As previously discussed, the CAFC has agreed to reconsider Marine Polymer Technologies, Inc. v. HemCon, Inc. (here) en banc. The Court will reconsider whether or not intervening rights are created for a claim that is not literally amended in a post grant proceeding by a change in verbiage, but instead, by operation of prosecution disclaimer on the part of the Patentee. (earlier post here)

Interestingly, last week the Court considered a somewhat similar circumstance of claims that were confirmed in patent reexamination without amendment in Krippelz v. Ford Motor Company (here). In Krippelz, the Court considered an automotive mirror that emitted a “conical beam of light.” In patent reexamination the Patentee made statements pertaining to the shape of a light beam and it’s relation to reflecting elements, thus disclaiming arrangements that did not include these critical features. Based on these statements, the Court found that the Patentee disclaimed an interpretation of this language that could have impacted the Court’s claim construction, and as a result found the claims invalid.

The court’s application of prosecution disclaimer in Krippelz is straightforward, but an interesting contrast to the arguably innapropriate application of disclaimer in Marine Polymer.

As a reminder amicus briefing in Marine will be completed February 10th.

When faced with the assertion of a patent of dubious validity, prospective defendants increasingly resort to patent reexamination as a cost effective mechanism to dissolve the dispute.

In many patent disputes, patent reexamination is conducted in parallel to a district court or ITC proceeding. Of course, as the reexamination proceeding advances, the reexamination prosecution history creates new defensive opportunities such as, additional prosecution history disclaimer and/or estoppel arguments; enhanced, or additional  inequitable conduct positions; and new non-infringement arguments.

Claim changes and/or cancellation are a boon to defendants as potentially mooting current infringement contentions or at least creating an intervening rights defense.  Yet, it is important to keep in mind that such claim changes are not effective until the proceeding is concluded.This past Monday in Keung Tse v. eBay, Inc., et al (CAND), the Court considered whether cancellation/amendment  of a claim during patent reexamination mooted an otherwise justiciable dispute, explaining:

Only claim 21 of United States patent number 6,665,797 is asserted in this action. A reexamination of the ’797 patent was initiated in July 2007 by defendants in a different district court action, and in July 2009, the United States Patent and Trademark Office issued a final rejection of several claims, including claim 21. Plaintiff then filed the instant action in December 2009 — at a time when claim 21 of the ’797 patent did not officially exist.

Plaintiff appealed the USPTO rejections, and he amended claim 21 in March 2010, during the appeal process. The Board of Patent Appeals and Interferences reversed the rejection as to amended claim 21, but affirmed the rejection of other claims. Plaintiff then appealed the BPAI decision to the Court of Appeals for the Federal Circuit; that appeal remains pending (see Dkt. No. 133).

.           .          .           .           .             .          .         .

The court continued,

No reexamination certificate has been issued for the ’797 patent. Thus, the original version of claim 21 has been cancelled, but the amended version has not yet issued. There is no claim 21 at this time, and there is no guarantee that a reexamination certificate eventually will issue with the an amended version of claim 21 in its current form.

(emphasis added, decision dismissing the action here)

While, practically speaking, claim 21 has been “changed” during reexamination, such alterations are not effective until the certificate issues. As noted in MPEP 2250,

Amendments proposed in a reexamination will normally be entered and be considered to be entered for purposes of prosecution before the Office (if they are timely and comply with the rules); however, the amendments do not become effective in the patent until the reexamination certificate under 35 U.S.C. 307 is issued and published.

Thus, claim 21 of the original patent still exists in a technical sense until cancelled or amended by certificate, which has yet to happen. Thus, the court is incorrect to assume that claim 21 “does not exist.”

The effective date of a claim cancellation/amendment may seem esoteric, but, ignoring this reality could lead to premature summary judgement motions on non-infringement, intervening rights, etc. Of course, such a development is a strong argument in favor of staying a case, which seemed the more appropriate remedy here.

(Note:  the Patentee did not respond to the Court’s Order to show cause as to why the case should continue, which may explain the result.)

