In Rolls-Royce PLC v. United Technologies Corp. (here), the Federal Circuit applied a non-traditional test in its interference-in-fact analysis, and in Agilent Technologies Inc. v. Affymetrix Inc. (see past blog post here), the court imposed a very controversial claim interpretation standard for copied claims.  In a rare form of collateral damage, the Agilent decision led the BPAI to rescind one of its fundamental rules, 37 C.F.R. 41.200(b).

Would Solicitor participation in these cases have protected the institutional interests of the BPAI?  The answer is not clear.  However, absent Solicitor participation, the BPAI’s record will be left to speak for itself.

Fortuitously, 35 U.S.C. 143 requires the Solicitors Office to participate in appeals to the Federal Circuit taken by applicants, patent owners (ex parte and inter partes reexamination), and third parties (inter partes reexamination). 

Appeals taken by applicants and patent owners in ex parte reexamination are as old as the hills.  However, Safoco was the first appeal of an inter partes reexamination to reach the Federal  Circuit.  Safoco confirmed (here) that the Solicitor’s Office will participate in inter partes reexamination appeals, although not as a named party.   In interference appeals, the Solicitor’s Office has discretion whether to participate as an amicus.  However, the Solicitor has seldom participated as an amicus in an appeal from the decision of the BPAI in an interference — although he has occasionally been ordered by the court to do so in cases where the winning party below chose not to defend its win on appeal.

Interestingly, if S.515 is enacted, the Solicitor’s discretion to intervene would extend to inter partes reexam, derivation cases, and inter partes or post grant review.  Unless the Solicitor’s Office is motivated to serve as wingman, the renamed Patent Trial and Appeal Board’s interests will be alone and vulnerable.

In reversing the district court’s finding of invalidity under 35 U.S.C § 102(g)(2), the CAFC concluded that Honeywell’s employees did not qualify as “another inventor” under section (g)(2) because (1) they were not involved in the conception of the technology and (2) those who had conceived the invention were outside of the United States.

102(g)(2) requires prior invention in the U.S. In contrast, 102(g)(1), which governs patent interferences, allows for prior invention in foreign countries as permitted by 35 U.S.C. § 104. So would there have been a different outcome given the facts reported in the decision if this dispute had occurred in a patent interference?

No, for at least two reasons. Consider sections (g)(1) and (g)(2):

A person shall be entitled to a patent unless … (g)(1) during the course of an interference …, another inventor involved therein establishes, to the extent permitted in section 104, that before such person’s invention thereof the invention was made by such other inventor…, or (g)(2) before such person’s invention thereof, the invention was made in this country by another inventor….

So, because the hypothetical interference would have involved Honeywell and Solvay, but not Honeywell’s Russian contractor, the contractor’s employees would not constitute “another inventor” involved in the interference. Further, and perhaps more interestingly, because Russia is neither a NAFTA country nor a WTO member, even if the Honeywell owned patent application named the true Russian inventors any conception which occurred in Russia could not be relied upon in the interference to prove a date of invention.

Honeywell argued that (g)(2) ignores globalization realities, but the CAFC wisely countered:

Whether this holding ignores the realities of globalization and outsourcing by modern-day research companies, as Honeywell contended at oral argument, is not the question before us.

Until Russia steps up to the plate and joins the WTO, U.S. companies outsourcing research to Russia has definite draw-backs!

In particular, the Board held that Regents could not antedate U.S. Patent No. 5,998,474 (“Cavazza”) because the ‘912 patent and Cavazza were claiming the same patentable invention. Applying, 37 C.F.R. 41.203(a), the Board reasoned that the two patents were directed to “the same patentable invention” since a claim of the Regents patent is obvious in view of a claim of Cavazza, and vice versa.

This leaves the Regents in a bind, aside from challenging the BPAI decision to the CAFC, how can an interfering patent applied in patent reexamination be overcome?

One rarely elected alternative would be to pursue a patent vs. patent interference in a district court under 35 U.S.C. 291.  291 actions are rare due to the arcane nature of interferences.  Most patent owners wisely elect not to assume the uncertainty of how a district court will apply interference laws and/or administer unfamiliar interference procedures.

