With Congress on summer hiatus, and significant election uncertainty coming in the Fall, Patent Reform efforts are seemingly on hold (again). Still, last week, the USPTO was able to secure an additional $139 million in funding. H.R. 5874 permits the USPTO to retain $139 million in fees collected from patent applications and patent maintenance fees
USPTO Pilot Program Announced to Accelerate Ex Parte Patent Reexamination
Yesterday, the USPTO announced a pilot program, effective immediately, aimed at reducing the pendency of ex parte patent reexamination. The program entitled “Pilot Program for Waiver of Patent Owner’s Statement in Ex Parte reexamination Proceedings” will be triggered once a new ex parte reexamination request is accorded an initial filing date.
In devising the pilot program, the USPTO has explained that only 10% of Patent Holder’s take advantage of the opportunity to submit a Patent Owner statement. (Inter Partes Reexamination does not provide for Patent Owner’s Statements). The reason behind the lack of enthusiasm in filing Patent Owner statements is that the filing of such a statement entitles the Third Party to a rebuttal. Outside of the filing of such a statement, Third Party participation in ex parte reexamination is precluded by statute. Therefore, simply waiting for the Office to issue the first action effectively silences the Third Party for the remainder of the proceeding.
The Federal Register Notice explains that the new pilot program will seek to reduce overall pendency by cutting out this front loaded, dead time found in 90% of ex parte reexaminations. [T]he USPTO will contact the patent owner and request the optional waiver of the right to file a patent owner’s statement after the proceeding has been granted a filing date and before the examiner begins his or her review. This will enable the USPTO in suitable cases to issue the first Office action on the merits (including an NIRC) together with or soon after the order for reexamination, and thereby reduce the pendency of the proceeding by about three to five months.
This pilot program is a very positive step, and makes perfect procedural sense. The USPTO is to be commended for attempting to tackle the pendency issue. Yet, I expect that few Patent Holders, given the chance, will take advantage of the program.
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Arguments in Patent Reexamination Trip Up Sigram Schindler
As discussed last week, patent reexamination is often leveraged concurrent with district court litigation for strategic purposes. As district court pendencies continue to rise, even in districts known for relatively speedy resolutions, an early filed reexamination will very likely mature in time to provide additional fodder for claim construction. (Markman). In some cases, even where the reexamination concludes favorably to the Patent Holder, the discussion in the reexamination prosecution history may still carry the day.
Last week, a Markman Order was issued in Sigram Schindler Beteiligungsgesellschaft mbH v. Cisco Systems, Inc., Civ. No.09-72-SLR (July 26, 2010) (More info on the Sigram Schindler patent reexamination is found here)
Interestingly, in the Markman Order, Sigram Schindler is called out by the Court for taking inconsistent positions before the USPTO in patent reexamination.
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BPAI Applies an Implied Claim Construction in Patent Reexamination Appeal
BPAI Affirms Claims of Expired Patent in Ex Parte Reexamination
The rejection of all claims (save 25, which was confirmed) of expired Patent 4,925,294, (hereinafter, “‘294 Patent”) owned by Three-Dimensional Media Group LTD., was affirmed by the BPAI on Monday. In affirming the rejection, at issue in the appeal was the meaning of “3-D” as recited in the claims of the ‘294 Patent.
The Patent Holder took the position that the term “3-D” was to be accorded a special meaning. In this regard, the Patent Holder claimed that at the time of filing the Applicant was being their own lexicographer MPEP 2111.01 (IV). In support of this assertion, the Patent Holder presented declaration evidence from persons skilled in the art that identified the meaning of “3-D,” in the context of the ‘294 Patent, as defining stereoscopic 3-D.
The BPAI rejected the Patent Holder definition and declaration evidence as inconsistent with the specification.
