By Robert C. Mattson
| February 3, 2010
As a result of the popularity of reexamination, courts are frequently faced with the issue of whether evidence of parallel reexamination proceedings should be considered at trial.  In our previous posts, “Is Evidence of Parallel Reexamination Proceedings Admissible at Trial? (Parts I and II),” we discussed using pending reexamination proceedings to support invalidity contentions and prove inequitable conduct.  Accused infringers have also attempted to use evidence of parallel reexamination proceedings to rebut allegations of willful infringement.
Admissibility in Litigation?

Reexamination Evidence Used to Rebut Willfulness

Willful infringement exists where an accused infringer acted “despite an objectively high likelihood that its actions constituted infringement of a valid patent” and the “objectively defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer.”  In re Seagate Technology, LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007).  Thus in order for willful infringement to be found, the accused infringer must have known or should have known that the relevant patent was valid.  Willfulness is to be evaluated “under the totality of the circumstances.” Id. at 1369.  Thus, alleged infringers accused of willful infringement have asked the court to consider the existence of pending reexamination proceedings.  The theory asserted by alleged infringers is typically a variant of the following: where the PTO has granted a request for reexamination, and thus concluded that substantial questions of patentability exist, an alleged infringer could not have acted “despite an objectively high likelihood that its actions constituted infringement of a valid patent.”  In other words, where the PTO has called into question the validity of the patent by granting reexamination, any infringement thereafter could not have been willful.

In  Lucent Technologies, Inc. v. Gateway, Inc., the court agreed with that theory, granting summary judgment of no willful infringement based on the existence of a pending request for reexamination.  2007 US. Dist. LEXIS 95934, at *18-19 (S.D. Cal. Oct. 30, 2007) (citing In re Seagate Tech., LLC, 497 F.3d 1360, 1374 (Fed. Cir. 2007)).  The Lucent court observed that a substantial question of invalidity or infringement is likely sufficient to avoid a charge of willfulness based on post-filing conduct.  Id.  The court noted that, although a grant of reexamination would not always prevent summary judgment of willful infringement, the recognition of a substantial question of patentability by the Patent Office was one factor among the totality of the circumstances.  Id.

A similar decision was reached in TGIP Inc. v. AT&T Corp., 527 F. Supp. 2d 561, 579 (E.D. Tex. 2007).  There, the court considered evidence of a pending reexamination in granting judgment as a matter of law on the issue of willfulness.  The court felt it was of particular significance to the lack of willfulness that “the patentee was concerned enough to ask for reexamination of the [patent].”  Id.  This seems to imply that especially where a patentee files for reexamination, difficulty may arise in later asserting willful infringement.

Despite the pro-defendant rulings in the previous two cases, not every court has concluded that evidence of a grant of a reexamination request is relevant in determining willfulness.  This is particularly true where the evidence would be presented to a jury.  In Presidio Components Inc. v. American Technical Ceramics Corp., the court found that because the reexamination proceedings were still incomplete and based solely on evidence provided by the alleged infringer, the proceedings — even if relevant — were unfairly prejudicial and the potential for jury confusion was great.  No. 08-CV-335, at 3 (S.D. Cal. Nov. 13, 2009) (granting motion in limine to exclude reexamination evidence); see also Intel Corp. v. Commonwealth Scientific and Industrial Research Organisation, No. 06-cv-551 at 4 (E.D. Tex. April 9, 2009) (“[W]ithout any conclusions of the PTO to rely upon, evidence that the PTO is currently reexamining the patent may work to unduly alleviate Defendants’ ‘clear and convincing’ burden for both invalidity and willfulness in front of the jury….”).  The Presidio court differentiated itself from Lucent, noting that Lucent dealt with the grant of reexamination at the summary judgment stage, where the evidence would not be presented to the jury.  Id. at 4.  Thus, the risk of jury confusion was lesser in Lucent than it would be in Presidio.

The court in Realtime Data, LLC v. Packeteer, Inc., further contemplated the difference in prejudice between reexamination evidence as considered by a judge and the same evidence considered by a jury.  No. 6:08-cv-144 (E.D. Tex. Dec. 30, 2009).  The Realtime court concluded, “although an ongoing reexamination proceeding and the USPTO’s actions therein could be considered by the court as a factor in a willfulness determination at the summary judgment stage, during trial in a request for judgments as a matter of law as to willful infringement, and/or post-verdict, it should not be introduced before the jury due to the highly prejudicial effect the USPTO’s actions would have on the jury.  Id. at 4.

While the previous courts were concerned with the entity who would be considering the evidence (judge or jury) in evaluating potential prejudice, the primary concern of other courts is the status of the reexamination proceedings.  Reexamination proceedings, like litigation, take time.  Thus, at the moment the court assesses the reexamination evidence, the reexamination may or may not have progressed beyond the mere grant of the request for reexamination.  Non-final or final rejections may have been issued.  The reexamination may even be complete.

In Ultratech Int’l, Inc. v. Swimways Corp., the relevant reexamination proceedings were complete and the examiner found all relevant claims patentable.  2009 U.S. Dist. LEXIS 80997 (M.D. Fla. Mar. 3, 2009).  After the certificate of reexamination had issued, confirming the validity of the suit patent, the patentee sought to amend the complaint to assert willful infringement.  The court, considering the stage of the reexamination, allowed the patentee to supplement the complaint.  However, the court limited the willful infringement claim to acts occurring after the conclusion of the reexamination.  Id. at *8-9.  In differentiating infringement before the conclusion of the reexamination and infringement afterward, the court reasoned “before the Reexamination Certificate issued, allegations that the Defendant’s actions were deliberate or reckless would not have provided sufficient factual or legal grounds because the validity of the [patent at issue] remained questionable.”  Id.  The Ultratech decision was later cited by St. Clair Intellectual Property Consultants, Inc. v. Matsushita Elec. Indus. Co., for the proposition that continued infringement after the issuance of a reexamination certificate could be considered objectively reckless.  2009 U.S. Dist. LEXIS 49882, at *7 (D. Del. Jun. 10, 2009); see also St. Clair Intellectual Property Consultants, Inc. v. Palm, Inc., 2009 U.S. Dist. LEXIS 49922, at *5-6 (D. Del. Jun. 10, 2009).

Safoco, Inc. v. Cameron Int’l Corp., a more conservative opinion, disagreed with Ultratech. No. H-05-0739 (S.D. Tex. Jul. 31, 2009).In Safoco, the PTO had reexamined the patents at issue, and although some changes were made, the court noted that the examiner had not required any “substantive” changes to be made.  Id. at 59-60.  Thus, when the alleged infringers, attempted to obtain summary judgment of no willful infringement, based on evidence of reexamination, the court did not react favorably.  Unlike the court in Ultratech, the Safoco court concluded that, regardless of whether the infringing activity occurs before or after the reexamination certificate issues, “the granting of a reexamination request by the USPTO is only a single factor to consider and is not dispositive as to the objective prong of the willful infringement standard.” Id. at 58.  It noted that, compared to the mere fact that a reexamination proceeding has occurred, “the outcome of a reexamination proceeding is far more persuasive, though again not necessarily dispositive, as to whether the defendant acted ‘despite an objectively high likelihood that its actions constituted infringement of a valid patent.’” Id.  In the Safoco defendant’s case, the court did not find the outcome of the reexamination proceeding dispositive, and denied the summary judgment motion.

As will be discussed in a subsequent post, alleged infringers have also recently attempted to use evidence of granted reexamination requests to oppose or support motions for preliminary injunction.
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