Intervening Rights

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PTAB Formally Appoints Vice Chief & Board Executive

Federal Circuit Flips Burden in PTAB Motion to Amend

For PTAB practitioners, the en banc decision in In re Aqua Products is a complete non-event. While the decision has been embraced as a net positive for Patentees, practically speaking, it will not move the needle on amending at the PTAB.

Aqua Products held that it is improper for the PTAB to place the burden of persuasion on the Patentee relative to the patentability of new/amended claims. Going forward, this burden of persuasion will rest with Petitioners (as it does for originally challenged claims 35 USC § 316(e)). (here)

While this shift may be seen as a positive for Patentees, the difficulties/unpopularity in amending at the PTAB never had anything to do with an improper shifting of the burden of patentability.Continue Reading In Re Aqua Products: Much Ado About Nothing

CAFC Determines That Claims Must be Textually Amended to Invoke Intervening Rights Statute

During a post grant proceeding, an amendment of an originally issued claim could create an intervening rights defense for potential  infringers. That is to say if the amended or new claim introduced by the post grant proceeding is not substantially identical in scope relative to a previously issued claim, potential infringers of the amended/new claims may be provided with an absolute and/or equitable intervening rights defense (35 U.S.C. § 252).

Back in September, in Marine Polymer Technologies, Inc. v. Hemcon, Inc., the CAFC considered whether or not a claim needed to be explicitly (textually) amended to invoke the statute, or whether or not changes to claim scope based on prosecution history could have the same amendatory effect. The September panel ruled that an “amendment in effect” (i.e., disclaimer of claim scope) is equally effective in creating an intervening rights defense as an explicit amendment.

The panel decision was subsequently vacated in favor of an en banc review. In yesterday’s en banc decision, (here) the Court held (by a split-majority) that 35 U.S.C. §252 could not be invoked absent a textual change to the subject claim, explaining:

…
Continue Reading En Banc CAFC Reverses Intervening Rights Analysis

Amended/New Claims Barred by Res Judicata

Previously, the substantially identical standard enunciated by 35 U.S.C. § 252 was analyzed in Aspex Eyewear, Inc., et al., v Marchon Eyewear Inc., et. al., (SDFLA). In the lower court ruling, the court found that claims changed/added in patent reexamination were in fact substantially identical to the previously issued claims. This was because, the claim changes made during patent reexamination added claim features the district court previously ruled to be embraced by the originally issued claim scope.

The lower court explained (decision here) that Aspex was barred from re-litigating these new claims against the previous defendants, reasoning:

The [previous action] was fully adjudicated on the merits. The dismissal release . . . made clear that the settlement dismissed with prejudice as to any causes of action “any claim which could have been had by and between the Parties arising from or connected with [the earlier dispute]. Plaintiffs argue that it alleged legally separate causes of action in their complaint because claim 23 and claim 35 [reexamination changes] did not exist at the time the [previous actions] were being litigated. The reexamination of the ‘545 Patent does not entitle Plaintiffs to circumvent claim preclusion because the amended claims relate back to the original ‘545 Patent reissue date. (emphasis added)

In affirming the lower court, the CAFC reasoned (decision here):…
Continue Reading CAFC Denies Assertion of Claims Added in Reexamination

CAFC Re-considers Disclaimer Based Intervening Rights Defense

During a post grant proceeding, an amendment of an originally issued claim could create an intervening rights defense for potential  infringers. That is to say if the amended or new claim introduced by the post grant proceeding is not substantially identical in scope relative to a previously issued claim, potential infringers of the amended/new claims may be provided with an absolute and/or equitable intervening rights defense (35 USC § 252). Whether or not a claim change in post grant patent proceeding results in the an intervening rights defense is far from a straightforward determination as evidenced by the recent decision Marine Polymer Technologies, Inc. v. Hemcon, Inc..

The earlier panel ruled that disclaimer of claim scope is equally effective in creating an intervening rights defense as an explicit amendment. As such, the decision may be distorted to suggest that even if the patent owner is merely urging a claim interpretation that is consistent with the manner in which the term would have been understood at the time the underlying patent application was filed, intervening rights are created  For example, in cases where the post grant record simply clarifies the way in which a skilled artisan would have understood a claim term at the time of filing, or reiterates the positions of the previous intrinsic record, the scope of the claims cannot properly be said to have been altered during the subsequent proceeding.

