The en banc CAFC decision in Therasense has recalibrated inequitable conduct jurisprudence. The decision effectively tightened the standard that is applied in judging materiality of information underlying an inequitable conduct defense. More specifically, the Court replaced the previous “reasonable examiner” standard with a new ”but for” materiality analysis. The “but for” standard defines material information as any non-cumulative information which, had it been disclosed prior to patent issuance, would have prevented the patent from issuing.

As I discussed prior to the issuance of the Therasense decision, a “but for” materiality standard applies in Walker Process antitrust claims. Earlier this year, in U.S. Rubber Recycling, Inc. v. ECORE International Inc., et al.(CDCA), the California District Court considered whether or not prior art materials could satisfy a “but for” materiality standard where the USPTO had considered the very same information in a patent reissue proceeding, and had still reissued the patent. In deciding that this information could not be material as a matter of law, the Court explained that while a USPTO proceeding cannot cure fraudulent conduct, it can be dispositive of a “but for” materiality standard and that ”[b]ecause the PTO reexamines re-issuance applications as if being presented for the first time, the fact that the PTO did re-issue Defendant’s patent even with the prior art precludes Plaintiff from plausibly pleading [Walker Process].[1]

Since the court’s initial ruling on the Walker process claim, the Therasense decision issued.  Last week, the Court considered the applicability of the same art under an inequitable conduct theory. Not surprisingly, the court found that reissuance of the patent precluded a finding of “but for” materiality as a matter of law.

The Court explained (decision here):

Defendant argues that Plaintiff cannot prove “but-for” causation because the Examiner reviewed Plaintiff’s alleged prior art and still allowed the original claims to be reissued. (Mot. 6:7-19.) The Court agrees. Out of judicial economy, the Court refrains from repeating its analysis in its Order Denying Plaintiff’s Motion to Reconsider. In the July 8, 2011, Order, the Court explained that the “PTO undoubtedly considered most, if not all, of the alleged prior art.” (Order, July 8, 2011, at 6.) The Court listed the numerous prior art alleged by Plaintiff in its Complaint and systematically showed how each prior art is listed on the face of the RE41945 or was submitted in an IDS to the PTO. (See id.) Under the Federal Circuit’s recent en banc decision in Therasense, Plaintiff must show that “the PTO would not have allowed [the] claim[s] [of the '723 Patent] had it been aware of the undisclosed prior art.” 2011 WL 2028255, at *11. Because the PTO in the instant action allowed the claims after the disclosure of the alleged prior art, Plaintiff cannot prove “but-for materiality.” (Order, July 8, 2011, at 6-7.)

While the Therasense decision also provided that certain egregious conduct could qualify information as de facto material, such was not the case here.  (The USPTO has since attempted to codify the Therasense decision as proposed Rules 56 and 555 to provide a “but for plus” materiality standard). Going forward, it may be that USPTO post grant proceedings play a more prominent role in assessing the merits of an inequitable conduct charge.

As discussed yesterday, the USPTO has proposed to modify asepcts of Rule 1.56(b) and Rule 1.555(b) to comport to the materiality standard of the recent Therasense decision of the CAFC. In doing so, the Office has proposed a definition of ”but for-plus” materiality standard defined by acts of omission (duty of disclosure) together with affirmative acts relating to willful false statements and misrepresentations (duty of candor and good faith).

Rule 56 is an ethical guidepost that pertains only to Patent Applicants. As such, aside from a rare protest under Rule 1.291 or 1.99, third parties do not submit prior art materials to the USPTO under this Rule (of course patent reform will provide more opportunities for pre-grant submissions). Instead, Rule 56 compliance is litigated as an element of an inequitable conduct defense to patent infringement. Charges of inequitable conduct are not substantively considered in patent reexamination as the Office is a less than ideal arbiter of questions of “intent.” 

Currently, the USPTO is proposing to define, by Rule, a materiality standard in terms of “bad acts.” Consequently, has the USPTO now undermined established practice (MPEP) by encouraging new 1.555(b)(2) submissions for consideration of such information in patent reexamination?

