Inter partes re-examinations Pre-litigation Strategies: Patent Reexamination
By Robert E. Krebs and Hal J. Bohner of Thelen Reid Brown Raysman & Steiner LLP
This article was originally published in the Spring 2004 edition (Vol. 4, No. 1) of Thelen Reid's Intellectual Property and Trade Regulation Journal.
The costs of patent litigation – both in terms of time and money – have been well documented. For example, a patent lawsuit can require several years of concerted effort by company management and outside counsel to complete pretrial discovery and trial. Then, the trial may be followed by an appeal to the Federal Circuit Court of Appeals.
The costs and commercial uncertainty of patent litigation have been addressed by Congress in the "21st Century Dept. of Justice Appropriations Authorization Act of 2002." The Act amended a procedure, first created by Congress in 1980, for reexamination of patents in the U.S. Patent and Trademark Office (PTO). The reexamination procedure was expanded by Congress in 1999, when it provided for Inter Partes reexamination. The legislative purpose of Inter Partes reexamination is explained in the Congressional Record as follows:
Generally, Title V is intended to reduce expensive patent litigation in U.S. district courts by giving third-party requesters, in addition to the existing Ex Parte reexamination in Chapter 30 of Title 35, the option of Inter Partes reexamination proceedings in the PTO. Congress enacted legislation to authorize Ex Parte reexamination of patents in the PTO in 1980, but such reexamination has been used infrequently since a third party who requests reexamination cannot participate at all after initiation the proceedings. Numerous witnesses have suggested that the volume of lawsuits in district courts will be reduced if third parties can be encouraged to use reexamination by giving them an opportunity to argue their case for patent invalidity in the PTO. Title V provides that opportunity as an option to the existing parte reexamination procedures.[1]
This article summarizes the reexamination process and discusses strategies for a patent challenger. It should be noted that two principal issues are usually present in every patent litigation:
1. the question of validity of the patent in view of the prior art, and
2. the question of the scope of the claims of the patent.
As will be explained below, patent validity may be resolved in the reexamination process and, also, the scope of the patent claims may be altered.
Ex Parte Reexamination
In an Ex Parte reexamination, either a challenger or patent holder may seek reexamination of a patent based on patents or printed publications.[2] The requester files the request for reexamination and within three months the PTO determines whether a substantial new question of patentability exists.[3] If so, the PTO orders reexamination of the patent.[4] A determination that there is no substantial new question is final and non-appealable.[5]
If the PTO orders reexamination, the patent holder is given the opportunity to file a statement concerning the new question of patentability, including amendments or new claims they want to propose[6] (provided, however, that the claims may not be broadened).[7] If the patent holder files such a statement, the statement must be served on the person requesting reexamination, and the requester is given two months to file a reply to the patent owner's statement.[8] From that point on, the claims are examined without participation by the requester. Following the Ex Parte reexamination, the PTO issues a certificate canceling any claim determined to be unpatentable, confirming any claim determined to be patentable and incorporating in the patent any new claim or amended claim determined to be patentable.[9]
Inter Partes Reexamination
Inter Partes reexaminations are similar to Ex Parte proceedings in some ways. Both are initiated by a request for reexamination.[10] Also, the only ground for seeking reexamination under either process is prior art consisting of patents or printed publications.[11] Furthermore, at the outset, the PTO determines whether the request raises a substantial new question of patentability.[12]
If the PTO determines that there is a substantial new question of patentability, an Inter Partes reexamination is ordered.[13] Thereafter, just as in an Ex Parte proceeding, the third-party requester will be provided with a copy of Office Actions issued by the PTO.[14] Also, just as in an Ex Parte proceeding, the third-party requester will be provided a copy of the patent owner's responses to Office Actions. However, unlike an Ex Parte proceeding, the third-party requester may reply to the Office Actions and to the patent owner's responses.[15]
After the Examiner has reached a final decision in an Inter Partes proceeding, either the patent owner or the requester may appeal an adverse finding to the PTO Board of Patent Appeals and Interferences (Board). After the Board reaches its decision, either party may appeal to the U.S. Court of Appeals for the Federal Circuit from an adverse determination (Court).[16] On the other hand, in an Ex Parte case, the requester does not have comparable options of appeal either to the Board or to the Court.