This case was brought to my attention by the great Docket Navigator.

It is well established that the USPTO utilizes different standards of evidence and claim interpretation in patent reexamination. Likewise, there is no presumption of validity in patent reexamination. For this reason, district court/ITC claim construction findings (i.e., Markman Orders) are not binding on the USPTO. In re Trans Texas Holdings Corp., 498 F.3d 1290 (Fed. Cir. 2007). Yet, the findings of the USPTO with regard to claim construction can have significant impact on the court rulings.

For example, this past January, in St. Clair Intellectual Property Consultants, Inc. v. Canon Inc., (Fed. Cir. 2011, non-precedential), the CAFC reversed a lower court claim construction ruling, based in part, on the findings of USPTO examiners in patent reexamination, explaining:

Because an examiner in reexamination can be considered one of ordinary skill in the art, his construction of the asserted claims carries significant weight.

(See the earlier discussion of this case here)

Hoping to leverage this thinking, TDM America LLC, a plaintiff of the United States Court of Federal Claims, sought to undo an earlier adverse Markman Order and summary judgment of non-infringement. TDM sought relief under Fed. R. Civ. P. 60(b) arguing that a recently concluded ex parte patent reexamination of the patent at issue constituted new evidence requiring relief from the earlier judgment. TDM argued that, as in St. Clair, the claim scope statements of the reexamination record carry significant weight, and were contrary to the court’s earlier Markman and SJ findings.

Interestingly, the court agreed that a patent reexamination that concludes after judgement does qualify as “newly discovered” evidence (citing St Clair) under Fed. R. Civ. P. 60(b)., noting:

Defendant contends that TDM’s motion also should fail because it is not based upon “newly discovered evidence.” (Def.’s Opp’n, May 24, 2011, at 22.) Specifically, Defendant asserts that the PTO’s final determinations on the `614 and `862 patents did not occur until August 31, 2010 and February 21, 2011 respectively, well after the Court’s April 27, 2010 summary judgment decision. Id. Under Rule 60(b)(2), “newly discovered evidence” must exist at the time of the Court’s original decision. Yachts America, 8 Cl. Ct. at 281. TDM counters that, although the reexamination proceedings were not complete at the time of the Court’s summary judgment decision, the facts to which the reexamination pertained were in existence before the Court’s decision. (Pl.’s Reply Mem., June 29, 2011, at 15-16.) TDM relies on a Fifth Circuit case, Chilson v. Metropolitan Transit Authority, in which the court held that an audit completed after judgment but revealing facts that existed at the time of trial constituted “newly discovered evidence.” 796 F.2d 69, 73 (5th Cir. 1986). The Court also notes that the Federal Circuit has taken judicial notice of ex parte reexamination decisions. See St. Clair Intellectual Property Consultants, Inc. v. Canon, Inc., 2011 WL 66166, at *5 n1 (Fed. Cir. Jan. 10, 2011) (”[T]his court can take judicial notice of the reexamination record.”). On the basis of these authorities, the Court will treat the ex parte proceedings as “newly discovered evidence.”

Although accepting TDM’s Rule 60(b) patent reexamination theory, the court found TDM’s allegations of contrary claim scope findings sorely lacking, and improperly focused on positions that were later reversed by the examiners.

In the 1,226-page appendix, the PTO’s examiners made many observations about the Chemfix II process and the validity of the `614 and `862 patents, but in reversing course during the proceedings, the earlier examiner observations are not consistent with the later observations. Thus, in evaluating any of the PTO examiner statements, it is important to know when the statements were made. In its motion for relief from judgment, TDM habitually cites to many of the earlier examiner comments, which were later reversed and thus carry no weight. The final PTO position is consistent with the Court’s position, and would not cause the Court to alter the outcome of the case.

Although TDM was ultimately unsuccessful, the ability to introduce a favorable reexamination record under Fed. R. Civ. P. 60(b) appears to be a viable strategy for for patentees receiving adverse judgments concurrent to a pending patent reexamination proceeding.