Section (c) of Rule 1.555 provides that:

The responsibility for compliance with this section rests upon the individuals designated in paragraph (a) of this section and no evaluation will be made by the Office in the reexamination proceeding as to compliance with this section. If questions of compliance with this section are raised by the patent owner or the third party requester during a reexamination proceeding, they will be noted as unresolved questions in accordance with § 1.552(c). (emphasis added)

In view of the language of 555(c), which remains unchanged by the proposal, it is clear that submissions by third parties in patent reexamination that address matters of compliance with Rule 555 cannot be considered in the reexamination proceeding. This section does not preclude retrospective compliance arguments relating to the original prosecution (Rule 56 compliance challenges).  

On the other hand, MPEP 2216 cautions that conduct of parties should not be included in a Request for reexamination as such will not be considered. Further, Rule 1.552(c), (mentioned above in 1.555 (c)) provides that issues outside of patents and printed publications will not be considered, but merely noted on the record in the next Office Action.

The problem with the proposed changes is that Rule 555(b)(2) defines a materiality determination in terms of an analysis of affirmative acts relating to willful false statements and misrepresentations. The proposed changes to Rule 555(b) also replace the previous language that helped refined patent reexamination materiality in terms of patents and printed publications–it is unclear why this language was removed.

Assuming the USPTO finalizes the current proposal, the Office may have a difficult time refusing extrinsic information in patent reexamination as to the “plus” aspect of the proposed materiality standard. That is to say, the proposed Rule provides a “but for-plus” standard in ascertaining materiality of a reference, but the “plus” component is essentially off limits to Third Parties in arguing materiality of a given reference before the Office. 

Can the Office rightfully refuse extrinsic evidence explaining previous misleading submissions to the Office? Would such information not provide ”new light” as to the materiality of previously considered art under the Proposed Rules? 

A more manageable solution is to modify the proposal to add back in “patents and printed publications” to 555(b)(1) and to drop (b)(2) altogether. As written yesterday, safeguards against fraudulent conduct already exist, there is no need to muddy the waters of materiality.

With enhanced pre-grant submission rights being expanded by Patent Reform, and Inter Partes Review and Post Grant Review providing new, litigation style dispute formats, the USPTO could very well find themselves policing past conduct under the current proposal.

USPTO’s Rule 56 “But For-Plus” Proposal

Last week, the USPTO published proposed changes to the materiality standard of  37 CFR §§ 1.56 and 1.555 in response to the Federal Circuit en banc decision in Therasense, Inc. v. Becton, Dickinson & Co.

Impressively, the USPTO has managed to publish the proposed changes in just under two months (since the issuance of the Therasense decision). The initiative to craft such meaningful proposals in such a short time period, as well as the intention to help alleviate the significant duty of disclosure obligations is certainly greatly appreciated by all stakeholders.

In distilling the essence of Therasense down to succinct language for rule making purposes, the USPTO has promulgated a “but for-plus” test.

Is this test appropriate as currently presented, or does it require a bit more seasoning? 

The proposed rule is shown below in its entirety. (Rule 1.555 being the same)

§1.56 Duty to Disclose Information Material to Patentability

*******

(b) Information is material to patentability if it is material under the standard set forth in Therasense, Inc. v. Becton, Dickinson & Co., ___ F.3d ___(Fed. Cir. 2011). Information is material to patentability under Therasense if:

(1) The Office would not allow a claim if it were aware of the information, applying the preponderance of the evidence standard and giving the claim its broadest reasonable construction; or

(2) The applicant engages in affirmative egregious misconduct before the Office as to the information.

Part (b)(1) above is straight forward enough, (b)(2) on the other hand is a bit more problematic; (b)(2) embodies the “plus” aspect of the proposed “but for-plus” materiality standard.

Historically, the USPTO treated intentional misrepresentations, false and misleading statements under 37 CFR § 11.18(b)(1) as exemplified by MPEP § 410. Whereas, the duty of disclosure was covered by 37 CFR §§ 1.56, 1.555 and 1.933 and dealt with in MPEP § 2000. Affirmative egregious misconduct in the form or false statements or misrepresentations, especially in affidavits or declarations were considered to be inherently material. But such materiality was a result of a violation of the duty of candor and good faith. Whereas the duty of disclosure was confined to acts of omission and given separate treatment.

