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Waiver of Patent Owner Statement Disfavored in Ex Parte Patent Reexamination
New Ex Parte Patent Reexamination Pilot Program a Tough Sell
Back in August, I reported on a new USPTO pilot program designed to decrease pendency in ex parte patent reexamination by seeking waiver of the right to file a Patent Owner Statement.
According to 2009 PTO statistics, Patent Owners filed statements in 10% of ex parte reexaminations. This is because filing of such a statement gives a Third Party a one-time rebuttal opportunity. Otherwise, Third Party participation is precluded by statute in ex parte reexamination. Therefore, by simply waiting for the Office to issue the first action, the Third Party is effectively silenced for the duration of the proceeding.
The new pilot program seeks to avoid the period of time the USPTO must wait to receive a Patent Owner Statement by requesting an early waiver of this right from the Patent Owner. Assuming the Patent Owner cooperates upon receiving notice of the initial request filing, the USPTO can reduce pendency by avoiding this front loaded, down time.
Since the program has been in operation for a few weeks now, it seemed like a good time to review the early results, and caution certain Patent Owners on how this seemingly trivial question of procedure may come back to haunt them.
Based upon the preliminary data shown in PAIR, for those requests filed since August 5th, Patent Owners are currently deciding against waiver by about a 3-1 margin. (click to enlarge)
Of course, the data set is rather small at this point. Nevertheless, not surprisingly, the preliminary data indicates that few Patent Owner’s given the chance, will opt for a more streamlined proceeding.
This chart does not account for 6 cases in which the USPTO was unable to contact the Patent Holder. (As I pointed out in my earlier post, it is not uncommon for reexamination counsel to be different from the counsel listed on the face of a patent).
It is still too early to track the correlation between the refusal to waive the right to file, and ACTUAL statement filings. However, based on my experience, I would guess that most of those refusing to waive their right have no intention on exercising it. Only one case of the 15 declining waiver was a patent owner requested reexamination, thus, I would be surprised if more than one statement was ultimately filed of these 15 cases. Yet, for those Patent Holders conducting a concurrent litigation, refusing to accept the waiver followed by an non-filing may have collateral consequences.
It is just a matter of time before a refusal to accept the USPTOs waiver offer, followed up by the failure to file a statement is used against a Patent Holder in a motion to stay a parallel litigation. Third Parties seeking to stay the case would argue that the Patent Owner was asked by the USPTO to cooperate for the purposes of accelerating the proceeding by several months—but expressly declined, deliberately seeking delay as evidenced by the failure to ultimately file a statement. The argument would continue that this is evidence of the strength of the rejections (fear on the part of the Patent Owner) and, that such gamesmanship and circumstantial evidence of the likelihood of success, weigh in favor of staying the case.
While Patent Owner’s always had a right to waive the statement by simply filing a paper notifying the office (MPEP 2249), clearly this option was rarely exercised by evidence of the new telephone election procedure. Likewise, the interview summary in the record memorializing a lack of cooperation by the Patent Owner may be a bit more damaging in front of a judge….I guess we’ll find out soon enough.
I’ll follow up on the correlation between non-waiver and actual filing in a month or two.
Interesting point re litigation stays Scott.
On the fundamental question of whether the patent owner should file a Patent Owner Statement [or just wait for the first Office action] the “conventional wisdom” and 90% practice has been NO, to avoid a rebuttal by the advserse requestor, as you note.
However, I think that should be questioned. Once the reexamination examiner has rejected claims based on the unrebutted attacks of the requestor, it is inherently more difficult to reverse that examiner decision than if arguments in defense of the claims were before the examiner before the examiner decision to reject or re-allow those claims is made. Furthermore, since ex parte reexam requestors have to assume in advance they are only getting “one bite at the apple,” they are unlikely to have held back any further arguements anyway.*
*unless they are planning a second or “sandbag” reexamination with additional art held back from the first.
Paul,
As you point out, not responding to the determination has been the rule in most cases. I suspect that Patentees will take a closer look at this practice now that the PTO is pushing the issue.
In my view almost every ex parte reexam requester involved in litigation holds back art. There is gamesmanship on both sides, which is why I favor judges that force third parties to stipulate to some conditions in exchange for a stay. You should not be able to simply file serial requests until the end of time. On the bright side, it seems the PTO has been taking a closer look at serial requests as of late.
