The estoppel consequences of inter partes reexamination are set forth in 35 U.S.C. §§ 315(c) and 317(b) as well as the uncodified provision of § 4607 of P.L. 106-113. This blog entry will focus on § 315(c). A third party is estopped from asserting in litigation 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.” 35 U.S.C. § 315(c). A few basic considerations can help an accused infringer minimize, if not eliminate, the negative effects of estoppel and still reap the benefits of inter partes reexamination. The foundation of a strong request for inter partes reexamination is a thorough search of the prior art before the request is filed. The statutory language of § 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. Thus, the party contemplating inter partes reexamination must be confident that an exhaustive prior art search was performed before filing a request for reexamination. In view of the high stakes nature of patent litigation, an exhaustive search for prior art typically does not pose a significant additional burden upon the accused infringer because a litigation budget can normally absorb the cost of multiple searches. Once an exhaustive prior art search has been performed, the next thing to consider is whether the prior art provides a compelling basis for invalidity. If the prior art supports strong invalidity arguments, then inter partes reexamination may be the most efficient and effective way to cause significant damage to a patent that should never have been allowed. On the other end of the spectrum, if the grounds for invalidity are weak, then inter partes reexamination is rarely, if ever, the best option for the accused infringer. A reexamination request with weak invalidity arguments will likely result in the worst of all scenarios for the accused infringer – a reexamination certificate confirming the original claims and giving the patent owner justification to proclaim that the patent is now “gold plated.” The fact that 95% of inter partes reexamination requests are granted only makes it more likely that a weak request for inter partes reexamination will merely gold-plate the original patent. Statistically speaking, even a weak request for inter partes reexamination that raises a substantial new question of patentability but falls short of establishing prima facie invalidity of patent claims is likely to be granted. This can be attributed to the relatively low important to a “reasonable examiner” threshold for establishing a substantial new question of patentability and to the fact that the patent owner cannot file a patent owner’s statement opposing the request prior to the Patent Office’s decision to initiate inter partes reexamination proceedings. Once inter partes reexamination is underway, however, the patent owner can actively participate in exposing the deficiencies of weak prior art. If the prior art does not support a sound basis for invalidity, then the Patent Office is likely to acknowledge deficiencies in the prior art and confirm the original patent claims under reexamination. Thus, the ability of the accused infringer to identify strong evidence in support of invalidity is a critical factor when contemplating inter partes reexamination. Once strong prior art is identified, the ultimate question to the accused infringer is whether the prior art is best presented to the Patent Office’s Central Reexamination Unit (“CRU”), which specializes in conducting reexamination of patents, or a jury of laypeople. (Most patent owners exercise their constitutional right to a jury trial, so a bench trial is normally not an option for the accused infringer.) Historical data suggests that the CRU is more likely than a jury to find invalidity. This is not surprising because the CRU does not presume a patent valid and applies a “preponderance of the evidence” standard in determining patentability of a claim under reexamination, whereas a jury must presume a patent valid and apply a “clear and convincing” evidentiary standard in determining invalidity issues. In any event, the unique strategic considerations of every case must always be taken into account when choosing the best audience for invalidity arguments. For example, some invalidity arguments are strengthened when presented simultaneously with other defenses or bases for invalidity that are not the subject of reexamination proceedings (e.g., noninfringement, prior public use, etc.). Moreover, the Patent Office rules anticipate the possibility that a third-party requester may discover new patents and printed publications after an order for inter partes reexamination issues. Under 37 C.F.R. § 1.948, a third-party requester can submit newly discovered prior art in connection with comments on a patent owner’s response to an Office action on the merits. Although § 1.948 is not a substitute for performing a diligent search for prior art prior to requesting reexamination, it can provide a vehicle for testing the validity of a patent against prior art that is discovered during reexamination proceedings. In sum, the § 315 (c) estoppel effect of inter partes reexamination should not be a concern if an exhaustive prior art search has been performed and the prior art patents and publications support strong invalidity arguments. Under these circumstances, the appropriateness of inter partes reexamination distills to a decision by the accused infringer whether the strong invalidity arguments are more likely to prevail in the CRU or a jury room. The fact that inter partes reexamination estoppel may prevent the accused infringer from getting two bites at the invalidity apple is not, in itself, a reason to dismiss inter partes reexamination as an alternative to district court litigation. When the accused infringer has identified strong prior art that is presumably as good or better than any prior art likely to be uncovered in the future, inter partes reexamination provides the accused infringer with a lower burden in proving invalidity and an extra choice as to who will determine whether the patent is invalid. Moreover, later discovered patents and printed publications can be used by the third party as a basis for filing an ex parte reexamination request against the same patent. Such a request is not precluded by law and if made early enough in the inter partes reexamination proceedings may be a basis to have such prior art considered in merged ex parte and inter partes reexamination proceedings. This is not considered to be a second bite at the apple and the ex parte reexamination request can be filed anonymously. The next blog entry in this two-part series will focus on possible exceptions to the estoppel effect of inter partes reexamination.