As can be appreciated, the proposed materiality definition mixes together concepts relating to acts of omission with that of false statements and misrepresentations.

Part (a) of both Rules 56 and 555 serve as a reminder that no patent will be granted or a reexamination certificate issue where fraud on the Office was practiced or attempted. In view of this statement, is it even necessary to define materiality in terms of egregious misconduct?

Tomorrow’s post will discuss the potential impact of the mixing of the duty of candor and good faith with that of the duty of disclosure relative to reexamination practices and the proposed post grant proceedings of the Leahy-Smith America Invents Act.

As mentioned yesterday, the USPTO has now issued a Notice of Proposed Rule Change in the Federal Register on Rule 56 and Rule 555. The proposal is for the Office to adopt the materiality decision of the recent Therasense decision of the CAFC. (Proposal here)

I will have more commentary on this proposal in the coming days.

As discussed yesterday, willful infringement exists where an accused infringer acted “despite an objectively high likelihood that its actions constituted infringement of a valid patent.” In re Seagate Technology, LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007). In assessing the propriety of a post-filing willfulness allegation (i.e., after the  complaint is filed with the court) Seagate is oft cited for the proposition that a plaintiff must seek injunctive relief (i.e., preliminary injunction). However, court’s have refused to impose such a wooden rule. Instead, court’s look to the totality of the circumstances, including factors such as the existence of concluded patent reexaminations.

In other words, where a patent survives patent reexamination, conduct of a defendant after issuance of the reexamination certificate may be deemed reckless. Ultratech Int’l, Inc. v. Aqua-Leisure Indus., Inc. v. Swimways Corp., No. 3:05-cv-134-J-25MCR, 2009 (M.D. Fla. Mar. 3, 2009); See also St. Clair Intellectual Property Consultants, Inc. v. Palm, Inc., 2009 U.S. Dist. LEXIS 49922, at *5-6 (D. Del. Jun. 10, 2009).

Last week, in denying a defendant summary judgment motion of no willful infringement, Judge Ward of the Eastern District of Texas extended the patent reexamination rationale noted above to newly issued continuation patents. In essence, Judge Ward explained that the prior art applied in the litigation for invalidity purposes had already been laundered by the USPTO during prosecution of the continuation patent applications. 

In SynQor, Inc. v. Artesyn Technologies, Inc., et al. (EDTX), Judge Ward reasoned:

In St. Clair, a patent holder’s post-filing willfulness allegation was permitted in spite of Seagate after the patent exited reexamination without substantially narrowed claims. SynQor’s position with the [newly issued continuation applications] is similar to St. Clair’s position with its reexamined patents. Prior to issuance of the [continuation applications as patents], SynQor had been engaged in litigation with defendants for 20 months. Any relevant prior art relied upon by Defendants must have been produced to SynQor approximately one year before the issuance of either patent. [by court order] SynQor, in turn, had a duty of candor to the USPTO to produce any prior art references material to patentability under 37 C.F.R. § 1.56(a) in its prosecution of the applications that issued as the [new patents]. Thus, at least as to art that was disclosed, Defendants’ invalidity defenses have been tested and found lacking by the PTO. The issuance of the [new patents] over Defendants’ asserted prior art creates an objectively high likelihood that the [new patents] are valid over that prior art, similar to the result of the reexamination in St. Clair. As a result, a preliminary injunction was not necessary for SynQor to assert post-filing willful infringement of the [newly issued patents]. Accordingly, Defendants’ motions for summary judgment of no willful infringement of [the newly issued patents] is DENIED.

Interestingly both patents (7,558,803 & 7,564,702) subject to the Summary Judgment Motion are now being reexamined at the USPTO based in part, on art that was submitted during original prosecution. (inter partes patent reexamination Control Nos 95/001,405 and 95/001,406). However, it appears that the grant of these reexaminations was in October of 2010, perhaps too late for the summary judgment briefing. The patents issued in July of 2009, it is unclear why the defendants waited a year to initiate reexamination proceedings.

