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Lockwood Reexamination Gripe Goes Nowhere

As discussed last week, the case of Lockwood v. Sheppard, Mullin, Richter & Hampton was recently argued before the CAFC. Wasting no time, today, the CAFC affirmed the lower court ruling without comment. As I explained in last week’s post, this result is not at all surprising given the exchange during oral argument. The decision is correct in my view.

Providing a state law action for suing requesters would inevitably lead to any difference of opinion (as to the strength of a patent reexamination request) being litigated. For example, roughly 25% of ex parte reexaminations are concluded with all claims confirmed, this does not make those requests a “sham.”

A true sham filing is a criminal act, this seems to be lost on most commentators.
Continue Reading Sham Patent Reexamination Argument Goes Nowhere

Rules for Ex Parte Appeals to be Simplified

In recent years, the USPTO has advanced significant changes to the rules of practice for ex parte appeals to the Board of Patent Appeals & Interferences (BPAI). (previously proposed appeal rules). The past proposal was not exactly greeted with enthusiasm by stakeholders. In response, today’s Federal register includes a new, and much improved, ex parte appeals rule package. (here)

The new proposal, consistent with the spirit of Director Kappos’ administration to date, advances a refreshing change of pace. Previously the Office proposed increased formality and bureaucratic hurdles seemingly geared toward making USPTO appeal practice more burdensome and expensive to Applicants. The new rules, like many of the proposals of the Kappos regime, advance common sense solutions designed to simplify appeal. Yet, one of the proposed revisions could be used to frustrate the statutorily mandated special dispatch to be accorded ex parte patent reexaminations.
Continue Reading New BPAI Appeal Rules Proposed

A Case for Suing the Wrong LawyersLast March, a guest post opined on the impact of fraudulent patent reexamination requests. The post primarily focused on a dispute originating from the California state court, Lockwood v. Sheppard, Mullin, Richter & Hampton. The author examined the vulnerabilities of the reexamination process and the impact of unwarranted reexamination proceedings on patent holders. Several commentators have commented on the case this week, now before the CAFC. (oral argument recording here)In Lockwood, the plaintiff accused a defendant law firm (Sheppard Mullin) of malicious prosecution relating to an alleged “sham patent reexamination” in a California State Court. The court determined that the state law cause of action was preempted by federal law (i.e.,  the USPTO has jurisdiction over practitioner conduct); this holding was appealed to the CAFC.By way of background, patent reexamination was initiated against Lockwood in 2003, Lockwood agreed to stay their ongoing  litigation with the third party requester, settling the dispute shortly thereafter.In addressing the “sham” merits of the patent reexamination, Lockwood chose not to filed a Patent Owner Statement disputing the order. Moreover, Lockwood could have petitioned to have the reexamination vacated as ultra vires, but did not. Very odd behavior for a defendant so wronged by a “sham” filing. One is left wondering whether Lockwood is simply having buyer’s remorse over a low settlement, and rather than suing their own attorneys for malpractice, went after the other side?At issue in the reexamination was whether or not the submitted references qualified as prior art. The Lockwood patent arguably benefited from a 1984 priority date (based on a parent CIP). A product manual submitted had a 1986 date, but was alleged to correspond to a system that was in operation in 1984. The Requester provided no explanation of the right to priority of each claim (in order to apply the manual as intervening art), nor how the public use of a system could be considered in patent reexamination. (See 90/006,623 for more information, particularly the response filed 7/20/05 and the original request).Interestingly, the reexamination was delayed more by Lockwood trying to add a method claim than anything else. The method claim was deemed broadening since the issued patent had none. Lockwood also added 22 new claims.The request that was filed would never be accepted today, it lumps rejections together, fails to identify key dates, claim interpretation, etc…but things were different prior to the creation of the Central Reexamination Unit in 2005. To be sure, the request was poorly reasoned, and should have been denied. Yet, even assuming Lockwood is allowed to pursue their claim at the state level (which seems very unlikely based upon the tenor of the CAFC questioning last week at oral argument) what is the real economic harm? Will Lockwood argue that they settled for too low an amount, would Sheppard counter with the seemingly poor legal advice Lockwood was following as a contributing factor?Seems to me that Lockwood sued the wrong attorneys if they were truly fooled, and harmed, by this alleged “sham” reque

