993);
see also Nielsen v. Preap, 139 S. Ct. 954, 967 (2019);
Dolan v. United States, 560 U.S. 605, 611 (2010);
Barnhart v. Peabody Coal Co., 537 U.S. 149, 159 (2003);
Regions Hosp. v. Shalala, 522 U.S. 448, 459 n.3 (1998);
United States v. Montalvo-Murillo, 495 U.S. 711, 717 (1990).
We have “faithfully applied this rule of law as formulated by the Supreme Court . . . that, ‘even in the face of a statutory timing directive, when a statute does not specify the consequences of non-compliance, courts should not assume that Congress intended that the agency lose its power to act.’”
Hitachi Home Elecs. (Am.), Inc. v. United States, 661 F.3d 1343, 1347 (Fed. Cir. 2011) (quoting Liesegang v. Sec’y of Veterans Affs., 312 F.3d 1368, 1376–77 (Fed. Cir. 2002));
see also Transpacific Steel LLC v. United States, 4 F.4th 1306, 1320–21 (Fed. Cir. 2021).
… I am also wondering if there is (or should be) some type of “law of the case” position with this particular case – given that the PTAB set out for the Bankruptcy Court to be a specific arbiter of the underlying (supposedly) driving issue that pushed the timing envelope to expire.
As noted, BOTH sides could have – and were directed TO have – the opportunity to address the timing limitation in the Bankruptcy Court. Does not the PTAB surrender its authority — in this particular case — with such a pronouncement?
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