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

Understandably, defendants typically seek protective orders providing  maximum protection of confidential materials, forbidding litigation counsel from using these materials in the prosecution of plaintiff’s patent applications. This prohibition known as a “patent prosecution bar,” is largely standard practice.  However, it is well established that patent reexamination does not involve “patent applications.” Thus, a thornier issue is presented when attempting to extend this bar to include barring participation by individuals with access to confidential information in ongoing reexamination proceedings.

Courts have taken divergent paths on the issue.  Some courts have forbidden litigation counsel from participating in the reexamination altogether. Visto Corporation v. Seven Networks, Civ. A. No. 03-333, 2006 WL 3741891 (E.D. Tex. Dec. 19, 2006).  Others, such as the Delaware District Court take a more liberal position.

In Kenexa BrassRing Inc. v. Taleo Corp., 2009 U.S. Dist. Lexis 12002 **2-3(D.Del. Feb. 18 2009) (Robinson S.) (found here), the Court reasoned that, since claim scope cannot be enlarged by amendment in reexamination, and as reexamination only deals with patents and printed publications, barring access to confidential material is “basically irrelevant to reexamination.” (citing Hochstein v Microsoft Corp. Civ. A. No. 04-73071, 2008 WL 4387594 (E.D. Mich. Sept 24, 2008)  In a recent case brought to my attention by the Delaware IP blog, Delaware District Court Order, Apeldyn Corp. v. AU Optronics Corp., C.A. No. 08-568-SLR (D. Del. March 1, 2010) (Poppiti. S.M.), the Kenexa line of reasoning was followed for a reexamination directed to LCD technology (found here).

The trend in Delaware is troubling for a few reasons.

A. Competitors

First, the “Hochstein Oath” as referred to in the Apeldyn Order, originated from a non-practicing entity (NPE). Certainly, a non-competitor has much less use of confidential materials than a competitor. In essence, the Hochstein Oath coming from a NPE is largely meaningless, as business aspirations rarely extend beyond the courthouse and, typically such portfolios do not extend beyond the patents in suit.

B. Complex Technology

Second, in Apeldyn, the dispute is between competitors in a very complex area of technology. In the Apeldyn dispute the claims are directed to relatively abstract electrical circuit features. The patent at issue relates to LCD display panels and the relative retardance (in radians) between polarization drive signals. Certainly, if a narrowing amendment becomes necessary in reexamination, such an amendment can now be closely tailored to the products of the defendant based on the access to confidential technical materials. Of course, amendment of claims is always avoided in reexamination, if possible, to avoid creation of intervening rights, yet, one must also keep in mind that amendments are sometimes necessary to obtain a reexamination certificate.[1] Perhaps even more importantly, new claims are routinely added in reexamination to add ammunition to the patent arsenal.[2] Indeed, as the addition of new, more narrow claims cannot serve as the sole basis for patent reissue, an initiated reexamination favors the Patent Holder in this respect.

The ability of a competitor to fashion claims, new or amended in complex areas of technology that are specifically targeted to relatively unknown features of a competitors product is game changing leverage in a litigation dispute. In such cases, confidential technical materials of a competitor are hardly “irrelevant to reexamination.”  New claims can mean new lawsuits.

C. Duty of Disclosure, Candor & Good Faith

Another consideration for litigants is that access to confidential materials by those involved in patent reexamination on behalf of the patent owner obligates those individuals to disclose such materials to the USPTO, if they are material to patentability.  Although such confidential materials may not qualify as prior art, they may refute, or be inconsistent with, a position the patent owner takes in opposing an argument of unpatentability relied on by the Office, or an argument for patentability (37 C.F.R. § 1.555). In such situations, the materials may be filed under seal in accordance with USPTO practice and procedure. Yet, should the Office deem the confidential information filed under seal material to patentability, the information will become public, at best frustrating the goal of the order, at worst a direct violation.  Still, the need of the Patent Owner to balance its duty of disclosure to the USPTO while complying with the protective order is of great importance in considering appropriate language.

As there is ample justification on the plaintiff and defendant sides to retain separate litigation and reexamination counsel, especially in the case of direct competitors, courts would be wise to consider the realities of this dilemma when faced with such issues in the future.

