Interference
By Scott A. McKeown
| March 2, 2011
First Inventor to File vs. First to Invent

Patent Reform & the Red Herring Patent Interference Argument


As the patent reform debate continues on the floor of the Senate, the expected battle against the so-called "first inventor to file" (FITF) began today. Senator Feinstein D-CA, broke from the party line and assailed the proposed FITF provision as inefficient, encouraging incomplete filings, and disadvantaging small inventors. Sen. Feinstein had an impressive understanding of these very complex issues.

In attempting to rebut Sen. Feinstein's position, two arguments were consistently repeated. First, it was argued that the "rest of the world" had a first inventor to file system. Ironically, this argument was made by the same folks beating the "America is the greatest innovator in the world" drum.

The second argument, was more troubling to me as a practitioner. This argument, justified the change to a FITF system based upon extreme patent interference statistics. In my opinion, the patent interference argument is a complete red herring.
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By
| October 29, 2010
220px-Wingmanass="alignleft size-full wp-image-4165" title="220px-Wingman" src="http://www.patentspostgrant.com/wp-content/uploads/2010/10/220px-Wingman.jpg" alt="220px-Wingman" width="220" height="177" />Whether in a social or tactical environment, everyone knows the importance of a good wingman.  Yet, the Board of Appeals and Patent Interferences (“BPAI”) has suffered from the absence of its wingman in several recent appeals to the Federal Circuit.

In Rolls-Royce PLC v. United Technologies Corp. (here), the Federal Circuit applied a non-traditional test in its interference-in-fact analysis, and in Agilent Technologies Inc. v. Affymetrix Inc. (see past blog post here), the court imposed a very controversial claim interpretation standard for copied claims.  In a rare form of collateral damage, the Agilent decision led the BPAI to rescind one of its fundamental rules, 37 C.F.R. 41.200(b).

Would Solicitor participation in these cases have protected the institutional interests of the BPAI?  The answer is not clear.  However, absent Solicitor participation, the BPAI’s record will be left to speak for itself.

Fortuitously, 35 U.S.C. 143 requires the Solicitors Office to participate in appeals to the Federal Circuit taken by applicants, patent owners (ex parte and inter partes reexamination), and third parties (inter partes reexamination). 

Appeals taken by applicants and patent owners in ex parte reexamination are as old as the hills.  However, Safoco was the first appeal of an inter partes reexamination to reach the Federal  Circuit.  Safoco confirmed (here) that the Solicitor's Office will participate in inter partes reexamination appeals, although not as a named party.   In interference appeals, the Solicitor's Office has discretion whether to participate as an amicus.  However, the Solicitor has seldom participated as an amicus in an appeal from the decision of the BPAI in an interference -- although he has occasionally been ordered by the court to do so in cases where the winning party below chose not to defend its win on appeal.

Interestingly, if S.515 is enacted, the Solicitor’s discretion to intervene would extend to inter partes reexam, derivation cases, and inter partes or post grant review.  Unless the Solicitor’s Office is motivated to serve as wingman, the renamed Patent Trial and Appeal Board’s interests will be alone and vulnerable.
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By
| October 15, 2010
CG98ass="alignleft size-full wp-image-4062" title="CG98" src="http://www.patentspostgrant.com/wp-content/uploads/2010/10/CG98.png" alt="CG98" width="175" height="229" />On October 13th, the Federal Circuit held in Solvay v. Honeywell International that, in order for prior invention to invalidate a patent under 35 U.S.C § 102(g)(2), the prior invention must have been conceived in the United States. The precedential decision (here) relates to ozone friendly fluorocarbons commonly used in refrigeration and heat storage systems. At issue in the appeal was whether or not Honeywell’s reproduction of technology, conceived by a Russian contractor, invalidated Solvay’s patent claims under 102(g)(2).[1]

In reversing the district court’s finding of invalidity under 35 U.S.C § 102(g)(2), the CAFC concluded that Honeywell’s employees did not qualify as “another inventor” under section (g)(2) because (1) they were not involved in the conception of the technology and (2) those who had conceived the invention were outside of the United States.

