arrow-pointing-two-directions-400x400Different standards lead to different results in patent reexamination and district court litigation

During district court patent infringement litigation between Baxter and Fresenius, Fresenius requested reexamination of Baxter’s patents relating to hemodialysis machines with touch screen  interfaces. At trial, the jury returned a verdict finding the patents invalid. However, the trial judge overturned the jury’s verdict. Fresenius then appealed the decision to the Federal Circuit.

The Federal Circuit  overruled the trial judge on one of the patents-in-suit, finding that substantial evidence supported the jury’s finding of obviousness. On another patent-in-suit, the Federal Circuit sided with Baxter that Fresenius had not proven patent claim invalidity by clear and convincing evidence.

In the reexamination proceeding on a third patent-in-suit, the USPTO finally rejected the patent claims forcing  Baxter to file an appeal to the BPAI. In its decision, the BPAI held:

“Although [the claims at issue] were not proven invalid in court, a lower standard of proof and the broadest reasonable interpretation standard of claim construction apply at the PTO and therefore the agency is not bound by the court’s determination. Ethicon v. Quigg, 849 F.2d 1422, 1429 (Fed.Cir. 1988) (“[T]he Board and the courts take different approaches in determining invalidity and on the same evidence could quite correctly come to different conclusions.”); In re Swanson, 540 F.3d 1368, 1377 (Fed. Cir.2008) (explaining the different standards of proof and claim construction used in reexamination relative to civil litigation in district court).

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[H]ere, Appellant has urged in the present appeal that we should defer to the district court’s ruling because “[a]part from the Thompson reference, the evidence here is the same as that examined by the District Court” . . . Because Appellant has repeatedly relied on the district court proceeding in support of nonobviousness, we discern no unfairness in subjecting Appellant to any adverse consequence that may arise from such reliance in the current reexamination, which is conducted under the preponderance of the evidence standard – a standard that is substantially lower than the clear and convincing standard used in district court.

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On this record, we conclude that there is no error in the Examiner’s factual findings and conclusions that a person of ordinary skill in the art would have been prompted to couple a touch screen user/machine interface with a hemodialysis machine in view of the collective teachings of the prior art references.”

This informative opinion is not surprising.  In reexamination of a patent that has not expired, the claims of the patent enjoy no statutory presumption of validity.  Claims are given their broadest reasonable interpretation in light of and consistent with the patent’s supporting written description.  The burden of proof is a preponderance of evidence standard to establish unpatentability, rather than the clear and convincing evidence standard applied by the courts.  Because the USPTO was not a party to the district court litigation they were not estopped by issue preclusion from reaching a decision inconsistent with the district court’s validity determination.