Where does a Patent Owner go for judicial review after losing an ex parte reexamination appeal at the Board of Patent Appeals and Interferences (BPAI)? Prior to 2001, Patent Owners had a clear choice of filing suit against the USPTO in the U.S. District Court for the District of Columbia, or appealing adverse BPAI decisions to the Court of Appeals for the Federal Circuit (CAFC). In 2001, amendments to the patent statutes ( 35 U.S.C. §§ 141 and 145 ) in the American Inventor Protection Act (AIPA) appeared to eliminate the District Court option, providing only for appeal to the CAFC. However, a recent case filed in the Eastern District of Virginia questions the USPTO’s interpretation of the statutory changes set forth in MPEP § 2279. In Sigram Schindler Beteilungsgesellschaft mbH v. Kappos, No. 1:09-cv-935-TSE-IDD (E.D. Va.) the patent owner (Sigram Schindler) seeks a right to a trial de novo under 35 U.S.C. § 145 after an adverse decision of the BPAI in an ex parte reexamination (requested by Cisco Systems Inc.) of Sigram Schindler's 2005 patent for a telecommunications network data transmission method and related network switch. Sigram Schindler is challenging the USPTO's interpretation of Section 13202(d) of Public Law 107-273 regarding judicial review of BPAI ex parte reexamination decisions. At the heart of Sigram Schindler’s law suit is a desire to obtain a de novo review of the BPAI’s decision in a federal district court that will provide discovery power over Cisco to obtain code utilized in Cisco’s products. Sigram Schindler appears to be advancing the theory that Cisco’s code will demonstrate that Sigram Schindler’s declaration evidence presented during the reexamination proceedings as to secondary considerations of non-obviousness is more significant than the BPAI gave it credit. (i.e., evidence of use of the invention by others is an objective indicator of non-obviousness).  Sigram Schindler is seeking the Eastern District of Virginia to nullify the USPTO 's interpretation of Public Law 107-273, section 13202(d) as "unlawful and legally void." In Sigram Schindler's August 19, 2009 filed complaint, they aver that "those rules are unlawful and should be set aside as having been adopted in excess of the PTO's statutory authority." They say the USPTO's efforts to regulate proceedings outside the USPTO is ultra vires. On October 21, 2009 the USPTO filed a motion for summary judgment seeking to dismiss the case. The USPTO says that Sigram Schindler lacks standing to bring the "premature" case because it's not clear how the BPAI will ultimately rule and whether they will even need to file an appeal to the courts. According to the USPTO's memo supporting its motion for summary judgment, "the challenged regulation -- whatever its import -- does not apply to [Sigram Schindler] now and may never apply to [Sigram Schindler] at all." The USPTO's position on the merits is that Sigram Schindler's case should fail because of the statutory language Congress specifically placed into the Patent Act in sections 141 and 145 regarding patent owners recourse to appeal only to the Federal Circuit. The USPTO argues that Congressional amendments in Public Law 107-273 that spurred the USPTO interpretation set forth in MPEP § 2279 in question supercede the prior versions of sections 141 and 145, and are controlling. Sigram Schindler’s strategy seems to be seeking a second chance in court to persuade the fact finder than its claims are non-obvious by gaining access to third party information that was not in its possession and that it could not obtain during the ex parte reexamination proceedings. As can be appreciated, if Sigram Schindler is successful, Patent Owner’s can emerge from the USPTO’s adverse decision by the BPAI and through a federal district court action obtain discovery from third parties that would be advantageous to its position in seeking reversal of an adverse decision by the USPTO’s BPAI in ex parte reexamination proceedings. For this reason, this case is an interesting one to watch unfold.
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In the summer of 2005, responding to industry criticism on the efficacy of patent reexamination, the USPTO created the Central Reexamination Unit (CRU).  The CRU is formed of highly skilled primary patent examiners that have been specially selected from the Patent Examining Corps.  These examiners average more than 15 years of experience and have technical backgrounds that reflect the broad spectrum of technologies encountered in patent reexamination.  Many of the primary examiners chosen to work in the CRU have advanced technical and law degrees.

The mission of the CRU is to ensure high quality, objective and timely processing of reexamined patents.  The CRU endeavors to comply with the “special dispatch” requirements of the reexamination statutes.  Reexamined patents are assigned to examiners in the CRU who were not previously involved in the examination of the original patents or in prior reexamination proceedings of the patents.  The examiners work in teams of three including a Special Program Examiner (SPE).  Patentability review conferences are conducted at each point in the reexamination decision making process in order to reach a consensus in decision making on claim patentability.

Currently, the CRU has 48 primary examiners working in 3 Units.  Gregory Morse, who was appointed the Director of the CRU on June 23, 2008 has 5 SPEs and fourteen technical support staff.  Mr. Morse, in turn reports to Technology Center Director Irem Yucel.

