In Re Tanaka Decision on “Bullet Claims” Reversed at CAFCToday, the CAFC has held that the addition of narrower, dependent claims in patent reissue is an “error” contemplated by the patent reissue statute. In re Tanaka (CAFC 2011) (here)As a reminder, Ex parte Tanaka was decided in December of 2009 by the Board of Patent Appeals and Interferences (BPAI). In their holding, the Board explained that a reissue application was improper where the only defect identified in an issued patent was the failure to present additional dependent claims.  The Board reasoned that the mere addition of new dependent claims did not identify any defect in the issued patent. In their decision, the Board rejected the reasoning of In re Handel, which indicated that a failure to pursue dependent claims was an appropriate error in patent reissue. The Board characterized this reasoning as “dicta.”The Board’s decision was reversed today by the CAFC. In their reversal, the court explains that contrary to the Board’s position, the In re Handel dicta is consistent with the patent reissue statute, and the court has not departed from this line of reasoning over the years.In their decision to reverse the Board, the court explained:As interpreted by this court, the reissue statute imposes two requirements for properly invoking the reissue process. First, the original patent must be “wholly or partly inoperative or invalid.” Hewlett-Packard Co. v. Bausch & Lomb, Inc., 882 F.2d 1556, 1564 (Fed. Cir. 1989). Second, “the defective, inoperative, or invalid patent” must have arisen “through error without deceptive intent.” Id. at 1565. There is no dispute in this case that any defect arose without deceptive intent. . . . Judge Giles S. Rich wrote the Handel decision reversing the Board’s rejection of the reissue application. He explained that the reissue claims involved subject matter disclosed in the specification and thus were properly directed to “the invention disclosed in the original patent.” Id. at 944. In a footnote, Judge Rich remarked that “[t]he term ‘inoperative’ has been construed to mean inoperative adequately to protect the invention, which may be due to failure of the solicitor to understand the invention.” Id. at 945 n.2 (quoting McGrady, Patent Office Practice 309 (4th ed. 1959)). Judge Rich added that because the original patent claims were all retained in the reissue application the “term ‘less’ [in Handel’s reissue declaration] appears to have been used in the sense of fewer claims than he could properly have made, rather than in the statutory sense of subject matter included within the claims.” Id. at 946 n.2 (emphasis in original). Thus “[t]he narrower appealed claims are simply a hedge against possible invalidity of the original claims should the prior use be proved, which is a proper reason for asking that a reissue be granted.” Id. While this court has since characterized that view as dictum, it has not departed from it. . . . Even though the rule that adding a dependent claim as a hedge against possible invalidity is a proper reason to seek reissue has seemingly never been formally embodied in a holding of this court or its predecessor, articulation of the rule in Handel was not simply a passing observa-tion—it was a considered explanation of the scope of the reissue authority of the PTO in the context of a detailed explanation of the reissue statute. Based on this court’s adoption of that rule and its adherence to the rule in both Muller and Hewlett-Packard, this court rejects the Board’s contrary ruling.In the dissent, Judge Dyk explains that where all the original claims are still present in the patent reissue proceeding, the addition of narrower dependent claims is a surrender of nothing (i.e., statute requires surrender of original patent). He also notes that the cases relied upon by the majority are distinguishable on their facts.In essence Judge Dyk seems to be saying that where a patent reissue application seeks only new, dependent claims, it is essentially a continuation application by proxy. I think the USPTO would agree. Certainly, the anti-continuation lobby present at the USPTO back in 2008-2009 spawned quite a few initiatives to combat continuation filings. Today’s decision is a very positive development for Patente

Today, the CAFC has held that the addition of narrower, dependent claims in patent reissue is an “error” contemplated by the patent reissue statute. In re Tanaka (CAFC 2011) (here)

As a reminder, Ex parte Tanaka was decided in December of 2009 by the Board of Patent Appeals and Interferences (BPAI). In their holding, the Board explained that a reissue application was improper where the only defect identified in an issued patent was the failure to present additional dependent claims.  The Board reasoned that the mere addition of new dependent claims did not identify any defect in the issued patent. In their decision, the Board rejected the reasoning of In re Handel, which indicated that a failure to pursue dependent claims was an appropriate error in patent reissue. The Board characterized this reasoning as “dicta.”

The Board’s decision was reversed today by the CAFC. In their reversal, the court explains that contrary to the Board’s position, the In re Handel dicta is consistent with the patent reissue statute, and the court has not departed from this line of reasoning over the years.

In their decision to reverse the Board, the court explained:

As interpreted by this court, the reissue statute imposes two requirements for properly invoking the reissue process. First, the original patent must be “wholly or partly inoperative or invalid.” Hewlett-Packard Co. v. Bausch & Lomb, Inc., 882 F.2d 1556, 1564 (Fed. Cir. 1989). Second, “the defective, inoperative, or invalid patent” must have arisen “through error without deceptive intent.” Id. at 1565. There is no dispute in this case that any defect arose without deceptive intent. . . . 

Judge Giles S. Rich wrote the Handel decision reversing the Board’s rejection of the reissue application. He explained that the reissue claims involved subject matter disclosed in the specification and thus were properly directed to “the invention disclosed in the original patent.” Id. at 944. In a footnote, Judge Rich remarked that “[t]he term ‘inoperative’ has been construed to mean inoperative adequately to protect the invention, which may be due to failure of the solicitor to understand the invention.” Id. at 945 n.2 (quoting McGrady, Patent Office Practice 309 (4th ed. 1959)). Judge Rich added that because the original patent claims were all retained in the reissue application the “term ‘less’ [in Handel’s reissue declaration] appears to have been used in the sense of fewer claims than he could properly have made, rather than in the statutory sense of subject matter included within the claims.” Id. at 946 n.2 (emphasis in original). Thus “[t]he narrower appealed claims are simply a hedge against possible invalidity of the original claims should the prior use be proved, which is a proper reason for asking that a reissue be granted.” Id. While this court has since characterized that view as dictum, it has not departed from it. . . . 