A more palatable alternative is to file a reissue application and request an interference (a 35 U.S.C. 135(a) interference).  However, in order to adhere to 35 U.S.C. § 251, the patent owner must identify and correct a defect with the reissue application. In years past, Patent Holders may have simply alleged that the defect was the failure to present a dependent claim. Once the reissue proceeding was commenced on this basis, the interference could then be pursued.  However, pending the review of Ex parte Tanaka by the CAFC, such a practice seems like a dead end.

In the case of Regents, the USPTO has concluded that interfering patents exist. Thus, it is clear that a defect as to invalidity is present in accordance with the reissue statute. Yet, unlike other bases for patent reissue, can the existence of an interfering patent alone qualify as an “error” when statutory authority exists for district courts to also address the issue?

The USPTO has announced that 37 C.F.R. 41.200(b) is no longer viable in light of the  Federal Circuit’s Agilent Technologies, Inc. v. Affymetrix[1] decision, and has thus cancelled the rule. 

As discussed in earlier posts commenting on the Agilent and Koninklijke Philips Electronics N.V. v. Cardiac Science Operating Company[2] decisions, the Federal Circuit has concluded that, when a party challenges the patentability of a “copied” claim pursuant to 35 U.S.C. §112, first paragraph, the “copied” claim should be interpreted in light of the specification of the targeted patent or application.  In contrast, Rule 41.200(b) required that a claim in interference be given its broadest reasonable construction in light of the specification in which it appears.

With Rule 41.200(b) taken out of its misery, one has to wonder what guidance examiners will be given when examining claims “copied” to provoke an interference.  Will examiners be instructed to apply one claim construction when considering written description and another claim construction when applying prior art to the same “copied” claims?  Will the MPEP be updated? 

If nothing else, the PTO’s decision to cancel Rule 41.200(b) in response to Agilent reinforces the prevailing opinion that interference practice is arcane. 

[2] 590 F3d 1326 (Fed. Cir. 2010).

Currently, derivation cases are a species or type of interference decided by the Board of Patent Appeals and Interferences (“BPAI”).  In an interference proceeding at the BPAI, derivation is proven by establishing prior conception of the interfering subject matter and communication of the conception to the opposing party. 

Examiners rarely, if ever, suggest an interference sua sponte.   Consequently, in the vast majority of cases, an applicant wishing to initiate a derivation proceeding is required to suggest an interference pursuant to 37 C.F.R. § 41.202.  The suggestion of an interference is initially considered by an examiner, who is instructed by the MPEP not to even consider the suggestion of interference until after he or she has decided that the targeting applicant’s claims are in condition for allowance, but for the existence of the targeted application or patent.  Therein, lies the rub.  As stated in MPEP 2304.02(d), “[a]n applicant is not entitled to an interference simply because applicant wants one. The interfering claim must be allowable, particularly with respect to the written description supporting the interfering claim.”  Thus, examiners are effectively interference gatekeepers to the BPAI.  With little or no experience in considering a suggestion of an interference and even less incentive to recommend one, when a suggestion of an interference is filed by an applicant, the examination process often becomes tortured. 

S.515 would substantially change the process for initiating derivations and maintain a one year “copy” provision, as discussed next.

Initiating a derivation process (§ 135) — S.515 replaces the suggestion process currently employed by the PTO with a petition process.  S.515 provides that:

The petition shall set forth with particularity the basis for finding that an earlier applicant derived the claimed invention from the petitioner and, without authorization, filed an application claiming such invention. 

PPG Comment: the S.515 provision implementing a petition process in place of the current suggestion process may prove to be a marked improvement depending on how the petition process is implemented.  Although S.515 does not expressly provide so, hopefully, the decision to remove examiners from the requesting process and to give that responsibility to the Director or his designee reflects that the petitioner will not have to establish the patentability of the claimed subject matter as a prerequisite to initiating a derivation proceeding.  In derivation proceedings, where there is often an allegation of “bad” acts, that would seem appropriate. 

One year statute of limitations (§ 135) — S.515 maintains a 35 U.S.C. §135(b) type one year statute of limitation provision.  S.515 provides that: 

Any such petition may only be filed within 1 year after the first publication of a claim to an invention that is the same or substantially the same as the earlier applicant’s claimed Invention.

