2013-1206

United States Court of Appeals

for the Federal Circuit
EXELA PHARMA SCIENCES, LLC, EXELA PHARMSCI, INC., and
EXELA HOLDINGS, INC.,
Plaintiffs-Appellants,
v.
TERESA STANEK REA and UNITED STATES
PATENT AND TRADEMARK OFFICE,
Defendants-Appellees,
v.
CADENCE PHARMACEUTICALS, INC. and
SCR PHARMATOP,
Intervenors.

Appeal from the United States District Court for the Eastern District of Virginia
in case no. 12-CV-469, Judge Liam OGrady.

BRIEF OF INTERVENORS

(counsel listed on inside cover)

Charles A. Weiss
HOLLAND & KNIGHT LLP
31 W. 52nd Street
New York, NY 10019
charles.weiss@hklaw.com

Richard P. Bress
Gabriel K. Bell
LATHAM & WATKINS LLP
555 Eleventh Street, NW, Suite 1000
Washington, DC 20004
(202) 637-2200

Counsel for SCR Pharmatop

Kenneth Schuler
Marc Zubick
LATHAM & WATKINS LLP
233 South Wacker Drive, Suite 5800
Chicago, IL 60606
(312) 876-7700
Stephen Swinton
LATHAM & WATKINS LLP
12636 High Bluff Drive, Suite 400
San Diego, CA 92130
(858) 523-5400
Counsel for Cadence Pharmaceuticals, Inc.

CADENCE PHARMACEUTICALS, INC.S CERTIFICATE OF INTEREST

Counsel for Defendant-Intervenor Cadence Pharmaceuticals, Inc. certifies
the following:
1.

The full name of every party or amicus curiae represented by me is:

Cadence Pharmaceuticals, Inc.

2.

The name of the real party in interest (if the party named in the caption is not
the real party in interest) represented by me is:
N/A

3.

All party corporations and any publicly held companies that own 10 percent
or more of the stock of the party or amicus curiae represented by me are:
None.

4.

The names of all law firms and the partners or associates that appeared for
the party or amicus curiae now represented by me in the trial court or agency
or are expected to appear in this court are:
Latham & Watkins LLP: Richard P. Bress, Stephen P. Swinton, Kenneth G. Schuler, Gabriel K. Bell, Marc N. Zubick
Oliff & Berridge, PLC: Aaron L. Webb, Peter T. Ewald

Dated: September 27, 2013

Respectfully submitted,

/s/ Richard P. Bress

Richard P. Bress
Counsel for Cadence
Pharmaceuticals, Inc.

SCR PHARMATOPS CERTIFICATE OF INTEREST

Counsel for Defendant-Intervenor SCR Pharmatop certifies the following:
1.

The full name of every party or amicus curiae represented by me is:

SCR Pharmatop

2.

The name of the real party in interest (if the party named in the caption is not
the real party in interest) represented by me is:
SCR Pharmatop

3.

All parent corporations and any publicly held companies that own 10 percent
or more of the stock of the party or amicus curiae represented by me are:
None.

4.

The names of all law firms and the partners or associates that appeared for
the party or amicus curiae now represented by me in the trial court or agency
or are expected to appear in this court are:
Holland and Knight LLP: Charles A. Weiss
Morris Nichols Arsht & Tunnell: Thomas C. Grimm
Oliff & Berridge, PLC: Aaron L. Webb, Peter T. Ewald

Dated: September 27, 2013

/s/ Charles A. Weiss

Charles A. Weiss
Counsel for SCR Pharmatop

ii

TABLE OF CONTENTS
Page
CADENCE PHARMACEUTICALS, INC.S CERTIFICATE OF
INTEREST .......................................................................................................i
SCR PHARMATOPS CERTIFICATE OF INTEREST ......................................... ii
TABLE OF AUTHORITIES .....................................................................................v
STATEMENT OF RELATED CASES ..................................................................... 1
STATEMENT OF JURISDICTION.......................................................................... 1
COUNTERSTATEMENT OF THE ISSUES............................................................ 2
INTRODUCTION .....................................................................................................3
COUNTERSTATEMENT OF THE CASE ............................................................... 5
COUNTERSTATEMENT OF THE FACTS ............................................................ 9
A.

Statutory and Regulatory Background .................................................. 9

1.

Limited Grounds For Third-Party Challenges ............................ 9

2.

Timing Rules For International Patent Applications, And

Provision For Exceptions ..........................................................11

B.

The Patent-In-Suit And The Parties ....................................................12

C.

Exelas Petition And The PTOs Letter ..............................................13

D.

The District Court Proceedings ...........................................................14

1.

Exelas Claims ..........................................................................14

2.

The PTOs Motion To Dismiss .................................................14

3.

Hire Order.................................................................................15

4.

Reconsideration In Light Of Hire Order ..................................16

SUMMARY OF THE ARGUMENT ......................................................................18

ARGUMENT ...........................................................................................................22
I.

STANDARD OF REVIEW ...........................................................................22

II.

EXELAS APA ACTION WAS PROPERLY DISMISSED ........................22

A.

Exelas APA Action Against The PTO Is An Untimely Facial

Challenge Under Controlling Precedent .............................................22

iii

Page

B.

III.

1.

Fourth Circuit Law Governs Application Of The Statute

Of Limitations ...........................................................................24

2.

Exelas Suit Is, Under Fourth Circuit Precedent, A Facial

Challenge To The PTOs Revival Rule And Patent
Issuance .....................................................................................25

3.

Exelas Suit Is Time-Barred Under The Fourth Circuits

Holding In Hire Order ..............................................................30

4.

The PTOs 2012 Letter Refusing To Act On Exelas

Petition Did Not Restart The Clock ..........................................34

Exelas APA Action Against The PTO Is Independently

Foreclosed Under Pregis .....................................................................40
1.

The Patent Act Precludes Exelas APA Action

Challenging The Patent-In-Suits Validity ...............................41

2.

The Patent Act Provides Adequate Remedies ..........................45

3.

Exelas Attempts To Evade Pregis Are Unavailing ................. 46

THE MERITS OF EXELAS APA ACTION ARE NOT BEFORE

THIS COURT ................................................................................................49

CONCLUSION ........................................................................................................51

iv

TABLE OF AUTHORITIES
Page(s)
CASES
Animal Legal Defense Fund v. Quigg,
932 F.2d 920 (Fed. Cir. 1991) .......................................................................43
Aristocrat Technologies Australia Pty. Ltd. v. International Game
Technology,
543 F.3d 657 (Fed. Cir. 2008) ................................................................passim
Association of Data Processing Service Organizations, Inc. v. Camp,
397 U.S. 150 (1970).......................................................................................41
Bay Area Laundry & Dry Cleaning Pension Trust Fund v. Ferbar Corp. of
California, Inc.,
522 U.S. 192 (1997).......................................................................................33
Block v. Community Nutrition Institute,
467 U.S. 340 (1984)................................................................................ 41, 43
Bowen v. Michigan Academy of Family Physicians,
476 U.S. 667 (1986).................................................................................41, 43
Bray v. United States,
785 F.2d 989 (Fed. Cir. 1986) .......................................................................24
Dunn-McCampbell Royalty Interest, Inc. v. National Park Service,
112 F.3d 1283 (5th Cir. 1987) .......................................................................34
Forshey v. Principi,
284 F.3d 1335 (Fed. Cir. 2002) .....................................................................25
Functional Music, Inc. v. FCC,
274 F.2d 543 (D.C. Cir. 1958).................................................................32, 33
Garcia v. Vilsack,
563 F.3d 519 (D.C. Cir. 2009).......................................................................45

Page(s)
Gold Dollar Warehouse, Inc. v. Glickman,
211 F.3d 93 (4th Cir. 2000) .........................................................25, 26, 28, 29
GPX International Tire Corp. v. United States,
666 F.3d 732 (Fed. Cir. 2011) .......................................................................50
Hire Order Ltd. v. Marianos,
698 F.3d 168 (4th Cir. 2012) ..................................................................passim
ICC v. Brotherhood of Locomotive Engineers,
482 U.S. 270 (1987)...............................................................17, 20, 35, 36, 39
Jersey Heights Neighborhood Association v. Glendening,
174 F.3d 180 (4th Cir. 1999) ...................................................................34, 46
Landmark Screens, LLC v. Morgan, Lewis, & Bockius, LLP,
676 F.3d 1354 (Fed. Cir. 2012) .....................................................................24
Madey v. Duke University,
307 F.3d 1351 (Fed. Cir. 2002) .....................................................................22
Magnivision, Inc. v. Bonneau Co.,
115 F.3d 956 (Fed. Cir. 1997) .......................................................................49
Magnola Metallurgy, Inc. v. United States,
508 F.3d 1349 (Fed. Cir. 2007) ....................................................................35
Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak,
132 S. Ct. 2199 (2012)...................................................................................41
MedImmune, Inc. v. Genentech, Inc.,
549 U.S. 118 (2007).......................................................................................42
NLRB Union v. FLRA,
834 F.2d 191 (D.C. Cir. 1987).......................................................................33
Norton v. Southern Utah Wilderness Alliance,
542 U.S. 55 (2004).........................................................................................39

vi

Page(s)
P & V Enterprises v. U.S. Army Corps of Engineers,
516 F.3d 1021 (D.C. Cir. 2008).........................................................36, 37, 38
Pregis Corp. v. Kappos,
700 F.3d 1348 (Fed. Cir. 2012) ..............................................................passim
Pupols v. U.S. PTO,
413 F. Appx 232 (Fed. Cir.), cert. denied, 131 S. Ct. 3009 (2011) ............. 44
Rozenblat v. Kappos,
345 F. Appx 601 (Fed. Cir. 2009) ................................................................44
Sackett v. EPA,
132 S. Ct. 1367 (2012)...................................................................................41
SmithKline Beecham Corp. v. Apotex Corp.,
439 F.3d 1312 (Fed. Cir. 2006) ...............................................................25, 39
Spannaus v. U.S. DOJ,
824 F.2d 52 (D.C. Cir. 1987).............................................................22, 33, 34
Syntex (U.S.A.) Inc. v. U.S. PTO,
882 F.2d 1570 (Fed. Cir. 1989) ...............................................................43, 44
United States v. Fausto,
484 U.S. 439 (1988).......................................................................................41
Your Home Visiting Nurse Services, Inc. v. Shalala,
525 U.S. 449 (1999).................................................................................35, 39