Last March, a guest post opined on the impact of fraudulent patent reexamination requests. The post primarily focused on a dispute originating from the California state court, Lockwood v. Sheppard, Mullin, Richter & Hampton. The author examined the vulnerabilities of the reexamination process and the impact of unwarranted reexamination proceedings on patent holders. Several commentators have commented on the case this week, now before the CAFC. (oral argument recording here)

In Lockwood, the plaintiff accused a defendant law firm (Sheppard Mullin) of malicious prosecution relating to an alleged “sham patent reexamination” in a California State Court. The court determined that the state law cause of action was preempted by federal law (i.e.,  the USPTO has jurisdiction over practitioner conduct); this holding was appealed to the CAFC.

By way of background, patent reexamination was initiated against Lockwood in 2003, Lockwood agreed to stay their ongoing  litigation with the third party requester, settling the dispute shortly thereafter.

In addressing the “sham” merits of the patent reexamination, Lockwood chose not to filed a Patent Owner Statement disputing the order. Moreover, Lockwood could have petitioned to have the reexamination vacated as ultra vires, but did not. Very odd behavior for a defendant so wronged by a “sham” filing. One is left wondering whether Lockwood is simply having buyer’s remorse over a low settlement, and rather than suing their own attorneys for malpractice, went after the other side?
Continue Reading Sham Patent Reexamination Dispute Before CAFC

The USPTO can Demonstrate the What, Where, Why, and HowThe affirmative defense of inequitable conduct is commonplace in most patent disputes. Indeed, many have labeled this defense a “plague” due to its over-use by defendants. The prevalence of inequitable conduct before the district courts is especially debated on the eve of the CAFC en banc review in Therasense, Inc. v. Becton Dickinson and Co. At issue in Theresense is the very foundations upon which an inequitable conduct defense is built. The CAFC will consider the degree of materiality necessary, as well as the degree to which intent may be inferred.A key issue under consideration by the CAFC in Therasense is:What is the proper standard for materiality? What role should the United States Patent and Trademark Office’s rules play in defining materiality? Should a finding of materiality require that but for the alleged misconduct, one or more claims would not have issued?As an affirmative defense inequitable conduct must be plead with particularity, no matter what the CAFC decides in Theresense.  Likewise, materiality is determined from the perspective of a reasonable examiner …..so, why not just have the USPTO demonstrate what they would have done in the form of an office action in patent reexamination?As Judge Folsom explained in striking an inequitable conduct defense in TiVo v Verizon Communications on October 28th (here), the perspective of what might have happened in examination can be fairly detailed:the Federal Circuit held that for “pleading inequitable conduct in patent cases, Rule 9(b) requires identification of the specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO.” Id at 1327. The “who” of the material omissions and misrepresentations concerns those individuals with a duty of candor and good faith in dealing with the Patent and Trademark Office (“PTO”). Id. at 1329. The “what” and “where” of the material omissions relate to “which claims, and which limitations in those claims, the withheld references are relevant to, and where in those references the material information is found[.]” Finally, a pleading needs to state the “particular claim limitations or combination of limitations that are supposedly absent from the information of record. Such allegations are necessary to explain both ‘why’ the withheld information is material and not cumulative, and ‘how’ an examiner would have used this information in assessing the patentability of the claims.” (citing Exergen Corp. v. Wal-mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009)).As pointed out in past posts, the filing of a request for patent reexamination parallel with litigation provides significant benefits aside from simply attacking the validity of an issued patent. With Theresense perhaps making the defense of inequitable conduct a bit more challenging in the near term, it may be that office actions in patent reexamination will be increasingly valued as road maps to demonstrating materiality.

