By Scott A. McKeown
| November 24, 2009
The seemingly never ending political battles relating to the pending patent reform legislation rage on, especially as they relate to the proposed post grant opposition and reexamination provisions.  

The current bills, H.R. 1260 and S 515, originated from legislative proposals from as far back as 2005.   S. 515 was reported out of the Senate Judiciary Committee on April 2, 2009, a committee report on this bill was issued on May 13, 2009. 

 Both of the bills include overlapping proposals, with respect to post grant oppositions and expanded inter partes reexamination.  Minor differences exist in the proposed bills, such as the availability of public use evidence to the expanded inter partes reexamination proposed, and the application of inter partes estoppel to ITC actions.


In January 2009, the Heritage Foundation released a white paper entitled: Promoting Innovation with Patent Reform: A Memo to President-elect Obama.  The paper opposed the legislative proposals regarding the expansion of reexamination and establishment of post-grant opposition.  

In July of 2009, a report of economist Professor Scott Shane Ph.D. was provided at the request of Jeff Sessions, the ranking Republican on the Senate Judiciary Committee, regarding the perceived impact of post grant opposition on the patent system.  The report was overwhelmingly negative, noting that the proposed opposition system would achieve none of the goals it was designed to accomplish and would, among other things, increase the length of patent pendency, increase the cost of validity disputes, decrease R&D efforts and disadvantage universities and small organizations.  Some have speculated that Senator Sessions is an ally of the anti-reform lobby and requested this information with a strong idea of the answer (previously the same economist had attacked the infringement damages aspect of the same legislation).

A.  Administration

On October 5, 2009, the Obama administration released, via a letter from Commerce Secretary Gary Locke to the Senator Sessions, the administration's positions on S. 515.  In the letter, the Administration took some notable positions not previously considered.

Of particular relevance to post grant proceedings, Secretary Locke stated:

Post-Grant Review and Other Quality Enhancements

The Administration supports the establishment of a phased-in post-grant review procedure, as well as phased-in changes to inter partes reexamination, to reduce costs and increase certainty by offering a lower-cost and faster alternative to litigation as a means of reviewing questions of patent validity. Such a procedure also would provide a check on patent examination, ultimately resulting in higher-quality patents. It is important that post-grant review procedures be designed to prevent delay and abusive challenges.

A post-grant review procedure like that envisioned by S. 515 would improve the quality of patents and lead to significant savings by avoiding unnecessary litigation. At the same time, any review procedure would increase USPTO's costs. The USPTO would benefit from the flexibility to set or adjust fees to recover the cost of doing the applicable work. Depending on the scope and timing of post-grant review, intermediate steps to ensure adequate resources may need to be explored until a new fee schedule can take effect. We would be pleased to work with Congress to develop procedures to meet the above goals or to provide technical drafting assistance on these provisions.

With this in mind, it is worth looking at S. 515 to see what post-grant proceedings the Obama Administration supports.  Section 5 of S. 515 as reported by committee on April 2, 2009, can be summarized as follows:

  • Reexamination Proceedings: Inter partes reexaminations would begin to look more like court cases and would be heard by administrative patent judges.  The Bill would eliminate the “or could have raised” estoppel.  The Bill would also clarify that parties would be estopped from filing inter partes reexamination requests after a district court judgment. 

  • Additional Post Grant Review: Within (i) 12 months of issuance of a patent or reissue patent or (ii) at the consent of the patent owner, a third party can file a cancellation petition based on virtually any ground of invalidity (rather than simply prior art). The only enumerated exclusion is invalidity based on failure to disclose the best mode as required by 35 U.S.C. §112. Post grant review would be precluded between the same cancellation petitioner and the same patent. The post grant reviews would also be conducted by the administrative patent judges.


In a press conference conducted on October 6, 2009, Director Kappos outlined the position of the USPTO relative to the legislation.  The Director noted that 12 months needed for rulemaking relating to Post-grant review.  After rulemaking, the implementation would be gradual, over a period of an additional 4 years, to allow PTO to prepare/staff for such proceedings. 

Current State of the Legislation

            Upon learning of Senator Locke’s letter, Senator Patrick Leahy (D-Vermont) issued the following statement:

The administration’s letter of support for the needed provisions in the Patent Reform Act reinforces the urgent need to enact this legislation.  It has been more than 50 years since Congress passed meaningful reforms to our nation’s patent system, and it is wrought with inefficiencies.  I have been working with the bill’s cosponsors, interested Senators, and the administration to reach consensus on this important legislation.  I particularly appreciate the commitment of Secretary Locke and Under Secretary Kappos to this legislation.  Now that the administration has indicated its support for the Patent Reform Act, I look forward to working with Majority Leader Reid to schedule Senate debate before the end of the year.