Last February NTP appealed the invalidity findings of the USPTO to the Court of Appeals for the Federal Circuit (CAFC). At that time I predicted that the case would shift back to the USPTO on a disputed claim construction issue. Today, the CAFC, while affirming much of the UPSTO’s fact finding, did indeed remand the case for further consideration of a new definition of “electronic mail” or “electronic mail message.”

The eight related appeals included thousands of claims of the NTP portfolio, of note, the USPTO rejected all but one of the previously adjudicated (RIM Litiigation) NTP claims in patent reexamination. Specifically, all of the claims of NTP Inc’s U.S. Patents 6,317,592, 5,819,172, and 6,067,451 were rejected and affirmed (BPAI). Rejections were affirmed-in-part in 5,436,960 and 5,625,670, (the surviving ‘670 claims were added in reexamination, claim 15 of the ‘960 appears to be the only surviving claim successfully asserted against RIM).

Today, the CAFC affirmed the rejection of all 764 claims of the ’592 patent. (NTP I, here).

A second decision (NTP II, here), which pertains to the remaining patents noted above as well as a few others, Vacated-in-part, Reversed-in-part, and Remanded previous determinations of the BPAI.

What does all of this mean for NTP?

Certainly, the remand on claim construction is a positive development for NTP. If nothing else it gives NTP another opportunity to argue for claims that stood previously rejected by the USPTO. Yet, many of the claims subject to the reexamination proceedings were newly added and it seems unlikely that the reexamination proceedings will conclude in time for these claims to have any enforceable term.  

As to the previously issued claims, while the CAFC did reverse some rejections, it is unclear whether or not the BPAI will enter new rejections based on obviousness, the new definition of “electronic mail,” or newly formulated theories altogether.

Aside from the potentially positive developments noted above, the CAFC decisions were negative in many other respects. For example, the CAFC affirmed the BPAI’s finding that the Telenor reference qualified as prior art, and also discounted the attempts of NTP to antedate certain art via 1.131 declaration evidence.

Uncharacteristically, the CAFC commented a few times that NTP’s arguments have seemingly shifted over time, and noted on the record that NTP has conceded several points that should not be revisited by the USPTO.

At the end of the day, the fight returns back to the USPTO for further appeal briefing and argument, and perhaps an eventual return to the CAFC. As such, the only certainty created by today’s decisions are the likely years of USPTO and CAFC processing still to come.

Claim Interpretation Practices in Patent Reexamination

As discussed over the past few months, the USPTO is considering various proposals in an attempt to streamline patent reexamination. The proposals of the speakers at the June 1 public meeting, as well as the webcast, are found (here).

Throughout the month of June, I have explained my own proposals to accelerate/improve patent reexamination. In past posts, I explained an alternative that the USPTO might consider to encourage Patentee cooperation with the Pilot Program to Waive a Patent Owner Statement in Ex Parte Patent Reexamination. More recently, I have discussed changes to petition practice for accelerating petition processing, and avoiding common petition issues when a Third Party withdraws from an inter partes patent reexamination.

With June drawing to a close, and with public comments due to the USPTO on the Streamline Proposals due today (June 29, 2011), this will be my final post of this multi-part series.

In this post I explain how a relatively common claim interpretation deficiency is overlooked by the USPTO, leading to unnecessary reexamination proceedings and expense for Patent Holders.

Currently, the grant rate of patent reexamination is well over 90%. With patent reexamination increasingly initiated concurrent with district court and/or ITC litigation, the mere grant of a request for patent reexamination can have a devastating effect on the timeliness of patent enforcement efforts. For patents in inter partes reexamination, roughly 50% of cases in litigation remain subject to a stay pending the outcome of the patent reexamination proceedings for at least 4 years. Thus, an improvidently granted reexamination request can effectively shut the Patent Holder out of court for years, and significantly add to (1) the cost of enforcement and (2) the delay in collecting damages for patent infringement.