The affirmative defense of inequitable conduct is commonplace in most patent disputes. Indeed, many have labeled this defense a “plague” due to its over-use by defendants. The prevalence of inequitable conduct before the district courts is especially debated on the eve of the CAFC en banc review in Therasense, Inc. v. Becton Dickinson and Co. At issue in Theresense is the very foundations upon which an inequitable conduct defense is built. The CAFC will consider the degree of materiality necessary, as well as the degree to which intent may be inferred.

A key issue under consideration by the CAFC in Therasense is:

What is the proper standard for materiality? What role should the United States Patent and Trademark Office’s rules play in defining materiality? Should a finding of materiality require that but for the alleged misconduct, one or more claims would not have issued?

As an affirmative defense inequitable conduct must be plead with particularity, no matter what the CAFC decides in Theresense.  Likewise, materiality is determined from the perspective of a reasonable examiner …..so, why not just have the USPTO demonstrate what they would have done in the form of an office action in patent reexamination?
Continue Reading Therasense to Amplify Demand for Patent Reexamination?

Marked Increase in Patent Reexamination Filings for Fiscal Year 2010With September marking the end of fiscal year 2010, the USPTO has released year end statistics for patent reexamination operations. A total of 780 ex parte patent reexamination filings were made in fiscal 2010.  This is an 18% increase over 2009 filings figures, and an all time record for such filings. (report here)Inter partes patent reexamination filings for fiscal 2010 totaled 281. This is a 9% increase over 2009 filings, and also an all time record for such filings. Roughly 70% of these filings are related to a co-pending litigation. (report here)As to operational statistics of the Central Reexamination Unit (CRU), highlights include a reduction in the delay to a first action on the merits (FAOM). For example, in 2007, the average time from filing of a request for patent reexamination to FAOM was about one year for ex parte patent reexamination. This pendency has decreased to 7 months for 2010. (report here)For insight into the post grant/litigation strategies driving the year-over-year increase in patent reexamination filings, check out PLI’s Reissue & Reexamination Strategies and Tactics with Concurrent Litigation 2011. The program is offered in San Francisco January 10, 2011 and in New York  February 11, 2011. The webcast is available January 10th.I will co-chair both events and speak on the topic of Pre-Trial and Post-Trial Reexamination Strategies Concurrent with Litigation. The Hon. Paul J. Luckern of the International Trade Commission will comment on judicial perspectives of patent reexamination, and my partner Todd Baker will discuss reexamination and reissue practices. A USPTO representative (OPLA invited) will discuss inter partes reexamination petition practice, and corporate speakers will round out this compelling CLE progr

With September marking the end of fiscal year 2010, the USPTO has released year end statistics for patent reexamination operations. A total of 780 ex parte patent reexamination filings were made in fiscal 2010.  This is an 18% increase over 2009 filings figures, and an all time record for such filings. (report here)

Inter partes patent reexamination filings for fiscal 2010 totaled 281. This is a 9% increase over 2009 filings, and also an all time record for such filings. Roughly 70% of these filings are related to a co-pending litigation. (report here)

As to operational statistics of the Central Reexamination Unit (CRU), highlights include a reduction in the delay to a first action on the merits (FAOM). For example, in 2007, the average time from filing of a request for patent reexamination to FAOM was about one year for ex parte patent reexamination. This pendency has decreased to 7 months for 2010. (report here)

For insight into the post grant/litigation strategies driving the year-over-year increase …
Continue Reading Patent Reexamination Filings at All Time High