PPG Comment: This language is not entirely clear.  The start of the one year “statute of limitations” is triggered by publication of the “bad guy’s” claim.  That is OK.  However, the remainder of the provision suggests that the bad guy’s published claim must be directed to “the same or substantially the same” invention as the earlier applicant’s claimed invention.  The problem with this provision is that, in derivation cases, more likely than not the applicant (petitioner) is the later applicant — not the earlier applicant.

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[1] Since the Post-Grant Reviews will apparently be handled under the BPAI’s current rules for handling Contested Cases, 37 CFR 41.100 et seq., a great deal of procedural interference practice will presumably remain. 

[2] See also Gholz, Would Derivation Proceedings Be The Same as Derivation Interferences?, 16 Intellectual Property Today No. 5 at page 8 (2009).  Mr. Gholz is a partner of mine at Oblon Spivak.

The legislative history of 35 U.S.C. § 312 suggests that a purpose of the substantial new question of patentability (“SNQ”) prerequisite is to prevent patent owner harassment via seriatim requests for reexamination.[1] Consistent with that purpose, MPEP § 2240.II provides:

In certain situations, after a grant of a second or subsequent request for ex parte reexamination, where (A) the patent owner files a petition under 37 CFR 1.182 as part of the statement or as the statement, and (B) it appears clear that the second or subsequent request was filed for purposes of harassment of the patent owner, if the petition is granted, prosecution on the second or subsequent reexamination would be suspended.  {Emphasis added.}

However, absent an overt and documented threat to tie up a patent in reexamination, can a patent owner establish a “clear” intent by the third party requester to harass a patent owner? The answer to date appears to be no.  The contributors of this blog are unaware of a single successful 37 C.F.R. § 1.182 (“182”) petition (i) to suspend a second or subsequent reexamination or (ii) to vacate an order granting a second or subsequent reexamination due to patent harassment.

With the emerging use of reexamination as a litigation strategy, it is difficult to imagine that ex parte reexamination has not been misused to harass patent owners.  So what can patent owners do to avoid serial ex parte requests?

When the patent in reexamination is in district court litigation, the patent owner should seek an order from the court requiring the third party requester (i) to submit all purported SNQs in a single subsequent reexam request to prevent harassment and (ii) to agree to be estopped from filing further reexam requests when a NIRC is mailed. If the case is stayed, the patent Owner should seek stipulations that no further requests wil be filed, and that thedefendant will be bound by the outstanding request.

Outside of judicial management, however, the patent holder appears to have little recourse with respect to harassing filings.  While petitions may be pursued to seek vacatur of serial requests for reexamination, if harasssment is the sole basis and there is no smoking gun, it is unclear how many requests must be filed to reach the USPTO’s unspoken threshold of pain.

(1) whether, and in what respect, the reissue claims are broader in scope than the original patent claims;

(2) whether the broader aspects of the reissue claims relate to subject matter surrendered in the original prosecution; and

(3) whether the reissue claims were materially narrowed in other respects, so that the claims may not have been enlarged, and hence avoid the recapture rule.  {Emphasis added.}

You may recall the 2003 Board of Patent Appeals and Interferences (“Board”) precedential decision In re Eggert[2].  In Eggert, the Board concluded that the “materially narrowed” language of step (3) permitted a reissue claim reciting a claim element having an intermediate scope between the original scope of the claim element and the scope of that element as amended to overcome prior art.  For example, according to Eggert, if an original claim recited an apparatus comprising, among other elements “a fastener,” and if the allowed claim recited “a screw” to overcome prior art that included a nail, then Eggert permits a reissue claim reciting “a threaded fastener” as claiming an intermediate scope between “a fastener” and “a screw.”

