Day Long Webcast February 3, 2012

Last call for Friday’s CLE program entitled “Post-Grant Proceedings 2012 – The New Patent Litigation.”  This year, while currently available post grant proceedings will certainly be covered, the program will focus on the many changes of the AIA, how these proceedings will impact patent litigation, and the progress of the USPTO rule making and implementation efforts. 

Scheduled Speakers include:

-Chief Judge James D. Smith of the Board of Patent Appeals & Interferences (soon to be Patent Trial & Appeal Board (PTAB)). Judge Smith will provide an update on the implementation and rule making efforts necessary to transform the BPAI into the PTAB.

-Director of the Central Reexamination Unit (CRU), Ms. Irem Yucel will also participate in a panel discussion with Judge Smith to provide an update on the efforts of the CRU to adapt to the changes of the AIA and where this unit will fit into the USPTO equation going forward.

-Director of the Office of Patent Legal Administration (OPLA), Brian Hanlon will provide an update on reexamination practice and petition handling, and other aspects of OPLA efforts to implement the post grant aspects of the AIA.

For more information on this program, including how to attend in person (New York) or to register for the webcast, please visit the PLI information page (here)

When faced with the assertion of a patent of dubious validity, prospective defendants increasingly resort to patent patent reexamination. Once a suit is filed, the opportunity to obtain a stay of an ongoing district court infringement action pending a parallel patent reexamination is a major benefit of the USPTO proceeding. Courts have the inherent power to manage their dockets, including the authority to stay patent infringement litigation pending the conclusion of a USPTO patent reexamination. A stay of the court proceeding enables defendants to halt, or altogether avoid cost prohibitive litigation discovery, which can be rather lengthy and painful.

For this reason, patent reexamination parallel to a district court is often initiated in an attempt to stay the more cost prohibitive court proceeding. In deciding whether or not to stay the court proceeding the courts look to many factors. (See factor based analysis here) 

If the Court proceeding is not stayed, both proceeding will proceed on parallel tracks. Should the Court proceeding continue on to the CAFC, can you try to persuade the appellate court to stay the proceeding pending the outcome of the reexamination?

This situation was considered by the CAFC yesterday in Synqor Inc., v. Artesyn Technologies Inc., et al. At issue in the appeal are five patents relating to power converter circuitry. While the suit has been pending, inter partes patent reexaminations were initiated by the defendants at the USPTO. While the court upheld the validity of the patents, to date, the reexaminations proceedings have been quite unfavorable to the Patent Holder.

In considering whether or not to stay the appeal, the CAFC explained:

The power of the Court to stay proceedings is incidental to its inherent power to control the disposition of the cases on its docket. See Landis v. North Am. Co., 299 U.S. 248, 254 (1936). Here, we cannot say the appellants have shown that staying proceedings for such a lengthy period of time is warranted. [Defendants] reliance on this court’s decision in Standard Havens Prpds., Inc. v. Gencor Indus., 996 F.2d 1236 (Fed. Cir. 1993) to support a contrary conclusion is unpersuasive.

This court in Standard Havens directed the district court to stay its damages proceedings until the PTO reexamination proceeding became final. In that case, the PTO’s proceedings were complete and the decision of the BPAI was on appeal before another district court. Here, however, the court is being asked to stay proceedings at the relative end of the litigation process pending a lengthy administrative process that even the appellants predict will take at least 10-14 months to complete. Under these circumstances, we deem it appropriate to deny the motions to stay.

Going forward, with the accelerated schedule of Inter Partes Review & Post Grant Review (12-18 months in total), the ability to stay court procedings pending USPTO proceedings is likely to be greatly enhanced.

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.

USPTO Fee Structure to Discourage Conduct?

It is expected that the rules to implement post-grant review (PGR), inter partes review (IPR) and transitional business methods post-grant review (TBMP) proceedings will be printed in the Federal Register this coming Tuesday. Included in the new rules will be the filing fees associated with these new proceedings. By statute these filing fees must be set to recover the average actual costs to the USPTO to conduct these proceedings.