Since the Board found that “3-D” was not limited to only stereoscopic 3-D as advanced by the Patent Holder, the majority refused to provide an explicit plain meaning construction of 3-D. Instead the majority explained that by advancing the special (i.e., Applicant being their own lexicographer) definition, the Patent Holder did not dispute the plain meaning of “3-D”, and had therefore waived any right to dispute plain meaning. (citing Ex Parte Frye, 94 USPQ2d 1072, 1075 (BPAI 2010)). As a result, the claim term “3-D” was defined inferentially, that is to say the term was identified as being broader than the Patent Holder’s asserted definition, thus met by the art of record.
Yet, can such a fundamental exercise as a plain meaning claim construction be waived, especially for an expired patent that must follow the Papst-Motoren claim interpretation standard to preserve validity?
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U.S. Based Filers Dominate Patent Reexamination
(click to enlarge embedded images)Patent reexamination has evolved into a highly effective risk management tool for organizations faced with potential patent infringement liability. This post grant review mechanism of the USPTO is increasingly employed not only as a true alternative to costly patent litigation as originally intended by Congress, but also as a parallel track procedure offering strategic advantage relative to a concurrent litigation.Still, some organizations outside the U.S., most notably the Japanese, appear to be operating in accordance with outdated perceptions as to the strategic value and efficacy of modern day patent reexamination. Illustrated below is a comparison of reexamination request rates (non-anonymous) for U.S. vs. Japanese filers. To the untrained eye, the relative filing rates seem entirely logical for a U.S. based, intellectual property right. Yet, when considering that the vast majority of the top patent filers in the U.S. are in fact Japanese companies, domestic dominance in patent reexamination is especially surprising.Clearly, U.S. requests for patent reexamination significantly outpace Japanese requests (including both ex parte and inter partes requests). Indeed, when the chart above is filtered to exclude those Requesters initiating patent reexamination of their own patents (not uncommon for Japanese filers), the contrast between the two filing rates is all the more stark. Certainly, some anonymous reexamination requests (ex parte) may be originated by Japanese filers, yet, this statistic would not be at all significant in my experience.So, why aren’t the Japanese embracing the offensive use of patent reexamination to the extent of U.S. companies?It may be that past prejudices still linger in Japan as to the effectiveness and reliability of patent reexamination at the USPTO. Prior to changes in the law of patent reexamination that created inter partes reexamination in 1999, (AIPA of 2002, In re Swanson), and changes to the handling of reexaminations internal to the USPTO (Central Reexamination Unit), patent reexamination was universally viewed as a fruitless exercise.In addition to the poor track record of past patent reexamination practices at the PTO, historically, Japanese companies are more likely to settle disagreements with competitors by cross-license rather than by overt, offensive actions. Indeed, due to the sheer size of their patent portfolios, Japanese companies are unlikely to have had much negative experience being attacked in patent reexamination by competitors (see below). Thus, there appears to be a general unfamiliarity with the offensive value of patent reexamination.Still, Japanese companies are also targeted by “patent trolls” on a regular basis. In this respect, the misfortunes of Japanese companies are no different than U.S. companies. As a result, Japanese companies are just as likely to benefit from some of the strategic opportunities offensive patent reexamination has to offer.Perhaps once the changed landscape of patent reexamination in the U.S is widely appreciated in Japan, the Japanese filing rate will more closely track the U.S. filing ra
Patent reexamination has evolved into a highly effective risk management tool for organizations faced with potential patent infringement liability. This post grant review mechanism of the USPTO is increasingly employed not only as a true alternative to costly patent litigation as originally intended by Congress, but also as a parallel track procedure offering strategic advantage relative to a concurrent litigation.
Still, some organizations outside the U.S., most notably the Japanese, appear to be operating in accordance with outdated perceptions as to the strategic value and efficacy of modern day patent reexamination.
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Case Stayed 5 years in Favor of Inter Partes Patent Reexamination to Restart?
Back on September 25, 2005, Judge Farnan of the United States District Court for the District of Delaware stayed the litigation between Hasbasit Belting, Inc. v. Rexnord Industries, Inc. (Civil Action 03-185) relating to U.S. Patent 6,523,680. The stay was entered in favor of inter partes reexamination 95/000,072.
