Patents Post Grant Blog

–Guest Posting–

Mr. Raymond Mercado is a doctoral student in political science at Duke University

The Use and Abuse of Patent Reexamination

The presence of a threshold requirement (the “substantial new question of patentability” or “SNQ”) intended to protect patent holders from unwarranted reexamination proceedings reflects Congressional recognition that reexamination—like the patent application process—is susceptible to fraud and other misconduct.  Yet, whereas the literature and caselaw dealing with inequitable conduct by patentees is vast, there has been surprisingly little exploration of misconduct on the part of reexamination requesters.  My paper, The Use and Abuse of Patent Reexamination, attempts to fill this gap by examining the vulnerabilities of the reexamination process and the impact of unwarranted reexamination proceedings on patent holders.

Suppose that a third-party requester were to fabricate or mischaracterize prior art, for example by misrepresenting the publication date of an obscure reference, deliberately mistranslating a foreign reference, altering the drawings and figures, or simply by proffering an elaborate but objectively unreasonable interpretation of the prior art.  The PTO, unable to independently verify the publication date or supply a proper translation of the prior art, and often all too willing to parrot the representations of the requester as to its contents (cf. MPEP 2246), grants the request.  Since reexamination at the very least carries with it a stigma of uncertainty regarding one’s entitlement to the patent, and during its duration can so severely undermine a patent’s enforceability as to render it a nullity, the patent holder subject to an unwarranted proceeding would be wrongfully deprived of the economic benefits his patent should otherwise have afforded him.  Litigation may be stayed, licensing negotiations may come to a halt, and capital may become more difficult to raise at the very moment when the patent holder is forced to expend resources to defend his patent.  Thus I argue that patent owners must have recourse to some remedy when a cloud has been cast over their property by baseless reexamination proceedings.

A recently filed casemay shed some light on available recourse.  In Lockwood v. Sheppard, Mullin, Richter & Hampton, LLP, No. 09-CV-5157, slip op. (C.D. Cal. Nov. 24, 2009), the patent holder brought suit alleging that defendants filed fraudulent and misleading requests for reexamination of two of his patents.  The outcome of the Lockwood case, currently on appeal before the Federal Circuit, will serve as an important test determining whether patent holders have any legal recourse when they are effectively deprived of their patent rights through wrongfully instigated reexamination proceedings.   

Given the recent preoccupation of Congress with proposals for Patent Reform and new types of post-grant review, and given the potential of this problem to undermine the quid pro quo of the patent system—jeopardizing the objective of disclosure by weakening patent rights—I submit that the issue this paper addresses could not be more timely. Accordingly, I explore the realities of abuse in the patent reexamination process.  I look closely at several instances in which patent holders complained of misconduct on the part of the requester.  Finally, I conclude with a number of proposals which, if enacted, might better protect current and future variants of the reexamination process from abuse.

I would welcome any comments regarding these issues, as I revise the paper for publication. 

A draft of the paper can be downloaded (here)