The CRU will only reexamine patent claims for which reexamination has been requested for which a substantial new question of patentability has been established. MPEP § 2240 (citing Sony v. Dudas)  The CRU makes the determination as to whether the new or previously presented patents and printed publications would have been important to a reasonable examiner in deciding whether to allow the patents claims.  The new or previously presented patents and printed publications must be noncumulative to the information previously considered during the original patent examination.

The CRU works closely with the Office of Patent Legal Administration (OPLA) directed by Brian Hanlon to address issues associated with, intra alia, petitions, merger of proceedings, and return of improperly submitted papers.

For fiscal year 2009 ending September 30, 2009, 658 ex parte reexamination and 258 inter partes reexamination requests were filed.  92% of ex parte reexamination requests and 95% of inter partes reexamination requests were granted.  Of the patents that were subject to reexamination recent trends show that more than 60% of these patents are involved in concurrent litigation.  Average pendencies to reexamination certificate for these proceedings were 25.2 and 35.8 months, respectively.  For ex parte reexamination concluded proceedings, 25% had all claims confirmed, 11% had all claims canceled and 64% had claim changes.  For inter partes reexamination concluded proceedings, 6% had all claims confirmed, 54% had all claims canceled or disclaimed and 40% had claim changes.

These USPTO reexamination statistics demonstrate that reexamination proceedings conducted by the CRU quite often result in patents having their scope of protection narrowed; accounting for the increased popularity of third parties filing reexamination requests, especially where the reexamined patents are in concurrent litigation.
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In the case of concurrent post grant proceedings at the USPTO, 37 CFR §§ 1.565(d) and 1.991 provide for a discretionary merger of reissue application examination with either ex parte or inter partes reexamination proceedings.  These rules provide that such merged proceedings will be conducted using the rules set forth for reissue application examination that are normally less restrictive than those applicable to reexamination.  As can be appreciated, such a merger would provide the patentee greater flexibility after final rejection and, in most situations, RCE practice and extensions of time as a matter of right; important procedural advantages.  But note that the USPTO may undo the merged proceedings if an RCE is filed in the reissue application (See MPEP §1452) and modify the response period/extension of time practice for reissue applications involved in a concurrent litigation (See MPEP §1442.03).

Moreover, although amendments to claims in reexamination can only be narrowing amendments, if the patent for which reissue is two years or less old, a broadened reissue application can be filed.  In this way, use of patent reissue together with merged reexamination proceedings may provide useful procedural and tactical advantages to a patent owner.

However, whether to merge such proceedings or to suspend action on one of them is a decision that is made by the USPTO sua sponte based on the relative timing of the filings of the reissue application and the reexamination requests, the stage of the respective proceedings, whether a continuation or RCE of the reissue application has been filed, whether the reexamination proceeding is ex parte or inter partes, and whether the patent owner will consent to a stay of the examination of the reissue application pending the outcome of the reexamination proceeding.  Normally, the USPTO favors merger to prevent inconsistency in the handling of the proceedings, if conducted separately.

A merger order issued by the USPTO in merged proceedings sets forth the conditions for how the merged proceedings will be conducted.  If the merged proceedings involve inter partes reexamination, the third party’s participation will be limited to the issues applicable to reexamination.  This permits the patent owner to have other issues such as those applicable to broadened reissue claims dealt with on an ex parte basis.  Moreover, the merged proceedings may be assigned to an examiner in the Technology Center handling the reissue application rather than to examiners in the Central Reexamination Unit (CRU).  This could be advantageous to the patent owner, especially when considering the fate of the patents subjected to inter partes reexamination by the CRU where for completed inter partes reexamination proceedings only 6% have survived with all claims confirmed.  Currently, the Office appears to disfavor merger of inter partes reexamination proceedings and may instead choose to stay the reissue application proceeding in favor of such reexamination proceedings.

However, there are also significant disadvantages to the rules of reissue examination practice.  Patent reissue permits the correction of defects relating to subject matter eligibility, utility, written description, enablement, and clarity of the original claims.  During reexamination, these same defects may only be considered in claims which are amended or added by the reexamination, and not in the originally patented claims. See MPEP §2258.  Thus, a patentee should seriously consider filing a reissue application where the issued patent, for example,  issued prior to In re Bilski, 545 F.3d 943, 88 USPQ2d 1385 (Fed. Cir. 2008), as a significant risk of invalidation may exist for certain method claims if litigated.

Additionally, in reexamination, it is Office practice to examine only those claims specifically identified in the reexamination request.  On the other hand, patent reissue will typically include a comprehensive examination of all claims. 37 C.F.R. §1.176 (See MPEP §1440)

Merger provides interesting opportunities for patent owners and third party requesters alike, (via serial patent reexamination requests).  However, the question of whether or not concurrent USPTO proceedings should be initiated in any given case, requires a close analysis of the facts.