In 2005, the Federal Circuit decided North American Container v. Plastipak Packaging, Inc.[3] The reissue claims in North American Container completely omitted a claim element relied on during the original prosecution of the subject patent to overcome prior art.  In deciding that the reissue claims violated the recapture doctrine, the Federal Circuit stated that, even if the reissue claims when looked at as a whole may be of “intermediate scope,” the recapture rule must be applied on a limitation-by-limitation basis such that a limitation relied on during prosecution to overcome prior art may not be omitted without triggering the recapture rule.[4]

Notably, many commentators believe that North American Container may be inconsistent with but does not expressly overrule Eggert.  This is because, based on the facts of North American Container, the Federal Circuit did not address the “intermediate scope” issue of Eggert.  Instead, in North American Container, the limitation relied on during prosecution was omitted in its entirety.  A few Board decisions and dissenting/concurring opinions distinguish North American Container from Eggert on this basis.[5]

Nonetheless, the Board’s decisions subsequent to North American Container reflect that the Board is applying North American Container and not its own precedent, Eggert.  That is, the Board is disallowing any claim reciting a claim element which is broader (even if the element is broadened to an intermediate scope) than the claim elements original scope where the claim element was narrowed during prosecution to overcome prior art.[6] Thus, if “a fastener” was recited by an original claim, and “a screw” were recited at allowance to overcome a prior art reference that includes a nail, then the Board has concluded that a reissue claim reciting “a threaded fastener” constitutes impermissible recapture.

Interestingly, of the thirty-eight Board decisions we reviewed addressing the recapture doctrine, ten of the cases were reversed.[7] Eight of the ten reversals turned on whether the claimed subject matter at issue was properly shown by the examiner as being surrendered during the original prosecution of the application which matured into the subject patent.

Thus, it appears that an appellant’s best hope in obtaining a reversal on appeal is to rebut the examiner’s finding of surrendered subject matter.  Stay tuned for a follow-up posting that examines the Board’s current view on surrendered subject matter.

[2] 67 USPQ2d 1716 (Bd Pat. App. & Int. 2003).

[3] 415 F.3d 1335 (Fed. Cir. 2005).

[4] Id at 1350.

[5] See e.g., Appeal 2007-3925 and Appeal 2007-0700.  These appeal decisions can be found using the link provided in footnote 7.

[6] Appeal 2007-0040.  This appeal decision can be found using the link provided in footnote 7.

[7] We searched for the Board’s recapture decisions decided after North American Container using the USPTO’s database which can be found at:  http://des.uspto.gov/Foia/BPAIReadingRoom.jsp.

Ex Parte Tanaka

With pendency of patent applications increasing and a growing inventory of applications awaiting appeal, a cynic would argue that Tanaka is a transparent attempt by the Board of Patent Appeals and Interferences (“BPAI”) to reduce the number of pending reissue applications awaiting examination, and/or to short circuit applicant efforts to use patent reissue as a substitute for failing to keep a continuation application pending.  Be that as it may be, an unintended consequence of Tanaka will likely be an increased number of patent owner initiated ex parte reexaminations.  As such, the Central Reexamination Unit (“CRU”) may very quickly be burdened with the work of the Examining Corps by patent holders seeking results now clearly foreclosed through patent reissue.

An expanded panel of the BPAI concluded that adding a dependent claim to “hedge against possible invalidity of the original claims” does not constitute an error correctible by a reissue application.  The panel did not accept as binding the “dicta” from In re Handel, 312 F.3d, 136 USPQ 460 (CCPA 1963) (opining that reissue as a hedge against possible invalidity is proper).  This may set up a basis for a possible appeal to the Federal Circuit by the reissue applicant.  In short, according to the Tanaka opinion, if the basis of the § 251 error is claiming more than the patentee was entitled to, then an original patent claim must be narrowed to satisfy § 251.  When original patent claims are retained, neither more nor less is claimed and hence no basis for reissue is presented.

When a patent owner is confronted with possible claim invalidity, rather than making an admission in reissue regarding the possible invalidity of an original patent claim as appears to be required by Tanaka, a patent owner may now choose to initiate ex parte reexamination.

