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Stay of Parallel Litigation Denied Due to Lack of Estoppel?When implementing a patent reexamination strategy, a threshold determination is whether or not to initiate ex parte or inter partes patent reexamination, or both. This decision is very straight forward for older patents (i.e., those patents that did not mature from an application filed on or after November 29, 1999). This is because applications filed prior to the 1999 date are not eligible for inter partes patent reexamination.Yet, as the years progress, fewer and fewer patents are outside of the inter partes date provision. So, where both options are available, which is the better option?Like most legal inquiries, the answer is “it depends.” For those seeking a stay of a parallel litigation, the answer will vary in accordance with the practice of the presiding judge.As detailed previously, a Nevada judge found that ex parte patent reexamination pendency is controlled by the Patentee, and determined that a stay is appropriate. The judge reasoned that any potential delays in the ex parte proceeding could be controlled by the Patentee.Last week, in eComSystems Inc., v. Shared Marketing Sevices Inc., and Ace Hardware Corp (MDFL), the judge found that the potential for an ex parte patent reexamination to simplify issues for trial was limited compared to inter partes patent reexamination. The judge explained that estoppel provisions of inter partes patent reexamination would prevent a defendant from arguing the same art in the parallel litigation.Inter partes reexaminations provide a third party the right to participate in the reexamination process and, thus, have a res judicata effect on the third party requester in any subsequent or concurrent civil action. See 35 U.S.C. §§ 314-315. . . .. Ex parte reexaminations, on the other hand, do not bar the requestor from relitigating the exact same issues in district court.Accordingly, the Court does not find that judicial economy will be served by a stay because the pending ex parte reexaminations of the patents-in-suit would still leave Shared Marketing and Ace free to relitigate the exact same issues before this Court.In this case, the patents were subject to inter partes patent reexamination; yet the defendants opted for the lower risk, ex parte option. While the Order is silent as to the perceived  gamesmanship of this choice, the decision may be more about this choice then the loss of estoppel. Indeed, as pointed out by the judge, even had estoppel applied, patent reexamination will not defeat all invalidity defenses (e.g., public use, on-sale bar, inequitable conduct).This case was brought to my attention by the great Docket Navigator.

When implementing a patent reexamination strategy, a threshold determination is whether or not to initiate ex parte or inter partes patent reexamination, or both. This decision is very straight forward for older patents (i.e., those patents that did not mature from an application filed on or after November 29, 1999). This is because applications filed prior to the 1999 date are not eligible for inter partes patent reexamination.

Yet, as the years progress, fewer and fewer patents are outside of the inter partes date provision. So, where both options are available, which is the better option?

Like most legal inquiries, the answer is “it depends.” For those seeking a stay of a parallel litigation, the answer will vary in accordance with the practice of the presiding judge.…