Even though the rule that adding a dependent claim as a hedge against possible invalidity is a proper reason to seek reissue has seemingly never been formally embodied in a holding of this court or its predecessor, articulation of the rule in Handel was not simply a passing observa-tion—it was a considered explanation of the scope of the reissue authority of the PTO in the context of a detailed explanation of the reissue statute. Based on this court’s adoption of that rule and its adherence to the rule in both Muller and Hewlett-Packard, this court rejects the Board’s contrary ruling.

In the dissent, Judge Dyk explains that where all the original claims are still present in the patent reissue proceeding, the addition of narrower dependent claims is a surrender of nothing (i.e., statute requires surrender of original patent). He also notes that the cases relied upon by the majority are distinguishable on their facts.

In essence Judge Dyk seems to be saying that where a patent reissue application seeks only new, dependent claims, it is essentially a continuation application by proxy. I think the USPTO would agree. Certainly, the anti-continuation lobby present at the USPTO back in 2008-2009 spawned quite a few initiatives to combat continuation filings. 

Today’s decision is a very positive development for Patentees.

Manager’s Amendment of H.R. 1249 Passed, Headed to FloorPatent Reform took another step in the direction of passing into law today. In a 32-3 vote, the Manager’s Amendment was passed, along with several small amendments, to the House floor. A full list of all proposed amendments may be found (here). Several deal breaking amendments were proposed, but failed, including a proposal to ditch the first inventor to file scheme, and another to utilize the SNQ standard for Inter Partes Review. Upon passage of H.R. 1249 (and amendments) to the floor, Chairman Smith explained,Today’s vote puts much-needed patent reform one step closer to enactment.  The America Invents Act updates our patent system to make it easier for innovators to produce new technologies that drive economic growth and generate jobs.This important legislation is long overdue.  The last major patent reform was nearly 60 years ago.  Since then, American inventors have helped put a man on the moon, developed cell phones and launched the Internet. But we cannot protect the technologies of today with the tools of the past. Technological innovation from America’s intellectual property is linked to three-quarters of our economic growth.  American IP industries account for over half of all U.S. exports and provide millions of Americans with well-paying jobs. In order to have a healthy economy, we must have a healthy patent system. These reforms discourage frivolous suits, enhance patent quality and streamline international principles. After six years of bipartisan efforts, I look forward to crossing the finish line on patent reform.Expect further political maneuvers on the House floor, still, patent reform is getting very close to becoming reality. 

Patent Reform took another step in the direction of passing into law today. In a 32-3 vote, the Manager’s Amendment was passed, along with several small amendments, to the House floor. A full list of all proposed amendments may be found (here). 

Several deal breaking amendments were proposed, but failed, including a proposal to ditch the first inventor to file scheme, and another to utilize the SNQ standard for Inter Partes Review. Upon passage of H.R. 1249 (and amendments) to the floor, Chairman Smith explained,

Today’s vote puts much-needed patent reform one step closer to enactment.  The America Invents Act updates our patent system to make it easier for innovators to produce new technologies that drive economic growth and generate jobs.

This important legislation is long overdue.  The last major patent reform was nearly 60 years ago.  Since then, American inventors have helped put a man on the moon, developed cell phones and launched the Internet. But we cannot protect the technologies of today with the tools of the past. 

Technological innovation from America’s intellectual property is linked to three-quarters of our economic growth.  American IP industries account for over half of all U.S. exports and provide millions of Americans with well-paying jobs. 

In order to have a healthy economy, we must have a healthy patent system. These reforms discourage frivolous suits, enhance patent quality and streamline international principles. After six years of bipartisan efforts, I look forward to crossing the finish line on patent reform.

Expect further political maneuvers on the House floor, still, patent reform is getting very close to becoming reality.

 

Walker Process Allegation Defeated by Re-issuance of Original Patent ClaimsPost grant proceedings before the USPTO cannot cure inequitable conduct. This is because the inequitable conduct inquiry centers on the patentee’s intent during the prosecution of the original application. Still, a finding that a reference lacks materiality by the USPTO in a post grant proceeding can be quite useful to a patentee for rebutting a charge of inequitable conduct. Likewise, a finding of materiality by the USPTO in a post grant proceeding can be quite useful to defendants for bolstering a charge of inequitable conduct. In this same vein, a recent case has demonstrated that a favorable post grant result at the USPTO may be used to completely preclude allegations of fraud that rely upon the “but for” test, such as a Walker Process claim.A Walker Processclaim seeks to strip a patentee of its exemption from the antitrust laws. Several factors must be present to prove such a claim, one of which is “a clear showing of reliance, i.e., that the patent would not have issued but for the misrepresentation or omission.”In U.S. Rubber Recycling, Inc. v. ECORE International Inc., et al.(CDCA), plaintiff, U.S. Rubber, alleged that Ecore’s U.S. Patent 6,920,723 was fraudulently procured and wrongfully enforced to monopolize the rubber acoustical underlayment market. The fraud allegations were based on the theory that, during the prosecution of the ‘723 Patent, Ecore intentionally withheld material prior art from the USPTO. (inequitable conduct). U.S. Rubber also alleged that Ecore threatened litigation to competitors, distributors, architects, and end-users, and communicated to them that they may not sell or purchase rubber acoustic underlayment from anyone else due to the ‘723 Patent. U.S Rubber asserted that  these threats were baseless, made in bad faith, and for anti-competitive purposes. (Walker Process Claim); other torts and unfair competition theories were also alleged.Prior to the suit, Ecore sought a broadening reissue of the ‘723 Patent. During the patent reissue proceedings, Ecore provided to the USPTO the allegedly withheld prior art materials. The ‘723 Patent was successfully reissued in November of 2010 with all original claims, and additional, broader claims. Shortly thereafter, Ecore moved for judgement on the pleadings (Rule 12 (c)) with respect to the Walker Process claim.In deciding the issue the court held:The MPEP states that “[a] reissue application will be examined in the same manner as a non-reissue, non-provisional application, and will be subject to all the requirements of the rules related to non-reissue applications.” MPEP § 1440 (8th ed. 2010); see also 37 C.F.R. §1.176(a). In other words, the PTO fully examines a re-issuance as if it were presented for the first time. See Nupla Corp. v. IXL Mfg. Co., 114 F.3d 191 (Fed. Cir. 1997); see also (Pl.’s Resp. 2:14-16 (stating that “the reissue process is an entirely new application process based on the scope of claims, which was the basis of Defendant’s reissue application”).) Here, Defendant submitted its reissuance application with the allegedly invalidating prior art. (See RJN Exs. 2-8.) Even with the contentious prior art, the PTO issued RE41945 to Defendant, and did so after reviewing the patent as if for the first time. (RJN Ex. 1.) The re-issuance does not cure the alleged fraud, but it is dispositive of whether the PTO would have issued the original ‘723 Patent.Because the PTO reexamines re-issuance applications as if being presented for the first time, the fact that the PTO did re-issue Defendant’s patent even with the prior art precludes Plaintiff from plausibly pleading Claim One.Interestingly, the “but for” test has been proposed as a standard for inequitable conduct pleadings. Therasense, Inc. v. Becton Dickinson and Co. (CAFC 2011).

