In re Tanaka Decision Likely to Drive Two-Part Supplemental Examination Filing Strategy

During yesterday’s Strafford Legal webinar on the topic, I explained that Supplemental Examination (SE) is a mechanism of the AIA that is designed to effectively cure inequitable conduct via a new post grant proceeding of the USPTO. This mechanism, effective September 16, 2012 will be available to all issued patents.

In operation, SE allows a Patentee to submit very detailed explanations of potential issues that may serve to render the patent invalid under an inequitable conduct theory in litigation. Upon submission of Substantial New Questions of patentability (SNQs) detailing such potential defects, the Office will reconsider or correct such information; that is to say the Office will perform a “supplemental examination.”

If the SNQs of an SE request do not rise to the appropriate level to justify further proceedings, an SE certificate is issued stating such, and the proceeding concludes. Likewise, should SNQs be identified in the request for SE, a certificate is issued identifying such. Thereafter, a modified form of “re-examination” is initiated by the Office to explore the SNQs presented in the request. Should the Office determine that the identified SNQs do not preclude patentability in the reexamination phase, a reexamination certificate is issued to complement the SE certificate. Thus, SE is modeled on the same “but for” materiality standard pronounced in Therasense.

At first blush, the option to cure potential inequitable conduct issues seems an attractive option for Patentees. Yet, practically speaking, there may be very few instances in which an SE filing is advisable.

First, the level of detail required to present an SNQ in an SE request is significant, unlike other post grant options— such as patent reissue. The CAFC’s decision in Tanaka may present a more appealing option for those seeking to correct all but the most pronounced inequitable conduct problems.

Consistent with Tanaka, a patent reissue application can be pursued based upon the simple addition of new dependent claims. Thereafter, IDS filings can be submitted for many of the same SNQs that would otherwise be presented in a request for SE. Perhaps most importantly, there would be no need to explain these issues with the same detail as required by the SE rules. After considering such IDS filings, should the Office allow the claims without amendment “but for” materiality is disproven. In other words, inequitable conduct on such issues is for all practical purposes cured by operation of the patent reissue. On the other hand, if it becomes apparent that amendment is required (thus proving “but for” materiality), the Patentee can simply abandon the reissue filing and pursue the more detailed, and much more expensive, SE filing.

Second, as mentioned above, the cost of the SE filing is significant.

As outlined in January’s rule package for supplemental examination, a filing fee of $ 5,180 is necessary 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). Conversely, the filing fees for patent reissue are currently set at a fraction of the cost of an SE filing.

Moreover, the SNQ standard applied in SE is a very low hurdle (over 94% of SNQs are accepted by the Office in ex parte patent reexamination filings.) On the other hand, the prima facie standard necessary for a first action is considerably higher. As such, it is not that uncommon in current ex parte patent reexaminations proceedings for the Office to grant an SNQ, then promptly issue a first action confirmation of the claims. Under the SE cost structure, a Patentee would be paying $16,000 for a determination that may be seemingly made for several hundred dollars via a patent reissue IDS filing.

Third, calling out practitioner conduct is fraught with peril.

It seems extremely unwise for a law firm to pursue SE for issues arising from it’s earlier prosecution representation as they must detail such issues in an SNQ format. Depending upon the circumstances, the request itself could serve as a road map for a malpractice charge. Likewise, filing a request and calling out the conduct of a competitor, in a public filing, may be equally unwise.

The USPTO has predicted roughly 100 SE fillings per year based upon current Patentee initiated ex parte patent reexamination filings (the thinking being SE offers the same advantages with additional benefits). Yet, SE filings are expected to be few and far between. For those that are pursued, testing the waters first via patent reissue would seem to be a prudent strategy.