Continue Reading Choosing Between Ex Parte & Inter Partes Patent Reexamination

Unreasonable to Extend Claim Scope to Described Prior ArtPerhaps mindful of the last patent reexamination appeal that related to flooring technology, yesterday the BPAI reversed an Examiner claim construction as unreasonable. As a reminder, claims in patent reexamination are accorded a broadest reasonable interpretation (BRI) consistent with the specification, from the perspective of one of skill in the art. In re Yamamoto, 740 F.2d 1569, 222 USPQ 934 (Fed. Cir. 1984).Since the Suitco decision, (linked above), the Office has been making more of an effort to ensure that claims are not broadened to a point of inconsistency with the specification. There is a delicate balance between incorporating limitations from the specification to the claims, and reading claims consistent with the specification. Yesterday’s decision, illustrates one helpful constraint on BRI, namely, clear disavowal of the patent specification.The decision, ex parte Jorgen J. Muller Jr., (here) revolved around an injection molded floor panel. Specifically, the claims were directed to structure of the panel that helped eliminate undesirable “sink marks” of the tile that otherwise form when the tiles are curing. In this regard, the claims recited an area defined by each of the one or more structures is contained within and positioned directly above an area defined by the one or more support members.A figure of the patent is reproduced below showing the area defined by the support members.The area defined by the upper structures 220 are entirely contained within, and aligned with, an area defined by the lower support members 215 and 217.Yet, the Examiner interpreted the limitation, “an area” of the structure is “contained within” an area defined by the support member, as requiring that only a part of the structure be contained within the support member. Thus, the Examiner interpreted the claim to permit the top structures to extend outside the area of the bottom support members.The Board noted that the Examiner interpretation was inconsistent with the specification, and therfore, unreasonable as clearly embracing the prior art discussed in the specification of the patent. The prior art discussed as suffering from the “sink mark” problem was illustrated in the patent as Fig. 3B below.The Board noted that, with regard to Fig. 3B:[T]he Examiner’s interpretation of the disputed limitation corresponds to the configuration of the prior art tile depicted in Figure 3. This configuration is discussed above as resulting in sink marks. It is not reasonable to read the claims as reading on a prior art configuration which was expressly addressed and remedied by the ‘592 patent.The Board then continued to explain that one of skill in the art would understand the claimed area to be within the vertical alignment of the structures and support members.There are few bright lines in interpreting claims under the BRI standard. However, one seems to be that any interpreation embracing disavowed claim scope of a patent specification is unreasonab

Perhaps mindful of the last patent reexamination appeal that related to flooring technology, yesterday the BPAI reversed an Examiner claim construction as unreasonable. As a reminder, claims in patent reexamination are accorded a broadest reasonable interpretation (BRI) consistent with the specification, from the perspective of one of skill in the art. In re Yamamoto, 740 F.2d 1569, 222 USPQ 934 (Fed. Cir. 1984).

Since the Suitco decision, (linked above), the Office has been making more of an effort to ensure that claims are not broadened to a point of inconsistency with the specification. There is a delicate balance between incorporating limitations from the specification to the claims, and reading claims consistent with the specification. Yesterday’s decision, illustrates one helpful constraint on BRI, namely, clear disavowal of the patent specification.
Continue Reading Specification Disavowal Limits Claim Scope in Patent Reexamination

Timing of Post Filing Conduct Deemed Crucial

As discussed previously, one purpose for seeking patent reexamination parallel to 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.

As Fairchild semiconductor learned the past week, it is probably best not to wait 5 years into a litigation and after a jury trial to showcase that objectively reasonable behavior.
Continue Reading Patent Reexamination After an Adverse Jury Verdict

First CAFC Review of Inter Partes Patent ReexaminationIn inter partes reexamination 95/000,034,Vanguard Identification Systems Inc., v Bank of America Corporation, the BPAI reversed the examiners obviousness rejection, emphasizing the difference between a proper obviousness determination for design and utility patents. (previous discussion here) The BPAI determined that the prior art reference of record did not show a data card containing any type of aperture, but secondary references did.  Nevertheless, the BPAI determiend that it would not be obvious to modify the primary references to include one of the circular apertures of the secondary references.  The Board explained that obviousness of a design patent requires an analysis of whether the design would have been obvious to a designer of ordinary skill who designs articles of the type involved and that there must be a reference, a something in existence, the design characteristics of which are basically the same as the claimed design in order to support a holding of obviousness.  Vanguard then took the fight on to the CAFC in Vanguard Identification Systems Inc. v. David J. Kappos et al.Unfortunately for Vanguard, the reversal of the BPAI was affirmed without comment (Rule 36, here). Clearly, that not all inter partes patent reexaminations end in defeat for Patentees. Interestingly, this is the first inter partes patent reexamination to make it through the full process (i.e., from initial filing to CAFC appeal) some 11 years after enactment of the inter partes patent reexamination statutes. Also interesting in that the USPTO was supporting the patentability determination here, as opposed to their usual ro