 

Post grant proceedings before the USPTO cannot cure inequitable conduct. This is because the inequitable conduct inquiry centers on the patentee’s intent during the prosecution of the original application. Still, a finding that a reference lacks materiality by the USPTO in a post grant proceeding can be quite useful to a patentee for rebutting a charge of inequitable conduct. Likewise, a finding of materiality by the USPTO in a post grant proceeding can be quite useful to defendants for bolstering a charge of inequitable conduct. In this same vein, a recent case has demonstrated that a favorable post grant result at the USPTO may be used to completely preclude allegations of fraud that rely upon the “but for” test, such as a Walker Process claim.

 

A Walker Processclaim seeks to strip a patentee of its exemption from the antitrust laws. Several factors must be present to prove such a claim, one of which is “a clear showing of reliance, i.e., that the patent would not have issued but for the misrepresentation or omission.”

In U.S. Rubber Recycling, Inc. v. ECORE International Inc., et al.(CDCA), plaintiff, U.S. Rubber, alleged that Ecore’s U.S. Patent 6,920,723 was fraudulently procured and wrongfully enforced to monopolize the rubber acoustical underlayment market. The fraud allegations were based on the theory that, during the prosecution of the ‘723 Patent, Ecore intentionally withheld material prior art from the USPTO. (inequitable conduct). U.S. Rubber also alleged that Ecore threatened litigation to competitors, distributors, architects, and end-users, and communicated to them that they may not sell or purchase rubber acoustic underlayment from anyone else due to the ‘723 Patent. U.S Rubber asserted that  these threats were baseless, made in bad faith, and for anti-competitive purposes. (Walker Process Claim); other torts and unfair competition theories were also alleged.

Prior to the suit, Ecore sought a broadening reissue of the ‘723 Patent. During the patent reissue proceedings, Ecore provided to the USPTO the allegedly withheld prior art materials. The ‘723 Patent was successfully reissued in November of 2010 with all original claims, and additional, broader claims. Shortly thereafter, Ecore moved for judgement on the pleadings (Rule 12 (c)) with respect to the Walker Process claim.

In deciding the issue the court held:

The MPEP states that “[a] reissue application will be examined in the same manner as a non-reissue, non-provisional application, and will be subject to all the requirements of the rules related to non-reissue applications.” MPEP § 1440 (8th ed. 2010); see also 37 C.F.R. §1.176(a). In other words, the PTO fully examines a re-issuance as if it were presented for the first time. See Nupla Corp. v. IXL Mfg. Co., 114 F.3d 191 (Fed. Cir. 1997); see also (Pl.’s Resp. 2:14-16 (stating that “the reissue process is an entirely new application process based on the scope of claims, which was the basis of Defendant’s reissue application”).) Here, Defendant submitted its reissuance application with the allegedly invalidating prior art. (See RJN Exs. 2-8.) Even with the contentious prior art, the PTO issued RE41945 to Defendant, and did so after reviewing the patent as if for the first time. (RJN Ex. 1.) The re-issuance does not cure the alleged fraud, but it is dispositive of whether the PTO would have issued the original ‘723 Patent.

Because the PTO reexamines re-issuance applications as if being presented for the first time, the fact that the PTO did re-issue Defendant’s patent even with the prior art precludes Plaintiff from plausibly pleading Claim One.

Interestingly, the “but for” test has been proposed as a standard for inequitable conduct pleadings. Therasense, Inc. v. Becton Dickinson and Co. (CAFC 2011). 

SNQ Standard Removed by Proposed Manager AmendmentToday, the Chairman of the House Judiciary Committee circulated a Manager’s Amendment to H.R. 1249. (here).  There were several notable changes to the proposed Inter Partes Review and Post Grant Review proceedings.Perhaps the most noteworthy change in the manager’s amendment from a post grant perspective is the removal of the Substantial New Question of Patentability (SNQ) standard for Inter Partes Review. Previously I explained that the SNQ standard was adopted by the House for Inter Partes Review over the proposed “reasonable likelihood of success” standard of Senate bill S.23. The House adoption of the more liberal SNQ standard was not only unpopular, but rendered other aspects of the bill wasteful. Fortunately, this change has been undone by the manager amendment.Other notable Post Grant Changes include:Inter Partes Review-expansion of window to request an Inter Partes Review once litigation is initiated (expanded from 9 months to one year)-a provision was added guaranteeing that the petitioner will get at least one opportunity to file written comments if an Inter Partes Review is instituted. (I guess if the Board sides with the Patentee at the outset, the Patentee would not need to file anything that would trigger a petitioner right of response, effectively forcing the petitioner to the CAFC?)-the section of H.R. 1249 pertaining to staying an ITC action was removed (Sec. 320)Post Grant Review-the section of H.R. 1249 pertaining to staying an ITC action was removed (Sec. 330)Other provisions and changes, perhaps most notably to the first to file provision (correction of language). Also a provision was added to study the impact of patent troll litigation and its effect on the econo

Today, the Chairman of the House Judiciary Committee circulated a Manager’s Amendment to H.R. 1249. (here).  There were several notable changes to the proposed Inter Partes Review and Post Grant Review proceedings.