I’d like to address the notions of “holding back” prior art in an ex parte context. In my experiences there is often a need to not keep the uncertainty of patent validity dragging on for extended periods of time. However, most our our third party efforts have been pre-emptive reexaminations as part of a broader IP strategy insuring freedom to operate for various market segments.
In that way we can obtain some certainty for a company regarding its market access and insuring a known royalty burden, if any. It is not a gamesmanship but it does help to keep an SNQ or two in reserve so that a third party can try to level the playing field particularly when there is a nutty declaration submitted by the patentee regarding a secondary considerations when the CRU does not have the resources to call the patentee on it.
However, in the case, for example, of our Reexamination 90/010131, our SNQ’s were going to final rejection and another third party (not affiliated with us or even known to us) then “tagged team” (a better term than “sandbag”) us *control 90/010905) and slowed down the process (the two reexaminations were combined). The net result is that the inevitable invalidity of the claims (one SNQ rejection has now been repeated 3 times and the other SNQ rejection twice) was slowed down by another third party.
We appreciate the opportunity for this discussion of reexamination strategies.
Re: “..a nutty declaration submitted by the patentee regarding a secondary considerations when the CRU does not have the resources to call the patentee on it. ”
They do have one resource they could be using a lot more and more effectively – 37 CFR 1.105.
Yes, from the requestors standpoint, “tag teaming” sounds better, but unsuspecting patent owners may very well feel “sandbagged” by a second reexam citing previously witheld supplimental prior art against claim distinctions they argued in the first reexam.
If a second reexam is initited by an agent or front for the patent owner for purposes of delay, that is both a potential ethics violation and IC for not citing its SNQ [hence material] prior art in the first reexam if they then knew about.
Rule 105 requests are easily avoided if the Patetee informs the USPTO that the information is unknown or not readily available. The Office issued 105 requests here and there in application prosecution some 4-5 years ago….but they were largely ineffective and have fallen out of favor.
In my opinion issuing 105 requests in reexamination would disrupt special dispatch and give Patentees grounds for seeking extensions of time. If the Patentee is truly hiding something you can bet the inequitable conduct spotlight will find it’s way to the issue down the line. Perhaps these issues can be explored in an opposition system, if that ever comes to pass.
But Scott and Paul, in the case of the Higuchi patent with the two reexaminations I referenced above, I was the original reexamination requestor and put in my best SNQ’s in the original reexamination. After getting a second Office Action (not final because the reexam examiner forgot about the obviousness type double patenting SNQ), out of the blue and unknown to me came another requestor and another reexamination that repeated some of the SNQs (but did provide a declaration to counter the Patentee’s declaration first provided in response to the second office action) and a couple of new SNQ’s with some “new” references.
But it should be noted that the Higuchi patent was litigated four times and the “new” prior art provided by the second requestor and second reexamination was actually prior art raised in one of the earlier litigations.
The precedent to be set (or at least I’m optimistic will prevail given that this rejection has now been repeated after the Patentee took its best shot) is obviousness type double patenting. The patentee argued in response to the second office action (or first time the obviousness type double patenting rejection was made as a rejection) that it was not a bona fide basis for an SNQ. The terminal disclaimer route is not available to the Patentee due to the fact that there has not been common ownership.
Therefore, there can be situations where a reexamination is tag teamed (although perhaps that is not a good expression as the second requestor acted independently of and without knowledge of the first requestor). The net result is a significant slow down of the process as the two reexaminations get combined and the Patentee gets even more bites at the apple.
Double patenting is an SNQ based on patents and printed publications, I don’t see the patent owner gaining any traction arguing otherwise. Such SNQs are common in bio/pharma reexams.
Yes, merger can be a temporary setback, but from the PTO perspective they can’t very well conduct separate proceedings on the same issue.
Jeff, if the patent owner files a declaration with secondary unobviousness evidence allegations and the PTO asks via 37 CFR 1.105 for specific supporting evidence, and it is not provided, that should provide additional grounds for giving it little if any weight. Likewise for other conclusory declarations.
If the reexam is inter partes, I don’t see wny the opposing party could not even suggest Rule 105 questions to the examiner, noting that the reexamination system does not provide any other cross-examination credibility control or restraint on declarations.