In inter partes reexamination 95/000,034,Vanguard Identification Systems Inc., v Bank of America Corporation, the BPAI reversed the examiners obviousness rejection, emphasizing the difference between a proper obviousness determination for design and utility patents. (previous discussion here) 

The BPAI determined that the prior art reference of record did not show a data card containing any type of aperture, but secondary references did.  Nevertheless, the BPAI determiend that it would not be obvious to modify the primary references to include one of the circular apertures of the secondary references.  …
Continue Reading Hole in Patent Reexamination Strategy Leads to CAFC Defeat

                                                                                                                          Inter Partes SNQs Outpace Ex Parte 2:1 

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Looking back on 2010 patent reexamination filings, the mean number of Substantial New Questions of Patentability (SNQs) presented differs based upon the type of reexamination proceeding.  For ex parte patent reexamination, the mean value is 8.7 SNQs per request, for inter partes patent reexamination the number is 17.3 SNQs per request. The median values are 6 for ex parte patent reexaminations and 11 for inter partes patent reexamination. Of course, these numbers are unlikely to surprise most practitioners.

For example, ex parte patent reexamination may be requested by a patent owner. In such situations there is certainly little motivation to bury the USPTO in reasoned statements to undermine patentability (IDS filings are another issue altogether). More importantly, requesters of ex parte patent reexamination are not bound by the estoppel provisions of inter partes patent reexamination.
Continue Reading SNQ Rates in Patent Reexamination

Senate Judiciary Committee Releases BillAs I discussed earlier this week, the patent reform debate will begin anew in a matter of days. Today, a bipartisan group of Senators announced their intention to introduce new patent reform legislation when the Senate returns to session next week. The first bill to be introduced on Tuesday (found here),

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Golf Ball Brawl Heard at BPAIYesterday, the Board of Patent Appeals & Interferences (BPAI) heard oral arguments in the longstanding dispute between Callaway Golf and Acushnet. Acushnet is the parent company of Titleist, maker of the ProV1 family of golf balls. Callaway asserts that the ProV1 balls infringe several of their patents (6,210,293, 6,503,156, 6,506,130, 6,595,873)In 2006, Acushnet sought inter partes patent reexamination of the Callaway patents. To date, all claims of the Callaway patents were rejected by the USPTO. These rejections were considered by the Board yesterday.In the co-pending litigation the patents were also found invalid. (March 2010 D.Del). Interestingly, despite a 1996 contractual agreement between the companies that mandated all proceedings be conducted in the Delaware court, Acushnet sought patent reexamination at the USPTO anyway. Late last week, the court reinstated a decision determining that the pursuit of patent reexamination by Acushnet was a breach of the contract. As a result of that decision (here) Callaway feverishly petitioned to delay the Board hearing, arguing that the Board should not help Acushnet break their contractual obligations; not surprisingly, the Board declined that invitation.So, yesterday, the Board learned all about Acushnet, a company known for their balls.The majority of the debate related to whether or not a certain hardness range recited in the claims referred to a characteristic of the material, used to construct the ball, or the ball itself. Callaway argued that the claims were directed to a ball, not ingredients. It was also argued that since a Markman Order on the meaning of the claim terms had been considered by the BPAI that this claim interpretation should be controlling on the USPTO. Callaway also referenced secondary indicia of non-obviousness that pointed to the sales success of the ProV1 golf balls.Callaway emphasized to the Board that the claims reciting a polyurethane embodiment were of primary importance. When prompted by the Board as to whether or not Callaway was intending to waive the claims not including this feature, Callaway agreed to waive those claims on the spot. I am guessing the Board probably would have preferred that happen before reading all of the briefs and associated examiner positions.  Strange.In rebuttal, Acushnet explained that the specifications of the patents were broad enough to cover a ball hardness interpretation and an ingredient hardness interpretation, thus the PTO was correct in rejecting the claims. Acushnet then explained that they (Titleist) sell more balls than anyone else because they are the market leader and that the Callaway evidence of secondary considerations had no meaningful nexus to the patented claims.The dispute will inevitably head on to the CAFC no matter the decision of the Board. If the claims ultimately fall at the CAFC (my guess), I will be very interested in the outcome of the breach of contract issue. Can Acushent really breach the contract in view of CAFC indications that a patent is “void ab initio” when found unpatentable as a result of reexamination. Standard Havens Products Inc. v. Gencor Industries Inc., 996 F.2d 1236 (Fed. Cir. 1993) (per curiam). In other words, if the patent never existed….what about that contra