STATUTES, REGULATIONS AND RULES

5 U.S.C. 701 et seq..................................................................................................1
5 U.S.C. 701(a)(1) ...........................................................................................20, 40
5 U.S.C. 701(a)(2) .................................................................................................35

vii

Page(s)
5 U.S.C. 702 .........................................................................................................40
5 U.S.C. 704 ...................................................................................................20, 45
5 U.S.C. 706(1) .....................................................................................................39
5 U.S.C. 706(2)(C) ................................................................................................47
28 U.S.C. 1295(a)(1) ...............................................................................................1
28 U.S.C. 1331 ........................................................................................................1
28 U.S.C. 1338(a) ...................................................................................................1
28 U.S.C. 2201(a) .................................................................................................42
28 U.S.C. 2401(a) ...............................................................................2, 6, 7, 18, 22
35 U.S.C. 1 et seq....................................................................................................9
35 U.S.C. 2 ............................................................................................................38
35 U.S.C. 3 ............................................................................................................38
35 U.S.C. 101 ........................................................................................................10
35 U.S.C. 102 ........................................................................................................10
35 U.S.C. 103 ........................................................................................................10
35 U.S.C. 111 ..........................................................................................................9
35 U.S.C. 132 ..........................................................................................................9
35 U.S.C. 133 ..........................................................................................................9
35 U.S.C. 134 ....................................................................................................9, 42

viii

Page(s)
35 U.S.C. 141 ....................................................................................................9, 42
35 U.S.C. 145 ....................................................................................................9, 42
35 U.S.C. 271 ........................................................................................................10
35 U.S.C. 282 ........................................................................................5, 10, 42, 47
35 U.S.C. 282(b) ...................................................................................................11
35 U.S.C. 301-307...............................................................................................42
35 U.S.C. 301 ........................................................................................................10
35 U.S.C. 302 ........................................................................................................10
35 U.S.C. 305 ..........................................................................................................9
35 U.S.C. 306 ..........................................................................................................9
35 U.S.C. 311-318...............................................................................................42
35 U.S.C. 311 ..................................................................................................10, 42
35 U.S.C. 314 ..........................................................................................................9
35 U.S.C. 315 ....................................................................................................9, 10
35 U.S.C. 321 ..................................................................................................10, 42
35 U.S.C. 351 et seq..............................................................................................11
35 U.S.C. 371 ....................................................................................................9, 14
35 U.S.C. 371(c) .............................................................................................11, 12
35 U.S.C. 371(d) .................................................................................11, 12, 23, 27

ix

Page(s)
35 U.S.C. 41(a)(7) .................................................................................................12
Pub. L. No. 112-29, 125 Stat. 284 (2011)................................................................10
Pub. L. No. 112-211, 126 Stat. 1527 (Dec. 18, 2012; effective Dec. 18,
2013) ..............................................................................................................49
37 C.F.R. 1.17(l) ...................................................................................................11
37 C.F.R. 1.17(m) .................................................................................................11
37 C.F.R. 1.137(a).................................................................................................11
37 C.F.R. 1.137(b) ..................................................................................6, 8, 11, 24
37 C.F.R. 1.181 .....................................................................................................13
37 C.F.R. 1.181(a)(3) ............................................................................................38
37 C.F.R. 1.182 .....................................................................................................13
37 C.F.R. 1.491 .....................................................................................................11
37 C.F.R. 1.495 ...............................................................................................11, 12
47 Fed. Reg. 41,272 (Sept. 17, 1982) ......................................................................12
65 Fed. Reg. 57,024 (Sept. 20, 2000) ......................................................................12
Fed. Cir. R. 47.5(b) ....................................................................................................1

OTHER AUTHORITY
Gillian E. Metzger, Facial Challenges and Federalism, 105 Colum. L. Rev.
873, 881 (2005)..............................................................................................29

STATEMENT OF RELATED CASES

There are no other appeals arising from the district court action below. See
Fed. Cir. R. 47.5(a). The following cases may be directly affected by the outcome
in the present appeal: Cadence Pharmaceuticals, Inc. v. Exela Pharma Sciences,
LLC, No. 11-cv-733 (D. Del. filed Aug. 18, 2011); Cadence Pharmaceuticals, Inc.
v. Fresenius Kabi USA, LLC, No. 3:13-cv-139 (S.D. Cal. filed Jan. 17, 2013); and
Cadence Pharmaceuticals, Inc. v. Sandoz, Inc., No. 3:13-cv-278 (S.D. Cal. filed
Feb. 4, 2013). See Fed. Cir. R. 47.5(b).
STATEMENT OF JURISDICTION
Exela Pharma Sciences, LLC, Exela PharmSci, Inc., and Exela Holdings,
Inc. (collectively Exela) brought this suit against the United States Patent &
Trademark Office and its Director (collectively the PTO) in the Eastern District
of Virginia under the Administrative Procedure Act (APA), 5 U.S.C. 701 et
seq., asserting jurisdiction under, inter alia, 28 U.S.C. 1331, 1338(a). On
December 19, 2012, the district court held that the action was untimely and
dismissed it with prejudice. A1-6, A7. On February 8, 2013, Exela timely
appealed. ECF No. 57. This Court has jurisdiction under 28 U.S.C. 1295(a)(1).

COUNTERSTATEMENT OF THE ISSUES

1.

Whether the district court correctly dismissed Exelas complaint as

untimely under the applicable six-year statute of limitations, 28 U.S.C. 2401(a),

and the Fourth Circuits recent binding authority in Hire Order Ltd. v. Marianos,
698 F.3d 168 (4th Cir. 2012), because its complaint seeks to invalidate a PTO rule
and a U.S. patent each issued more than six years earlier.
2.

Whether, in any event, dismissal was required under this Courts

recent decision in Pregis Corp. v. Kappos, 700 F.3d 1348 (Fed. Cir. 2012), because
the Patent Act precludes an accused infringer from circumventing the Acts
detailed and purposefully-limited framework for asserting defenses to patent
infringement by bringing a collateral APA suit against the PTO to challenge the
patents validity.

INTRODUCTION
Facing a patent infringement action in another district court, Exela brought
this collateral APA action against the PTO claiming that the patent-in-suit is
invalid because, during patent prosecution, the PTO applied an invalid procedural
rule. Two recent appellate decisions independently require affirmance of the
district courts order dismissing this action.
First, as the district court held, Exelas suit is untimely under Hire Order
Ltd. v. Marianos, 698 F.3d 168, 170 (4th Cir. 2012), a Fourth Circuit case
construing the governing six-year statute of limitations in remarkably similar
circumstances. Although Exela now argues that Fourth Circuit law does not apply
to this issue, Exela argued the exact opposite below. Exela was correct the first
time, and in any event it cannot change course on appeal. This is important
because, as the district court recognized, controlling Fourth Circuit precedent
requires dismissal of Exelas suit as untimely.
In Hire Order, the Fourth Circuit held that a plaintiffs facial challenge to
agency action accrues at the time of the agency action, even if the plaintiff is not
harmed until long after the limitation period ends. That holding is dispositive here
because all of the PTOs relevant actionsimplementing its revival rule (in 1982),
reviving the patent application (in 2003), and, ultimately, issuing the patent-in-suit
(in 2006)occurred more than six years prior to Exelas suit. Exelas principal

argument is that its claims are timely because they accrued not when the PTOs
actions occurred but only when Exela felt the effects of those agency actionsi.e.,
when Exela faced the infringement action. But Hire Order considered and
squarely rejected that position. Under Hire Order, Exelas facial challenge was
untimely and properly dismissed for that reason.
Second, and even more fundamentally, Exelas APA action must be rejected
under this Courts recent decision in Pregis Corp. v. Kappos, 700 F.3d 1348 (Fed.
Cir. 2012). Pregis establishes that a third party cannot sue the PTO under the
APA to challenge a PTO decision to issue a patent, even in circumstances where
the third party ostensibly has no other way to raise its particular invalidity
challenge. Id. at 1357. That holding squarely forecloses Exelas APA suit, which
seeks to invalidate the patent-in-suit based on the PTOs allegedly improper revival
of the patent application. Just as Exela cannot raise the procedural irregularit[y]
of improper revival as a defense in the parallel infringement action, see
Aristocrat Techs. Australia Pty. Ltd. v. Intl Game Tech., 543 F.3d 657, 663 (Fed.
Cir. 2008), it cannot do an end-run and seek to invalidate the patent on that same
ground in an APA suit against the PTO, see Pregis, 700 F.3d at 1357-61 (citing
Aristocrat, 543 F.3d at 662-63).
Under Exelas contrary view, accused infringers could (and undoubtedly
would) pursue collateral actions against the PTO as a matter of course,

inundat[ing] the courts with arguments relating to every minor transgression they
could comb from the file wrapper, Aristocrat, 543 F.3d at 663, and forcing the
PTO to defend under APA standards any patent asserted in an infringement
actionoften years after the patent issued. As this Court has explained,
[a]llowing competitors to collaterally attack issued patents through suits under the
APA would destroy the Patent Acts careful framework for judicial review at the
behest of particular persons through particular procedures. Pregis, 700 F.3d at
1359. Although the district court reached a contrary conclusion prior to this
Courts holding in Pregis, this Court subsequently has resolved the issue. Under
Pregis, it is clear that Exelas APA suit cannot proceed.
The district courts judgment dismissing Exelas suit should be affirmed.
COUNTERSTATEMENT OF THE CASE
In August 2011, patent owner SCR Pharmatop (Pharmatop) and licensee
Cadence Pharmaceuticals, Inc. (Cadence) sued Exela in the United States
District Court for the District of Delaware alleging infringement of the patent-insuit, U.S. Patent No. 6,992,218 (the 218 patent), A94-101, and another patent
not at issue here. Exela counterclaimed, asserting, among other things, that the
patent-in-suit is invalid. That infringement action remains ongoing and is not
under review here.

In November 2011, Exela petitioned the PTO to reconsider and withdraw its
decision (in 2003) to revive the unintentionally abandoned patent application that
ultimately issued as the 218 patent (in January 2006). A64, 94. Shortly
thereafter, in February 2012, the PTO issued a letter observing that, as a third
party, Exela had no statutory or regulatory right to intervene in or challenge an ex
parte proceeding, and declining to reconsider its decision to revive the patent
application. A68-69.
In April 2012, Exela brought the present suit under the APA directly against
the PTO. A26-27. Exela sought a declaratory judgment that the PTOs rules and
regulations allowing for the revival of an international patent application under the
unintentional standard are unlawful and that the patent-in-suit is invalid.
A40 b, e. The PTO moved to dismiss the action for lack of subject matter
jurisdiction or failure to state a claim. The PTO argued, inter alia, that Exelas
complaint was an untimely facial challenge under the relevant six-year statute of
limitations, 28 U.S.C. 2401(a), because it was filed more than six years after any
of the challenged agency actionsthe PTOs promulgation of its revival
regulation, 37 C.F.R. 1.137(b), and the PTOs 2003 revival decision that led to
the patent-in-suits issuance in early 2006. A332-35. The PTO also argued that, in
any event, the Patent Act prevents accused infringers from bringing collateral
challenges to patent validity under the APA. A342-49.