Will the en banc ruling provide for such needed flexibility?
Continue Reading Practicalities of Patent Reexamination Key to Proper Intervening Rights Determination

Reexamination Disclaimer Effectively Amends Claims Surrendering $29 Million Damage Award

During a post grant proceeding, an amendment of an originally issued claim could create an intervening rights defense for infringers. That is to say if the amended or new claim introduced by the post grant proceeding is not substantially identical in scope relative to a previously issued claim, potential infringers of the amended/new claims may be provided with an absolute and/or equitable intervening rights defense (35 USC § 252). Of course, the conclusion as to whether or not a claim change in patent reexamination/reissue will result in the an intervening rights defense is far from a straightforward determination.

Yesterday, the CAFC considered 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, changed in scope by operation of Patentee disclaimer. This “amended in effect” theory has shown up in at least one other case as of late and is likely to gain considerable traction going forward thanks to yesterday’s CAFC decision.
Continue Reading CAFC Finds Intervening Rights Created by Post Grant Disclaimer

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

Cancellation of Dependent Claim Deemed “Amendment in Effect”If claims, as amended in a post grant proceeding, are not substantially identical in scope relative to the previously issued claims, potential infringers of the amended claims may be provided with an intervening rights defense (35 USC § 252) Of course, the conclusion as to whether or not a claim change in patent reexamination/reissue will result in the an intervening rights defense is far from a straightforward determination.As demonstrated recently, even where an amendment is made to overcome a prior art rejection, such a changed claim can still be considered substantially identical to the previously issued claim. Courts have consistently held that it is not the verbiage of a claim that must be substantially identical. Instead, courts look to the difference between originally issued claim scope relative to the scope of claims exiting patent reissue and/or patent reexamination. Adding another layer of complexity to this calculus is the recent case of University of Virginia Patent Foundation v. General Electric Company.  In University of Virginia (here) an independent claim was considered to be “amended in effect” based upon the cancellation of a dependent claim. In arriving at this conclusion, the court explained “[a]lthough no formal amendment was made to Claim 1, it was amended in effect when Claim 4 was canceled and the scope of Claim 1 changed.” At issue in University of Virginia is a patent relating to magnetic resonance imaging (MRI). In explaining how claim 1 could be “amended in effect,” the court reasoned:[T]he Patent Foundation filed an Amendment under 37 C.F.R. § 1.111 and § 1.550 canceling dependent Claim 4 of the patent, which had recited “[t]he method of claim 1, wherein said magnetization recovery period has a time of zero.” The Patent Foundation explained that it canceled the claim “because it does not properly depend from claim 1 because a ‘magnetization recovery period [that] has a time of zero’ does not ‘allow[s] [sic] T1 and T2 relaxation before the start of the next sequence cycle,’ as required by the magnetization recovery period of claim 1. Stated simply, a finite period of time must occur for T1 and T2 relaxation to occur, and thus a magnetization recovery period that has a time of zero is inconsistent with claim 1. . . Based on the Patent Foundation’s amendment, the PTO withdrew all of its objections to the claims except for those pertaining to Claim 4, which was canceled, and issued the reexamination certificate on May 4, 2010. In its statement of reasons for patentability, the PTO declared that “the claimed ‘magnetization recovery period’ is interpreted to correspond to a finite period of time (i.e., greater than zero) that allows substantially complete T1 and T2 relaxation to occur—i.e., relaxation to thermal equilibrium of both the longitudinal component and the transverse component—as opposed to partial or substantially incomplete relaxation.”. . . In order to overcome the PTO’s initial rejection of Claim 1 during reexamination, the Patent Foundation voluntarily canceled dependent Claim 4, the terms of which provided for a magnetization recovery period of time zero. I held above that prior to the cancellation of Claim 4, the magnetization recovery period in Claim 1 included the option of a period of time zero. After the cancellation, it is undisputed by the parties that the recovery period in Claim 1 does not include the option of a period of time zero. Thus, the amendment effected a change in meaning in Claim 1. Although no formal amendment was made to Claim 1, it was amended in effect when Claim 4 was canceled and the scope of Claim 1 changed.Critics of ex parte patent reexamination will often point to the roughly 25% of  cases in which all claims are confirmed. Yet, as previously pointed out, additional disclaimer and prosecution history of a patent reexamination concurrent to litigation can have a significant impact on litigation claim construction. Thus, these statistics do not tell the full story as significant victories may be achieved with respect to improved claim construction positions.Likewise, even where seemingly inconsequential claim changes are made, wiping out up to six years of infringement damages is a significant victory. Going forward, in view of cases such as University of Virginia, prosecution history disclaimers may be increasingly leveraged as “amendments in effect” for the purpose of asserting an intervening rights defen