Further information regarding the advantages and disadvantages of merger will be presented at the Patent Law Institute Reissue and Reexamination Strategies and Tactics with Concurrent Litigation 2010.
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By Scott A. McKeown
| November 5, 2009
The inter partes reexamination estoppel provision of 35 U.S.C. § 315(c) is a familiar one to many patent practitioners.  This provision is often cited as the primary justification for disfavoring inter partes reexamination over other post grant patent strategies. Yet, as ITC actions become increasingly utilized for their expediency in reaching a conclusion, further consideration should be given to the applicability of this estoppel to Federally created Agencies.

Specifically, § 315(c) provides:

“[a] third party requester…is estopped from asserting at a later time, in any civil action arising in whole or in part under section 1338 of title 28, the invalidity of any claim finally determined to be valid and patentable on any ground which the third-party requester raised or could have raised during the inter partes reexamination proceedings.”

Importantly, this estoppel provision is explicitly limited to “civil action[s] arising in whole or in part under section 1338 of title 28.”  Section 1338 of title 28, in turn, merely provides that “[t]he district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents, plant variety protection, copyrights and trademarks.”  In other words, 28 U.S.C. § 1338 gives original jurisdiction over patent cases to the Article III district courts, but says nothing about Article I courts, such as the ITC.  Accordingly, the inter partes reexamination estoppel provision of 35 U.S.C. § 315(c) only applies to civil actions in the district courts, and does not apply to ITC investigations.

Since the inter partes reexamination estoppel provision does not apply to ITC investigations, respondents are free to raise the same invalidity arguments in both fora -- in effect, to get two bites at the apple.

This means that respondents in Section 337 investigations at the ITC should consider the potential benefits to be gained by initiating a concurrent inter partes reexamination proceeding at the USPTO.  While the odds of obtaining a stay of ITC proceedings in favor of a concurrently filed reexamination proceeding is for the most part, unlikely, the ability of the reexamination requester to actively participate in the reexamination may lead to the creation of intervening rights, prosecution history estoppel, and non-infringement positions relative to the patent at issue.  In this way, the requesting party may offer to “back out” of participation in the reexamination as part of an overall settlement strategy; thereby leading the Patentee in a much favorable position to recover the patent.
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By Scott A. McKeown
| November 4, 2009
Welcome to PatentsPostGrant.com! Post grant patent proceedings at the USPTO, such as ex parte and inter partes Reexamination are becoming increasingly favored tools to combat patents of questionable validity.  Likewise, some of these same Reexamination tools can also serve as mechanisms to defend and/or focus the scope of pioneering patent portfolios. The emerging popularity of Reexamination stems from two factors, the first is the recent creation of the Central Reexamination Unit (CRU) within the USPTO.  While the use of reexamination by third party requesters was quite modest in the 1990s and the beginning of the 2000s, there has been a dramatic increase in the number of requests since that time.  The emerging popularity of reexamination stems in part from the recent creation of a Central Reexamination Unit (CRU) within the United States Patent and Trademark Office (USPTO).  CRU Examiners, all of whom are hand-picked experienced primary patent examiners who work in three person teams and handle only reexamination proceedings.  Thus, the quality of reexamined patents has increased based on the CRU team approach, and the speed of reexaminations has improved. The second factor is the increased willingness of some Federal District Courts to stay a patent litigation in the face of an initiated Reexamination.  As such, some third parties are filing more reexamination requests in an effort to avoid the high cost of patent litigation in the United States. Together with Patent Reissue, a post grant tool exclusive to Patent Owners for broadening claims or correcting latent defects in issued patents, the use of these multi-purpose proceedings continues to increase. Looking forward, recent legislation has been proposed to establish a post-grant opposition proceeding before Administrative Patent Judges of the new USPTO Patent Trials and Appeals Board. This proceeding is proposed to embrace validity issues not currently subject to reexamination review, and to provide limited discovery opportunities. Due to the wide support for this proceeding, it is anticipated that post-grant opposition will become law to replace and/or augment Reexamination options in the future. With a trained eye on this expanding landscape, PatentsPostGrant.com is dedicated to providing helpful insight and commentary to the complex array of existing and proposed post grant  options. Whether patent Reexamination, Reissue or proposed Opposition systems, this resource will provide informed commentary, observed trends, practice tips as well as news for the purpose of sharing our experienced views with our readers. This informational resource is being provided and maintained by the Reexamination/Reissue Practice Group of Oblon Spivak.  As counsel to some of the largest companies in the world, the Reexamination/Reissue Practice Group of Oblon, Spivak is the undisputed leader in post grant patent practice before the USPTO.
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