Shortly thereafter, 12 Republican Senators issued a letter  to Reid and to Minority Leader Mitch Connel (R-Kentucky) stating that the Senate bill “needs additional work before it is brought to the floor….the measure includes new and expanded mechanisms for the administrative reexamination of patents.  These so-called post-grant review provisions, as currently crafted, are quite problematic” 

Looking Down the Road

The only conclusion that can be drawn from recent developments is that the reexamination and post grant aspects of the reform legislation, along with other provisions relating to damages and inequitable conduct, are still drawing significant attention from lobbyists.  While the Administration is hopeful to move this bill to a conclusion by year end, in view of the battles looming on health care, one can only conclude that patent reform has once again lost momentum.
By Scott A. McKeown
| November 23, 2009


Is it Possible to Comply with Larson Manufacturing?

Two weeks ago, we discussed the merger of concurrent post grant proceedings relating to the same patent at the USPTO.  In addition to concurrent proceedings of a same patent, it is also quite common for entire portfolios of a Patent Owner to be subject to reexamination.  In such cases, the reexamination of different patents (including direct continuations of one another) are not merged.  Likewise, there may also be ongoing continuation patent application examination (i.e., patent applications claiming subject matter directed to the same invention in applicant’s earlier filed patent and meeting the conditions of section 120 of the patent statutes) being examined concurrently with the parent patent in reexamination.  However, reexamination proceedings are not merged with non-reissue application examination.

In such concurrent proceeding situations, what are the obligations of the Patent Owner in satisfying the duties of disclosure, candor and good faith?

The later situation noted above was very recently analyzed in Larson Manufacturing Co. of South Dakota, Inc. v. Aluminart Products (Fed. Cir 2009).  In Larson, the court found that certain Office Actions in an ongoing continuation patent application examination, which were not cited during a concurrently prosecuted reexamination of a related patent, were material information required to be cited in the reexamination proceeding.  The Federal Circuit remanded the case for a determination on intent before arriving at a conclusion of whether inequitable conduct was committed by the attorney representing the patent owner in the reexamination proceedings.

In arriving at the determination of materiality, the court cited the Examiner of the continuation application’s opinions in the Office Actions with respect to the applicability of the prior art common to both proceedings as being information that was inconsistent with or refuted the position that the patent owner was arguing for the patentability of substantially similar claims in the reexamination proceedings, relying upon the holding of Dayco Products See Dayco Prod., Inc. v. Total Containment, Inc., 329 F.3d 1358, 1365-69, 66 USPQ2d 1801, 1806-08 (Fed. Cir. 2003) (contrary decision of another examiner reviewing substantially similar claims is 'material'); See Also MPEP 2004 (note 9).

Based on the Larson holding, it is clear that the lack of citation of Office Actions of a related patent application examination in a reexamination proceeding may satisfy the materiality requirement of an inequitable conduct allegation.  When handling a reexamination proceeding for a patent owner, the obvious solution to this problem is to provide the Office Actions of pending continuation patent applications to the Office.  Yet, in 2008, prior to the Larson holding, MPEP § 2282 (for ex parte reexaminations) and MPEP § 2686 (for inter partes reexamination) were amended to provide apparently contradictory guidance:

. . .It is not required nor is it permitted that parties submit copies of copending reexamination proceedings and applications (which copies can be mistaken for a new request/filing); rather, submitters may provide a notice identifying the application/proceeding number and its status. (emphasis added)

Based on this language, the Office has published guidance, prior to Larson, that is now inconsistent with the direction provided by the Federal Circuit.  The Larson holding did not address whether mere citation of the continuation application by patent application number and status would have sufficed.  Yet, in view of Dayco, it is likely that the inequitable conduct charge would have been made by the accused infringer nevertheless.  As such, the current language of MPEP § 2282/2686 appears to place practitioners in an ethical quandary when trying to comply with the duty of disclosure and the conditions set forth in this MPEP section.

Part II of this series will be presented next week and analyze Third Party Considerations in view of § 2282/2686, namely, the evolution of these sections in view of abusive third party tactics.

By Scott A. McKeown
| November 20, 2009
Despite the $612.5 million patent infringement settlement between NTP and RIM in 2006, there have remained ongoing reexaminations making their way through the reexamination and appeal process at the USPTO.  On November 10, The Board of Patent Appeals and Interferences (BPAI) affirmed final rejections relating to two reexaminations of NTP (U.S. Patent Nos. 5,819,172 and 6,317,592). 

As brief background, the reexamination of the NTP patents began during the litigation between NTP v. RIM.  The reexaminations continued at the USPTO in parallel with the then ongoing, and now infamous, litigation.  However, the co-pending litigation continued on to the settlement, narrowly avoiding a disruption of RIM's business in the U.S via court imposed injunction. 