In analyzing requests for patent reexamination, Examiner’s are trained to apply a Broadest Reasonable Interpretation (BRI) to patented claims. Unfortunately, over emphasis upon this standard ignores the fact that the scope of certain patent claims are defined by 35 U.S.C. § 112, 6^th paragraph, and may not be interpreted in this manner, namely—“means-plus-function” claims.

35 U.S.C. § 112 6^th requires:

An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof. (emphasis added)

As further outlined by MPEP 2181-2183, it is impossible to examine a means or step-plus-function claim without considering the structure, material or acts described in the specification; otherwise there is no claimed structure or acts by which to compare any equivalence in the prior art. See MPEP 2183 (C)

In my experience, the USPTO will almost always grant a reexamination request for MPF claims by applying an improper BRI analysis of the recited function alone.  In fact, I have never seen a Request denied for failure to provide the necessary structural mapping between the specification and MPF claims.  This practice encourages accused infringers in parallel litigations to pursue reexamination requests with little to no downside. That is to say, the Request can be devoid of any structural analysis relative to the patent and still be granted.  In this way, the accused infringer maintains all flexibility in the parallel proceeding with respect to arguing structural equivalents (i.e., non-infringement & invalidity).

The USPTO should not accept a Request for Patent Reexamination which would be dismissed as non-compliant if it were part of an Appeal Brief to the BPAI—an appeal brief requires this structural analysis explicitly. (CFR 41.37(c)(1)(vii)). Which makes perfect sense as any reasoned analysis requires analysis of the equivalent structure of the specification.

For this reason, many of these improvidently granted reexaminations ultimately terminate in favor of the Patent Holder, sometimes years later on appeal to the BPAI, where such structure is considered for the first time.

To avoid litigation gamesmanship, and to reduce Patent Holder harassment, it is incumbent upon the USPTO to require that means plus function claims be examined, from the outset, in accordance with the 35 U.S.C. § 112 6^th paragraph guidance provided in MPEP § 2181-2183.

Back in March, I discussed the degree of change that can be secured from the USPTO via a Certificate of Correction (COC). As a reminder, one of the more limited methods to address errors in an issued patent is via COC as defined by 35 U.S.C. § 255. The statue provides that mistakes of a clerical or typographical nature, or of minor character may be corrected upon request. Such mistakes must have been made in good faith, and not constitute new matter or require reexamination.

Once issued, a valid COC is only effective prospectively. For this reason, such certificates are best secured at the earliest possible date.

Of course until claims are very closely scrutinized, the need for minor correction may not be so apparent. In cases where the COC is not secured for years, is there a mechanism available to retroactively correct a patent claim as to such minor errors?

This issue was recently explored in Fujitsu Limited v. Tellabs Operations Inc., and Telllabs Inc. (NDIL).

In Fujitsu U.S. Patent 5,386,418 was at issue. Claim 1 recited the language “and flag data;” this was a mistake. Claim 1 should have recited “a flag data.”

Although the ‘418 Patent originally issued in 1995, a COC was not obtained until 2007, immediately prior to the Tellabs litigation.

With respect to the claim language issue, Tellabs advanced two theories on summary judgment: (1) The COC was invalid for broadening the claims; and (2) claim 1, as issued, was indefinite.

In ruling on these motions, the court explained that the COC corrected a minor issue, thus the COC was valid. For similar reasoning the court rejected argument (2).

Fujitsu also sought summary judgment of its own, arguing that that the claim correction should be made retroactively, based on the doctrine of judicial correction. Tellalbs argued that the combination of a COC and judicial correction for the same patent was improper. The court agreed with Fujitsu, explaining, (full decision here):

Although a valid certificate of correction is only effective prospectively, Southwest Software, Inc. v. Harlequin Inc., 226 F.3d 1280, 1295 (Fed. Cir. 2000) (“[F]or causes arising before its issuance, the certificate of correction is not effective.”), the district court can retroactively correct certain errors in a patent’s claims if “(1) the correction is not subject to reasonable debate based on consideration of the claim language and the specification and (2) the prosecution history does not suggest a different interpretation of the claims.” Novo Indus., L.P. v. Micro Molds Corp., 350 F.3d 1348, 1354, 1357 (Fed. Cir. 2003). These “determinations must be made from the point of view of one skilled in the art.” Ultimax Cement Mfg. v. CTS Cement Mfg., 587 F.3d 1339, 1353 (Fed. Cir. 2009).  