If claims, as amended in a post grant proceeding, are not substantially identical in scope relative to the previously issued claims, potential infringers of the amended claims may be provided with an intervening rights defense (35 USC § 252) Of course, the conclusion as to whether or not a claim change in patent reexamination/reissue will result in the an intervening rights defense is far from a straightforward determination.

As demonstrated recently, even where an amendment is made to overcome a prior art rejection, such a changed claim can still be considered substantially identical to the previously issued claim. Courts have consistently held that it is not the verbiage of a claim that must be substantially identical. Instead, courts look to the difference between originally issued claim scope relative to the scope of claims exiting patent reissue and/or patent reexamination. Adding another layer of complexity to this calculus is the recent case of University of Virginia Patent Foundation v. General Electric Company.  In University of Virginia (here) an independent claim was considered to be “amended in effect” based upon the cancellation of a dependent claim.
Continue Reading Intervening Rights Created by Claim Cancellation in Patent Reexamination

Substantially Identical…More than Meets the Eye!An interesting issue raised by any post grant claim amendment (e.g., patent reissue and/or patent reexamination) is: For a given claim, what is the degree of amendment (i.e., change in scope) that will exceed the “substantially identical” standard of 35 U.S.C. § 252?This threshold determination will determine the availability of past infringement damages for the amended/new claims, or whether a potential infringer may  avoid liability for past damages based on the doctrine of intervening rights. If claims, as amended in a post grant proceeding, are not substantially identical in scope relative to the previously issued claims, potential infringers of the amended claims may be provided with an intervening rights defense. Clearly, Patentees tend to argue that amended/new claims are substantially identical, while infringers argue that the claims are not substantially identical.Last week, the substantially identical standard of 35 U.S.C. § 252 was analyzed in Aspex Eyewear, Inc., et al., v Marchon Eyewear Inc., et. al., (SDFLA). Interestingly, the court found that claims changed/added in patent reexamination were in fact substantially identical to the previously issued claims.  Ordinarily this would be fantastic news for a Patentee, but for Aspex, it was the end of the road. As explained by the court, Aspex previously sued the defendants (Revolution and Marchon) for infringement of U.S. Reissue Patent RE37,545 (reissue of U.S. Patent 5,568,207). Claim 22 of the ‘545 patent was asserted against both defendants. In 2007, Revolution was found to infringe claims 22, effectively ending the case. Likewise, in 2008, Aspex settled with Marchon, dismissing their claims with prejudice.An unrelated third party requested ex parte patent reexamination of the ‘545 Patent in 2007. During the reexamination, previously re-issued claim 23 was amended and claim 35 was newly added. Upon completion of the reexamination, in 2009, Aspex once again sued Revolution and Marchon for infringement of amended claim 23 and new claim 35.The court found that the new features provided by amended claim 23 and new claims 35 were in fact already implied by the issued claims. Thus, the court determined that the claim changes resulted in a substantially identical claim scope to the previous version of the issued claims. Therefore, the court explained (decision here) that Aspex was barred from re-litigating these new claims against the previous defendants, reasoning:”Identical” does not mean verbatim, but rather means “without substantive change.” Slimfold Mfg. v. Kinkead Indus.810 F.2d 1113, 1115 (Fed. Cir. 1987). “Claims are not interpreted in a vacuum, but are part of and read in light of the specification.” addition of the words “having a horizontal surface” or “magnetic member surfaces” does not substantively change the scope of the original claim 23, but merely makes the claim more definite. .                     .                           .                           .The Revolution California Action was fully adjudicated on the merits. The dismissal release of the Marchon Settlement made clear that the settlement dismissed with prejudice as to any causes of action “any claim which could have been had by and between the Parties arising from or connected with” the Marchon California Action. Plaintiffs argue that it alleged legally separate causes of action in their complaint because claim 23 and claim 35 did not exist at the time the California Actions were being litigated. The reexamination of the ‘545 Patent does not entitle Plaintiffs to circumvent claim preclusion because the amended claims relate back to the original ‘545 Patent reissue date. (emphasis added)Interestingly, claim 23 was rejected as unpatentable in view of certain prior art during the patent reexamination. The claim was then amended to overcome the art of record with the above noted language; this fact was not analyzed by the court. As such, this case may be cited in the future for the proposition that–the amendment of a claim in patent reexamination to avoid the prior art does not necessarily equate to a substantial change in claim sco