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

Participation in USPTO pilot program held against PatenteeIn August of this year, the USPTO introduced a pilot program 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” is triggered once a new ex parte reexamination request is accorded an initial filing date. Once a Patentee agrees to waive the patent owner response period (since such statements are rarely filed), the USPTO is able to issue an office action together with the grant of an ex parte reexamination (just like inter partes reexamination).Not surprisingly, many Patentess opt to maintain their right to file an Owner Statement in ex parte patent reexamination.In my earlier posts on the pilot program I questioned the affect participation in this program would have on a district court’s decision to stay a parallel litigation. The impact of a Patentee’s participation in the pilot program was recently considered in Brass Smith LLC v. RPI Industries Inc. (D.NJ).Perhaps realizing that NJ is rather “stay friendly,” the plaintiff decided to cooperate with the USPTO and waive their right to a patent owner response period. Brass informed the court of the participation in the program, stating that the reexam would now move faster. Brass also proposed that RPI agree to stop selling/marketing the infringing products until the reexam was completed in exchange for the stay. (see my post of last month on the self imposed injunction tactic). The thinking of Brass seemed to be that, since  the NJ court was likley to grant the stay anyway, Brass may as well try to angle for some sort of benefit.  Ignoring, the attempt at striking a bargain, the court just stayed the case, in part, citing the accelerated reexamination schedule as justification.The court’s opinion and order (here)  summarized the background events, as:On October 18, 2010, counsel for BSI sent a letter to the Court and to counsel for RPI, indicating that it has agreed to participate in the PTO’s “Pilot Program for Waiver of Patent Owner’s Statement in Ex Parte Reexamination Proceedings,” which is “designed to reduce the pendency time of reexamination proceedings.” (Doc. No. 59, hereinafter “BSI Letter”). BSI’s letter further asserts that BSI has contacted RPI and offered to resolve RPI’s motion by stipulating to a stay of the case during the pendency of the reexamination proceedings, so long as RPI refrains from selling, referencing, or showing the allegedly infringing product during the same time period. (Id.). According to the letter, as of October 18, 2010, RPI has not responded to BSI’s proposal.In performing the familiar factor based analysis to determine the relative inequities of staying the litigation, such as potential prejudice to the plaintiff as a result of the reexamination pendency delay, the court explained:….. “any delay would not be for such a protracted or indefinite period to constitute an abuse of discretion.” Cima Labs, Inc. v. Actavis Grp. HF, C.A. No. 07-893 (DRD), 2007 U.S. Dist. LEXIS 41516 (D.N.J. June 7, 2007) (internal citations omitted). Indeed, BSI itself recently informed the Court that it agreed to participate in the PTO’s Pilot Program, which may reduce the pendency of the reexamination by approximately three to five months. (emphasis added)Many patent reexaminations are sought, at least in part, for the purposes of obtaining a stay. As such, it appears that the decision to participate in the pilot program may be very carefully considered going forward.

In August of this year, the USPTO introduced a pilot program 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” is triggered once a new ex parte reexamination request is accorded an initial filing date. Once a Patentee agrees to waive the patent owner response period (since such statements are rarely filed), the USPTO is able to issue an office action together with the grant of an ex parte reexamination (just like inter partes reexamination).

Not surprisingly, many Patentess opt to maintain their right to file an Owner Statement in ex parte patent reexamination.

In my earlier posts on the pilot program I questioned the affect participation in this program would have on a district court’s decision to stay a parallel litigation. The impact of a Patentee’s participation in the pilot program was recently considered in Brass Smith LLC v. RPI Industries Inc. (D.NJ).

Perhaps realizing that NJ is rather “stay friendly,” the plaintiff decided to cooperate with the USPTO and waive their right to a patent owner response period. Brass informed the court of the participation in the program, stating that the reexam would now move faster. Brass also proposed that RPI agree to stop selling/marketing the infringing products until the reexam was completed in exchange for the stay. (see my post of last month on the self imposed injunction tactic). The thinking of Brass seemed to be that, since  the NJ court was likley to grant the stay anyway, Brass may as well try to angle for some sort of benefit.  Ignoring, the attempt at striking a bargain, the court just stayed the case, in part, citing the accelerated reexamination schedule as justification.
Continue Reading Chilling Effect of the USPTO Patent Reexamination Pilot Program?