In August 2012, the district court denied the PTOs motion to dismiss. A15.
The court held that Exelas claims did not accrue until Exela faced the
infringement suit in 2011, and that, contrary to the PTOs position, Exelas suit
was therefore timely. A9-11. The court also rejected the PTOs argument that the
APA suit was an improper third-party collateral attack. A13. In the courts
view, the presumption in favor of judicial reviewability of agency action has not
been overcome by a showing that Congress intended to preclude review in a
manner fairly discernible in the [Patent Acts] statutory scheme. A15 (citation
omitted). Pharmatop and Cadence then intervened, unopposed, as defendants.
A5001-02, A5032-33.
In October 2012, the Fourth Circuit held that a present-day facial attack on
an agencys 1969 ruling (challenging the ruling on its face in some, but not all,
circumstances) was untimely under 28 U.S.C. 2401(a), rejecting the plaintiffs
argument that their action did not accrue until they were affected by the rule in
2008. Hire Order, 698 F.3d at 169-70. The PTO, Pharmatop, and Cadence
promptly asked the district court here to reconsider its timeliness ruling in light of
Hire Order. A462-63. Exela agreed with them that Fourth Circuit law is
controlling with respect to the proper application of the statute of limitations in
this case. A506; see also A494, 497, 500. But Exela maintained that, despite Hire
Order, Exelas claims did not accrue until Exela was purportedly harmed by the

PTOs actionsi.e., until Exela faced the private infringement action in 2011.
A501.
In a December 2012 order, the district court agreed that Exelas claims are
barred under Hire Order. A4-6. As the district court explained, Hire Order
teaches that facial challenges must be brought within six years of the relevant final
agency action. The district court found that Exelas suit is a facial challenge
because it seeks a declaration regarding which standard to apply across the board,
rather than a determination regarding how to apply a standard and claims that the
PTOs rules and regulations are not in compliance with the authority granted in
the express language of the statute. A4, 6. Then, applying Hire Order, the court
held that Exelas claims are untimely because they came more than six years after
the PTOs challenged revival rule, 37 C.F.R. 1.137(b) (originally promulgated in
1982). A4-6. The court rejected Exelas argument that the PTOs 2012 letter
which refused Exelas request to reopen the PTOs 2003 revival decisionis itself
a reviewable agency action, because the PTO merely refused to consider Exelas
improper petition, rather than denying it on the merits. A2 n.1. Accordingly, the
district court dismissed Exelas suit in its entirety.
Also in December 2012 (shortly before the district courts decision on
reconsideration), this Court held that a third party cannot sue the PTO under the
APA to challenge a PTO decision to issue a patent. Pregis, 700 F.3d at 1357.

This appeal followed.

COUNTERSTATEMENT OF THE FACTS
A.

Statutory and Regulatory Background

1.

Limited Grounds For Third-Party Challenges

The Patent Act, 35 U.S.C. 1 et seq., provides an intricate scheme for

administrative and judicial review of PTO patentability determinations. Pregis,
700 F.3d at 1358. The Act provides several avenues for patent applicants to
challenge adverse decisions in the course of ex parte patent prosecution. For
example, applicants can ask the examiner to reconsider a rejection, 35 U.S.C.
132, seek to revive an abandoned application, id. 111, 133, 371, appeal a
twice-rejected application to the Board of Patent Appeals and Interferences (now
the Patent Trial and Appeal Board), id. 134, and appeal an adverse Board
decision to the Federal Circuit, id. 141, or, alternatively, bring a civil action
within 60 days of the Boards decision in the U.S. District Court for the Eastern
District of Virginia against the PTO to seek issuance of the patent, id. 145.
Similarly, if the PTO conducts an ex parte or inter partes reexamination, the
patentee can participate in such proceedings and appeal adverse decisions. Id.

 305-06, 314-15. 1 And, once issued, patents are presumed valid and patentees
can enforce their patent rights in suits brought in civil actions. Id. 271, 282.
In contrast to the extensive rights it affords patent applicants to challenge
adverse PTO decisions, the Patent Act strictly limits the extent of third parties
involvement in patent prosecution and reviewlimiting both their opportunities
for participation and the issues they can raise. During a patent examination, third
parties can bring certain matters to the PTOs attention, such as relevant prior art
references or the applicants prior written statements on the scope of the patent. Id.
301. Third parties can also raise prior art by petitioning the agency to undertake
ex parte reexamination or inter partes reexamination, and can appeal a decision on
the latter. Id. 302, 311, 315. But the Patent Act does not permit third parties to
raise any other validity concerns during a patent examination or reexamination.
The Patent Act also limits the defenses that an accused infringer can assert in
a patent infringement action, to four enumerated grounds: (1) noninfringement or
unenforceability of the patent, (2) invalidity of the patent on any ground specified
in part II as a condition for patentability (under 101, 102, 103), (3) invalidity

Unless otherwise indicated, statutory citations are to the provisions in effect

when this suit was filed, before most of the changes in the Leahy-Smith America
Invents Act (AIA), Pub. L. No. 112-29, 6, 125 Stat. 284, 299-313 (2011), took
effect. Those amendments are not materially different for purposes of this appeal
and reconfirm the comprehensive nature of the review scheme. For example, inter
partes reexamination has been superseded by inter partes review and post-grant
review. 35 U.S.C. 311, 321 (effective Sept. 16, 2012).
10

of the patent for lack of adequate written description or enablement (under 112)
or certain other errors (under 251), and (4) [a]ny other fact or act made a
defense by this title. Id. 282(b). Accused infringers are not permitted to raise
an invalidity defense on the basis of prosecution irregularities and procedural
lapses, such as the PTOs improper revival of an abandoned patent application
under 133 and 371. Aristocrat, 543 F.3d at 663.
2.

Timing Rules For International Patent

Applications, And Provision For Exceptions

A foreign inventor may file an international patent application and prosecute

the patent in the United States under the Patent Cooperation Treaty. 35 U.S.C.
351 et seq. To do so, an applicant must submit certain documents and fees
within 30 months of the foreign application from which the international
application stems. See 35 U.S.C. 371(c); 37 C.F.R. 1.491, 1.495.2 Otherwise,
the application is considered abandoned, unless it be shown to the satisfaction of
the Director that such failure to comply was unavoidable. 35 U.S.C. 371(d). In
1982, the PTO issued a regulation providing that an abandoned application can be
revived if the Commissioner finds that the abandonment was either unavoidable
or unintentional, 37 C.F.R. 1.137(a), (b), and providing a different fee for
revival under each standard, id. 1.17(l), (m). See also 35 U.S.C. 41(a)(7); 47

The thirty-month period runs from the international application itself if it does
not claim priority to a foreign application.
11

Fed. Reg. 41,272, 41,277 (Sept. 17, 1982).3 Since then, the PTO has consistently
applied the alternative unavoidable and unintentional standards to requests for
revival.
B.

The Patent-In-Suit And The Parties

On June 6, 2000, Pharmatop filed a French patent application for a new

method for obtaining aqueous formulations with active principles susceptible to
oxidation and the aqueous solutions thus obtained. A32 31; A469. A year later,
Pharmatop filed an international patent application in the United States. A32 32;
see No. PCT/FR01/01749 (international application); No. 10/332,060 (U.S.
application). Under PTO rules, Pharmatop had until December 6, 200230
months from the filing of the initial French applicationto complete the necessary
requirements to enter the national stage. See 35 U.S.C. 371(c); 37 C.F.R.
1.495. When the deadline passed, the application was deemed abandoned. See
35 U.S.C. 371(d); A32 33. But less than a month later, on January 2, 2003,
Pharmatop filed a petition under 37 C.F.R. 1.137(b) to revive the international
application because the delay had been unintentional. A33 38. On April 25,
2003, the PTO granted Pharmatops petition and revived the application. A60;
A71.
3

The subsequent amendments to 37 C.F.R. 1.137 do not affect this appeal, as

Exela observes. See Br. 9 n.1. The version in effect at the time of the PTOs 2003
revival decision is reproduced in the Addendum at ADD-7. See 65 Fed. Reg.
57,024, 57,057-58 (Sept. 20, 2000).
12

On January 31, 2006, the PTO issued the patent-in-suit, the 218 patent, to
Pharmatop. A94. Cadence is the exclusive sub-licensee. A82 28-29. The
commercial embodiment of the 218 patent is OFIRMEV, which was approved
by the FDA in 2010. See NDA No. 022450. OFIRMEV, the first intravenous
formulation of acetaminophen available in the United States, is a non-narcotic pain
reliever now commonly used, for example, to augment or replace narcotics (like
morphine) in the hours after a patient undergoes surgery. A82 30; A5025.
OFIRMEV was added to the FDAs book of approved drugs (the so-called
Orange Book) and was listed as being protected by the 218 patent and another
patent not at issue here. A34; A82-82 31.
On April 7, 2011, Exela sought approval from the FDA to make and sell a
generic copy of OFIRMEV and asserted that the 218 patent is invalid. See A34
46; A85 44; see ANDA No. 20-3092. That prompted Pharmatop and Cadence
to file an infringement action based on the 218 patent (and another patent) against
Exela (and others) in the United States District Court for the District of Delaware.
A76, 90-92 (No. 11-cv-733). Exela counterclaimed for declaratory judgment of
noninfringment and invalidity.
C.

Exelas Petition And The PTOs Letter

On November 30, 2011, Exela petitioned the PTO under 37 C.F.R. 1.181
and 1.182 to reconsider and withdraw its petition decision reviving [the]

13

abandoned U.S. patent application [that] ultimately issued as U.S. Patent No.
6,992,218. A56-67. Exela argued that the PTO had no authority to revive an
international patent application based on the unintentional standard. A57.
Observing that the Patent Act and the PTO regulations do not provide for a
nonparty challenge to an ex parte patent proceeding, the PTO declined Exelas
petition for reconsideration and issued a letter to that effect on February 17, 2012.
A68-69. The PTO also returned Exelas petition fee. A69.
D.