An interesting issue raised by any post grant claim amendment (e.g., patent reissue and/or patent reexamination) is: For a given claim, what is the degree of amendment (i.e., change in scope) that will exceed the “substantially identical” standard of 35 U.S.C. § 252?

This threshold determination will determine the availability of past infringement damages for the amended/new claims, or whether a potential infringer may  avoid liability for past damages based on the doctrine of intervening rights. If claims, as amended in a post grant proceeding, are not substantially identical in scope relative to the previously issued claims, potential infringers of the amended claims may be provided with an intervening rights defense. Clearly, Patentees tend to argue that amended/new claims are substantially identical, while infringers argue that the claims are not substantially identical.

Last week, the substantially identical standard of 35 U.S.C. § 252 was analyzed in Aspex Eyewear, Inc., et al., v Marchon Eyewear Inc., et. al., (SDFLA). Interestingly, the court found that claims changed/added in patent reexamination were in fact substantially identical to the previously issued claims.  Ordinarily this would be fantastic news for a Patentee, but for Aspex, it was the end of the road.
Continue Reading Court Labels Claims Transformed in Patent Reexamination Mere Disguise

Safety-Signs-1065A-lg1-300x300Previously, we explored what types of amendments to claims under post-grant review can trigger intervening rights.

As you may recall, claim amendments in current post grant proceedings at the USPTO (i.e., reexamination/reissue) create intervening rights. 35 U.S.C. 307 (ex parte) and 35 U.S.C. 316 (inter partes) describe the impact of amending claims in patent reexamination, incorporating 35 USC 252 (relating to intervening rights in reissue applications). In essence, the doctrine of intervening rights forecloses the recovery of past damages for patent infringement if a claim is amended after issuance of the patent.

The case of Kim v. The Earthgrains Co., k/n/a Sara Lee Bakery Group Inc., 01-cv-3895 (N.D. Ill.), presented the issue of whether a change in the transitional phrase (i.e., legally operative terms) of a patent claim could trigger intervening rights.
Continue Reading Change in Transitional Phrase Can Trigger Intervening Rights

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–A Glitch in the Matrix?–

As noted in Part I of our series on intervening rights, claim amendments in reexamination and/or reissue at the USPTO may create absolute and/or equitable intervening rights. Although the doctrine of intervening rights is codified as a component of reissue statute 35 U.S.C. § 252, reexamination statutes 35 U.S.C. § 307 (ex parte) and 35 U.S.C. § 316 (inter partes) incorporate the reissue statute in this regard.

35 U.S.C. § 252 Effect of Reissue.

The surrender of the original patent shall take effect upon the issue of the reissued patent, and every reissued patent shall have the same effect and operation in law, on the trial of actions for causes thereafter arising, as if the same had been originally granted in such amended form, but in so far as the claims of the original and reissued patents are substantially identical, such surrender shall not affect any action then pending nor abate any cause of action then existing, and the reissued patent, to the extent that its claims are substantially identical with the original patent, shall constitute a continuation thereof and have effect continuously from the date of the original patent. (emphasis added)

As can be appreciated, 35 U.S.C. § 252 states that substantially identical claims are treated no differently with respect to liability (damages) than original claims.[1]

Of course, this provision begs the question:

What types of claim changes can be made
Continue Reading Intervening Rights & The Substantially Identical Standard