As demonstrated in last week’s rule package for supplemental examination, the average aggregate cost can be significantly higher than present fee levels. The proposed rules issued last week set a fee of $ 5,180 to request supplemental examination and another $16,000 for the resulting ex parte reexamination should the supplemental examination request raise a substantial new question of patentability (SNQ). It is expected that Tuesday’s rule package for PGR, IPR and TBMP will set fee levels in excess of $ 40,000. But, such fee levels may have an unfortunate chilling effect on those interested in using these new post grant patent proceedings.

Interestingly, in February 2012, the USPTO will be publishing proposed rules for adjusting all of its fees under its new fee setting authority set forth in the America Invents Act (AIA). The new USPTO fee setting authority will permit the USPTO to revise the fees set by Congress under 35 U.S.C. §§ 41 (a) and (b) based on the aggregate costs of funding the USPTO. This will permit the USPTO to incentivize and disencentivize applicant, patent owner and third party behavior by setting the fees at low or high levels to encourage certain activities while discouraging others. For example, filing, issue and first stage maintenance fees may be set low to encourage innovation while excess claim, extension of time, continuation application, and second stage and third stage maintenance fees may be set higher to subsidize the costs of patent examination. However, if the USPTO were to set at punitive rates fees for requests for continued examination (RCE) and appeals, this will be not received favorably by the patent user community. RCE and appeals are not activities that applicants relish. If these are necessary to pursue because of poor patent examination it would be unjust to force applicants to pay excessive fees to achieve justice when the patents should have been granted at an earlier stage of examination.

Correction of improvidently issued patents by post grant proceedings is in the public’s interest. Therefore, if the USPTO were to impose excessively high fees to request ex parte reexamination, IPR, PGR and TBMP, such will be inconsistent with sound public policy. Ideally, if these patents should have not have issued, then the maintenance fees paid by the patent owners who have benefited by obtaining defective patents should be used to subsidize the costs of the proceedings. It is especially unfair for third parties adversely affected by such patents to have to pay the full costs of their correction. It is hoped that when the USPTO does its fee redesign in February that they will correct the problem created by Congress by resetting these post-grant patent proceedings fees at lower rates to increase participation rates to desired levels.

Finally, the patent user community is concerned that the new proposed rules for adjusting fees will be boosted above the 15% surcharge rate effective in September 2011 to build a revolving reserve fund above the collections level needed to achieve Congressional budget levels assigned by Congress. If fees collected exceed appropriation levels then they become subject to fee diversion by Congress. Until the fee diversion problem is resolved the patent user community will remain skittish about the money infused into a revolving fund with a future hope, but no guarantee, that the USPTO will have full access to the fees.

Today, by Federal Register Notice (here), the USPTO has scheduled public hearings on fee setting with the Patent Public Advisory Committee (PPAC). Interested members of the public may present their views and comments by coordinating in advance with the Office.

Yesterday, the USPTO issued a Notice of Proposed Rule Making to outline the procedures for conducting supplemental examination (here). (See the earlier discussion on the related changes to patent reexamination fees provided by this Notice).

As a reminder, the America Invents Act provided supplemental examination (SE) as a mechanism to cure inequitable conduct before the USPTO. Upon submission of SNQs that explain potential issues for supplemental examination, the Office may initiate a type of “re-examination” that follows the procedures for ex parte patent reexamination with some modification. In essence this proceeding was based on a “but for” theory later adopted in Therasense.

In addition to proposing a steep price to initiate SE and conduct the related reexamination proceeding, (roughly $22K) the Office has outlined the rules for conducting supplemental examination.

Notable provisions are as follows:

-A request for SE is limited to a maximum of 10 “items of information.” (additional filings may be pursued in parallel)

-Only the owner of a patent may pursue SE.

-The Office will consider SE requests within 90 days of submission in the same manner as patent reexamination.

-A mapping of means or step-plus-function claims relative to the patent specification for any such claim to be examined.

-A mapping of specification support for claims called into question by the presentation of a 112 or 101 based SNQ.

-Explanation of documents, and transcripts of any audio/vide0 submissions are required. (SE is not limited to patents or printed publications).