Perhaps the most noteworthy change in the manager’s amendment from a post grant perspective is the removal of the Substantial New Question of Patentability (SNQ) standard for Inter Partes Review. Previously I explained that the SNQ standard was adopted by the House for Inter Partes Review over the proposed “reasonable likelihood of success” standard of Senate bill S.23. The House adoption of the more liberal SNQ standard was not only unpopular, but rendered other aspects of the bill wasteful. Fortunately, this change has been undone by the manager amendment.

Other notable Post Grant Changes include:

Inter Partes Review

-expansion of window to request an Inter Partes Review once litigation is initiated (expanded from 9 months to one year)

-a provision was added guaranteeing that the petitioner will get at least one opportunity to file written comments if an Inter Partes Review is instituted. (I guess if the Board sides with the Patentee at the outset, the Patentee would not need to file anything that would trigger a petitioner right of response, effectively forcing the petitioner to the CAFC?)

-the section of H.R. 1249 pertaining to staying an ITC action was removed (Sec. 320)

Post Grant Review

-the section of H.R. 1249 pertaining to staying an ITC action was removed (Sec. 330)

Other provisions and changes, perhaps most notably to the first to file provision (correction of language). Also a provision was added to study the impact of patent troll litigation and its effect on the economy.

USPTO Vacates Reexamination Certificate Cancelling All Claims?Typically, a patent reexamination proceeding is terminated after a patentability determination of the USPTO. Termination may occur during the prosecution phase or after the appeal phase is concluded. Occasionally, a patent reexamination is terminated based upon a failure of a Patentee to present timely filings.  Once terminated, a certificate is published informing the public of the outcome of the patent reexamination proceeding (i.e., claim changes/cancellations).For those terminations caused by the failure to present a timely filing, such as an interview summary (ex parte) or a response to an office action, it is possible to petition under 37 CFR § 1.137(b) to have the late papers entered and the termination vacated; thereafter, the patent reexamination proceeding continues. But what if the petition is not filed until months after the initial termination, and after the printing of a certificate informing the public that all claims of the patent have been cancelled?The answer might surprise you.In Extreme Networks, Inc. v. Enterasys Networks, Inc., (WDWI), after an adverse jury verdict, defendant Enterasys sought ex parte patent reexamination of the Extreme Network patents at issue. The verdict found Enterasys liable for $200k in damages, but more importantly, an injunction was entered against the defendant (now stayed).In April of 2010, first office actions were issued in two of the ex parte patent reexaminations (90/010,433 & 90/010,432) . In June of 2010, petitions for extension of time were filed by Extreme to extend the due date for filing the responses; these petitions were denied. In July of 2010, both reexaminations were terminated as a response was never filed to the April office actions. 4 months later, reexamination certificates were printed cancelling all claims of the respective patents.Relying on the printed certificates, Enterasys motioned for the court to dissolve the injunction. Shortly thereafter, Extreme petitioned the USPTO to vacate the terminated reexamination proceedings, despite the fact that the certificates had already printed. Extreme claimed that the months of delay in filing their response was unintentional; curiously, the USPTO granted the petitions.Enterasys then filed a new motion with the court alleging that the petition filing constituted clear inequitable conduct (as the decision not to file a response after the extension denial was intentional), and that the injunction threat was no longer equitable. The court denied the relief requested by Enterasys, but continued the stay until the conclusion of the patent reexaminations (decision here)Petitions to vacate a terminated patent reexamination are not uncommon. Yet, here, the reexaminations were not only terminated, they were concluded, and resulted in printed certificates. Only after the printing of the certificates were the petitions submitted to the office. It is unclear how the USPTO can justify jurisdiction over such concluded proceedings. Indeed, 37 CFR  § 1.570(d) provides:If a certificate has been issued which cancels all of the claims of the patent, no further Office proceedings will be conducted with regard to that patent or any reissue applications or reexamination requests relating thereto. (emphasis added)Here the office decision vacated the reexamination certificate that cancelled all claims, and allowed further proceedings. This action seems directly at odds with 1.570(d).Moreover, even assuming such vacatur were proper on another basis, public policy would seem to favor reliance upon printed reexamination certificates. Certainly practitioners should be allowed to correct simple mistakes, but with so many patent reexaminations being related to high profile litigations (as was the case here) it should not take 6 months to file a simple petition…..just my two cents. Very, very strange case.This case was brought to my attention by the great Docket Navigator.

Typically, a patent reexamination proceeding is terminated after a patentability determination of the USPTO. Termination may occur during the prosecution phase or after the appeal phase is concluded. Occasionally, a patent reexamination is terminated based upon a failure of a Patentee to present timely filings.  Once terminated, a certificate is published informing the public of the outcome of the patent reexamination proceeding (i.e., claim changes/cancellations).

For those terminations caused by the failure to present a timely filing, such as an interview summary (ex parte) or a response to an office action, it is possible to petition under 37 CFR § 1.137(b) to have the late papers entered and the termination vacated; thereafter, the patent reexamination proceeding continues. 

But what if the petition is not filed until months after the initial termination, and after the printing of a certificate informing the public that all claims of the patent have been cancelled?

The answer might surprise you.

In Extreme Networks, Inc. v. Enterasys Networks, Inc., (WDWI), after an adverse jury verdict, defendant Enterasys sought ex parte patent reexamination of the Extreme Network patents at issue. The verdict found Enterasys liable for $200k in damages, but more importantly, an injunction was entered against the defendant (now stayed).