[2] Of course the Apeldyn patent is close to expiration (2012).  However, the addition of new, “picture” claims is a common reexamination tactic.

To avoid violation of the protective order, the USPTO provides a mechanism for submission of protective order materials under seal pursuant to MPEP §§ 724.02 and 724.04(c) with a petition to expunge the submitted information. In accordance with MPEP guidelines, information subject to a protective order, must be filed in a sealed, clearly labeled, envelope or container. Each document or item must be clearly labeled as a document “Subject To Protective Order.” If the item or document is “Subject to Protective Order” the proceeding, including the tribunal, must be set forth on each document or item. The envelope or container, as well as each of the documents or items, must be labeled with complete identifying information for the file to which it is directed, including the Office or area to which the envelope or container is directed.

Any materials, i.e., information, properly submitted under MPEP § 724.02 in a reexamination proceeding will be sealed from public view. The submitted information will be maintained separate from the reexamination file and will not be publicly available until a determination has been made as to whether or not the information is material to patentability. A petition to expunge (37 CFR 1.59) should accompany the submission of proprietary materials, and in any event, must be filed prior to, or shortly after (i.e., in time to be addressed before the reexamination proceeding enters the reexamination certificate printing process), the mailing of a Notice of Intent to Issue Reexamination Certificate (NIRC). If the petition to expunge is not filed in time to be addressed before the reexamination proceeding enters the reexamination certificate printing process, or the petition is filed, and denied/dismissed, then the materials submitted under MPEP § 724.02 will be released to the public with any other papers in the reexamination file.

Prior to the mailing of a NIRC, the examiner will review the reexamination file and determine if a petition to expunge is in the reexamination file but not acted upon. The examiner, or other appropriate Office official who is responsible for considering the information, will make a determination as to whether or not any portion or all of the information submitted is material to patentability.

If any portion or all of the submitted information is found to be material to patentability, the petition to expunge will be denied and the information will thereafter become a permanent part of the reexamination file and open to the public. Where a submission containing protected material is found to be material to patentability, it still may be possible to redact the submission to eliminate the protected material while retaining the important material (e.g., where a confidential identifying number, such as a serial number or social security number, is included, which is not needed for the context of the submission). If so, the redacted version may be submitted to the Office along with a petition under 37 CFR 1.182 requesting that the unredacted version be sealed and be replaced with the redacted version.

If all of the submitted information is found not to be material to patentability, the petition to expunge will be granted and the information expunged. If a portion of the submitted information is found not to be material to patentability, and a portion is found to be material to patentability, the petition to expunge will be dismissed, and patent owner (or the requester, in limited instances where appropriate) provided with an opportunity to separate the material and non-material information, such that the non-material information can be expunged.

It is preferable that the petition to expunge be submitted upon filing of the protective order information under seal. If a petition to expunge is not filed prior to, or shortly after (i.e., in time to be addressed before the reexamination proceeding enters the reexamination certificate printing process), the mailing of the NIRC, the materials submitted under MPEP § 724.02 will become a permanent part of the reexamination file and open to the public under 37 CFR 1.11(d). In the event materials have already been made of record by a party, and it is subsequently determined that the materials are protected, the proper petition to submit would be a petition to seal the protected material under 37 CFR 1.182, with the requisite fee.

Finally, practitioners should keep in mind that when such protective order materials are voluminous, as is usually the case, the petitioned review of materiality at the time of NIRC can be time consuming for the Office. Therefore, to avoid delay in printing of the reexamination certificate practitioners should consider seeking a de-designation of such materials via court order, where feasible.

Part II of our discussion on 2282/2686 

Previously, we analyzed Patent Owner compliance with MPEP 2282/2686 in patent reexamination in the wake of Larson Manufacturing Co. of South Dakota, Inc. v. Aluminart Products (Fed. Cir. 2009).  Specifically, the previous post explored the Patent Owner’s duty to notify the Office of concurrent proceedings (2282 for ex parte, 2686 for inter partes).  

In this installment, we explore MPEP 2282/2686 relative to the duty to notify the Office of external proceedings, such as a district court litigation involving the patent at issue.  