Yesterday, the rejection of issued claims 1-14 was reversed at the BPAI (decision here). The refusal to adopt a rejection of claim 6 and 13 was also affirmed. Thus, the Third Party, Rexnord Industries, may find itself on the wrong side of the estoppel equation of 35 USC 315 (c) very shortly.
More importantly, will the court recognize the significant delay to date, and the appeal reversal as justification enough to lift the stay?
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Examiner Comments in Prosecution History Discounted as Unskilled?
The relevance of original patent application prosecution history in patent reexamination remains an unsettled issue at the USPTO. As we discussed last month, the MPEP mandates the application of Phillips v. AWH Corp., 415 F.3d 1303; (Fed. Cir. 2005) (en banc) with regard to according a plain meaning to claim terms.Yet the broadest reasonable interpretation (BRI) looks exclusively at the specification.
Last week, the BPAI addressed the use of prosecution history in according a plain meaning in Ex parte Team Worldwide Corporation (Appeal 2010-002223). In doing so, the Board reversed a rejection applied in reexamination based upon the plain meaning of “body.” In the Patentee’s brief, it was pointed out that the original patent application examiner advanced a similar understanding of the term “body” as that argued by the Patentee in the later patent reexamination. While the Board ultimately adopted the Patentee interpretation, it refused to consider the prosecution history, explaining:
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Patent Reexamination as a Form of Litigation Damage Control
Threat of Injunction Dissolves in Flexiteek Litigation
The initiation of patent reexamination for patents subject to concurrent litigation can provide strategic benefits independent of the ultimate outcome of the reexamination. These litigation inspired applications of patent reexamination can be thought of as falling into one of two categories, namely, pre-trial maneuvers or post-trial, damage control.
Pre-trial Maneuvers are those patent reexaminations initiated to potentially enhance a defendant’s battle in the district court. For example, patent reexamination may be sought as an avenue to establish objectively reasonable behavior for use in preventing a willfulness finding. (see e.g., the yesterday’s Fairchild Semiconductor press release). Still other defendants initiate patent reexamination concurrent with litigation as a mechanism to leverage more acceptable settlement terms, provide additional fodder for claim construction, or to demonstrate the materiality of a reference subject to an inequitable conduct defense.
Post-trial (damage control) on the other hand, is a litigation inspired use of patent reexamination that seeks to undo the damage inflicted by the ruling of the district court.
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How Long Does Patent Reexamination Really Take?
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One of the threshold questions in considering patent reexamination, whether a patent owner, or third party is:
How long will it take?
This question is also the subject of significant debate when litigants in a concurrent district court proceeding argue for/against staying the proceeding. Defendants will often point to the published PTO statistics which identify a 24-28 month pendency to conclusion (NIRC). Conversely, Patentee’s point out that these published number do not account for appeal processing. As can be seen from the chart above, reexaminations that are contested through to appeal, are taking roughly 5 years (ex parte or inter partes). Thus, it is quite disingenuous for defendants
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Bad Apple! BPAI Rejects Apple Patent Reissue on Equitable Principles
CAFC to Decide Prosecution Laches in Patent Reissue
Earlier this year we discussed the Ex Parte Tanaka decision of the Board of Patent Appeals & Interferences (BPAI) with respect to “bullet claims” in patent reissue, now before the CAFC. On June 24, 2010, a second Board decision relating to patent reissue was appealed to the Federal Circuit (Ex Parte Staats).
Although presented in the context of patent reissue, the point of contention in Staats is actually one of prosecution laches and the application of equitable principles to statutory interpretation. In Staats, the Board upheld a rejection of a broadening reissue application as defective under 35 U.S.C. 251 for failing to include the appropriate broadening oath within two years of the original patent issuance. The Board reasoned that although a parent reissue had filed an appropriate broadening oath and identified at least one error, the continuation reissue was not entitled to rely on that oath, despite the continuity between these reissue applications.
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