Two weeks back I discussed the “patentee estoppel” impact of Rule 42.73(d)(3)(1). As a reminder, when a patent claim is cancelled or finally refused in a validity trial proceeding of the Patent Trial & Appeal Board (PTAB), the Patentee is thereafter precluded from taking an inconsistent action before the USPTO. This preclusion includes, obtaining in any patent, a claim that is not patentably distinct from the finally refused or cancelled claim.
In the earlier post, I discussed how the final refusal or cancellation of a patent claim could have a devastating impact on active continuation patent application portfolios. This is because when a parent patent has a broad, generic claim cancelled or refused in a post grant trial of the PTAB, the Patentee is estopped from pursuing a continuation (or reissue) application presenting claims of indistinct scope. Absent a proactive strategy, such a result would significantly undermine the investment in continuation application portfolios of large patent filers.
Perhaps even more disturbing, is the infectious nature of this estoppel relative to other, issued patents of an unsuccessful Patentee.
42.73(d)(3)(i), is arguably just as applicable to a later filed patent reexamination.
For example, let’s assume there is a portfolio of 5 patents all of which stem from straight continuation filings of a parent (i.e., same specification and no divisional applications), and there are no pending continuation applications. A challenger could choose to attack the broadest claim of the patent portfolio via a PTAB trial. If successful, then, a string of patent reexamination filings would be submitted on the same, or very similar art as the previous PTAB trial. Let’s add another wrinkle and assume the patents include terminal disclaimers between and among the 5 patents of the portfolio. An expansive reading of 42.73(d)(3)(i) may not only prevent new claims or amendments in those later reexamination proceedings based upon their indistinct claims, but could prevent the reexamination filings from being defended by the Patentee at all. (Note that patentably distinct claims cannot be presented during patent reexamination since broadening is not permitted)
As a reminder, the text of 42.73(d)(3) is as follows:
(3) Patent applicant or owner. A patent applicant or owner is precluded from taking action inconsistent with the adverse judgment, including obtaining in any patent:
A claim that is not patentably distinct from a finally refused or cancelled claims; or
(iii) An amendment of a specification or of a drawing that was denied during the trial proceeding, but this provision does not apply to an application or patent that has a different written description.
The USPTO could take the position that “obtaining in any patent” does not refer to claims already obtained in an issued patent. Still, even under such a strict interpretation the Patentee would almost certainly be prevented from amending or adding new claims during the patent reexamination as a result of the infectious PTAB estoppel. For portfolios that have closely linked patents (such as the example above), taking on the broadest claim in a PTAB proceeding may be the simplest and cleanest method to destroy a sizeable portfolio. Thereafter, the challenger would present a series of relatively lower cost patent reexamination filings, perhaps presenting estoppel as a rejection based on the patent subject to the earlier PTAB proceeding– much the same way a double patenting rejection would be presented.
42.73(d)(3)(i) was not part of the AIA statutes. Rather, the USPTO adopted the Patentee estoppel concept from the “interference estoppel” of patent interferences. In patent interferences, the codification of such a “loser” estoppel principle made sense. That is to say, in a priority contest, the losing party should not be able to, after an unfavorable result in a patent interference, simply re-present the conflicting claims in another Office proceeding.
On the other hand, patentability trials of the PTAB have other practical impacts that would preclude such behavior. Patentees losing a PTAB trial could not simply re-present the very same claims in a new Office proceeding as the USPTO has a well established policy of administrative estoppel for such situations. Likewise, few Patentees will simply cancel issued claims in a PTAB proceeding in favor of a newly minted continuation patent clams of an indistinct scope as doing so restarts the clock on recoverable patent damages, Moreover, such claims while perhaps indistinct to the USPTO, typically provide new, non-infringement defenses to competitors of the Patentee.
Patent reexamination has existed since the early 1980s without being constrained by a rule such as 42.73(d)(3). The USPTO may be hard pressed to demonstrate a procedural basis/abuse that demands such a far reaching result. Public comments submitted to the USPTO on the earlier version of this Rule emphasized that the USPTO does not possess substantive rule making authority. It may be that another court challenge along the lines of Tafas v. Dudas is in store for the USPTO.