Yesterday, the Board of Patent Appeals & Interferences (BPAI) heard oral arguments in the longstanding dispute between Callaway Golf and Acushnet. Acushnet is the parent company of Titleist, maker of the ProV1 family of golf balls. Callaway asserts that the ProV1 balls infringe several of their patents (6,210,293, 6,503,156, 6,506,130, 6,595,873)

In 2006, Acushnet sought inter partes patent reexamination of the Callaway patents. To date, all claims of the Callaway patents were rejected by the USPTO. These rejections were considered by the Board yesterday.

In the co-pending litigation the patents were also found invalid. (March 2010 D.Del). Interestingly, despite a 1996 contractual agreement between the companies that mandated all proceedings be conducted in the Delaware court, Acushnet sought patent reexamination at the USPTO anyway. Late last week, the court reinstated a decision determining that the pursuit of patent reexamination by Acushnet was a breach of the contract. As a result of that decision (here) Callaway feverishly petitioned to delay the Board hearing, arguing that the Board should not help Acushnet break their contractual obligations; not surprisingly, the Board declined that invitation.

So, yesterday, the Board learned all about Acushnet, a company known for their balls.
Continue Reading Callaway Golf’s Last Stand in Patent Reexamination

Delay in Patent Reissue Undermines Equitable Defense35 U.S.C. 252 presents two flavors of intervening rights in the reexamination/reissue context: absolute intervening rights, and equitable intervening rights. The more common of the two, absolute intervening rights, precludes infringement liability prior to issuance of new/amended claims if such claims are not substantially identical in scope to the claims of the original patent.Equitable intervening rights are available as a means to balance the public interest in the patent system and the remedial purpose of the reissue statute with the private interest of an infringer who innocently and in good faith has undertaken substantial activities that become infringing with the issuance of a reissue patent. For example, if prior to the issuance of a new/amended claim, a defendant invests in a new manufacturing line to develop products that infringe the new/amended claims, negotiates contracts to deliver infringing goods, and otherwise proceeds in conducting such business in good faith, the court may permit such infringement to continue under terms the court deems as equitable to both parties.In Bendix Commercial Vehicle Systems LLC, et al v. Haldex Brake Products Corp., (NDOH) having lost all previous battles (inequitable conduct in patent reissue here) (recapture in patent reissue here), defendant Haldex argued that they should be allowed to infringe based upon the doctrine of equitable intervening rights.In denying the defense of equitable intervening rights to Haldex, the court explained (decision here):To determine whether the grant of equitable intervening rights is appropriate, courts consider various factors, including: (1) whether substantial preparation was made before the reissue; (2) whether there are existing orders or contracts; (3) whether non-infringing goods can be manufactured from the inventory used to manufacture the infringing product and the cost of conversion; and, (4) whether the infringer has made profits sufficient to cover its investment. Seattle Box Co., Inc. V. Indus. Crating & Packing, Inc., 756 F.2d 1574, 1579-80. As this is an equitable determination, the court may also consider the relative degrees of good faith or bad faith exercised by the parties in connection with their product and patent development.The court reviewed the facts of the case in the context of the above factors. The court did not find the Haldex investments to be substantially more than their profits. Likewise, the court pointed out that trial testimony indicated that their investment was not made in reliance upon the availability of the U.S. market, and that infringement was well known at the time of most of the investment.In responding to Haldex’s argument that Bendix’s delay in filing suit on the reissue patent was in bad faith, the court reasoned:Further, because of the “delay” in filing for reissue, Haldex had more time than it otherwise would have had to recoup some of the losses from its investment. The delay in filing led to a delay in the issuance of the second patent, which gave Haldex more opportunity for sales that were protected by the absolute intervening rights provided by the statute. (footnote 4)Interesting.This case was brought to my attention by the great Docket Navigator.