In April of 2010, first office actions were issued in two of the ex parte patent reexaminations (90/010,433 & 90/010,432) . In June of 2010, petitions for extension of time were filed by Extreme to extend the due date for filing the responses; these petitions were denied. In July of 2010, both reexaminations were terminated as a response was never filed to the April office actions. 4 months later, reexamination certificates were printed cancelling all claims of the respective patents.

Relying on the printed certificates, Enterasys motioned for the court to dissolve the injunction. Shortly thereafter, Extreme petitioned the USPTO to vacate the terminated reexamination proceedings, despite the fact that the certificates had already printed. Extreme claimed that the months of delay in filing their response was unintentional; curiously, the USPTO granted the petitions.

Enterasys then filed a new motion with the court alleging that the petition filing constituted clear inequitable conduct (as the decision not to file a response after the extension denial was intentional), and that the injunction threat was no longer equitable. The court denied the relief requested by Enterasys, but continued the stay until the conclusion of the patent reexaminations (decision here)

Petitions to vacate a terminated patent reexamination are not uncommon. Yet, here, the reexaminations were not only terminated, they were concluded, and resulted in printed certificates. Only after the printing of the certificates were the petitions submitted to the office. It is unclear how the USPTO can justify jurisdiction over such concluded proceedings. Indeed, 37 CFR  § 1.570(d) provides:

If a certificate has been issued which cancels all of the claims of the patent, no further Office proceedings will be conducted with regard to that patent or any reissue applications or reexamination requests relating thereto. (emphasis added)

Here the office decision vacated the reexamination certificate that cancelled all claims, and allowed further proceedings. This action seems directly at odds with 1.570(d).

Moreover, even assuming such vacatur were proper on another basis, public policy would seem to favor reliance upon printed reexamination certificates. Certainly practitioners should be allowed to correct simple mistakes, but with so many patent reexaminations being related to high profile litigations (as was the case here) it should not take 6 months to file a simple petition…..just my two cents. Very, very strange case.

This case was brought to my attention by the great Docket Navigator.

Using a Parallel Patent Reexamination as Evidence of Invalidity?Increasingly, courts are presented with evidence of a parallel patent reexamination and must determine whether/when such evidence is admissible.Admissibility of evidence is governed by the Federal Rules of Evidence (“FRE”).  In recent cases, where the admissibility of evidence of concurrent reexamination proceedings has been offered with respect to the ultimate question of validity, patentees have attempted to use three rules of evidence to exclude such evidence, FRE 402, FRE 403, and FRE 802.FRE 402 excludes irrelevant evidence.  Patentees, hoping to keep evidence of concurrent reexamination proceedings out of the litigation and away from the jury, have argued that this evidence is irrelevant and should be excluded under FRE 402.  Several courts have agreed.  For example, in the Northern District of Iowa, where reexamination had been granted but no office action had issued, the court stated that “evidence of incomplete patent reexamination proceedings is not admissible to prove invalidity of a patent, because it has no probative value on that issue.”  Transamerica Life Ins. Co. v. Lincoln National Life Ins. Co., 597 F. Supp. 2d 897, 907 (N.D. Iowa 2009) (citing Fed. R. Evid. 402).  Likewise, in the District of Utah, the court held that “evidence concerning the reexamination proceedings is likely irrelevant because it does not have the tendency to make any fact more or less probable than it would otherwise be.” Edizone, L.C. v. Cloud Nine, 2008 U.S. Dist. LEXIS 41258, at *4 (D. Utah, May 22, 2008).  Even where reexamination proceedings resulted in the rejection of claims and the issuance of  actions closing prosecution, the Southern District of Texas still found that such evidence was irrelevant.  Tesco Corp. v. Weatherford Int’l, Inc., 2010 U.S. Dist. LEXIS 121054 (S.D. Tex., Sep. 27, 2010).  The Tesco court stated that “[u]nlike in reexaminations, those challenging the validity of a patent in litigation must overcome a presumption of validity by proving by clear and convincing evidence that a patent is valid.  The conclusions of examiners as to whether a claim should be confirmed or rejected using a completely different standard have no probative value in this context.”  Id. at *27.  Nonetheless, the Tesco court held that evidence of concurrent reexamination proceedings was relevant to the issue of willful infringement.  Id. at *29-30.However, even where such evidence has been found to be relevant, some courts have found that it fails the test of FRE 403.  FRE 403 states that “evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.”  Patentees, hoping to exclude evidence of concurrent reexamination proceedings have argued that the probative value of such evidence would be far outweighed by the danger of its prejudice.  Several courts have agreed.  Where the PTO had granted a request for reexamination, the Eastern District of Texas held that “[t]he simple fact that a reexamination decision has been made by the PTO is not evidence probative of any element regarding any claim of invalidity. . . . Even if it was, its probative value is substantially outweighed by its prejudicial effect in suggesting to the jury that it is entitled to ignore both the presumption of validity and the defendant’s clear and convincing burden at trial.” i4i L.P. v. Microsoft Corp., 670 F. Supp. 2d 568, 588 (E.D. Tex. 2009).  The Northern District of Illinois similarly held that “telling the jury that the patent has been called into question by the Patent Office may significantly influence the jury’s application of the presumption of validity and significantly prejudice [the patentee]. The prejudicial potential of this evidence far outweighs any probative value it may have.” Amphenol T&M Antennas, Inc. v. Centurion Int’l, Inc., 2002 U.S. Dist. LEXIS 822, at *5 (N.D. Ill., Jan. 17, 2002).  Even where final rejections had been made during reexamination, the District of Delaware held that “[a]bsent unusual circumstances… non-final decisions made during reexamination are not binding, moreover, they are more prejudicial (considering the overwhelming possibility of jury confusion) than probative of validity.” SRI Int’l Inc. v. Internet Security Sys., Inc., 647 F. Supp. 2d 323, 356 (D. Del. 2009).FRE 802 ensures the inadmissibility of hearsay evidence.  Hearsay is defined as “a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.”  Fed. R. Evid. 801(c).  In Fresenius Medical Care Holdings, Inc. v. Baxter International, Inc., the patentee argued that the alleged infringer was offering several PTO documents, including the grant of a request for reexamination, to prove the truth of the matters asserted therein.  No. 03-cv-1431 (N.D. Cal. May 15, 2006).  According to the patentee, such documents were hearsay.  In response, the accused infringer asserted that this evidence fell within the public records exception to the hearsay rule, FRE 803(8), and was admissible.  Id.  FRE 803(8) creates an exception for “[r]ecords, reports, statements, or data compilations, in any form, of public offices or agencies, setting forth (A) the activities of the office or agency, or (B) matters observed pursuant to duty imposed by law as to which matters there was a duty to report…, or (C) in civil actions…, factual findings resulting from an investigation made pursuant to authority granted by law, unless the sources of information or other circumstances indicate lack of trustworthiness.”  Fed. R. Evid. 803(8).  In Fresenius, the court found that evidence of a grant of reexamination fell within this exception and was not excludable as hearsay.  Id., slip op. at 4-6.  Specifically, it found that the PTO is a public office or agency, that the determination that a substantial new question of patentability exists is a final decision, and that PTO documents are trustworthy. Id. at 5. For purposes of proving invalidity, evidence of concurrent reexamination proceedings is almost certainly to be excluded as lacking relevance under FRE 402 and/or as being more prejudicial than probative under FRE 403.For the above reasons, parallel patent reexamination filings are almost never filed for the purpose of convincing a fact finder that a patent should be found invalid at trial.Instead, the benefits of parallel patent reexamination have been discussed at great length here as potentially impacting other aspects of litigation, “Is Evidence of Parallel Reexamination Proceedings Admissible at Trial?” (Parts I, II, III, and IV). In past posts, we have explained the benefits of parallel patent reexamination evidence as: aiding an inequitable conduct defense, impacting claim construction,  rebutting allegations of willful infringement, obtaining patent owner admissions to support a non-infringement defense, obtaining an intervening rights defense, providing grounds to stay a district court proceeding, and supporting/opposing injunctive reli