.           .           .           .           .           .           .           .           .           . 

Neither Hoffer nor Ultimax suggests that the district court’s authority to correct a patent is constrained by the presence of a certificate of correction, and the court declines to impose such a proscription against judicial correction in this case. Consequently, the court agrees with Fujitsu that the Novo standard is the controlling standard for judicial correction, and the ‘418 Patent’s Certificate of Correction does not prevent this court from correcting the same error in claim 1

.           .           .           .           .           .           .           .           .           . 

Patents provide an important notice function to the public and, as a result, post-issuance judicial corrections which have a retroactive effect must be carefully scrutinized. In this case, viewing the intrinsic evidence from the perspective of one of ordinary skill in the art, as the court must in determining whether a judicial correction is supported under Novo, this court finds that the only reasonable correction of claim 1 replaces “and flag bit data” with “a flag bit data.” A person of ordinary skill in the art, having reviewed the specification, drawings, and prosecution history, would have immediately recognized this error and understood what was claimed. The court accordingly corrects claim 1 of the ‘418 Patent to replace “and flag bit data” with “a flag bit data.”

This case was brought to my attention by the great Docket Navigator.

Last May, Ex parte Lund was decided by the Board of Patent Appeals & Interferences (BPAI) (here). In the decision, the Board affirmed the rejection of the reexamined claims based upon the construction of the claim language electrical connecting means adapted to electrically connect said display means and said data entry array to said computer means in both said first and said second positions.

The Patentee urged that the means-plus-function structure corresponding to the electrical connecting means was limited to the specific mechanical orientation of the connectors shown in the Lund patent (Figs 12 and 15). Yet, the Board found that the function recited only required an electrical connection, such as provided by the ribbon cable or slot connector of the specification.

Unhappy with the Board’s decision, the Patentee appealed to the CAFC, emphasizing the first and second position aspects of the claimed function, explaining that this language demonstrated that the connector must be mechanically oriented in a specific fashion. 

Lund’s claim 1 is directed to a laptop computer. The first position is the usual clam-shell orientation (open), the second position enabled the user to rotate the screen and collapse it down on the keyboard in a tablet computer fashion. This was done by removing the screen from a slot connector, reversing the screen and re-inserting it to the connector, or by way of a flexible ribbon cable. (see below)

The prior art showed reversible screens that could be moved between such positions, but the electrical connections were distinguishable from those shown in Lund’s patent, at least with respect to mechanical positioning. The orientation sought by Lund is shown below as illustrated in Figs 12 and 15 of the patent.

During oral argument, the CAFC noted that the positional features argued were already present in dependent claims 2-8 of the Lund Patent. These claims were not subject to patent reexamination. In an awkward moment for the Patentee, Judge Lourie asked the Patentee why he was on appeal since claims 2-8 already captured what was being argued, and that these claims stood uncontested. Judge Lourie also pointed out that claim differentiation would seem to require a broader reading of claim 1. The Patentee did not have any meaningful rebuttal to these inquiries.

Ultimately, the CAFC seemed to agree with the Solicitor that although the claimed electrical connecting means was limited to the structure of the specification, in this case the card or ribbon connector, the function recited did not require any specific mechanical orientation to achieve the recited electrical connection function. So, although other aspects of claim 1 required specific mechanical interaction between components, the function of the electrical connecting means required only connectivity. Absent the existence of the dependent claims, perhaps this case would have been a closer call.

Last year I explained that the patent reexamination statutes preclude proper review of originally issued means-plus-function claims (i.e., claims drafted to invoke 35 U.S.C. § 112 6th paragraph). This is because a proper examination of a means-plus-function claim requires consideration of the structure and acts described in the specification. Once such acts/structure are identified, then a determination is made as to the equivalence of the acts/structure of the cited prior art. Yet, where support is deficient for MPF claims, a rejection pursuant to 35 U.S.C. § 112 2^nd is not possible.  