The District Court Proceedings

1.

Exelas Claims

On April 26, 2012, Exela filed the present suit against the PTO, styled as a
Complaint For Declaratory And Injunctive Relief And Petition For Review Of
Rulemaking. A26. Exela sought declarations that the Patent Act, 35 U.S.C.
371, only permits revival under the stringent unavoidable standard; that the
USPTO rules and regulations allowing for the revival of an international patent
application under the unintentional standard are unlawful; that the 218 patent is
invalid due to the PTOs improper 2003 revival decision; and that the PTO
must address the merits of Exelas 2011 petition. A40-41 b, d, e, f.
2.

The PTOs Motion To Dismiss

The PTO moved to dismiss Exelas action under Federal Rules of Civil
Procedure 12(b)(1) and (6) for lack of jurisdiction and failure to state a claim.

14

A319, 330. The PTO argued that (i) Exelas claims are untimely because they
accrued more than six years prior, when the agency itself acted (in 1982 or 2003),
not later when Exela faced suit (in 2011); (ii) Exela lacks standing; and (iii) Exela
cannot bring an APA action to collaterally attack the PTOs revival decision or
patent issuance. On August 22, 2012, the district court denied the PTOs motion
on all three grounds. A8-16. Shortly thereafter, the court granted the unopposed
motions of Pharmatop and Cadence to intervene as defendants. A5032-33.
3.

Hire Order

On October 18, 2012, the Fourth Circuit held that, for a facial APA
challenge to an agency action, 2401(a)s six-year limitations period begins to
run when the agency publishes the actioneven if the plaintiff was not harmed
until well after the limitations period ended. Hire Order v. Marianos, 698 F.3d at
170 (citation omitted). In that case, two federally licensed gun dealers had sued
the Bureau of Alcohol, Tobacco, Firearms & Explosives and argued that a 1969
Revenue Ruling covering federal licensees could not, under the governing statute,
prevent them from making a certain transaction at a gun show in Chantilly,
Virginia. Id. at 169. The court rejected the plaintiffs contention that the limitation
period accrued in 2008, when they became federally licensed gun dealers. Rather,
it held that the limitations period for the plaintiffs facial challenge accrued in 1969

15

when the ruling was issued and had long since expired, and affirmed the district
courts dismissal for lack of jurisdiction. Id. at 170.
4.

Reconsideration In Light Of Hire Order

Shortly after Hire Order was decided, the PTO, Pharmatop, and Cadence
(collectively Defendants) asked the district court to reconsider its denial of the
motion to dismiss. A462-87. Defendants explained that, under Hire Order,
Exelas suit was untimely because the limitations period began to run not on the
date of Exelas alleged injury (as the district court initially had ruled) but instead at
the time of the PTOs actionseither when the PTO implemented the regulation in
1982 or when it revived the patent application in 2003each of which occurred
more than six years prior to Exelas suit. Exela asserted that Hire Order was
inapposite because that decision involved a facial challenge whereas Exelas is
(purportedly) only as-applied. A503-07. And, in any event, Exela argued that the
district court should review the PTOs refusal to consider Exelas 2011 petition
and order the PTO to consider the petition on the merits. A507-11.
The district court agreed with Defendants. A1-6. The court explained that,
although it previously found that the PTOs final agency action did not trigger the
running of the six-year statute of limitations, Hire Order compelled the opposite
result. A3. The court recognized that, under Hire Order, [i]f a party brings a
facial challenge against an agencys regulation under the APA, it must do so within

16

six years of the final agency action, even if the plaintiffs claimed injury allegedly
does not occur until after the limitations period. A4. Applying that principle to
this case, the court first examined the four counts in Exelas complaint and
concluded that each raises a facial challenge. A4-6. The court found that, at root,
Exelas position is that the USPTO has promulgated an improper regulation
whereby it applies the less stringent unintentional standard to the revival of the
international patent application, when it should have applied an unavoidable
standard. A4. And it concluded that [t]his type of challenge to an agencys
decision regarding which standard to apply across the board, rather than a
determination regarding how to apply a standard, is a facial challenge rather than
an as-applied challenge. Id. Bound by Hire Order, the district court therefore
held that Exelas complaint was untimely under 2401(a) because it was filed
more than six years after any final agency action. A4-6.
The district court also rejected Exelas request to review the PTOs refusal
to act on Exelas 2011 petition. It held that the PTOs 2012 letter did not
constitute an agency action because the agency did not deny, but rather refused to
consider, [Exelas] request. A2 n.1 (citing ICC v. Bhd. of Locomotive Engrs, 482
U.S. 270 (1987) (Locomotive Engineers)).

17

SUMMARY OF THE ARGUMENT

Under controlling precedent, the district court correctly dismissed Exelas
APA suit against the PTO.
First, Exelas suit is an untimely facial challenge under Hire Order. As
Exela expressly argued below, Fourth Circuit law governs the statute of limitations
issue. In Hire Order, the Fourth Circuit held that, under the applicable six-year
statute of limitations, 28 U.S.C. 2401(a), a facial challenge to an agencys ruling
accrues at the time of the final agency actioneven if the challenger was not
affected by the ruling until after the limitations period expired. 698 F.3d at 170.
Exelas principal argument is that its claims did not accrueand thus the statute of
limitations period did not begin to runwhen the agency actions occurred (in 1982
through 2006), but only when Exela felt the effects of those actions (in 2011, when
Exela faced the infringement suit in Delaware). However, Hire Order considered
and squarely rejected that approach as inapplicable to facial challenges.
Exela concedes that the complaint in Hire Order raised a facial challenge.
Br. 39-42; A503-07. And Exela concedes that the district court correctly
interpreted Hire Order. Br. 40. So the only contested issue is whether Exela raises
a facial challenge like the one in Hire Order. It does. Exela seeks a declaration
that the PTOs unintentional standard is invalid across the entire range of cases
dealing with the revival of international applications because the unintentional

18

standard allegedly is inconsistent with the Patent Act provision that specifically
governs those casesjust as the plaintiffs in Hire Order argued that the agency
ruling prohibiting transactions at gun shows was categorically invalid across the
entire range of cases dealing with transactions between an in-state and out-of-state
dealers because the ruling was inconsistent with the statute that specifically
governed those cases. Moreover, none of the relief Exela seeks depends on facts
specific to its case or is related to any agency action against Exelajust as none of
the relief the Hire Order plaintiffs sought depended on facts specific to their case
or was related to any agency action against them. Therefore, the district court
correctly found that Hire Order controls here, and that under Hire Order, Exelas
facial challenge is untimely because it arose more than six years after any final
agency actionmore than six years after the rules promulgation (in 1982) and the
patents ultimate issuance (in 2006).
The district court also correctly held that the PTOs 2012 letter refusing to
reconsider its earlier rulings did not restart the limitations clock because that
refusal was not a reviewable agency action in the first placelet alone a serious
and substantive reconsideration of those earlier rulings. Exelas contrary view
would eviscerate the statute of limitations for agency actions, because any time a
challenger decided to file a petition for reconsideration of a longstanding agency
ruling, anything the agency did in response (even a refusal to respond) would

19

restart the clock for challenging the original ruling. That manifestly is not the law.
See Locomotive Engineers, 482 U.S. at 278-81. Thus, Exelas reliance on the 2012
letter to extend the limitations period is unavailing. Importantly, Exela has not
appealed the district courts refusal to order the PTO to consider Exelas petition
on the merits. Any such argument is therefore waived. And, in any event, Exela
has identified no statute or regulation compelling the PTO to engage in the
substantive reconsideration that Exelas petition requested.
The district courts dismissal for untimeliness should be affirmed.
Second, Exelas suit must be rejected because it is an improper APA action
under the recent Pregis decision of this Court. Pregis holds that the Patent Act
forecloses an accused infringer from using an APA suit against the PTO to
challenge an issued patent. This Court reached that conclusion on two independent
grounds. 700 F.3d at 1356-61; 5 U.S.C. 701(a)(1), 704. The Court found
Congresss intent to preclude collateral APA actions fairly discernible from the
statutory scheme of the Patent Act, which contains detailed provisions
circumscribing precisely how, when, where, and by whom a patents validity can
be challenged. Pregis, 700 F.3d at 1358-59 (citation omitted). And the Court also
found APA review of the PTOs articulated rationale for finding a patent valid
foreclosed because the Patent Act already provides an adequate remedy to raise

20

fundamental invalidity challenges. Both of those holdings independently dispose

of Exelas suit.
Exelas attempt to side-step Pregis fails. Br. 50-54. Exela protests that
Pregis cannot apply here because Exela cannot raise improper revival via any of
the Patent Acts available third-party review mechanisms. But that is precisely the
situation this Court addressed in Pregis. There the plaintiff sought to raise a
claimchallenging the PTOs reasoning for issuing a patent over prior artthat
could only be raised in an APA action. Nonetheless, the Court found the claim
foreclosed. Indeed, when explaining that holding the Court expressly noted that
some PTO actionssuch as an allegedly improper revival of [an] abandoned
applicationare simply not reviewable. Pregis, 700 F.3d at 1360 (emphasis
added) (citing Aristocrat, 543 F.3d at 662-63). And that is not surprising, as this
Court previously refused to let improper revival, or any other prosecution
irregularity or procedural lapse, however minor, become grist for a later
assertion of invalidity. Aristocrat, 543 F.3d at 663. Exelas contrary view would
invite accused infringers to bring APA actions against the PTO in response to
virtually every private infringement suit, inundat[ing] the courts with arguments
relating to every minor transgression they could comb from the file wrapper. Id.
Pregis rightly concluded that Congress foreclosed that avenue. The district courts
dismissal may also be affirmed on this independent ground.

21

The district courts dismissal should be affirmed.

ARGUMENT
I.

STANDARD OF REVIEW
This Court reviews de novo the district courts grant of a motion to dismiss,

under governing Fourth Circuit law. Madey v. Duke Univ., 307 F.3d 1351, 1358
(Fed. Cir. 2002); Fed. R. Civ. P. 12(b)(1), (6).
II.

EXELAS APA ACTION WAS PROPERLY DISMISSED

A.