Increasingly, courts are presented with evidence of a parallel patent reexamination and must determine whether/when such evidence is admissible.

Admissibility of evidence is governed by the Federal Rules of Evidence (“FRE”).  In recent cases, where the admissibility of evidence of concurrent reexamination proceedings has been offered with respect to the ultimate question of validity, patentees have attempted to use three rules of evidence to exclude such evidence, FRE 402, FRE 403, and FRE 802.

FRE 402 excludes irrelevant evidence.  Patentees, hoping to keep evidence of concurrent reexamination proceedings out of the litigation and away from the jury, have argued that this evidence is irrelevant and should be excluded under FRE 402.  Several courts have agreed.  For example, in the Northern District of Iowa, where reexamination had been granted but no office action had issued, the court stated that “evidence of incomplete patent reexamination proceedings is not admissible to prove invalidity of a patent, because it has no probative value on that issue.”  Transamerica Life Ins. Co. v. Lincoln National Life Ins. Co., 597 F. Supp. 2d 897, 907 (N.D. Iowa 2009) (citing Fed. R. Evid. 402).  Likewise, in the District of Utah, the court held that “evidence concerning the reexamination proceedings is likely irrelevant because it does not have the tendency to make any fact more or less probable than it would otherwise be.” Edizone, L.C. v. Cloud Nine, 2008 U.S. Dist. LEXIS 41258, at *4 (D. Utah, May 22, 2008).  Even where reexamination proceedings resulted in the rejection of claims and the issuance of  actions closing prosecution, the Southern District of Texas still found that such evidence was irrelevant.  Tesco Corp. v. Weatherford Int’l, Inc., 2010 U.S. Dist. LEXIS 121054 (S.D. Tex., Sep. 27, 2010).  The Tesco court stated that “[u]nlike in reexaminations, those challenging the validity of a patent in litigation must overcome a presumption of validity by proving by clear and convincing evidence that a patent is valid.  The conclusions of examiners as to whether a claim should be confirmed or rejected using a completely different standard have no probative value in this context.”  Id. at *27.  Nonetheless, the Tesco court held that evidence of concurrent reexamination proceedings was relevant to the issue of willful infringement.  Id. at *29-30.

However, even where such evidence has been found to be relevant, some courts have found that it fails the test of FRE 403.  FRE 403 states that “evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.”  Patentees, hoping to exclude evidence of concurrent reexamination proceedings have argued that the probative value of such evidence would be far outweighed by the danger of its prejudice.  Several courts have agreed.  Where the PTO had granted a request for reexamination, the Eastern District of Texas held that “[t]he simple fact that a reexamination decision has been made by the PTO is not evidence probative of any element regarding any claim of invalidity. . . . Even if it was, its probative value is substantially outweighed by its prejudicial effect in suggesting to the jury that it is entitled to ignore both the presumption of validity and the defendant’s clear and convincing burden at trial.” i4i L.P. v. Microsoft Corp., 670 F. Supp. 2d 568, 588 (E.D. Tex. 2009).  The Northern District of Illinois similarly held that “telling the jury that the patent has been called into question by the Patent Office may significantly influence the jury’s application of the presumption of validity and significantly prejudice [the patentee]. The prejudicial potential of this evidence far outweighs any probative value it may have.” Amphenol T&M Antennas, Inc. v. Centurion Int’l, Inc., 2002 U.S. Dist. LEXIS 822, at *5 (N.D. Ill., Jan. 17, 2002).  Even where final rejections had been made during reexamination, the District of Delaware held that “[a]bsent unusual circumstances… non-final decisions made during reexamination are not binding, moreover, they are more prejudicial (considering the overwhelming possibility of jury confusion) than probative of validity.” SRI Int’l Inc. v. Internet Security Sys., Inc., 647 F. Supp. 2d 323, 356 (D. Del. 2009).

