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:
Section 307(b) governs intervening rights arising from ex parte reexamination and specifies that only “amended or new” claims incorporated into a patent during reexamination “will have the same effect as that specified in section 252,” i.e., will be susceptible to intervening rights. HemCon ignores this threshold statutory requirement and asks that we proceed directly to the subsidiary “substantive change” analysis, which derives from § 252. See Kaufman Co. v. Lantech, Inc., 807 F.2d 970, 975–77 (Fed. Cir. 1986) (explaining the relationship between §§ 252 and 307(b) and holding that “identical,” as used in § 252, means “without substantive change”). But under § 307(b), the first question when assessing whether intervening rights arose from a reexamination is whether the asserted claim is “amended or new”; if the answer is no, that ends the inquiry. Only if the claim at issue is new or has been amended may the court proceed to the second step in the analysis and assess the substantive effect of any such change pursuant to § 252.
. . .
Whether or not Marine Polymer’s arguments to the examiner and cancellation of claims during reexamination may have affected the remaining claims’ effective scope, they did not “amend” those claims for intervening rights purposes or make them “new,” which is what the statutory language requires. Intervening rights are therefore unavailable under § 307(b) as a matter of law.
With respect to the public policy arguments in favor of defendant Hemcon, the Court noted:
HemCon also expresses concern that excluding its concept of amendment by argument from the ambit of § 307(b) would “create a significant loophole” in the intervening rights defense—shrewd patentees would simply opt to rely on arguments rather than amendments to effectively change, and thereby preserve, otherwise invalid claims during reexamination without engendering intervening rights against those claims. Reply Br. for Defendant-Appellant at 25, 2011 WL 287045.
We believe that is highly unlikely. If, in reexamination, an examiner determines that particular claims are invalid and need amendment to be allowable, one would expect an examiner to require amendment rather than accept argument alone. . . . Thus, the fear of gamesmanship does not persuade us to rule contrary to the plain meaning of the statute. Various amici have in fact pointed out that such gamesmanship concerns run both ways, suggesting that HemCon’s interpretation of § 307(b), if adopted, would invite putative infringers to initiate reexamination proceedings with marginal or non-invalidating prior art. Under HemCon’s rule, such a requestor could expect that, even if the reexamination ultimately confirms all claims as patentable without amendment, the patent owner will necessarily make substantive arguments in defending the claims, thereby allowing the requestor to allege intervening rights based on those arguments.
The majority is correct that the USPTO almost always requires claim amendments, but, in this case, the Office simply confused issues of claim differentiation. As to the points of the amici favorable to Marine Polymer, after the initial panel ruling in Marine, intervening rights defenses indeed began to spring up in ongoing litigations that included claims previously confirmed in patent reexamination.
A fairly spirited dissent was authored by Judge Dyk. The dissent took issue with the manner in which the majority seemingly addressed the intervening rights issue in dictum and their strict interpretation of the statute. With respect to public policy concerns the dissent argued:
Tellingly, the amici who support the court’s interpretation of the statute recognize that formal amendments to claim language during the course of reexamination are unusual. See Amicus Br. of Soverain et al. at 10. Telling too they admit that formal amendments are now, and will be, avoided for the very purpose of avoiding the creation of intervening rights. Id. at 4 (arguing that patent owners often “follow a course of not seeking to amend their asserted claims, with the settled understanding that if they could avoid claim amendments, they could also avoid intervening rights”). In other words, applicants will amend claims by argument rather than formal methods for the very purpose of avoiding intervening rights.
This very problem has led numerous amici to oppose the majority’s mechanical construction of the term “amend” and to recognize that the majority’s interpretation of intervening rights will create the very opportunities for mischief and “foster gamesmanship” that the statute was designed to avoid. Amicus Br. of Geico et al. at 9-10 (“[U]nder such a rule, patentees will be reluctant to change the words of their claims during reexamination or reissue and, instead, badger examiners with arguments changing the meaning of the words in the claims.”); Amicus Br. of Hewlett-Packard Co. et al. at 11 (“Appellee’s reading of the statute to exclude claims narrowed through disclaimer would lead to absurd results and discourage formal claim amendments in favor of prosecution history maneuvering.”).
While the dissent is very well reasoned otherwise, the reliance on the exaggerated public policy arguments of the Hemcon amici is misguided. It is certainly true that amendments are disfavored by Patentees in reexamination/reissue— yet, such is hardly a novel practice. Indeed, the USPTO has been “badgered” with arguments attempting to change the meaning of the words in the claims since the very inception of patent reexamination. Simply stated, the fact pattern of Marine is an aberration, not an indication that the PTO will suddenly begin accepting pronouncements of claim scope in favor of claim amendments.
Interestingly, even had Marine textually amended their claims to the same effect, according to the lower court’s claim interpretation ruling, the claim scope would not have been altered. As evidenced by the recent Aspex decision, intervening rights may not exist where the text of the claims is amended to comport with the claim construction of a district court.