As a reminder, 35 U.S.C. § 112 cannot be used to reject original claims in patent reexamination. Such a rejection is inappropriate as it would not be based on a “patent or printed publication as required by 35 U.S.C. § 301. See MPEP 2258 (II). Thus, in cases where the specification support is deficient, the USPTO must ignore this deficiency during patent reexamination. Instead, the claims are examined by turning a blind eye to the indefiniteness issue and applying the familiar broadest reasonable interpretation standard. 

In applying the BRI standard, the scope of MPF claims are broadened beyond their relatively narrower, statutorily defined scope–which is limited to the specific act/structures of the specification and equivalents. Confusingly, enlarging the scope of a claim in patent reexamination is also in direct conflict with a patent reexamination statute, 35 U.S.C. § 305. This patent reexamination paradox was most recently demonstrated in Ex Parte Avid Identifications Systems Inc. (U.S. Patent 5,499,017)

Although the Patentee in Avid appeared to identify structure in their brief, the Board indicated that the cited structure did not clearly correspond to the claim language, explaining:

In the absence of any specific structure in the Specification corresponding to the claimed “means for extracting data,” we construe the “means” as including any structure that can be represented by a box that performs the recited function or equivalents thereof. (emphasis added).

If this had been an appeal of a patent application, a 112 2nd paragraph rejection would have certainly been issued, not so for patent reexamination.

Ultimately, the Avid appeal affirmed art rejections of the MPF claims. As such, this claim interpretation conundrum may seem harmless. Still, in appeals where the art rejections of MPF claims are reversed, application of the BRI standard effectively broadens the scope of the reexamined claims– in violation of the statute. Perhaps more significantly, the creation of such a record is unnecessarily misleading the public as to the proper scope of such claims.

MPF support issues are increasingly case dispositive in patent litigation.  Aristocrat Techs. Austl. Pty Ltd. v. Inter. Game Tech., 521 F.3d 1328 (Fed.Cir. 2008) See also Blackboard, Inc. v. Desire2Learn Inc., No. 2008-1368, slip op. at 21 (Fed. Cir. July 27, 2009).

Interestingly, in a different patent reexamination context, a challenge to 112 written description is permitted. 

For example, if the patent subject to the reexamination request claims priority to a parent case, intervening prior art may be presented together with an argument that the priority claim is ineffective as to written description. Presumably, the 112 analysis is permitted in this context as the request is not attacking 112 support of the reexamined patent, but instead, corresponding disclosure of a parent. Therefore, the SNQs presented are still based on patents and printed publications as they do not explore 112 issues of the underlying specification.

It seems that MPF claims cannot be properly reexamined at the USPTO until the conflict between the above noted patent reexamination statutes is remedied. Although the current patent reform legislation before Congress addresses many aspects of post grant practice, this issue remains outstanding.

A successful reexamination from a defendant perspective does not always result in an overt claim change or cancellation. In other words, even where claims are confirmed, statements in the reexamination record that are inconsistent with arguments made in a concurrent litigation, or that rise to the level of an outright disclaimer, may provide new, non-infringement positions to defendants.

This week, the CAFC relied upon statements made by a Patentee in the patent reexamination of U.S. Patent 5,355,964 to affirm claim construction findings of the EDVA and NDCA.

In American Piledriving Equipment Inc., v. Geoquip, (CAFC 2011), the court explained:

The prosecution history removes all doubt that one of ordinary skill in the art would have understood the term “integral” to mean “formed or cast of one piece.” During reexamination, American Piledriving attempted to distinguish a prior art reference by arguing this very point . . .

 American Piledriving nevertheless argues that it did not clearly and unmistakably disavow the construction of “integral” it urges on appeal. It points out that it did not amend its claims and made multiple arguments to overcome the asserted prior art reference. American Piledriving contends that the statement was unnecessary to overcome the reference and that the examiner explicitly disagreed with it.