FRE 802 ensures the inadmissibility of hearsay evidence.  Hearsay is defined as “a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.”  Fed. R. Evid. 801(c).  In Fresenius Medical Care Holdings, Inc. v. Baxter International, Inc., the patentee argued that the alleged infringer was offering several PTO documents, including the grant of a request for reexamination, to prove the truth of the matters asserted therein.  No. 03-cv-1431 (N.D. Cal. May 15, 2006).  According to the patentee, such documents were hearsay.  In response, the accused infringer asserted that this evidence fell within the public records exception to the hearsay rule, FRE 803(8), and was admissible.  Id.  FRE 803(8) creates an exception for “[r]ecords, reports, statements, or data compilations, in any form, of public offices or agencies, setting forth (A) the activities of the office or agency, or (B) matters observed pursuant to duty imposed by law as to which matters there was a duty to report…, or (C) in civil actions…, factual findings resulting from an investigation made pursuant to authority granted by law, unless the sources of information or other circumstances indicate lack of trustworthiness.”  Fed. R. Evid. 803(8).  In Fresenius, the court found that evidence of a grant of reexamination fell within this exception and was not excludable as hearsay.  Id., slip op. at 4-6.  Specifically, it found that the PTO is a public office or agency, that the determination that a substantial new question of patentability exists is a final decision, and that PTO documents are trustworthy. Id. at 5.

For purposes of proving invalidity, evidence of concurrent reexamination proceedings is almost certainly to be excluded as lacking relevance under FRE 402 and/or as being more prejudicial than probative under FRE 403.

For the above reasons, parallel patent reexamination filings are almost never filed for the purpose of convincing a fact finder that a patent should be found invalid at trial.

Instead, the benefits of parallel patent reexamination have been discussed at great length here as potentially impacting other aspects of litigation, “Is Evidence of Parallel Reexamination Proceedings Admissible at Trial?” (Parts I, II, III, and IV). In past posts, we have explained the benefits of parallel patent reexamination evidence as: aiding an inequitable conduct defense, impacting claim construction,  rebutting allegations of willful infringement, obtaining patent owner admissions to support a non-infringement defense, obtaining an intervening rights defense, providing grounds to stay a district court proceeding, and supporting/opposing injunctive relief.

Confirmed Dependent Claims Confuse Court?It seems every day there is a new decision issued in a district court addressing a motion to stay pending patent reexamination. (certainly I have written my fair share of posts on the topic). Due to the routine nature of these decisions, I try to avoid discussing the topic too much absent some noteworthy development.Recently, in Simson Garfinkel v Decru Inc., (EDTX) (here) the plaintiff sought to lift a stay that has been in place since the Summer of 2008. Initially, the case was stayed pending an ex parte patent reexamination (U.S. Patent 6,993,661). The plaintiff requested that the case be stayed until the conclusion of that proceeding. During this reexamination, all the issued claims were cancelled in favor of new claims, which were allowed. Shortly thereafter, the defendants sought inter partes reexamination of the new claims. In a first action, dependent claims 946-53) were confirmed, but the independent claims (42-45) were rejected. After learning of the confirmation of the dependent claims, the plaintiff sought to lift the stay. In denying the plaintiff’s request, the court cited the defendant’s argument that the confirmed claims are “virtually certain” to be amended. However, this argument is based on a flawed understanding of patent reexamination practice. At page 4 of the decision, the court explained:Defendants sur-reply that contrary to Plaintiff’s assertions, all of the claims in the Plaintiff’s patent are “virtually certain” to undergo further changes, even the ones that Plaintiff has identified as affirmed. Dkt. No. 101 at 2. Defendants point out that the four independent claims, claims 42 to 45, have been rejected and that claims 46 through 53 depend from those independent claims. Thus, claims 46 through 53 has to “either be amended to independent form, or be made to depend on a new independent base claim” for those claims to be allowable. (emphasis added)This is absolutely not the case. Unlike regular prosecution, it is improper to object to an allowable dependent claim by virtue of a dependency to a rejected base claim. There is never a need to amend such claims. As explained in MPEP § 2260.01.If an unamended base patent claim (i.e., a claim appearing in the reexamination as it appears in the patent) has been rejected or canceled, any claim which is directly or indirectly dependent thereon should be confirmed or allowed if the dependent claim is otherwise allowable. The dependent claim should not be objected to or rejected merely because it depends on a rejected or canceled patent claim. No requirement should be made for rewriting the dependent claim in independent form. As the original patent claim numbers are not changed in a reexamination proceeding, the content of the canceled base claim would remain in the printed patent and would be available to be read as a part of the confirmed or allowed dependent claim. (emphasis added)Rather than pointing this issue out to the court during oral argument to aid in justify the lifting of the stay, unfortunately, shortly after the briefing concluded….the Patentee placed all of the dependent claims in independent form in a December 2010 amendment.( This was done despite the fact that the office, correctly, made no such requirement).Here the stay may very well have remained in place based on other factors beyond the scope of reexamination issue. However, the ability to point out that the claims will not change and that the defendants argument is wrong may have persuaded the judge to lift the stay. Instead, the Patentee now has to wait until September before seeking another reconsideration of the issue.  As pointed out previously, this amendment mistake is quite common, and can often times have significant impact on unexamined, intervening claims.This case was brought to my attention by the great Docket Navigator.

It seems every day there is a new decision issued in a district court addressing a motion to stay pending patent reexamination. (certainly I have written my fair share of posts on the topic). Due to the routine nature of these decisions, I try to avoid discussing the topic too much absent some noteworthy development.