102(g)(2) requires prior invention in the U.S. In contrast, 102(g)(1), which governs patent interferences, allows for prior invention in foreign countries as permitted by 35 U.S.C. § 104. So would there have been a different outcome given the facts reported in the decision if this dispute had occurred in a patent interference?



No, for at least two reasons. Consider sections (g)(1) and (g)(2):
A person shall be entitled to a patent unless … (g)(1) during the course of an interference …, another inventor involved therein establishes, to the extent permitted in section 104, that before such person's invention thereof the invention was made by such other inventor…, or (g)(2) before such person's invention thereof, the invention was made in this country by another inventor….

So, because the hypothetical interference would have involved Honeywell and Solvay, but not Honeywell’s Russian contractor, the contractor’s employees would not constitute “another inventor” involved in the interference. Further, and perhaps more interestingly, because Russia is neither a NAFTA country nor a WTO member, even if the Honeywell owned patent application named the true Russian inventors any conception which occurred in Russia could not be relied upon in the interference to prove a date of invention.

Honeywell argued that (g)(2) ignores globalization realities, but the CAFC wisely countered:
Whether this holding ignores the realities of globalization and outsourcing by modern-day research companies, as Honeywell contended at oral argument, is not the question before us.

Until Russia steps up to the plate and joins the WTO, U.S. companies outsourcing research to Russia has definite draw-backs!


[1] As a matter of candor, I wish to point out that Solvay is represented by my firm, Oblon Spivak.
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| September 29, 2010
roadblockass="alignleft size-full wp-image-3880" title="roadblock" src="http://www.patentspostgrant.com/wp-content/uploads/2010/09/roadblock.jpg" alt="roadblock" width="203" height="144" />This past Monday the BPAI pointed out that a Patent Holder may not swear behind a patent that claims the same invention, the proper forum for such a priority contest being a patent interference proceeding. The decision, Ex parte Regents of the University of California (“Regents”) (decision here), affirmed-in-part the rejection of U.S. patent No. 5,916,912 in ex parte reexamination.  In particular, the Board held that Regents could not antedate U.S. Patent No. 5,998,474 (“Cavazza”) because the ‘912 patent and Cavazza were claiming the same patentable invention. Applying, 37 C.F.R. 41.203(a), the Board reasoned that the two patents were directed to “the same patentable invention” since a claim of the Regents patent is obvious in view of a claim of Cavazza, and vice versa. This leaves the Regents in a bind, aside from challenging the BPAI decision to the CAFC, how can an interfering patent applied in patent reexamination be overcome? One rarely elected alternative would be to pursue a patent vs. patent interference in a district court under 35 U.S.C. 291.  291 actions are rare due to the arcane nature of interferences.  Most patent owners wisely elect not to assume the uncertainty of how a district court will apply interference laws and/or administer unfamiliar interference procedures. A more palatable alternative is to file a reissue application and request an interference (a 35 U.S.C. 135(a) interference).  However, in order to adhere to 35 U.S.C. § 251, the patent owner must identify and correct a defect with the reissue application. In years past, Patent Holders may have simply alleged that the defect was the failure to present a dependent claim. Once the reissue proceeding was commenced on this basis, the interference could then be pursued.  However, pending the review of Ex parte Tanaka by the CAFC, such a practice seems like a dead end. In the case of Regents, the USPTO has concluded that interfering patents exist. Thus, it is clear that a defect as to invalidity is present in accordance with the reissue statute. Yet, unlike other bases for patent reissue, can the existence of an interfering patent alone qualify as an "error" when statutory authority exists for district courts to also address the issue?
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| April 15, 2010
Cancelled -- Rule 41.200(b)ass="size-full wp-image-2162 alignleft" title="cancelled" src="http://www.patentspostgrant.com/wp-content/uploads/2010/04/cancelled.gif" alt="Cancelled -- Rule 41.200(b)" width="172" height="129" /> The USPTO has announced that 37 C.F.R. 41.200(b) is no longer viable in light of the  Federal Circuit’s Agilent Technologies, Inc. v. Affymetrix[1] decision, and has thus cancelled the rule.  As discussed in earlier posts commenting on the Agilent and Koninklijke Philips Electronics N.V. v. Cardiac Science Operating Company[2] decisions, the Federal Circuit has concluded that, when a party challenges the patentability of a “copied” claim pursuant to 35 U.S.C. §112, first paragraph, the “copied” claim should be interpreted in light of the specification of the targeted patent or application.  In contrast, Rule 41.200(b) required that a claim in interference be given its broadest reasonable construction in light of the specification in which it appears. With Rule 41.200(b) taken out of its misery, one has to wonder what guidance examiners will be given when examining claims “copied” to provoke an interference.  Will examiners be instructed to apply one claim construction when considering written description and another claim construction when applying prior art to the same “copied” claims?  Will the MPEP be updated?  If nothing else, the PTO’s decision to cancel Rule 41.200(b) in response to Agilent reinforces the prevailing opinion that interference practice is arcane. 
[1] 567 F.3d 1366 (Fed. Cir. 2009). [2] 590 F3d 1326 (Fed. Cir. 2010).
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| April 12, 2010
objectWhere an order has been granted to stay a patent litigation pending the outcome of a reexamination of the patent-in-suit, there is little likelihood that patent owner will be able to successfully appeal the decision ordering the stay of litigation.  Such orders are generally not appealable, because they are not considered final decisions.  See Gould v. Control Laser Corp., 705 F.2d 1340 (Fed. Cir. 1983).  There is an exception where the stay "effectively could put one of the appellants out of court" or if some "patent issue would escape review by a federal court if the case is stayed."  See Slip Track Sys., Inc. v. Metal-Lite, Inc., 159 F.3d 1337, 1340 (Fed. Cir. 1998).