The BPAI decisions are uncharacteristically voluminous, spanning some 300 pages.  The BPAI soundly rejected several NTP positions, and was able to affirm the rejection of the claims in both NTP patents on appeal.  The remaining patents of the RIM case are also on appeal, with decisions very likely forthcoming in the near term (U.S. Patent Nos. 6,067,451; 5,625,670; and 5,436,960).
Third party use of patent reexamination can be thought of as both a “sword” and a “shield.” In the “shield context”, patent reexamination may function to shield an infringer from litigation costs if the reexamination filing results in the stay of a federal district court infringement litigation. Likewise, the reexamination of a patent immediately prior to an imminent litigation may cast enough of a cloud over a patent to avoid litigation altogether, or to re-calibrate the licensing expectations. In this way, the shielding of unwarranted litigation expenses gains the infringer significant settlement leverage. Conversely, the use of a patent reexamination may also serve as a “sword”, providing offensive value. Aside from the obvious intervening rights, prosecution estoppel, and non-infringement positions that may be created by ongoing reexamination prosecution, a timely initiated reexamination proceeding may utilized in a more generic fashion to demonstrate a perceived weakness with respect to patent validity. For example, at the preliminary injunction stage of a litigation, even an early rejection of a litigated patent by the USPTO (i.e., first official action) may indicate a low likelihood of success on the merits. As this factor is a crucial component of a preliminary injunction determination, the well timed reexamination filing may provide dividends even at this early stage. Depending on the respective stages of the reexamination and district court litigation proceedings, a district court judge may be strongly discouraged from imposing a preliminary injunction against an accused infringer. For example, if the reexamination proceeding a reached a final action by the USPTO rejecting the asserted patent claims. A final Office action rejecting patent claims casts enough doubt on the validity of a patent to warrant denial of a preliminary injunction. In opposing a preliminary injunction, one need only to establish a substantial question as to invalidity of asserted patents claims requiring less proof than the clear and convincing showing necessary to establish invalidity itself. v., Inc., 239 F.3d 1343, 1359 (Fed. Cir. 2001). On the other hand, too early in the proceeding, the mere granting on a reexamination order may not suffice to avoid a preliminary injunction. The USPTO orders 92% of ex parte reexamination requests and 95% of inter partes reexamination requests. The order is not a merits determination, not does it suggest what the ultimate outcome of the reexamination will be. Erico Int’l Corp. v. Doc’s Mktg., Inc., 2007 U.S. Dist LEXIS 1367 (N.D. Ohio Jan. 9, 2007) When faced with imminent or recently initiated infringement litigation, timely reexamination filings can provide both offensive and defensive benefits to defendants.
(Clarification: This post analyzes patent reexaminations of a subject patent that claims the benefit of an earlier filed CIP and/or provisional application for priority purposes.  In such circumstances, intervening art presenting a Substantial New Question of patentability (SNQ) may be applied calling into question these priorty dates.  In such unique circumstances, enablement and written description issues pertaining to the originally issued patent claims will be considered by the USPTO for the purpose of detemining whether or not the priority claim is properly supported.  Of course, such an analysis of original patent claims is not performed outside of these limited circumstances). 

According the MPEP §§ 2258 and 2658, the USPTO during a reexamination proceeding will not consider 35 U.S.C. § 112, 1st paragraph issues with respect to the reexamination of original patent claims. It will, however, consider such issues where new or amended claims are presented or where any part of the disclosure is amended.

Nevertheless, where the patent subject to reexamination has claimed the benefit of the filing date of an earlier filed U.S. or foreign patent application, reexamination proceedings may be based on intervening patents or printed publications where the patent claims under reexamination may be entitled only to the actual filing date of the patent.

But can this strategy be used as a “back door” attack on the original patent claims’ compliance with 35 U.S.C. § 112, 1st paragraph where the patent for which reexamination is sought is a continuation or divisional patent?

Do the examiners in the Central Reexamination Unit have to make a determination of original continuation or divisional patent claims’ compliance with 35 U.S.C. § 112, 1st paragraph when assessing whether the parent application or patent complies with 35 U.S.C. § 112, 1st paragraph?

Suppose that the original patent’s prosecution history includes no intervening prior art. In such circumstance, the original examiner presumably made no affirmative determination as to the right of priority. Further assume that the patents or printed publications included in the reexamination request are non-cumulative with respect to the prior art of record in the original patent’s file history and raise a substantial new question of patentability against the original patent claims, if these claims are not entitled to the filing date of the earlier filed applications.

In accordance with the MPEP §2258 (I)(C), reexamination can be ordered under these facts, even though the effect will be to assess whether the original patent claims have adequate written description support and are full enabled.

The patent owner will likely presents arguments and evidence during reexamination that the parent applications provide adequate support for the original patent claims rather than amending or cancelling claims, or that the right to priority was determined in the original prosecution. (For an example of this issue where priority was assessed in the original prosecution see Reexamination Control No. 95/000,312 (discussing the Aotake reference)).

Advisedly, a third party requester should consider using inter partes reexamination rather than ex parte reexamination in order to fully participate in the proceedings. It is highly likely that the third party will need to rely on expert declaration evidence to rebut the patent owner’s showings as to why the original patent claims are entitled to an earlier filing date to antedate the intervening prior patents or printed publications.