For example, 2282 provides: 

Ordinarily, no submissions of any kind by third parties filed after the date of the order are entered into the reexamination or patent file while the reexamination proceeding is pending. However, in order to ensure a complete file, with updated status information regarding prior or concurrent proceedings regarding the patent under reexamination, the Office will, at any time, accept from any parties, for entry into the reexamination file, copies of notices of suits and other proceedings involving the patent and copies of decisions or papers filed in the court from litigations or other proceedings involving the patent. (emphasis added)

The lack of ability to participate in an ongoing ex parte reexamination is deemed a significant drawback by such Third Party Requesters.  Notably, 2282 allows a Third Party Requester to appropriately file materials in an ongoing ex parte reexamination. As such, 2282 is often employed by Third Party Requesters in an attempt to circumvent this prohibition. 

Likewise, even though inter partes reexamination provides for third party participation by statute, such participation is limited to the extent of Patent Owner action (See 37 CFR 1.947).  Thus, Third Parties often seek opportunities to submit additional information via 2686.  In response to these Third Party tactics, the Office has continually refined 2282 & 2686.

The underlined text below has been highlighted to show these refinements as expressed in 2282, the red text reflects the 2006 changes, and the blue the 2008 changes (2686 includes substantially similar changes).  As can be appreciated, the Office is attempting to address ambiguities in the previous language having to do with the content of an appropriate 2282 submission. 

 . . . .However, in order to ensure a complete file, with updated status information regarding prior or concurrent proceedings regarding the patent under reexamination, the Office will, at any time, accept from any parties, for entry into the reexamination file, copies of notices of suits and other proceedings involving the patent and copies of decisions or papers filed in the court from litigations or other proceedings involving the patent. >Such decisions include final court decisions (even if the decision is still appealable), decisions to vacate, decisions to remand, and decisions as to the merits of the patent claims. Non-merit decisions on motions such as for a new venue, a new trial/discovery date, or sanctions will not be entered into the patent file, and will be expunged from the patent file by closing the appropriate paper if they were entered before discovery of their nature. Further, papers filed in the court from litigations or other proceedings involving the patent will not be entered into the record (and will be expunged if already entered) if they provide a party’s arguments, such as a memorandum in support of summary judgment. If the argument has an entry right in the reexamination proceeding, it must be submitted via the vehicle (provision(s) of the rules) that provides for that entry right. It is not required nor is it permitted that parties submit copies of co-pending reexamination proceedings and applications (which copies can be mistaken for a new request/filing); rather, submitters may provide a notice identifying the application/proceeding number and its status. Any submission that is not permitted entry will be returned, expunged, or discarded, at the sole discretion of the Office.< It is to be noted that if the Office, in its sole discretion, deems the volume of the papers filed from litigations or other proceedings to be too extensive/lengthy, the Office may return >, expunge or discard, at its sole discretion,< all or part of the submission. In such an instance, a party may limit the submission in accordance with what is deemed relevant, and resubmit the papers. Persons making such submissions must limit the submissions to the notification, and must not include further arguments or information. Where a submission is not limited to bare notice of the prior or concurrent proceedings (in which a patent undergoing reexamination is or was involved), the submission will be returned by the Office. It is to be understood that highlighting of certain text by underlining, fluorescent marker, etc., goes beyond bare notice of the prior or concurrent proceedings. 

As shown above, the 2006 changes (red) provided the Office discretion in accepting voluminous court filings of Patent Holders or Third Party Requesters. As Patent Holder’s in a concurrent proceeding must file significant amounts of discovery and pleadings to comply with their duty of disclosure, candor and good faith, this change seems to provide the Office some relief in discouraging voluminous filings.  

The last portion of red text is the first attempt to address inappropriate filings of Third Party Requesters.  The blue text, as discussed next, is a further attempt to address the same improper behavior by refining the meaning of decisions. 

Improper behavior relative to 2282/2686 is most often found in reexaminations involved in concurrent district court proceedings.  In such cases, the Third Party defendant will unilaterally create a court filing commenting on the reexamination. The court filing essentially rebuts a recent reexamination response of the Patent Owner. Thereafter, the Third Party simply files the paper under the auspices of 2282/2686 with the Office.  Such tactics have recently played out in several district court disputes. 