-No amendments or interviews are permitted in SE. (i.e., within first 90 days of filing)

-The SE proceeding concludes with a determination that an SNQ exists, or not. Should an SNQ be identified, ex parte patent reexamination is conducted in the usual manner with the exception that there is no Patent Owner Statement permitted and the  proceeding will not be limited to patents and printed publications.

Curiously, the Notice predicts that all owner initiated ex parte patent reexamination filings will be filed as SE requests going forward. The thinking being that the added benefit of inequitable conduct protection will be a driving force for filers. However, after Therasense, and in view of the fact that SE is not limited to patents and printed publications, and in some respects requires much more detail as to claim mappings, etc., this prediction seems more than a bit optimistic.

Although not outlined in the Notice, the Office has stated publicly that SE will be conducted by the examiners of the Central Reexamination Unit (CRU).

For more information on this topic as well as ethical implications, I will be guest speaking together with Professor Lisa Dolak on February 14th. (Strafford Legal Webinar, register here)

As mentioned on Monday, the proposed rule package for supplemental examination is expected this week; in fact, it will publish tomorrow. In addition to the expected rule package on the new supplemental examination proceeding, the USPTO has included proposed revisions to existing patent reexamination fees.

The existing fee for requesting ex parte patent reexamination is $2520. The Notice proposes to raise this fee, to account for actual agency costs for conducting the proceeding, to a whopping $17,750. The notice also raises the fees for filing a petition (using the same justification) in either ex parte or inter partes patent reexamination to $1932. This new fee will apply to any petition filed under Rules 181,182, or 183. (The petition fee increase excludes extensions of time and some other minor petitions). Current fees are on the order of $200-$400. It may be that the increase in petition fees will help reign in the abusive practices currently plaguing the Office.

Certainly the Office should raise reexamination fees as they are presently quite low, but the jump to the proposed levels, especially as it relates to the hefty request fees, is unlikely to be received very favorably by the public.

The fee for filing a request for supplemental examination, and the corresponding reexamination that follows will cost filers. $21,296 ($5,180 for the request and $16,116 for the reexamination, if instituted). The Office is also charging extra for the review of documents that exceed 20 and 50 pages; an extra $166 for the former and $282 for the latter.

As I mentioned months back, the rumored cost of Inter Partes Review and Post Grant Review is upward of $48K per filing. Looking at these revisions to patent reexamination filing fees, one can expect higher fees for these more labor intensive office proceedings.

Tomorrow’s Federal Register will detail these fee changes and the rules for supplemental examination. Attached is a copy of the rules that will publish tomorrow (here)…more thoughts tomorrow.

]]> http://www.patentspostgrant.com/lang/en/2012/01/uspto-proposes-400-600-increase-in-patent-reexamination-fees/feed 0 http://www.patentspostgrant.com/lang/en/2012/01/post-grant-buzz-winter-2012 http://www.patentspostgrant.com/lang/en/2012/01/post-grant-buzz-winter-2012#comments Mon, 23 Jan 2012 18:53:49 +0000 Scott A. McKeown http://www.patentspostgrant.com/?p=7972 Winter 2012 – New Rules

Early 2012 is shaping up to be an exciting time for patent law, particularly for those focused on post grant patent practice.

USPTO–As to the new rule packages necessary to implement the new post grant mechanisms of the America Invents Act (AIA), it is rumored that the supplemental examination rules will issue this week. Due to an administrative delay with the Office of Management & Budget (OMB), the more extensive IPR and PGR rule packages are expected to publish next week. Earlier this month, some less extensive rules packages issued on patent reissue oath practice and changes to ex part patent reexamination practice.

CAFC– The court has agreed to reconsider Marine Polymer Technologies, Inc. v. HemCon, Inc. (here) en banc. As a reminder, this case considers 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 Patentee disclaimer. (earlier post here)

The court also has yet to issue a decision in In re Staats, which presents the USPTO theory that continuation filings in a broadening patent reissue must relate to a broadening that was foreseeable as presented in the original oath.

There is much to look forward to in the weeks to come.

One purpose for introducing evidence of an ongoing patent reexamination in a parallel litigation is to avoid a post filing (i.e., complaint) willfulness determination. The existence of an ongoing patent reexamination may be admitted to demonstrate that the accused infringer was not objectively reckless in its actions irrespective of its prior knowledge of the asserted patent.

