English
Concluded Ex Parte Reexamination Results Ignored by District Court?
Estoppel of 35 USC § 317(b) Applies Only to Inter Partes Patent Reexamination
One of the risks often associated with ex parte patent reexamination is that an outcome favorable to a patent holder is considered to “gold plate” a patent that is later asserted against the requester in district court, especially with respect to the same or similar art. This notion was tested recently in Crestron Electronics Inc. v. RGB Systems Inc., CV 09-8402 (CDCA).
Crestron’s U.S. Design Patent D569,863 is asserted against RGB in the California District Court. RGB had earlier sought ex parte reexamination of the same patent based upon the same prior art now applied in the district court proceeding. Not surprisingly, Crestron noted that the reexamination attempt based on the same art now before the district court had failed to invalidate the patent. In other words, without any presumption of validity, and the ability to invalidate the patent by a mere preponderance of the evidence, RGB failed. Thus, Crestron argued that the reexamination results should preclude an invalidity defense on the same art. The court decided that not only can RGB argue the same invalidity positions over again, but that the court need not even show deference to the reexamination results.More specifically, the court sided with RGB’s argument that:
…a district court must make its own validity determination and may not rubberstamp the PTO’s reexamination decision. E.g. Quad Environmental Tech. Corp. v. Union Sanitary Dist., 946 F.2d 870, 876 (Fed. Cir. 1991) (“The courts are the final arbiter of patent validity and, although courts may take cognizance of, and benefit from, the proceedings before the patent examiner, the question is ultimately for the courts to decide, without deference to the rulings of the patent examiner.”).
PPG Comment: Part of the problem with reading Quad Environmental so extensively is that the facts are quite distinguishable. While Quad also dealt with the issue of an earlier concluded reexamination on some of the same art, the key invalidity issue before the Quad Court related to public use evidence not considered in the concluded reexamination. Thus, it is quite clear why the Quad Court concluded that the earlier reexamination was not to be accorded deference, and why the Court must do their own validity analysis in most cases. However, here where the art and issues are identical, and RGB failed to prove invalidity under much more liberal USPTO standards, some deference seems appropriate. To be sure, courts often cite to the potential results of patent reexamination to justify staying a case, yet when given the opportunity to actually conserve judicial resources based on such results………
Of course, inter partes reexamination remedies this dilemma by operation of statutory estoppel (317 (b)).
Scott
It’s one thing for a trial court to say that it must make its own analysis (and perhaps arrive at a different conclusion from the PTO); it’s another for the court actually to do so. Experience in District Court cases with a parallel ITC investigation, shows that the level of deference shown by the trial judge to the ITC’s decision runs the gamut from great to none. In one instance, the trial judge announced that he “must make his own decision,” but then followed the ITC holding issue by issue.
Scott Daniels
Reexamination Alert
Westerman Hattori Daniels & Adrian
Isn’t this inconsistent with Hewlett-Packard co. v. Bausch & Lomb Inc., 15 USPQ2d 1526, 1527 (Fed. Cir. 1990) stating that “the burden of showing, by clear and convincing evidence, the invalidity of [patent claims]” . . “is especially difficult when the prior art was before the PTO during the prosecution of the application.” ?
Scott/Paul,
I agree that the judge may be just going through the motions (no pun intended), I just don’t get how a court can “benefit” or be “cognizant” of such a result, directly on point, and not give it serious weight. It does not appear that Crestron did an especially good job emphasizing the issue, so, that may be part of the problem as well.