Federal courts have often found jurisdiction to review stays in favor of state court suits when the state court judgment would have a fully preclusive effect on the federal action or moot the federal action entirely.  See , e.g. , Cone , 460 U.S. at 10; Terra Nova Ins. Co. v. 900 Bar, Inc. , 887 F.2d 1213, 1218-21 (3d Cir. 1989).  Stays in favor of administrative proceedings are similarly reviewed on an “effectively out of court” standard. See Gould , 705 F.2d at 1341; Hines v. D'Artois , 531 F.2d 726, 730-32 (5th Cir. 1976).

It is difficult to identify many circumstances in which an "effectively out of court" situation would be presented for substantive issues based on concurrent reexamination.  One possible example may be the need to litigate priority of invention issues in a  reexamination proceeding (assuming the Patent Owner needed to swear behind an anticipatory reference claiming the same invention).  Under those circumstances, the reexamination, if carried to completion, is likely to result in the cancellation of all of the claims of the Patent Owner's patent. That in turn would require a dismissal of a interfering patents suit under 35 U.S.C.  291, since a necessary condition for such an action is the existence of two valid and interfering patents. As a result, the district court would have no occasion to consider the issue of priority of invention following the resolution of the PTO reexamination proceeding. Such a consequence provides sufficient finality to make the stay order a “final decision” for appealability purposes.

Outside of such unique situations, the delay associated with patent reexamination may significantly undermine the value of injunctive relief. For example, where Patent Holder market share is being eroded, significant delay may effectively moot the controversy to the Patent Holder's detriment, especially in quickly advancing areas of technology. While the Patent Owner may be able to pursue infringement claims once the stay is lifted, where money damages are inadequate, the redressability aspect of the dispute may be lost.