Recently, in Simson Garfinkel v Decru Inc., (EDTX) (here) the plaintiff sought to lift a stay that has been in place since the Summer of 2008. Initially, the case was stayed pending an ex parte patent reexamination (U.S. Patent 6,993,661). The plaintiff requested that the case be stayed until the conclusion of that proceeding. During this reexamination, all the issued claims were cancelled in favor of new claims, which were allowed. Shortly thereafter, the defendants sought inter partes reexamination of the new claims. In a first action, dependent claims 946-53) were confirmed, but the independent claims (42-45) were rejected. After learning of the confirmation of the dependent claims, the plaintiff sought to lift the stay. 

In denying the plaintiff’s request, the court cited the defendant’s argument that the confirmed claims are “virtually certain” to be amended. However, this argument is based on a flawed understanding of patent reexamination practice.

At page 4 of the decision, the court explained:

Defendants sur-reply that contrary to Plaintiff’s assertions, all of the claims in the Plaintiff’s patent are “virtually certain” to undergo further changes, even the ones that Plaintiff has identified as affirmed. Dkt. No. 101 at 2. Defendants point out that the four independent claims, claims 42 to 45, have been rejected and that claims 46 through 53 depend from those independent claims. Thus, claims 46 through 53 has to “either be amended to independent form, or be made to depend on a new independent base claim” for those claims to be allowable. (emphasis added)

This is absolutely not the case. Unlike regular prosecution, it is improper to object to an allowable dependent claim by virtue of a dependency to a rejected base claim. There is never a need to amend such claims. 

As explained in MPEP § 2260.01.

If an unamended base patent claim (i.e., a claim appearing in the reexamination as it appears in the patent) has been rejected or canceled, any claim which is directly or indirectly dependent thereon should be confirmed or allowed if the dependent claim is otherwise allowable. The dependent claim should not be objected to or rejected merely because it depends on a rejected or canceled patent claim. No requirement should be made for rewriting the dependent claim in independent form. As the original patent claim numbers are not changed in a reexamination proceeding, the content of the canceled base claim would remain in the printed patent and would be available to be read as a part of the confirmed or allowed dependent claim. (emphasis added)

Rather than pointing this issue out to the court during oral argument to aid in justify the lifting of the stay, unfortunately, shortly after the briefing concluded….the Patentee placed all of the dependent claims in independent form in a December 2010 amendment.( This was done despite the fact that the office, correctly, made no such requirement).

Here the stay may very well have remained in place based on other factors beyond the scope of reexamination issue. However, the ability to point out that the claims will not change and that the defendants argument is wrong may have persuaded the judge to lift the stay. Instead, the Patentee now has to wait until September before seeking another reconsideration of the issue.  

As pointed out previously, this amendment mistake is quite common, and can often times have significant impact on unexamined, intervening claims.

This case was brought to my attention by the great Docket Navigator.

Director Kappos Informs Examing Corps of Temporary Funding Today, Director Kappos provided the following announcement to the Examing Corps:            Although the Commerce Department indicated earlier in the week that the USPTO should prepare a plan to shut down, it appears that temporary funding exists to keep the office going for a few days. Full announcement (here

Today, Director Kappos provided the following announcement to the Examing Corps: quote            Although the Commerce Department indicated earlier in the week that the USPTO should prepare a plan to shut down, it appears that temporary funding exists to keep the office going for a few days. Full announcement (here)

buzzGoings on and Rumored Changes at the USPTO Spring 2011

With so much attention focused on the current patent reform debate, continued efforts within the USPTO to improve post grant performance may be going unnoticed. Below are just a few office initiatives and rumored developments. 

USPTO to Close Monday?

Assuming Congress does not arrive at a solution to the current budget impasse, the USPTO has been informed by the Secretary of Commerce that it is not exempt from a government shutdown.

Central Reexamination Unit (CRU)

Recently, the Office has begun reviewing examiner applications to join the Central Reexamination Unit (CRU) for a temporary detail (3 months, extendable for a year) (opening listed here). Selected examiners will be assigned to work Continue Reading The Post Grant Buzz (Spring 2011)

Delay in Case Schedule Allows for Amended Complaint  Previously, Voda v. Medtronic Inc., et. al. (OKWD) examined the impact of multiple requests for patent reexaminationin the context of a motion to stay. Early in the case the defendant Medtronic was able to secure a stay pending a first request for patent reexamination. Shortly thereafter, the reexamination concluded favorably to the Patent Holder and the stay was lifted. Next, the defendants filed a second request for ex parte patent reexamination, and then a third request along with a second motion to stay the case. The court denied the second motion explaining that the case schedule had already been delayed for some two years.In a more recent decision (here), the plaintiff was able to add a further patent to the dispute by way of amended complaint. In permitting the amendment of the complaint, the judge once again explained that the defendants reexamination delay worked against them.In considering the plaintiffs request to amend the complaint to add an additional patent, the court characterized the defendants delay argument as follows:Defendants’ delay arguments are not well-taken, given that much of the delay that has occurred to date is the result of their filing serial reexamination requests before the PTO. This case was brought to my attention by the great Docket Navigator.

Previously, Voda v. Medtronic Inc., et. al. (OKWD) examined the impact of multiple requests for patent reexaminationin the context of a motion to stay. Early in the case the defendant Medtronic was able to secure a stay pending a first request for patent reexamination. Shortly thereafter, the reexamination concluded favorably to the Patent Holder and the stay was lifted. Next, the defendants filed a second request for ex parte patent reexamination, and then a third request along with a second motion to stay the case. The court denied the second motion explaining that the case schedule had already been delayed for some two years.

In a more recent decision (here), the plaintiff was able to add a further patent to the dispute by way of amended complaint. In permitting the amendment of the complaint, the judge once again explained that the defendants reexamination delay worked against them.

In considering the plaintiffs request to amend the complaint to add an additional patent, the court characterized the defendants delay argument as follows:

Defendants’ delay arguments are not well-taken, given that much of the delay that has occurred to date is the result of their filing serial reexamination requests before the PTO. 

This case was brought to my attention by the great Docket Navigator.