35 U.S.C. 252 presents two flavors of intervening rights in the reexamination/reissue context: absolute intervening rights, and equitable intervening rights. The more common of the two, absolute intervening rights, precludes infringement liability prior to issuance of new/amended claims if such claims are not substantially identical in scope to the claims of the original patent.

Equitable intervening rights are available as a means to balance the public interest in the patent system and the remedial purpose of the reissue statute with the private interest of an infringer who innocently and in good faith has undertaken substantial activities that become infringing with the issuance of a reissue patent. For example, if prior to the issuance of a new/amended claim, a defendant invests in a new manufacturing line to develop products that infringe the new/amended claims, negotiates contracts to deliver infringing goods, and otherwise proceeds in conducting such business in good faith, the court may permit such infringement to continue under terms the court deems as equitable to both parties.

In Bendix Commercial Vehicle Systems LLC, et al v. Haldex Brake Products Corp., (NDOH) having lost all previous battles (inequitable conduct in patent reissue here) (recapture in patent reissue here), defendant Haldex argued that they should be allowed to infringe based upon the doctrine of equitable intervening rights.
Continue Reading Intervening Rights as an Equitable Defense

Expanded BPAI Panel Divided on Proper Reissue PracticeThe proper interpretation of the patent reissue statutes was explored rather frequently at the Board of Patent Appeals & Interferences (BPAI) in 2010. Several important BPAI decision relating to patent reissue, In re Tanaka, In re Staats, and In re Mostafazadeh are now on appeal to the CAFC. As we begin 2011, the trend appears to be continuing.Last week, the Board considered the following two questions in Ex parte Shunpei Yamazaki (here), namely:1.  Does 35 U.S.C. § 251 authorize the Office to reissue a patent that has expired based on an expiration date set at the time of issuance of the original patent?2. Does 35 U.S.C. § 251 authorize the Office to expand in reissue the term of a patent beyond the term of the original patent set at the time of issuance?By way of background, Semiconductor Energy Laboratory, sought to reissue their U.S. Patent 6,180,991. This patent issued on January 30, 2001 based upon an application filed April 21, 1995. During the original prosecution, a terminal disclaimer was filed (November of 1996) to overcome a double patenting rejection. Thereafter, the claims subject to the earlier double patenting rejections were amended. As a result, the Applicant petitioned to withdraw the earlier filed disclaimer (April 1999).The petition remained pending at the USPTO for some time, roughly a year. At that point, a Notice of Allowance was issued and the issue fee paid by the Applicant. In the 21st month, (May 2001) the petition was dismissed as mooted by the issuance of the ‘991 Patent. In the petition decision, the Office explained that a terminal disclaimer cannot be removed once a patent issues, and also explained that patent reissue could not remedy the problem. As it stood, the Patent holder had mistakenly disclaimed some 14 years of patent term (based on a pre-GATT priority claim).Perhaps encouraged by a non-precedential Board decision, Ex parte Durckheimer (1996), and despite the caution of the Office that reissue practice could not remove the disclaimer, an application seeking reissue of the ‘991 Patent was filed on January 16, 2002.As is all too common with patent reissues applications, the case languished for some 9 years before reaching the Board for decision.In their decision, the majority answered both questions above in the negative, reasoning:We take this opportunity to resolve a conflict within the Office as to the meaning of “the term of the original patent” in 35 U.S.C. § 251 and whether the Office is authorized by this statute to remove a terminal disclaimer during reissue resulting in an expansion of the term of the original patent set at issuance.We interpret “the term of the original patent” in § 251 to refer to the “term” of the patent as the term set upon issuance of the original patent.  . . . . See Merck & Co., 482 F.3d at 1319; see also Bayer AG, 298 F.3d at 1381. Thus, we disagree with the Board’s earlier holding in Durckheimer that a terminal disclaimer does not alter “the term of the original patent.” . . . .As such, we feel that the prior panel’s interpretation of § 251 in Durckheimer was in error, and the present decision overrules Durckheimer. We adopt the position of the Office as stated in MPEP § 1490 that “[s]ince the granting of a reissue patent without the effect of a recorded terminal disclaimer would result in extending the term of the original patent, reissue under these circumstances would be contrary to the statute.”Consequently, at the time of issuance of Appellant’s patent on January 30, 2001, the statute recognized that the term of the ‘991 patent would expire on December 22, 2003, the expiration date specified in the Terminal Disclaimer. Section 251 does not permit the Office to now reissue the ‘991 patent beyond that term as set upon issuance. (internal footnotes omitted)However, the concurrence saw the issues raised by the Appellant a bit differently. The concurring APJ’s found that it is possible to reissue a patent for purposes of removing a terminal disclaimer, but that reissue must occur before expiration.The majority points to the language in § 251 which states that a patent may be reissued “for the unexpired part of the term of the original patent” (emphasis added). According to the majority, the term of a patent is set at the time of issuance and withdrawing a recorded terminal disclaimer in an issued patent would extend the term of that patent contrary to § 251.The “term” of a patent is set by statute at the time of issuance. 35 U.S.C. § 154(a)(2) (2010). However, as explained in Ex parte Durckheimer, No. 94-2004, slip op. at 19 (BPAI 1996), a terminal disclaimer does not alter the “term” of the original patent. Rather, a terminal disclaimer disclaims a “terminal part of the term . . . of the patent granted or to be granted” thereby resetting the expiration date of that patent. 35 U.S.C. § 253 (2010).The majority appears to equate “term” with “expiration date.” However, I respectfully disagree that these terms are synonymous in this case where a terminal disclaimer has been recorded in an issued patent. See, e.g., Merck & Co., Inc. v. Hi-Tech Pharmacal Co., Inc., 482 F.3d 1317, 1322-23 (Fed. Cir. 2007) (discussing the expiration date resulting from the terminal disclaimer and the expiration date of the patent in the absence of the terminal disclaimer). . . .As [to expiration] . . . . The Appellant’s patent expired on December 22, 2003, by virtue of the terminal disclaimer that remains in effect. Therefore, the Office does not have the authority to reissue the Appellant’s patent for “the unexpired part of the term of the original patent.” (internal footnotes omitted)As pointed out in the concurring opinion, a terminal disclaimer is just that, a disclaimer of term otherwise accorded an issuing patent.Of course, once a patent is expired there can be no “re-issuing” the patent for an unexpired term. Yet, here the error identified in the application for reissue is one of term, seasonably presented before expiration. It seems grossly unfair to punish the Appellant in view of the significant delays in patent reissue prosecution, not to mention the egregious petition delay in the original prosecution.Perhaps this patent reissue dispute, much like the 2010 cases that came before it, is also destined for CAFC revi

The proper interpretation of the patent reissue statutes was explored rather frequently at the Board of Patent Appeals & Interferences (BPAI) in 2010. Several important BPAI decision relating to patent reissue, In re Tanaka, In re Staats, and In re Mostafazadeh are now on appeal to the CAFC. As we begin 2011, the trend appears to be continuing.

Last week, the Board considered the following two questions in Ex parte Shunpei Yamazaki (here), namely:

1.  Does 35 U.S.C. § 251 authorize the Office to reissue a patent that has expired based on an expiration date set at the time of issuance of the original patent?

2. Does 35 U.S.C. § 251 authorize the Office to expand in reissue the term of a patent beyond the term of the original patent set at the time of issuance?
Continue Reading Removing Terminal Disclaimers by Patent Reissue