As can be appreciated from the 2008 changes noted above, submissions made for the purpose of infusing something other than bare notice, such as third party argumentation, are inconsistent with MPEP 2282/2686 (as published in July of 2008).  

In a recent district court case such tactics were characterized as: 

. . . counsel appears to be walking the line between aggressive advocacy and strategic exploitation/manipulation of the PTO’s rules and this Court’s docket.   

While this practice may be viewed as “walking the line” with respect to protective order issues of a district court, in view of the above changes to 2282/2686, and ethical guidelines relating to papers filed for improper purposes with the PTO, it would be wise to avoid tempting the Office of Enrollment and Discipline in this regard.

Is it Possible to Comply with Larson Manufacturing?

Two weeks ago, we discussed the merger of concurrent post grant proceedings relating to the same patent at the USPTO.  In addition to concurrent proceedings of a same patent, it is also quite common for entire portfolios of a Patent Owner to be subject to reexamination.  In such cases, the reexamination of different patents (including direct continuations of one another) are not merged.  Likewise, there may also be ongoing continuation patent application examination (i.e., patent applications claiming subject matter directed to the same invention in applicant’s earlier filed patent and meeting the conditions of section 120 of the patent statutes) being examined concurrently with the parent patent in reexamination.  However, reexamination proceedings are not merged with non-reissue application examination.

In such concurrent proceeding situations, what are the obligations of the Patent Owner in satisfying the duties of disclosure, candor and good faith?

The later situation noted above was very recently analyzed in Larson Manufacturing Co. of South Dakota, Inc. v. Aluminart Products (Fed. Cir 2009).  In Larson, the court found that certain Office Actions in an ongoing continuation patent application examination, which were not cited during a concurrently prosecuted reexamination of a related patent, were material information required to be cited in the reexamination proceeding.  The Federal Circuit remanded the case for a determination on intent before arriving at a conclusion of whether inequitable conduct was committed by the attorney representing the patent owner in the reexamination proceedings.

In arriving at the determination of materiality, the court cited the Examiner of the continuation application’s opinions in the Office Actions with respect to the applicability of the prior art common to both proceedings as being information that was inconsistent with or refuted the position that the patent owner was arguing for the patentability of substantially similar claims in the reexamination proceedings, relying upon the holding of Dayco Products See Dayco Prod., Inc. v. Total Containment, Inc., 329 F.3d 1358, 1365-69, 66 USPQ2d 1801, 1806-08 (Fed. Cir. 2003) (contrary decision of another examiner reviewing substantially similar claims is ‘material’); See Also MPEP 2004 (note 9).

Based on the Larson holding, it is clear that the lack of citation of Office Actions of a related patent application examination in a reexamination proceeding may satisfy the materiality requirement of an inequitable conduct allegation.  When handling a reexamination proceeding for a patent owner, the obvious solution to this problem is to provide the Office Actions of pending continuation patent applications to the Office.  Yet, in 2008, prior to the Larson holding, MPEP § 2282 (for ex parte reexaminations) and MPEP § 2686 (for inter partes reexamination) were amended to provide apparently contradictory guidance:

. . .It is not required nor is it permitted that parties submit copies of copending reexamination proceedings and applications (which copies can be mistaken for a new request/filing); rather, submitters may provide a notice identifying the application/proceeding number and its status. (emphasis added)

Based on this language, the Office has published guidance, prior to Larson, that is now inconsistent with the direction provided by the Federal Circuit.  The Larson holding did not address whether mere citation of the continuation application by patent application number and status would have sufficed.  Yet, in view of Dayco, it is likely that the inequitable conduct charge would have been made by the accused infringer nevertheless.  As such, the current language of MPEP § 2282/2686 appears to place practitioners in an ethical quandary when trying to comply with the duty of disclosure and the conditions set forth in this MPEP section.

Part II of this series will be presented next week and analyze Third Party Considerations in view of § 2282/2686, namely, the evolution of these sections in view of abusive third party tactics.