Some courts have found that reexamination evidence defeats a finding of willfulness, these courts typically examine the status of the claims in the reexamination proceeding at the time of the willfulness determination, finding that the weight of the reexamination evidence depends on whether the reexamination proceedings are complete and whether the patent claims have undergone substantive changes in reexamination. When seeking introduction of such evidence, depending upon the court, the stage of the parallel litigation (Summary Judgment, JMOL, Pre-Trial Motions) may determine whether or not it is admissible.

In recent years, courts have been reluctant to admit evidence of an ongoing patent reexamiantion at trial. This is because the presumption of validity may be undermined by communicating to the factfinder(s) that the USPTO has changed their mind. This trend is especially prominent in plantiff forums such as Texas. 

Last week, in Imaginal Systematic, LLC v. Leggett & Platt, Inc., et. al., (CACD), the California court expressed a different perspective:

Plaintiff’s Motion in Limine No. 3 seeks an order excluding any evidence relating to the inter partes reexamination proceedings. Plaintiff contends that this evidence is irrelevant and unfairly prejudicial. To the extent the evidence is offered to refute willful infringement allegations, the Court disagrees with Plaintiff’s argument. The evidence relating to the reexamination involves more than the mere fact that the U.S. PTO is reexamining the patents-in-suit. Rather, the evidence includes the fact that the proceedings have reached a stage where U.S. PTO has made findings as to the validity of the subject claims. These findings are directly relevant to whether there was an objectively high likelihood that the patents-in-suit were valid.

As is always the case with patent reexamination and parallel litigation, depending upon the court, your mileage may vary.

Post Grant Practice CLE

Today the AIPLA continues their multi-part web series on the America Invents Act (AIA). In the latest installment, the new post grant mechanisms of the AIA will be explored. The program is entitled Post-Issuance Activities and Enforcement Activities Under the America Invents Act.

Registration info is found (here)

For additional CLE credit in 2012, consider the following programs:

Post Grant Proceedings 2012 — The New Patent Litigation Practicing Law Institute, February 3, 2012 (NYC & Webinar)

Salvaging Patents with New Supplemental Examination Strafford Legal February 14th (Webinar)

USPTO Procedures Under the America Invents Act American Conference Institute March 26-27th (NYC & Webinar)

As anyone that has ever filed a patent reissue can attest, the inconsistent application of oath requirements can be maddening. In fact, the vast majority of patent reissue applications are delayed due to such informalities —aggravating an already significant problem.

As the America Invents Act has required that the “deceptive intent” component of patent reissue oaths be stricken, the USPTO has taken the opportunity to fix a few other problems while they were under the hood. Last Friday, a Notice of Proposed Rule making entitled “Changes To Implement the Inventor’s Oath or Declaration Provisions of the Leahy-Smith America Invents Act.” (here)

Major Changes, include:

(1) Delete the requirement for a reissue oath or declaration to include a statement that all errors arose without any deceptive intent on the part of the applicant;

(2) Eliminate the requirement for a supplemental oath or declaration when a claim is amended, and require a corrected oath or declaration only where all errors previously identified in the reissue oath or declaration are no longer being relied upon as the basis for reissue;

(3) Require applicants to specifically identify any broadening of a patent claim, rather than merely provide an alternative statement that applicant is correcting an error of either claiming more or less than a patentee was entitled to claim;

(4) Clarify that a single claim containing both a broadening and a narrowing of the claimed invention is to be treated as a broadening. These changes will provide for more efficient processing of reissue applications and improve the quality of patents, in accordance with the intent of the Leahy-Smith America Invents Act.

(5) In order to implement the conforming amendment made to 35 U.S.C. 251 in Section 4(b)(2) of the Leahy-Smith America Invents Act, the Office is also proposing to amend the rules to permit an assignee of the entire interest who filed an application under 35 U.S.C. 118 that was patented to sign the reissue oath or declaration in a reissue application of such patent (even if the reissue application is a broadening reissue).

(6) Liberalize the use of duplicate oaths in continuation reissue applications.

Additional rules packages detailing procedures for implementing IPR and PGR are expected next week.