Likewise, as noted in our post last week, "rolling ex parte reexamination requests" are often times abused by district court defendants. Where a concurrent litigation is under stay, rolling reexamination requests effectively keep the Patant Owner out of court. In such cases, appelate review may be in order for defendants gaming the system.
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| April 8, 2010
the-end-is-nearass="alignleft size-full wp-image-1999" title="the-end-is-near" src="http://www.patentspostgrant.com/wp-content/uploads/2010/04/the-end-is-near.jpg" alt="the-end-is-near" width="264" height="400" />... or is it?  Rumors of the demise of interferences via patent reform have been greatly exaggerated for years.  Whether S.515 will have a different fate than other recent patent reform bills is uncertain at best.  In any event, we continue our review of S.515 provisions related to post grant matters.  On March 4th and 5th, we outlined the provisions in S.515 which would change reexamination and implement a new Post-Grant Review revocation mechanism, respectively.  Today, we discuss what little of substantive interference practice[1] will remain if S.515 is enacted -- namely, derivation proceedings.[2]  Currently, derivation cases are a species or type of interference decided by the Board of Patent Appeals and Interferences (“BPAI”).  In an interference proceeding at the BPAI, derivation is proven by establishing prior conception of the interfering subject matter and communication of the conception to the opposing party.  Examiners rarely, if ever, suggest an interference sua sponte.   Consequently, in the vast majority of cases, an applicant wishing to initiate a derivation proceeding is required to suggest an interference pursuant to 37 C.F.R. § 41.202.  The suggestion of an interference is initially considered by an examiner, who is instructed by the MPEP not to even consider the suggestion of interference until after he or she has decided that the targeting applicant's claims are in condition for allowance, but for the existence of the targeted application or patent.  Therein, lies the rub.  As stated in MPEP 2304.02(d), “[a]n applicant is not entitled to an interference simply because applicant wants one. The interfering claim must be allowable, particularly with respect to the written description supporting the interfering claim.”  Thus, examiners are effectively interference gatekeepers to the BPAI.  With little or no experience in considering a suggestion of an interference and even less incentive to recommend one, when a suggestion of an interference is filed by an applicant, the examination process often becomes tortured.  S.515 would substantially change the process for initiating derivations and maintain a one year “copy” provision, as discussed next. Initiating a derivation process (§ 135) -- S.515 replaces the suggestion process currently employed by the PTO with a petition process.  S.515 provides that:
The petition shall set forth with particularity the basis for finding that an earlier applicant derived the claimed invention from the petitioner and, without authorization, filed an application claiming such invention. 
PPG Comment: the S.515 provision implementing a petition process in place of the current suggestion process may prove to be a marked improvement depending on how the petition process is implemented.  Although S.515 does not expressly provide so, hopefully, the decision to remove examiners from the requesting process and to give that responsibility to the Director or his designee reflects that the petitioner will not have to establish the patentability of the claimed subject matter as a prerequisite to initiating a derivation proceeding.  In derivation proceedings, where there is often an allegation of “bad” acts, that would seem appropriate.  One year statute of limitations (§ 135) -- S.515 maintains a 35 U.S.C. §135(b) type one year statute of limitation provision.  S.515 provides that: 
Any such petition may only be filed within 1 year after the first publication of a claim to an invention that is the same or substantially the same as the earlier applicant’s claimed Invention.
PPG Comment: This language is not entirely clear.  The start of the one year "statute of limitations" is triggered by publication of the "bad guy's" claim.  That is OK.  However, the remainder of the provision suggests that the bad guy's published claim must be directed to "the same or substantially the same" invention as the earlier applicant's claimed invention.  The problem with this provision is that, in derivation cases, more likely than not the applicant (petitioner) is the later applicant -- not the earlier applicant. _________________________________________________________________________________________________________________ [1] Since the Post-Grant Reviews will apparently be handled under the BPAI's current rules for handling Contested Cases, 37 CFR 41.100 et seq., a great deal of procedural interference practice will presumably remain.  [2] See also Gholz, Would Derivation Proceedings Be The Same as Derivation Interferences?, 16 Intellectual Property Today No. 5 at page 8 (2009).  Mr. Gholz is a partner of mine at Oblon Spivak.