Exelas APA Action Against The PTO Is An Untimely

Facial Challenge Under Controlling Precedent

28 U.S.C. 2401(a) provides that every civil action commenced against the
United States shall be barred unless the complaint is filed within six years after the
right of action first accrues. That mandate, which applies to APA actions, is a
jurisdictional limitation because timely filing under 2401(a) is a condition to the
governments limited waiver of sovereign immunity. See Hire Order, 698 F.3d at
171 (affirming dismissal for lack of jurisdiction under 2401(a)); Br. 21 n.4; see
also Spannaus v. U.S. DOJ, 824 F.2d 52, 55 (D.C. Cir. 1987) (Unlike an ordinary
statute of limitations, 2401(a) is a jurisdictional condition attached to the
governments waiver of sovereign immunity and, as such must be strictly
construed.).
The district court correctly held that the Fourth Circuits recent decision in
Hire Order interpreting and applying 2401(a) is controlling and dispositive of

22

that statute of limitations issue in this case. The plaintiffs in Hire Order (two
federally licensed firearms dealers) initiated a facial challenge in 2010 to a
Revenue Ruling issued in 1969 prohibiting licensed dealers from making sales at
gun shows. 698 F.3d at 169. They argued that the agency ruling was invalid under
an intervening statutory amendment insofar as it prohibited dealers like them (i.e.,
one in-state and one out-of-state) from making certain transactions at an in-state
gun show. Id. The court held that, under 2401(a), their facial challenge was
untimely because it accrue[d] decades ago at the time of final agency action
(in 1969). Id. at 170 (citation omitted). The court rejected the plaintiffs argument
that the limitations period did not begin to run until the plaintiffs were injured in
2008, when they became licensed dealers and had to refrain from making the
prohibited sales. Id. The court distinguished cases cited by the plaintiffs involving
as-applied challenges to an agencys later application of a rule in an agency
enforcement proceeding. See id. (distinguishing cases).
Hire Order equally compels dismissal of Exelas challenge as untimely. As
with the plaintiffs claim in Hire Order, Exelas challenge is a facial one because
Exela does not contend that the agency has applied any rule against Exela or that
Exelas challenge depends on any facts specific to this case. To the contrary,
Exela seeks a declaration about the proper interpretation of the statute, 35 U.S.C.
371(d) (which addresses abandoned international applications), and whether that

23

statute ever can lawfully be implemented per the agencys regulation, 37 C.F.R.
1.137(b) (which permits revival of any unintentional[ly] abandoned
application, whether domestic or international). And, as with the plaintiffs claim
in Hire Order, Exelas suit is untimely under 2401(a) because it facially
challenges agency action (issuance of the revival rule in 1982 and, ultimately,
issuance of the patent in early 2006) that occurred more than six years prior to the
suit. Hire Order teaches that Exelas claims accrued at the time of those agency
actions regardless of Exelas assertion that it was not harmed until it faced an
infringement action in 2011. Thus, under Hire Order, the district court properly
dismissed Exelas suit under 2401(a).
1.

Fourth Circuit Law Governs Application Of

The Statute Of Limitations

As this Court held just last year, it defers to the law of the regional circuits
on matters of procedural law that do not implicate issues of patent law, such as
statute of limitations rulings. Landmark Screens, LLC v. Morgan, Lewis, &
Bockius, LLP, 676 F.3d 1354, 1361 (Fed. Cir. 2012) (internal quotation marks and
citations omitted) (emphasis added). Accordingly, Fourth Circuit law governs the
timeliness of Exelas complaint under 2401(a).
Exela now contends for the first time (at 33 n.5) that, instead, Federal Circuit
law should govern. Exela is mistaken. Its sole support for that contention, Bray
v. United States, 785 F.2d 989, 991 (Fed. Cir. 1986), merely held that the Federal
24

Circuit (as opposed to a regional circuit) had jurisdiction over a particular appeal;
it did not address what circuits law applied. In any event, Exela affirmatively
argued below that [t]he timeliness of Exelas complaint under 28 U.S.C.
2401(a) is controlled by prior Supreme Court and Fourth Circuit case law.
A497; see also, e.g., A494, A500, A506. Exela is not free to change course now.
Forshey v. Principi, 284 F.3d 1335, 1358 (Fed. Cir. 2002) (en banc) ([T]he fact
that the appellant specifically urged [below] the legal rule that he now challenges
counsels against consideration of the issue.). For that matter, Exela has again
waived any objection to the application of Fourth Circuit law by objecting only in
a passing footnote in its opening appellate brief (at 33 n.5). SmithKline Beecham
Corp. v. Apotex Corp., 439 F.3d 1312, 1320 (Fed. Cir. 2006) ([A]rguments raised
in footnotes are not preserved.) (collecting cases).
For these reasons, Fourth Circuit law applies, and Exela has forfeited any
ability to argue otherwise.
2.

Exelas Suit Is, Under Fourth Circuit

Precedent, A Facial Challenge To The PTOs
Revival Rule And Patent Issuance

Under Fourth Circuit law, an as-applied challenge is one in which a party

relies on facts specific to its particular case and challenges the agencys application
of a rule against the party itself. See Hire Order, 698 F.3d at 170; Gold Dollar
Warehouse, Inc. v. Glickman, 211 F.3d 93, 100-01 (4th Cir. 2000). In contrast, a

25

facial challenge is divorced from the particular facts of the case and attacks an
agencys authorityor seeks a regulatory or statutory interpretationacross the
board in a manner that would apply to an entire range of cases. See Hire Order,
698 F.3d at 169-70; Gold Dollar Warehouse, 211 F.3d at 98-99.
Under those principles, Exelas complaint advances a facial challenge.
Exela seeks a declaration that the USPTO rules and regulations allowing for the
revival of an international patent application under the unintentional standard are
unlawful; that failure to meet the 371 requirements can only be excused under
the stringent unavoidable standard as expressly required by 35 U.S.C. 371(d);
and that the 218 patent is invalid. A40 e, d, b (emphasis added). Exelas
arguments as to the appropriate standard plainly present a facial challenge.
Thus, each of the complaints four counts, at root, states a facial attack, as the
district court explained. A4-6. Exelas complaint does not identify any facts
specific to this case that would distinguish it from any other patent that the PTO
issued after reviving an international application based on 37 C.F.R. 1.137(b)s
unintentional standard. Nor does Exela allege that the PTO applied any rules or
orders to Exela.
Even though it has not made its claim in defense of an agency enforcement
proceeding, and despite the plainly facial language of its complaint, Exela argues
that its challenge allegedly is as-applied because it is not seeking to strike down

26

 1.137(b) as a whole; Exela emphasizes that the rule is valid insofar as it

implements certain other statutory revival provisions, just not insofar as it
implements 35 U.S.C. 371(d), the statutory provision for reviving international
applications. Similarly, Exela protests that it is not seeking invalidation of
1.137(b) but rather just challenging one specific revival decision in which the
PTO applied 1.137(b), namely the revival of Pharmatops international
application. Br. 42.
These arguments do not alter the facial nature of Exelas claims. Exela is
not just saying that the PTO cannot revive the particular unintentionally abandoned
international application at issue for reasons particular to that application. It is
contending that 1.137(b), which expressly permits revival of unintentional[ly]
abandoned applications generally, is incompatible with the specific statutory
provision that governs revival of international applications, 35 U.S.C. 371(d).
According to Exela, there are no circumstances in which the PTO can lawfully
apply 1.137(b) to international application governed by 371(d). This is a facial
challenge to the compatibility of the agencys regulation with a statute that it is
intended to implement, which affects an entire statutory class of cases. Nothing
about it is specific to Exela or related to the PTOs application of any rule or order
to Exela.

27

Hire Order presented similar circumstances. The plaintiffs there argued

that, under the governing statute, the agency ruling at issue could not lawfully
prohibit a certain class of transactionsthose between in-state and out-of-state
firearms dealers. 698 F.3d at 169; see also Hire Order Compl. 6, No. 10-cv-1464,
(E.D. Va. Dec. 30, 2010), ECF No. 1 (seeking declar[ation] that [plaintiff 1, a
Virginia firearms dealer] may receive firearms at the Nations Gun Show in
Chantilly, Virginia from [plaintiff 2, an out-of-state firearms dealer] for subsequent
transfer at the Nations Gun Show in Chantilly, Virginia to non-federally licensed
Virginia residents). The plaintiff firearms dealers did not argue that the ruling
was invalid in all of its applications. They did not contend, for example, that it was
invalid with respect to transactions between two out-of-state dealers. Nonetheless,
all of the parties agreed that the plaintiffs challenge was a facial one. And Exela
itself now concedes that it was facial. Br. 40 (In a facial challenge, such as in
Hire Order .); see id. at 39-40, 42.
Similarly, in Gold Dollar Warehouse, the Fourth Circuit viewed as a facial
challenge tobacco warehouses claim that the agency exceeded its authority by
imposing personal liability for certain tobacco sales. 211 F.3d at 98-99. The court
held that the challenge was a facial challenge because [i]f the warehouses are
correct that the statute does not permit the USDA to impose personal liability
against warehouses at all, there are no circumstances under which the regulations

28

could lawfully be applied so as to impose personal liability on the warehouses.

Id. at 99. In contrast, the warehouses challenge to the penalties based on their
lack of knowledge of the source of the tobacco they sold was as-applied because it
was heavily dependent on several contested facts and framed in terms specific to
the [agencys] assessment of the penalties in their particular case. Id. at 100
(emphasis added).
Here, Exelas challenge is like the dealers facial challenge in Hire Order
and the warehouses facial challenge in Gold Dollar Warehouse because, if Exela
is correct, there are no circumstances under which [the unintentional provision
of the regulation, 1.137(b)] could lawfully be applied so as to [permit revival of
an international application under 35 U.S.C. 371(d)]. Gold Dollar Warehouse,
211 F.3d at 99. Exela seeks a categorical declaration that any PTO regulations
allowing revival of an international application where the delay was merely
unintentional are unlawful. A40 b, d, e. Exelas argument is that,
independent of the particular facts of this case, all such uses of 1.137(b) are
impermissible.4 Exelas challenge is no less facial merely because it is limited to a
specifically defined subset of the possible applications of 1.137(b). If, for

Cf. Gillian E. Metzger, Facial Challenges and Federalism, 105 Colum. L.

Rev. 873, 881 (2005) (observing that a litigant can make a partial facial
challenge by arguing that a statute is unconstitutional in a particular range of
applications, even if not unconstitutional in all or most).
29

example, 1.137(b) had separate subsections for each of the statutory

abandonment provisions that it implements, domestic and international, a challenge
to the regulations specific subsection relating to the abandonment of international
applications (under 371(d)) would plainly be a facial challenge. The result
cannot be different just because the regulation does not separate into distinct
subsections the statutory abandonment provisions to which it applies. For that
reason, the district court rightly treated Exelas suit as a facial challenge.
3.