A critical difference between Inter Partes and Ex Parte proceedings concerns estoppel. Unlike an Ex Parte requester, the Inter Partes requester will be estopped – in subsequent litigation in a district court or a subsequent Inter Partes proceeding – to assert the invalidity of any claim finally determined to be valid on any ground which is raised or could have been raised in the Inter Partes reexamination.[17]
Strategic Considerations
In both Ex Parte and Inter Partes proceedings, the patent challenger has the opportunity to submit prior art for consideration by the Examiner. The patent challenger, of course, has the ability to do a thorough search of the prior art to find art that may be used to invalidate the patent or limit the scope of the claims so the challenger's product does not infringe.
Whether to pursue patent reexamination – either Inter Partes or Ex Parte – involves the balancing of significant considerations. The major advantage to a patent challenger of the Inter Partes procedure over the Ex Parte procedure is that in the Inter Partes procedure the challenger has the right to participate throughout the process – for example, by supplying prior art and by filing rebuttals to arguments submitted by the patentee. Also, the challenger can submit arguments supporting the Examiner when the Examiner takes a position unfavorable to the patentee, and the challenger can submit declarations by technical experts concerning the patent and the prior art.
The challenger however, must consider certain disadvantages to the reexamination process. One important consideration is that the process gives the patentee the opportunity to amend its claims and add new claims. While the patentee may not broaden the scope of its claims, the patentee may amend the claims to (1) make them patentable in view of the prior art, including the new prior art cited by the challenger, and (2) make them more clearly cover the challenger's allegedly infringing product. Another major disadvantage to the challenger, in the Inter Partes process, is that the challenger is estopped from challenging the patent in court, except in very limited circumstances. Thus, the Inter Partes challenger must be prepared to do its best job before the PTO because it is unlikely to get another opportunity if it fails to achieve the results it desires there.
* Estoppel: Under Section 315(c) of the Patent Act, a third party that requests inter partes reexamination is estopped from later raising the same issues in a court proceeding. The proposed Patent Act of 2005 would change the estoppel provision and would allow inter partes reexams to apply to all patents (rather than only those filed since 1999).
Wednesday, April 09, 2008
Who at the USPTO Will Fix Inter Partes Reexaminations?
The American Inventors Protection Act, signed into law on November 29, 1999, made a number of landmark patent reforms, including the establishment of an inter partes reexamination procedure.
Initially shunned by 3rd parties, inter partes reexamination practice has grown considerably in the last few years: in 2003, only 23 requests were filed in the USPTO; in 2007, 126 requests were filed (see PTO statistics here).
One very disturbing fact, which has received scant attention, is this:
To date, the BPAI has not issued a single final decision on any inter partes reexamination.
Recently, the BPAI issued Watson & Chalin Manufacturing, Inc. v. Hendrickson USA, L.L.C., 2008 WL 345059 (PTO Bd. App. & Int. 2008), which, as noted by the good professor Hal Wegner, is only the third inter partes decision in history (presuming that Westlaw's reporting is complete). And despite the statutory requirement for "special dispatch", the reexamination languished in the PTO for 5 years (since 2003); the other two BPAI inter partes decisions (Lobo v. Congoleum and NEC v. Entegris) had to wait 4 years to get their decisions.
Why weren't the decisions "final"? In each case, the Board "played examiner" and instituted new grounds of rejection. Because a new rejection is introduced, the decision cannot be final, and cannot be appealed to the CAFC until there has been a rehearing at the Board, or prosecution is reopened.
This is worrisome stuff. Considering that post-grant review is such a crucial part of patent reform, someone at the PTO needs to explain what policies and procedures the Office intends to implement to avoid having the same problem when (if?) patent reform is enacted. |