Hedging against post grant invalidity Would you ever file a patent application without dependent claims?  I wouldn’t….and for obvious reasons. Dependent claims help present more detailed aspects of a claimed invention. In the prosecution context for example, dependent claims present a variation in claim scope to the examiner. Once searched by the patent examiner, in many cases dependent claims are identified as allowable and provide a simple amendment option, often leading to patent issuance. Likewise, once issued as a patent, dependent claims provide more detailed fallback positions that serve as a hedge against an invalidity attack. It is a rare patent indeed that issues without dependent claims.Yet, there exists another form of claim that also provides a narrowed presentation of inventive features that is increasingly avoided in patent applications; the means plus function claim. Many practitioners now advocate the avoidance of such claims, but why?Well, for one, litigators prefer broader, non-mpf claims.  Likewise, mpf claims complicate an infringement case due to their unique claim construction rules. Still others will point to recent case law finding such claims indefinite.  Aristocrat Technologies Australia (ATA) v. International Gaming Technology (IGT) (Fed. Cir. 2008)While these criticisms are valid, lost in the debate is the fact that in many cases such claims are more likely to withstand invalidity challenges, such as during patent reexamination….isn’t that the point in having narrower claims?Surely, with cases such as Aristocrat exhibiting the pitfalls of poorly drafted specifications, drafting an application that will support mpf claims can be challenging.Still, as demonstrated in the Funai appeal discussed yesterday, such claims are more likely to survive a challenge due to their relatively narrow interpretation. While Funai was affirmed on some grounds, the detailed analysis of the mpf claims at issue demonstrates the significant difference in claim construction used for mpf claims. In patent reexamination, the broadest reasonable interpretation (BRI) is not available for these more narrow claims. Instead, features of the specification MUST BE imported to these claims.As 112 issues are not considered in patent reexamination for original claims, the dangers of Aristocrat indefiniteness are non-existent at the USPTO. Likewise, with most patents subject to litigation now being subject to patent reexamination, a hedge against a liberal application of BRI is quite useful.The level of difficulty in drafting a patent application that will support proper mpf claims should not discourage Patentees from including these valuable claims as a hedge against invalidity. As most patents of mid-1990s vintage now demonstrate in patent reexamination, these claims can be the difference between winning and losi

Would you ever file a patent application without dependent claims?  I wouldn’t….and for obvious reasons. Dependent claims help present more detailed aspects of a claimed invention. In the prosecution context for example, dependent claims present a variation in claim scope to the examiner. Once searched by the patent examiner, in many cases dependent claims are identified as allowable and provide a simple amendment option, often leading to patent issuance. Likewise, once issued as a patent, dependent claims provide more detailed fallback positions that serve as a hedge against an invalidity attack. It is a rare patent indeed that issues without dependent claims.

Yet, there exists another form of claim that also provides a narrowed presentation of inventive features that is increasingly avoided in patent applications; the means plus function claim. Many practitioners now advocate the avoidance of such claims, but why?

Well, for one, litigators prefer broader, non-mpf claims.  Likewise, mpf claims complicate an infringement case due to their unique claim construction rules. Still others will point to recent case law finding such claims indefinite.  Aristocrat Technologies Australia (ATA) v. International Gaming Technology (IGT) (Fed. Cir. 2008)

While these criticisms are valid, lost in the debate is the fact that in many cases such claims are more likely to withstand invalidity challenges, such as during patent reexamination….isn’t that the point in having narrower claims?…