Exelas Suit Is Time-Barred Under The Fourth

Circuits Holding In Hire Order

Exelas facial challenge is untimely under 2401(a), because just like the
claims in Hire Order it accrue[d] at the time of final agency action, 698
F.3d at 170 (citation omitted), and all of the challenged agency actions here
occurred more than six years before Exelas suit. The PTOs regulation,
1.137(b), was initially issued in 1982 and, after reviving the patent application in
2003, the PTO ultimately issued the patent in January 2006. Because the statute of
limitations expired years ago (as to the regulation) or, at the latest, in January 2012
(as to the patent itself), Hire Order compels the conclusion that Exelas April 2012
complaint is untimely.
Exela nonetheless asserts its claims are timely for two reasons. Neither has
merit. First, Exela insists that, in contrast to claims that an agency has violated
APA procedures, which are subject to strict statutory limitations periods, its claims
30

pose substantive challenges to ultra vires agency action and thus, by their nature,
are not subject any statute of limitations at all. Br. 26-29 (relying on out-of-circuit
precedent). But the Fourth Circuit squarely rejected that very position in Hire
Order.
The plaintiffs claim in Hire Order was unquestionably substantive and
was explicitly framed as an ultra vires challenge. The Hire Order plaintiffs
asserted that, contrary to the agencys 1969 ruling, the [statute] in fact permits a
dealer from one state to sell firearms at a gun show in another state to a dealer from
the state in which the gun show is located. 698 F.3d at 169; see also Hire Order
Compl. 4 15. The plaintiffs therefore contended that the agency acted in excess
of its statutory authority. Hire Order Opening Br. 10, 2011 WL 5040509 (4th
Cir. Oct. 24, 2011). The Fourth Circuit nonetheless held that the plaintiffs claim
accrued in 1969 and was time-barred when the plaintiffs asserted it in 2010.
Exelas claims in this casethat the PTO regulations and actions applying the
unintentional standard are unlawful and exceed PTO authority (A40 d, e)
are, for these purposes, indistinguishable from the claim in Hire Order and equally
time-barred under 2401(a)s six-year statute of limitations.

31

Second, Exela insists that, as a matter of law, its claims did not accrue until
it purportedly suffered harm. Br. 33-39.5 But Hire Order explicitly rejected that
argument as well. The Fourth Circuit found the plaintiffs claim untimely even
though they did not suffer any harm until 2008four decades after the final
agency action. The court stated emphatically that the plaintiffs contention that
their cause of action did not accrue until they became federally licensed firearms
dealers in 2008 utterly fails. 698 F.3d at 170 (emphasis added). Under Hire
Order, Exelas claims likewise accrued at the time of the agency action and
likewise are untimely.
Exela would of course be correct in its arguments about substantive claims
and injury-based accrual if it were challenging an agency action against Exela.
When an agency applies a regulation in an enforcement action to the detriment of a
party, even if the enforcement action comes decades after the regulation was
enacted, the party can challenge the regulation in that context. Thus, Hire Order
expressly recognized that, where there is further [agency] action, an as-applied
challenge would not be barred. 698 F.3d at 170 (quoting Functional Music, Inc. v.
FCC, 274 F.2d 543, 546 (D.C. Cir. 1958)). But, as discussed, Exela is raising a

To the extent Exela suggests that it did not exist or suffer any (alleged) harm
during any relevant limitations period, see Br. 13, 31-32, Exela is mistaken. Exela
was founded in 2005, A34, the patent issued in 2006, and the infringement suit was
five years later, in 2011. But, under Hire Order, all of this is in any event
irrelevant.
32

facial challenge divorced from any particular factual circumstances specific to its
case and it was not advanced in response to any additional agency action against
Exela. Supra at 25-30. That is why Exelas arguments miss the mark. And that is
also why Exelas reliance on cases like Bay Area Laundry & Dry Cleaning
Pension Trust Fund v. Ferbar Corp. of Cal., Inc., 522 U.S. 192 (1997), NLRB
Union v. FLRA, 834 F.2d 191 (D.C. Cir. 1987), Spannaus, and Functional Music is
unavailing. E.g., Br. 28-29, 32-33, 36, 45. Hire Order found such cases
inapplicable precisely because [n]one of [them] involve[s] a facial challenge.
698 F.3d at 170 (rejecting plaintiffs reliance on Bay Area, NLRB Union,
Spannaus, and Functional Music).
In the end, Exela recognizes this. It ultimately concedes (with one caveat)
that, once this case is viewed as a facial challenge, the district courts judgment
was correct under Hire Order. Br. 40 (The error was not the district courts
reading of the Fourth Circuits decision, but its mistaken belief that Exelas
argument fell within Hire Orders facial-challenge ambit.). Exelas only
remaining avenue is to construe the PTOs 2012 letter as restarting the limitation
period. As discussed below, that argument also fails.
Moreover, even if Exelas challenge could be characterized as as-applied,
it would still be untimely under 2401(a). The limitations period for an APA
challenge to an agencys application of a rule begins when the agency completes a

33

final agency action in which it applies the rule against the challenger. See
Jersey Heights Neighborhood Assn v. Glendening, 174 F.3d 180, 186-87 (4th Cir.
1999); see also Dunn-McCampbell Royalty Interest, Inc. v. Natl Park Serv., 112
F.3d 1283, 1288 (5th Cir. 1987) (An as applied challenge must rest on final
agency action under the APA. But absent some final action, the APA will not
provide a cause of action to challenge agency decisions. (citation omitted)). The
cases upon which Exela relies stand for nothing more than that general proposition.
See, e.g., Spannaus, 824 F.2d at 56-59 (suit based on agencys action against
challenger). None of them lend any support to Exelas view that the government
can be forced to defend final actions long after the statute of limitations on those
actions has expired, brought by a challenger against whom the action has never
been applied. That is precisely the situation here. Exela identifies no final agency
actions in which the PTO has applied anything against Exela, and the final agency
actions Exela does identify were applied (to others) more than six years before
Exelas suit. Therefore, even construing Exelas suit as an as-applied challenge, it
would still be untimely.
4.

The PTOs 2012 Letter Refusing To Act On

Exelas Petition Did Not Restart The Clock

To avoid Hire Order, Exela argues that the PTOs 2012 letter refusing to
reopen the PTOs 2003 revival of the patent application restarted the limitations
period, making Exelas challenge to the revival decision timely. Br. 44-50.
34

According to Exela, the PTOs refusal to consider Exelas petition is functionally

equivalent to a reopening of the issue of whether the unintentional standard of 37
C.F.R. 1.137(b) validly applies to international applications. Br. 48. Exela is
mistaken. The 2012 letter did not reopen the issue.
At bottom, the letter is not a reviewable agency action in the first place
because the agency did not deny, but rather refused to consider, [Exelas]
request, as the district court correctly held. A2 n.1 (citing Locomotive Engineers).
Under the APA, an agency action is unreviewable to the extent that [it] is
committed to agency discretion by law. 5 U.S.C. 701(a)(2). Applying that
principle in Locomotive Engineers, the Supreme Court held that, when a party
petitions an agency for reconsideration on the same record that was before the
agency when it rendered its original decision, an order that merely declines to
reconsider the prior order is not itself reviewable. 482 U.S. at 278-80. A contrary
rule, the Court cautioned, would nullify the statute of limitations by allowing
perpetual availability of review by the mere device of filing a suggestion that the
agency has made a mistake and should consider the matter again. Id. at 281; see
also Your Home Visiting Nurse Servs., Inc. v. Shalala, 525 U.S. 449, 455 (1999)
([A]n agencys refusal to reopen a closed case is generally committed to agency
discretion by law and therefore exempt from judicial review. (internal quotation
marks and citations omitted)); Magnola Metallurgy, Inc. v. United States, 508 F.3d

35

1349, 1357 (Fed. Cir. 2007) (holding agency refusal to reconsider unreviewable
under Locomotive Engineers).
Locomotive Engineers forecloses Exelas argument that the PTOs 2012
letter triggers a new review period. Exelas petition did not purport to raise any
new evidence or changed circumstances that rendered the agencys original
order inappropriate. Locomotive Engineers, 482 U.S. at 278. Instead, Exela
merely argued that the PTO had no authority to revive an international patent
application under 371(d) based on 1.137(b)s unintentional standard and,
thus, that PTOs 2003 revival decision was unlawful. And the PTO merely
declined to revisit its conclusion to the contrary, as embodied in 1.137(b) of its
regulations and its 2003 revival decision. As in Locomotive Engineers, the PTOs
refus[al] to reopen [its earlier] proceeding[s] is not reviewable. 482 U.S. at 278.
To be sure, as Exela observes (Br. 48), an agencys substantive decision not
to revise an existing rule will be reviewable, and may in effect restart the
limitations clock, when the agency undertake[s] a serious, substantive
reconsideration of [that existing] rule. P & V Enters. v. U.S. Army Corps of
Engrs, 516 F.3d 1021, 1024 (D.C. Cir. 2008) (internal quotation marks and
citation omitted). But nothing in the PTOs 2012 letter suggests any such
reconsiderationserious and substantive, or otherwise. To the contrary, the
PTO refused to act on Exelas petition expressly because Exela had no right to

36

inject itself into ex parte examination proceedings. A68-69. Emphasizing that

point, the PTO returned Exelas petition fee. A69. The entire context of the
PTOs action shows that the PTO did not reconsider[] the merits of its
longstanding revival rule and, thus, did not restart the six-year limitations period.
P & V Enterprises, 516 F.3d at 1024 (citations omitted).
P & V Enterprises, upon which Exela primarily relies (at 45-46, 48),
confirms this conclusion. In that case, developers brought a facial challenge to a
1986 rule promulgated by the U.S. Army Corps that defines waters of the United
States. 516 F.3d at 1022. Because the challenge was otherwise untimely under
2401(a), the plaintiffs argued that the agency reopened and reconsidered its rule
by issuing an Advance Notice of Proposed Rulemaking (request[ing] public
input on issues associated with the definition of waters of the United States in
order to develop proposed regulations), receiving 130,000 comments, and
ultimately stating in a press release that it had decided not [to] issue a new rule.
Id. at 1022-23 (citations omitted). The court disagreed because the agency did not
offer its views on the existing rule, did not suggest that [it] considered the
substance of the rule to be in doubt in any precise manner, did not commit agency
resources to reconsidering the rule, and did not propose a new rule. Id. at 1024-25.
And the final press release had none of the indicia of a specific statement

37

explaining the agencys reasoning for retaining a particular rule or of new final
action taken regarding any existing rule. Id. at 1025.
The PTOs 2012 letter is even less serious and substantive than the
action in P & V Enterprises. The PTO never suggested that it was considering
revising its rule in any way and it took no comments. The letter provided no
insight into whether [the PTO] had rethought the policy underlying the rule
and did not purport to represent [the PTOs] considered reevaluation and updated
judgment on the substance of the ruleor the patent-in-suit. Id. at 1025.
Thus, the 2012 letter does not save Exelas otherwise stale challenge. Id. at
1023-24.
Nor can Exela paint the letter as functionally equivalent to substantive
reconsideration by arguing that the PTOs refusal to consider Exelas petition was
an abuse of discretion. Nothing in the three general provisions that Exela cites
suggests that the PTO is required to reconsider long-settled decisions anytime
anyone purports to identif[y] something unlawful. Br. 49; see 35 U.S.C. 23 (explaining powers of the PTO and Director); 37 C.F.R. 1.181(a)(3) (party may
petition [t]o invoke the supervisory authority of the Director in appropriate
circumstances (emphasis added)). To the contrary, as the PTO letter explains,
under the statutory scheme Exela, a third party, had no basis to demand that the
PTO disturb ex parte prosecution proceedings from years ago. A68.

