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Microsoft’s Late Use of Patent Reexamination in the i4i Dispute
As has been widely reported this week, U.S. Patent No: 5,787,499 has been confirmed by the USPTO in ex parte reexamination 90/010,347. The patent has been widely reported as impacting the popular Microsoft Word software, and the subject of the dispute between i4i Limited Partnership and Infrastructures for Information Inc v. Microsoft Corp, (E.D. Tx no. 07-CV-113). The favorable termination of the reexamination is not very surprising to those following the case as it is clear Microsoft’s use of reexamination in this case was to win a limited battle, not the war.
In our earlier post on the i4i patent reexamination, we noted that the request for reexamination was filed in November 2008. The request was granted in early 2009. Despite the fact that the Texas suit was initiated in early 2007, a request for reexamination was not filed until some 20 months later. In Texas, stays are not as commonly granted for patent reexaminations, certainly not to the extent of some of the more extreme districts. As such, it appears as though Microsoft determined the odds of obtaining a stay pending reexamination slim, and chose to follow the traditional litigation path; that is, right up until trial.
Based upon the briefing, it appears as though the late filing of the reexamination request was primarily to stave of a finding of willful infringement.[1] The thinking being that a granted reexamination request would tend to support Microsoft’s argument in the litigation that a good faith belief existed with respect to non-infringement and, thus, Microsoft could not have been acting in an objectively unreasonable manner.[2] So, Microsoft’s request for reexamination, in this respect, was successful. Ultimately, the court did not buy into the reexamination ploy, but, that is another story.
Still, some will inevitably decry the USPTO’s confirmation of the i4i Patent. What is lost in the misleading headlines and uninformed rhetoric is that not all reexamination requests are created equal. While Congress envisioned patent reexamination as an alternative to litigation, the fact of the matter is, frequently, patent reexamination is requested by defendants for markedly different purposes. In many cases, defendants are often times seeking to simply achieve very limited goals, such as:
-Increase costs for plaintiffs
-Avoid enhanced damages for willful infringement
-Establish an SNQ to support an inequitable conduct defense (i.e., materiality) for art overlooked in the original prosecution; and
-To dampen settlement expectations (i.e., no willfulness).
So, it is no surprise that Microsoft ultimately “lost” the reexamination…wining the war is never the purpose of a late filed reexamination request. Even had the reexamination continued, allowing for appeal pendency it would have been too little, too late.
Instead, Microsoft was simply looking for the reexamination to be granted. Once granted, the reexamination battle was considered won as being beneficial to the willfulness battle raging in court. Nothing further could have been reasonably expected after delaying the request some 20 months into the dispute.
[1] See 2009 U.S. Fed. Cir. Briefs 1504
[2] See TGIP, Inc. v. AT&T Corp., 527 F.Supp.2d 561, 579 (E.D. Tex. 2007).
Two additional reasons: to potentially get patent owners to make statements in defense of their patent claims that can be used against them to limit claim scope in litigation, and/or to committ inequitable conduct by not disclosing material prior art they learned about or were put on notice of between the patent issuance date and the reexamination date.
Agreed.
Of course if you wait to request reexamination after the Markman (as was the case here) the value of any later estoppel/disclaimer in the reexamination is diminished. With trial dates being pushed out ever further in Marshall, sitting on your reexamination rights until after Markman seems unwise to say the least.