 “[W]e have made clear . . . [that] an applicant’s argument that a prior art reference is distinguishable on a particular ground can serve as a disclaimer of claim scope even if the applicant distinguishes the reference on other grounds as well.” Andersen Corp. v. Fiber Composites, LLC, 474 F.3d 1361, 1374 (Fed. Cir. 2007). Moreover, regardless of whether the examiner agreed with American Piledriving’s arguments concerning “integral,” its statements still inform the proper construction of the term. See Seachange Int’l, Inc. v. C-Cor Inc., 413 F.3d 1361, 1374 (Fed. Cir. 2005) (“An applicant’s argument made during prosecution may lead to a disavowal of claim scope even if the Examiner did not rely on the argument.”); Microsoft Corp. v. Multi-Tech Sys., 357 F.3d 1340, 1350 (Fed. Cir. 2004) (“We have stated on numerous occasions that a patentee’s statements during prosecution, whether relied on by the examiner or not, are relevant to claim interpretation.”). American Piledriving unambiguously argued that “integral” meant “one-piece” during reexamination and cannot attempt to distance itself from the disavowal of broader claim scope. (emphasis added)

The above result bears out a very important application of patent reexamination concurrent with litigation, namely, the creation of additional fodder for claim construction purposes.

Clearly, a successful patent reexamination from a defendant perspective does not necessarily require that a Patentee cancel or amend claims. As such, when facing a suit in a district court in which a Markman Hearing is scheduled some 12-18 months in the future, initiation of patent reexamination at the outset may prove an effective strategy to focus the later debate.

Infamous Katz Portfolio Withers Under Pressure of Patent Reexamination

USPTO empirical data is quite helpful for determining the frequency by which claims are amended, cancelled, or confirmed in patent reexamination. Yet, when it comes to the overall efficacy of patent reexamination, USPTO statistics only tell part of the story.

A successful reexamination from an infringer’s perspective does not always result in an overt claim change or cancellation. In other words, even where claims are confirmed, statements in the reexamination record that are inconsistent with arguments made in a concurrent litigation, or that rise to the level of an outright disclaimer may provide new, non-infringement positions to defendants. Likewise, such statements may limit the Patentee’s ability to distinguish the prior art.

In the ongoing patent reexaminations of the Katz portfolio, there have been significant victories for challengers. However, as made clear by the CAFC last week (In re Katz Interactive Call Processing Patent Litigation) not every victory shows up in USPTO statistics as cancelled/amended claims.

In affirming a district court’s claim construction of U.S. Patents 5,684,862 and 6,292,547, the CAFC noted:

Based on an argument Katz made during reexamination to avoid prior art, the district court construed the term “personal identification data” to have a meaning distinct from passwords and PIN numbers. From the Statistical Interface group, claim 43 of the ’863 patent and claim 18 of the ’547 patent cover the use of “personal identification data.” In response to the examiner’s rejection on reexamination based on Yoshizawa’s use of a password as the “personal identification data,” Katz explained:

Although the Examiner alleges that the password entered by a subscriber satisfies the “one other distinct identification data element,” the Patentee respectfully submits that the claim requires that “one other distinct identification data element” to be “personal identification data” of the caller. A password that is composed (and frequently changed) serves as an access code or PIN, rather than personal identification data. . . . [S]everal examples of personal identification data [include] a caller’s name, address, telephone number, ini-tials, age, etc.

On appeal, Katz argues that the distinction it proffered in reexamination did not have the effect of disclaiming all passwords or PINs, particularly those that are not arbitrarily composed and are not frequently changed. We reject that argument. Katz’s disclaimer distinguished “personal identification data” from all composed passwords, not just arbitrarily composed passwords.  .  . .

We therefore find no error in the district court’s claim construction of “personal identification data.

The Katz patent portfolio, while still sizable, has lost quite a few battles as of late. A string of recent BPAI decisions in patent reexamination have gone against Katz. As illustrated above, even when winning a battle at the USPTO in patent reexamination, the creation of additional prosecution history may ultimately lose the war outside of the Office.