Continue Reading The Post Grant Magic of Means Plus Function Claims

ITC Invalidity Holding Reversed in Patent ReexaminationFunai Electric’s U.S. Patent 5,329,369 was previously asserted in the International Trade Commission (ITC) and the Central District of California against a group of TV manufacturers including Vizio. (As per usual, the district court actions were stayed in favor of the ITC action).The Administrative Law Judge (ALJ) of the ITC determined that claims 19 and 21 (along with others) of the ‘369 Patent were invalid. The Commission declined to review the ALJ’s findings and the matter was not appealed to the CAFC (although Vizio did appeal issues relating to another Funai patent). Also, in the European Patent Office (EPO), the foreign counterpart was likewise invalidated.Yet, in a parallel ex parte patent reexamination of the ‘369 Patent, claims 19 and 21 were found valid by the USPTO. (appeal decision here referencing confirmed claims). But how can claims found invalid by one government agency be resurrected from the dead by another?Clearly, the USPTO is bound by a final Federal District Court holding of patent invalidity, as such, reexamination and/or reissue of such a patent will not be ordered. MPEP 2242 (III (C)). However, the MPEP makes no mention of any binding effect of an ITC determination. Therefore, to understand the impact of an unfavorable ITC determination on other forums, one must look to the Commission’s congressional mandate.In 1974, the ITC mandate was revised to include the ability to analyze the validity of patents before them. In the Senate Report that accompanied this legislative change it was emphasized that:The Commission’s findings neither purport to be, nor can they be, regarded as binding interpretations of the U.S. patent laws in particular factual contexts. Therefore, it seems clear that any disposition of a Commission action by a Federal Court should not have a res judicata or collateral estoppel effect in cases before such courts.Consistent with the above identified mandate and legislative intent, decisions of the CAFC have consistently made clear that decisions of the ITC on patent issues have no preclusive effect in other forums.  Texas Instruments Inc. v. Cypress Semiconductor Corp., 90 F.3d 1558, 1568 (Fed. Cir. 1996).  Thus, the USPTO action in the Funai patent reexaminations is consistent with CAFC precedent.By choosing to proceed at the USPTO despite an adverse ITC invalidity holding, Patentee’s have the option to revisit any such holding in this increasingly popular forum through patent reexamination. By creating evidence of a contrary opinion, for example, future defendants would be unlikely to rely on the ITC holding alone as evidence of objectively reasonable behavior to fend off a charge of willful infringement.I will discuss the substance of the Funai BPAI appeal decisions in more detail tomorrow. (See itcblog.com for more background on the affect of ITC determinations

Funai Electric’s U.S. Patent 5,329,369 was previously asserted in the International Trade Commission (ITC) and the Central District of California against a group of TV manufacturers including Vizio. (As per usual, the district court actions were stayed in favor of the ITC action).

The Administrative Law Judge (ALJ) of the ITC determined that claims 19 and 21 (along with others) of the ‘369 Patent were invalid. The Commission declined to review the ALJ’s findings and the matter was not appealed to the CAFC (although Vizio did appeal issues relating to another Funai patent). Also, in the European Patent Office (EPO), the foreign counterpart was likewise invalidated.

Yet, in a parallel ex parte patent reexamination of the ‘369 Patent, claims 19 and 21 were found valid by the USPTO. (appeal decision here referencing confirmed claims). But how can claims found invalid by one government agency be resurrected from the dead by another?
Continue Reading ITC Invalidity Holding Reversed in Patent Reexamination