38

Notably, Exela has only invoked the 2012 letter as a means to extend the
limitations period for challenging the earlier agency actions; Exela has not
appealed the district courts refusal to order the PTO to consider the merits of
Exelas 2011 petition. See Br. 44-50. Thus, any such argument is waived.
SmithKline Beecham Corp., 439 F.3d at 1319 ([A]rguments not raised in the
opening brief are waived.). Regardless, the district court properly refused to order
the PTO to take further action because, as discussed, nothing in the statute or
regulations required such action and, thus, the PTOs letter declining to act is
unreviewable. See Locomotive Engineers, 482 U.S. at 278; Your Home Visiting
Nurse Servs., Inc., 525 U.S. at 457.6
Contrary to Exelas argument, the PTOs 2012 letter communicating its
refusal to reopen its revival decision was not a reviewable agency action that is
functionally equivalent to a reopening (Br. 48) and accordingly did not extend
the original statutory limitations period. The district court rightly rejected Exelas
attempt to make PTO orders perpetual[ly] reviewable and correctly dismissed
Exelas suit as untimely.

Similarly, Exela could notand has never purported toargue that the PTO
unlawfully withheld agency action under 5 U.S.C. 706(1). See Norton v. S.
Utah Wilderness Alliance, 542 U.S. 55, 64 (2004) ([A] claim under 706(1) can
proceed only where a plaintiff asserts that an agency failed to take a discrete
agency action that it is required to take.).
39

B.

Exelas APA Action Against The PTO Is

Independently Foreclosed Under Pregis

In addition to its untimeliness, Exelas suit was improper for an even more
fundamental reason. In Pregis, this Court recently held unequivocally that a third
party cannot sue the PTO under the APA to challenge a PTO decision to issue a
patent. 700 F.3d at 1357. And Exelas suit seeks to do precisely that. Pregis,
which was issued after the district court spoke to this issue below, A13-15, also
controls the outcome here and independently requires affirmance of the district
courts dismissal.
In general, the APA permits parties to seek judicial review of adverse
agency actions. 5 U.S.C. 702. However, that authorization is subject to
important limitations, two of which are relevant here. The APA does not provide
for judicial review if either (1) statutes preclude judicial review or (2) there is
another adequate remedy in a court. 5 U.S.C. 701(a)(1), 704; see Pregis, 700
F.3d at 1356. Each of these limitations, Pregis teaches, provides an independent
ground for affirming the district courts dismissal.
Exela attempts to evade Pregiss holding by emphasizing that its claim
(improper revival) is that the agency exceeded its statutory authority, and arguing
that this is a type of claim that cannot otherwise be raised. Br. 50-55. But the
same things were true in Pregis.

40

1.

The Patent Act Precludes Exelas APA Action

Challenging The Patent-In-Suits Validity

To determine whether a statute precludes APA review, this Court looks to

the statutes language, structure, and legislative history and purpose, as well as the
nature of the administrative action involved. Block v. Cmty. Nutrition Inst., 467
U.S. 340, 345 (1984). Judicial review is precluded when Congresss intent to
preclude review is fairly discernible in the statutory scheme, even if not
explicitly stated. Id. at 351 (quoting Assn of Data Processing Serv. Orgs., Inc. v.
Camp, 397 U.S. 150, 157 (1970)); see also Bowen v. Mich. Acad. of Family
Physicians, 476 U.S. 667, 671 (1986) (To preclude judicial review under [the
APA] a statute, if not specific in withholding such review, must upon its face give
clear and convincing evidence of an intent to withhold it. (citation omitted)). For
example, when a statute provides a detailed mechanism for judicial consideration
of particular issues at the behest of particular persons, judicial review of those
issues at the behest of other persons may be found to be impliedly precluded.
Block, 467 U.S. at 349; see also Match-E-Be-Nash-She-Wish Band of Pottawatomi
Indians v. Patchak, 132 S. Ct. 2199, 2208-09 (2012); Sackett v. EPA, 132 S. Ct.
1367, 1373-74 (2012); United States v. Fausto, 484 U.S. 439, 443-44 (1988).
Applying these well-established principles, this Court in Pregis held that the
Patent Acts intricate scheme for administrative and judicial review of PTO
patentability determinations evinces a clear Congressional intent to preclude
41

actions under the APA seeking review of the PTOs reasons for allowing the
claims during examination and the issuance of the patent itself. 700 F.3d at 1358.
The Court reached that conclusion after thoroughly reviewing the statutory
scheme.
The Patent Act, the Court explained, permits extensive participation by
patent applicants and holders and establishes specific procedures for challenging
PTO rejections and prerequisites for obtaining judicial review. Id. (citing 35
U.S.C. 134, 141, 145); see supra at 9-10. In contrast, the Patent Act provides
fewer and more restricted opportunities for participation by third parties. Pregis,
700 F.3d at 1358; see supra at 10-11. It provides only three avenues for third
parties to challenge an issued patents validity: participating in carefullycircumscribed reexamination proceedings that can only address a narrow range of
issues (with appeals to the Board and then this Court) 7; raising one of the defenses
enumerated in 282(a) in an infringement suit (such as invalidity on the basis of
prior art); or raising those same defenses in an affirmative declaratory judgment
action against the patentee. Pregis, 700 F.3d at 1358-59 (citing 35 U.S.C. 301307, 311-318, 282; 28 U.S.C. 2201(a); MedImmune, Inc. v. Genentech, Inc., 549

As noted, in the current version of the statute, the available mechanisms for
third party participation are likewise carefully circumscribed, as inter partes
reexamination has been replaced with inter partes review and post-grant review.
35 U.S.C. 311, 321 (effective Sept. 16, 2012); see supra at 10 n.1.
42

U.S. 118, 127 (2007)). Although those paths are deliberately limited, this is not a
case in which preclusion of a suit under the APA would leave an agency action
entirely free from judicial review. Id. at 1358 (contrasting Bowen, 476 U.S. at
678). In short, [t]he carefully balanced framework of the Patent Act specifies a
well-defined process for how, when, where, and by whom PTO patentability
determinations may be challenged. Id. at 1359.
The Pregis Court recognized that [a]llowing competitors to collaterally
attack issued patents through suits under the APA would destroy the Patent Acts
careful framework for judicial review at the behest of particular persons through
particular procedures. Id. Considering the language, structure, and purpose of the
statute as a whole, the Court concluded that Congresss intent to preclude third
parties from seeking APA review of the PTOs issuance of patents and the PTOs
reasons therefor is fairly discernible from the statutory scheme of the Patent
Act and overcomes the otherwise strong presumption in favor of review. Id. at
1359, 1358 (quoting Block, 467 U.S. at 351). 8 The Court thus rejected the accused

Consistent with Pregis, this Court has previously (and repeatedly) emphasized
that a potential infringer may not sue the PTO seeking retraction of a patent
issued to another by reason of its improper allowance by the PTO and a remedy,
if any, must await confrontation with the patent owner. Syntex (U.S.A.) Inc. v.
U.S. PTO, 882 F.2d 1570, 1576 (Fed. Cir. 1989) (emphasis added); see also
Animal Legal Def. Fund v. Quigg, 932 F.2d 920, 938 (Fed. Cir. 1991) (noting that
the Court has refused to open[] the door to collateral attack on the validity of
issued patents by allowing any competitor [to] simply file suit against the
43

infringers APA suit against the PTO challenging a patents validity and the PTOs
reasons for issuing it.
That holding compels the same result here. The Patent Acts preclusive
effect is especially apparent (and critical) where, as here, an accused infringer
attacks an issued patent based on what this Court has called procedural minutiae,
such as improper revival of international applications. Aristocrat, 543 F.3d at 663.
In Aristocrat, this Court held that accused infringers cannot assert improper revival
of an international application in defense of an infringement suit because [i]f any
prosecution irregularity or procedural lapse, however minor, became grist for a
later assertion of invalidity, accused infringers would inundate the courts with
arguments relating to every minor transgression they could comb from the file
wrapper. Id. (emphasis added). That concern is doubly applicable here, where,
under Exelas view, each infringement action would spawn an additional collateral
action against the PTO. The PTO would be open to suit, and potentially forced to
defend, every patent asserted in private litigation, often years after it was issued.
This Court foreclosed that result in Pregis. 700 F.3d at 1357-59; see also id. at
Commissioner challenging a patents validity because [t]he structure of the
Patent Act indicates that Congress intended only the remedies provided therein to
ensure that the statutory objectives would be realized); Pupols v. U.S. PTO, 413
F. Appx 232, 234-35 (Fed. Cir.) ([A] potential infringer may not sue the PTO
seeking retraction of a patent issued to another by reason of its improper allowance
by the PTO. (alteration in original) (quoting Syntex, 882 F.2d at 1576)), cert.
denied, 131 S. Ct. 3009 (2011); Rozenblat v. Kappos, 345 F. Appx 601, 603 (Fed.
Cir. 2009) (same).
44

1360 (citing Aristocrat, 543 F.3d at 662-63). For this reason, as in Pregis, Exelas
collateral APA suit must be rejected.
2.