In contrast to the error required under 35 U.S.C. § 251, a patent owner can establish a substantial new question (SNQ) of patentability without making an admission of claim invalidity.  Further, pursuant to current PTO policy, the CRU examines only claims identified in a reexamination request.  Therefore, reexamination is more attractive as it does not subject all claims to review like reissue, and does not consider patentability issues such as statutory subject matter under 35 U.S.C. § 101, or 35 U.S.C. § 112 for original claims.[1]

Patent owner initiated reexamination can be therefore be leveraged to add new dependent claims by presenting a narrowly tailored SNQ for those claim[s] where invalidity is at issue.  The patent owner can file a proposed amendment along with the reexamination request presenting a narrowing dependent claims to hedge against possible invalidity of original patent claims with or without amendment to the original patent claims. MPEP 2221

As patent reissue options are restricted, or are made less attractive by the USPTO, patent owner initiated ex parte reexamination may soon be on the rise. 

What if a party is contemplating whether to suggest an interference with a patent or to request inter partes reexamination of the patent?  This may be the case, for example, where the party believes that it has a published application which (i) would sufficiently support at least one claim that would interfere with the targeted claims and (ii) has an earlier effective filing date for that claim than the effective filing date of the targeted claims.  In this scenario, the party’s application qualifies as 35 U.S.C. § 102(e) art against the targeted patent.  Should the party (applicant) conduct a thorough prior art search or merely rely upon its own published application as the basis for the reexamination request?  If a search is to be conducted, when?  And, how thorough should that search be?

In order to have an interference declared, an applicant must timely present at least one claim which interferes with one or more claims of the targeted patent.  Typically, a party will present in its application claims “copied” from the targeted patent in order to have interfering claims.  Consequently, any prior art discovered by a prior art search directed to the subject matter of the targeted claims will often be material to examination of the “copied” claims and, pursuant to 37 C.F.R. 1.56, must be disclosed to the PTO.  The disclosed art may delay or, in a worst case, derail an indication of allowability (a prerequisite to an interference being declared). 

If the ultimate goal of the party is to obtain its own patent protection for the subject matter claimed in the targeted patent, then the party should forego a prior art search pre-interference.  This reduces the likelihood that the copied claims will be rejected during the examination process.  However, if the party is more concerned with cancelling claims of the targeted patent, then reexamination may be the proper choice.  As discussed above, a thorough prior art search is foundational to the inter partes reexamination vetting process.

A request for an en banc rehearing of the Agilent panel decision was denied by the Federal Circuit.  In Koninklijke Philips Electronics N.V. (“Philips”) v. Cardiac Science Operating Company (“Cardiac Science”) (Fed. Cir. case No. 2009-1241), a second panel of the Federal Circuit has maintained that, when a party challenges the patentability of a “copied” claim pursuant to 35 U.S.C. §112, first paragraph, the “copied” claim is interpreted in light of the specification of the targeted patent or application.

Notably, both Agilent and Philips were appeals from a district court 35 U.S.C. §146 action.  In a 146 action, parties may present new evidence to the district court that conflicts with the interference record before the Board of Patent Appeals and Interferences.  The district court must make de novo factual findings regarding this new evidence.  Ex parte patent applicants can also avail themselves of district courts and additional fact finding pursuant to 35 U.S.C. § 145. In a 145 action, “[T]he district court must defer to the PTO’s fact-finding except where appropriately admitted new evidence conflicts with a fact found by the PTO or presents a new factual issue that the PTO did not consider.”  Hyatt v. Doll, 576 F.3d 1246, 1273 (Fed. Cir. 2009).

Should the patent laws be revised to provide parties to an inter partes reexamination the option to take a mulligan in district court?  I would suggest not.  Although a 35 U.S.C. §145 type of action would afford the patent owner and/or the third party requestor an opportunity to supplement/rebut the PTO’s factual record, such an opportunity would likely lead to party abuses (e.g., sandbagging by the patent owner and undue delay by the third party) and wasted judicial resources. 

A more attractive alternative to implementing a 35 U.S.C. §145 type of proceeding for inter partes reexaminations would be the revision of the patent laws/rules governing case management of inter partes reexamination at the PTO.  Practitioners generally agree that employing case management techniques similar to the case management techniques employed by the Trial Division of the BPAI would be a good start.  Any new case management system should strive (i) to reduce delays created by petitions practice, (ii) to reduce the number of factual disputes, and (iii) to streamline the record presented to the CRU for “examination” and the BPAI for appeal.