Patentee’s Rescinding of Earlier Made Disclaimer Deemed “Gamesmanship” Back in June of this year, I discussed the case of Beneficial Innovations, Inc. v. AOL, LLC. et al., 2-07-cv-00555 (TXED) (Ward, J.). The previous post explained that even where a patent reexamination results in a win (i.e., confirmed claims), the creation of additional prosecution history estoppel/disclaimer may result in a surrender of claim scope. In Beneficial, U.S. patents 6,183,366 & 6,712,702 are currently asserted. These patents relate to an interactive network information service in which ”unrequested“ advertising presentations are delivered to a network node. An ex parte patent reexamination was filed against the ‘136 Patent in October of 2009 (90/009,593)In their Markman briefing, Beneficial asserted that unrequested defined “not requested by the user.” Conversely, the defendants asserted that unrequested defined “not sent in response to a signal from a user’s computer” In April of this year, a Markman Order was issued accepting Beneficial’s construction.Unfortunately, one week prior to the Markman Order, Beneficial’s response in the parallel ex parte patent reexamination appeared to advance the defendants’ Markman definition before the USPTO. Annoyed by the seeming inconsistency, Judge Ward issued a revised Markman Order at the end of June (adopting the defendants construction). In mid-July, in response to a Final Rejection, Beneficial filed a further response that clarified the earlier statement to the USPTO. Shortly thereafter, Beneficial sought a clarification from Judge Ward with respect to the revised Markman Order.In response, Judge Ward clarified one thing, namely, that he is not one to mess with…..Throughout the short opinion (here), Judge Ward takes issue with the timing of Beneficial’s actions. He notes that the initial inconsistency was filed “a week before this court’s claim construction order.” With respect to Beneficial’s filing of their revised statement to the USPTO on July 14, 2010, Judge Ward states “[i]t is important to note that this correspondence to the USPTO was a mere two weeks after the Court granted the first motion for reconsideration.” (June 30, 2010). Finally, with respect to Beneficial’s request to revisit the Markman issue, Judge Ward explains “Then merely two weeks after this correspondence with the USPTO, on July 30, 2010, Plaintiff filed a motion for clarification of the Court‟s construction of the term “unrequested” from the Court‟s previous motion for reconsideration.”Based on the perception that Beneficial’s timing evidenced a deliberate attempt to game the system, Judge Ward refused to disturb his late adoption of the defendants’ definition. Judge Ward summarized the issue as:Plaintiff argues that “[t]his patent holder‟s statement to the PTO regarding its definition of the phrase “input by the user” is binding in this litigation.” (Dkt. No. 273 at 8.) The Court disagrees. The Court rejects this attempt by Plaintiff to alter the Court‟s construction of “unrequested” by making after-the-fact, self-serving statements to the USPTO in reexamination. To allow Plaintiff‟s argument to succeed would open the door for “gamesmanship” where patentees could take advantage of reexamination to alter the Court‟s construction of disputed claim terms after the Court has issued its construction.PPG COMMENT: Beneficial’s response to the non-final action (February 5th) in patent reexamination was due to the USPTO on April 5th, one week prior to the Markman Order. Likewise, with a Final Action issued by the USPTO on May 14, 2010, Beneficial’s second response was due on July 14th. Both of these filing deadlines were driven by the USPTO, not any ulterior motive of the Patentee. With the Final Action being issued so quickly after Beneficial’s first submission, there did not seem much in the way of opportunity to submit an earlier clarification (it appears the issue of the inconsistency was briefed while the Final Action remained outstanding). Sadly for Beneficial, it appears that they are just a victim of a poorly worded initial response.As to gamesmanship, the reexamination at issue was requested roughly two years after the initial complaint. A further request for ex parte patent reexamination was recently filed on July 27, 2010 (90/011,117), thus, the defendants do not have much room to complain in this regard.Finally, the rescinding of an earlier disclaimer seems to call into question the “clear disavowal” necessary to limit the claim term at issue.  See Springs Window Fashions LP v. Novo Indus., L.P., 323 F.3d 989, 995 (Fed.Cir.2003). (If the applicant mistakenly disclaimed coverage of the claimed invention, then the applicant should have amended the file to reflect the error, as the applicant is the party in the best position to do so. The applicant, however, never retracted any of his statements . . .)Beneficial may have a good chance of sorting this out on appeal to the CAFC, still, their imprecise wording in patent reexamination will amount to a very expensive miss

Back in June of this year, I discussed the case of Beneficial Innovations, Inc. v. AOL, LLC. et al., 2-07-cv-00555 (TXED) (Ward, J.). The previous post explained that even where a patent reexamination results in a win (i.e., confirmed claims), the creation of additional prosecution history estoppel/disclaimer may result in a surrender of claim scope. In Beneficial, U.S. patents 6,183,366 & 6,712,702 are currently asserted. These patents relate to an interactive network information service in which ”unrequested“ advertising presentations are delivered to a network node. An ex parte patent reexamination was filed against the ‘136 Patent in October of 2009 (90/009,593)

In their Markman briefing, Beneficial asserted that unrequested defined “not requested by the user.” Conversely, the defendants asserted that unrequested defined “not sent in response to a signal from a user’s computer” In April of this year, a Markman Order was issued accepting Beneficial’s construction.

Unfortunately, one week prior to the Markman Order, Beneficial’s response in the parallel ex parte patent reexamination appeared to advance the defendants’ Markman definition before the USPTO. Annoyed by the seeming inconsistency, Judge Ward issued a revised Markman Order at the end of June (adopting the defendants construction). In mid-July, in response to a Final Rejection, Beneficial filed a further response that clarified the earlier statement to the USPTO. Shortly thereafter, Beneficial sought a clarification from Judge Ward with respect to the revised Markman Order.

In response, Judge Ward clarified one thing, namely, that he is not one to mess with…..
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