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| January 25, 2010
In a prior blog entry, we discussed why it is important to conduct a thorough prior art search prior to filing a request for inter partes reexamination.  In short, the statutory language of 35 U.S.C. § 315(c) is intended to limit the third-party requester to a single bite at the invalidity apple.  Any prior art patents and printed publications discovered after the request for reexamination is filed may be excluded as a basis for invalidity in litigation if that prior art was publicly accessible when the request for inter partes reexamination was filed. What if a party is contemplating whether to suggest an interference with a patent or to request inter partes reexamination of the patent?  This may be the case, for example, where the party believes that it has a published application which (i) would sufficiently support at least one claim that would interfere with the targeted claims and (ii) has an earlier effective filing date for that claim than the effective filing date of the targeted claims.  In this scenario, the party’s application qualifies as 35 U.S.C. § 102(e) art against the targeted patent.  Should the party (applicant) conduct a thorough prior art search or merely rely upon its own published application as the basis for the reexamination request?  If a search is to be conducted, when?  And, how thorough should that search be? In order to have an interference declared, an applicant must timely present at least one claim which interferes with one or more claims of the targeted patent.  Typically, a party will present in its application claims “copied” from the targeted patent in order to have interfering claims.  Consequently, any prior art discovered by a prior art search directed to the subject matter of the targeted claims will often be material to examination of the “copied” claims and, pursuant to 37 C.F.R. 1.56, must be disclosed to the PTO.  The disclosed art may delay or, in a worst case, derail an indication of allowability (a prerequisite to an interference being declared).  If the ultimate goal of the party is to obtain its own patent protection for the subject matter claimed in the targeted patent, then the party should forego a prior art search pre-interference.  This reduces the likelihood that the copied claims will be rejected during the examination process.  However, if the party is more concerned with cancelling claims of the targeted patent, then reexamination may be the proper choice.  As discussed above, a thorough prior art search is foundational to the inter partes reexamination vetting process.
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| January 22, 2010
In an earlier post, we inquired whether patent claims at the PTO are treated like a “nose of wax.”  Generally, a claim examined by the PTO is given its broadest reasonable interpretation in light of and consistent with the specification of the application or patent in which it appears.  One notable exception to the general rule arises in interferences where an applicant “copies” the claim of a targeted patent or application to provoke the interference.  In this case, if a party challenges the patentability of the “copied” claim pursuant to 35 U.S.C. §112, first paragraph, the “copied” claim is interpreted in light of the specification of the targeted patent or applicationSee Agilent v. Affymetrix, 567 F.3d 1366, 91 USPQ2d 1161 (Fed. Cir. 2009).   A request for an en banc rehearing of the Agilent panel decision was denied by the Federal Circuit.  In Koninklijke Philips Electronics N.V. (“Philips”) v. Cardiac Science Operating Company (“Cardiac Science”) (Fed. Cir. case No. 2009-1241), a second panel of the Federal Circuit has maintained that, when a party challenges the patentability of a “copied” claim pursuant to 35 U.S.C. §112, first paragraph, the “copied” claim is interpreted in light of the specification of the targeted patent or application. Notably, both Agilent and Philips were appeals from a district court 35 U.S.C. §146 action.  In a 146 action, parties may present new evidence to the district court that conflicts with the interference record before the Board of Patent Appeals and Interferences.  The district court must make de novo factual findings regarding this new evidence.  Ex parte patent applicants can also avail themselves of district courts and additional fact finding pursuant to 35 U.S.C. § 145. In a 145 action, “[T]he district court must defer to the PTO’s fact-finding except where appropriately admitted new evidence conflicts with a fact found by the PTO or presents a new factual issue that the PTO did not consider.”  