The Patent Act Provides Adequate Remedies

Exelas APA action is also barred under Pregis for the independent reason
that the Patent Act already provides an adequate remedy. 5 U.S.C. 704. As
discussed, the Patent Act affords three different adequate remedies in court for
competitors harmed by the PTOs erroneous issuance of a patentinter partes
review with subsequent appeals to the Board and this Court, invalidity defenses in
an infringement action, and a declaratory judgment action affirmatively seeking a
declaration of invalidity against a patent owner. Pregis, 700 F.3d at 1360. Pregis
held that these mechanisms adequately permit third parties to challenge the
fundamental aspects of patent validity, such as patent-eligible subject matter,
anticipation, obviousness, and written description. See id. That holding equally
forecloses Exelas APA suit attacking the patent-in-suits validity.
To the extent Exela protests that its particular claims cannot be asserted as
defenses to an infringement action, this Court has emphasized that the alternative
remedy need not be identical to or as effective as an APA suit, so long as it
provides relief of the same genre. Id. (quoting Garcia v. Vilsack, 563 F.3d
519, 523, 525 (D.C. Cir. 2009)). That the Patent Act does not permit an invalidity
challenge on each and every aspect of patent prosecutionsuch as the PTOs

45

reasoning for allowing the patent (in Pregis) or the propriety of the PTOs revival
of a tardy patent application (here)does not render the remedies afforded by the
Act inadequate. Id. at 1360-61; see also Jersey Heights Neighborhood Assn, 174
F.3d at 191-92 (holding remedy against private party is adequate and displaces
APA review under 5 U.S.C. 704 even though it only allows different relief than a
direct suit against government agency). As in Pregis, the Patent Acts provision of
an adequate remedy for assertion of an invalid patent displaces Exelas suit.
3.

Exelas Attempts To Evade Pregis Are

Unavailing

Exela invites this Court to revisit the issue of whether the congressional
intent to preclude APA review of the PTOs issuance of a patent is fairly
discernible in the [Patent Acts] statutory scheme. Br. 52 (citation omitted); see
id. at 50-53. But, as discussed, Pregis answered in the affirmative and it is no
longer an open question. In addition, Exela seeks to distinguish Pregis because
(i) judicial review is favored for claims like Exelas that charge the PTO with
acting beyond its authority in issuing a patent (id. at 51), and (ii) Exelas
particular invalidity claim cannot be raised elsewhere (id. at 52-54). But those
were exactly the arguments that Pregis addressedand rejected.
First, the challenger in Pregis likewise argued that the patent was invalid
because its issuance was in excess of statutory jurisdiction, authority, or
limitations. Pregis Plaintiff-Cross-Appellant Opening Br. 61, 2011 WL 1352200
46

(Fed. Cir. Jan. 20, 2011) (Pregis CAFC Br.) (quoting 5 U.S.C. 706(2)(C)).
The Court nonetheless found that the clear congressional intent in the Patent Act
overcomes the presumption in favor of judicial review. Pregis, 700 F.3d at 135759.
Second, contrary to Exelas mischaracterization, Pregis squarely held that
there was no APA remedy availableeven though the plaintiff presented an
invalidity claim different from a defense that could be raised in an infringement
action under 35 U.S.C. 282. The plaintiff sought, among other things, to
challenge the PTO examiners reasons for allowing the claim over the prior art,
which is different from the substantive argument that could be raised in defense
i.e., that the claim is, in fact, invalid over the prior art. Pregis, 700 F.3d at 135661. The plaintiff itself repeatedly insisted that it was pressing a distinct claim that
it could not raise in a suit brought under the Patent Act: the legal error in the
PTOs reasons for issuing a patent is not a defense to a claim for alleged
infringement and the only possible avenue for challenging the PTOs reasoning
was via suit under the APA. Pregis CAFC Br. 60 (emphasis added). An APA
action, the plaintiff stressed, would review[] the workthe decisionmakingthat
the agency actually did; the 282 defense does not. Pregis Plaintiff-CrossAppellant Reply Br. 22, 2011 WL 3580507 (Fed. Cir. July 19, 2011); see also id.
at 21; Pregis Rehg Pet. 3, 9, 12, 15, 2013 WL 1821850 (Fed. Cir. Feb. 21, 2013);

47

Pregis Mem. in Opp. to Fed. Defs. Mot. to Dismiss 23, No. 1:09-cv-467-GBLIDD (E.D. Va. July 30, 2009), ECF No. 53; Pregis Mem. in Opp. to Free-Flow
Packagings Mot. to Dismiss 26, No. 1:09-cv-467-GBL-IDD (E.D. Va. July 20,
2009), ECF No. 42. Therefore, the plaintiff argued, APA review must be available
to address claims that would not otherwise be redressable, such as the plaintiffs in
that case, and others, like improper revival. Pregis CAFC Br. 60-61 (citing
Aristocrat).
The Court squarely rejected that argument as well. As the Court explained,
[i]t is apparent that Congress decided not to provide for third parties to obtain
review of the reasons for allowance of claims. Pregis, 700 F.3d at 1359. And
the fact that the defenses available under 35 U.S.C. 282, or in a challenge to a
patent through inter partes reexamination, are not identical to an APA suit does not
render the carefully-considered judicial remedies provided by the Patent Act
inadequate. Id. at 1360-61. The Court concluded that the specific list of
defenses available under 282 reflects the deliberate judgment of Congress that
not every error during prosecution should provide a defense to a claim of patent
infringement. Id. at 1360.
Moreover, and importantly here, the Court specifically noted that one such
unavailable defense is improper revival of [an] abandoned application. Id.
(citing Aristocrat, 543 F.3d at 662-63). Thus, even if, as Exela contends, Pregis

48

somehow left room for an accused infringer to bring some other species of APA
suit (it does not), at a minimum the Court believed that infringers may not sue
under the APA pressing procedural minutiae such as alleged improper revival.
See id.; Aristocrat, 543 F.3d at 663; see also Magnivision, Inc. v. Bonneau Co.,
115 F.3d 956, 960 (Fed. Cir. 1997) ([P]rosecution irregularities by the examiner
or the applicant are not relevant to patent validity.). 9
Exelas attempts to distinguish Pregis are unavailing. That decision
provides an additional ground to uphold the district courts dismissal.
III.

THE MERITS OF EXELAS APA ACTION ARE NOT BEFORE

THIS COURT
Even if Exela could overcome the fatal untimeliness and preclusion of its

APA suit (and it cannot), the merits of its challenge are not ripe for adjudication by
this Court. Exela argues that it is undisputed that the PTOs rule allowing it to
revive the international patent application where the abandonment is

In any event, Exelas concern that the PTOs (purportedly) improper lax
revival standard will remain essentially unreviewable (Br. 52-53) has no
long-term implications. Congress recently amended the Patent Act to ensure that,
consistent with U.S. treaty obligations, the PTO does indeed have authority to
revive applicationsincluding international applicationsbased on the
unintentional standard. Patent Law Treaties Implementation Act of 2012, Pub.
L. No. 112-211, tit. II 201(b)(1), 126 Stat. 1527, 1534 (Dec. 18, 2012; effective
Dec. 18, 2013) (giving the PTO express authority to make rules for reviv[ing] an
unintentionally abandoned application); id. 202(b)(9), 126 Stat. at 1536 (striking
unavoidable language in 35 U.S.C. 371(d)).
49

unintentional is not authorized by 35 U.S.C. 371(d) and urges this Court to

so hold. Br. 22-23. Exelas assertion is incorrect and its request is premature.
The merits are not undisputed. On October 16, 2012, Exela filed a
summary judgment motion, arguing that, on the merits, the PTOs unintentional
standard is unlawful under 371(d) and, thus, that the patent-in-suit is invalid.
A435, A447-48. However, that merits briefing was suspendedat Defendants
request and over Exelas objectionso that Defendants could seek reconsideration
in light of Hire Order on the threshold timeliness issue. A5034. And the briefing
never resumed because the district court (correctly) dismissed the suit at the
threshold. Thus, Defendants have not yet briefed (but have certainly not conceded)
the merits of the PTOs revival ruleincluding, for example, whether Congresss
longstanding acquiescence has effectively ratified the rule. See, e.g., GPX Intl.
Tire Corp. v. United States, 666 F.3d 732, 739 (Fed. Cir. 2011). Accordingly, as
the merits were not vetted or decided below, this Court should decline Exelas
invitation to address them.

50

CONCLUSION
For the foregoing reasons, the district courts judgment should be affirmed.
September 27, 2013

Respectfully submitted,

/s/ Charles A. Weiss

Charles A. Weiss
HOLLAND & KNIGHT LLP
31 W. 52nd Street
New York, NY 10019
charles.weiss@hklaw.com

/s/ Richard P. Bress

Richard P. Bress
Gabriel K. Bell
LATHAM & WATKINS LLP
555 Eleventh Street, NW, Suite 1000
Washington, DC 20004
(202) 637-2200

Counsel for SCR Pharmatop

Kenneth Schuler
Marc Zubick
LATHAM & WATKINS LLP
233 South Wacker Drive, Suite 5800
Chicago, IL 60606
(312) 876-7700
Stephen Swinton
LATHAM & WATKINS LLP
12636 High Bluff Drive, Suite 400
San Diego, CA 92130
(858) 523-5400
Counsel for Cadence Pharmaceuticals,
Inc.

51

DECLARATION OF AUTHORITY PURSUANT TO FEDERAL CIRCUIT

RULE 47.3
Pursuant to Rule 47.3(d) of the Rules of the Unites States Court of Appeals
for the Federal Circuit, I, Richard P. Bress of Latham & Watkins LLP, hereby
swear under penalty of perjury pursuant to 28 U.S.C. 1746 that Charles A. Weiss,
counsel to SCR Pharmatop, has authorized me to sign the foregoing brief and SCR
Pharmatops Certificate of Interest on his behalf.
Executed: September 27, 2013

/s/ Richard P. Bress

Richard P. Bress

CERTIFICATE OF SERVICE
I hereby certify that on September 27, 2013, I electronically filed the
foregoing Brief of Intervenors with the Clerk of the United States Court of Appeals
for the Federal Circuit using the CM/ECF system, which will send notice of such
filing to all registered CM/ECF users.

/s/ Richard P. Bress

Richard P. Bress

CERTIFICATE OF COMPLIANCE
I hereby certify, pursuant to Federal Rule of Appellate Procedure
32(a)(7)(B) and the Rules of this Court, that the foregoing brief has been prepared
in a proportionally spaced typeface using Microsoft Word in Times New Roman
14-point font, and contains 11,795 words (excluding the parts of the brief
exempted by Federal Rule of Appellate Procedure 32(a)(7)(B)(iii) and by Federal
Circuit Rule 32(b)).

/s/ Richard P. Bress

Richard P. Bress