Hyatt v. Doll, 576 F.3d 1246, 1273 (Fed. Cir. 2009). Should the patent laws be revised to provide parties to an inter partes reexamination the option to take a mulligan in district court?  I would suggest not.  Although a 35 U.S.C. §145 type of action would afford the patent owner and/or the third party requestor an opportunity to supplement/rebut the PTO’s factual record, such an opportunity would likely lead to party abuses (e.g., sandbagging by the patent owner and undue delay by the third party) and wasted judicial resources.  A more attractive alternative to implementing a 35 U.S.C. §145 type of proceeding for inter partes reexaminations would be the revision of the patent laws/rules governing case management of inter partes reexamination at the PTO.  Practitioners generally agree that employing case management techniques similar to the case management techniques employed by the Trial Division of the BPAI would be a good start.  Any new case management system should strive (i) to reduce delays created by petitions practice, (ii) to reduce the number of factual disputes, and (iii) to streamline the record presented to the CRU for “examination” and the BPAI for appeal.
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| January 20, 2010
In a growing trend, district courts are using their discretion to deny motions to stay patent infringement litigation in light of concurrent proceedings at the USPTO.  In an earlier post, we commented on the Northern District of California’s deviation from that trend.  In Advanced Analogic Technologies, Inc. v. Kinetic Technolgies, Inc., the concurrent proceeding was an inter partes reexam.  In LG Electronics USA Inc. et al (“LG”) v. Whirlpool Corporation (“Whirlpool”) (Case No. 1-08-cv-00234), the defendant’s motion to stay was denied consistent with the trend to deny such motions and the concurrent proceeding was an interference. Judge Gregory M. Sleet of the District Court of Delaware denied Whirlpool’s motion to stay pending the outcome of an interference involving LG’s patents-in-suit.  The patents-in-suit are patent Nos. 7,316,121 and 7,383,689 and relate to refrigerators, their compartments, and their components. In determining whether a stay is appropriate, a district court's discretion is guided by the following factors: "(i) whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party; (ii) whether a stay will simplify the issues in question and trial of the case; and (iii) whether discovery is complete and whether a trial date has been set."  After considering those factors, Judge Sleet denied the motion to stay because (a) the interference might not resolve all issues regarding the asserted claims and (b) the litigation had progressed too far (i.e., discovery was complete and a trial date had been set). Unlike reexamination (which is substantially limited to prior art challenges), all grounds of unpatentability can be raised in an interference.  That is, the Board of Patent Appeals and Interferences (“BPAI”) has discretion whether to authorize patentability challenges in an interference.  Importantly, (1) the BPAI usually does authorize such challenges and (2) the decision whether to authorize a patentability challenge is made at a very early stage of an interference thus arming a district court judge with the information necessary to determine whether the interference is likely to simplify validity issues at trial.  Interestingly, Judge Sleet was concerned that the concurrent interference would not simplify the validity issues.  Interestingly, however, Judge Sleet’s Order does not indicate why he found that to be the case. It is also worth noting that most interferences are declared between a senior party applicant that provoked the interference and a junior party patentee.  Accordingly, there is a high likelihood that, if the interference gets to the priority stage (which most do not), a senior party applicant (presumably Whirlpool) will obtain a judgment that the junior party patentee's claims are unpatentable on the ground of priority. In contrast to requesting reexamination, requesting an interference can be a long and tortured ex parte examination process with the applicant largely at the mercy of an examiner who has little or no incentive to recommend an interference to the BPAI, and district courts will seldom stay an infringement litigation based merely on a suggestion of interference.  Consequently, strategic use of a suggestion of an interference in support of a motion to stay an ongoing district court litigation is a risky proposition during the ex parte examination/suggestion process of the defendant's pending application.  The fact that the LG litigation had progressed as far as it had while Whirlpool attempted to provoke an interference is of little surprise.
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