mistakesLast Friday, In re Mostafazadeh was argued before the CAFC (argument here). The case explored the boundaries of the patent reissue recapture rule. At dispute in the appeal was whether or not the third step of the rule, as outlined in MPEP 1412.02, is tied to the “critical limitation” (i.e., originally surrendered subject matter) or not. {10:30 min. mark}

The three step analysis of In re Clement is as follows:

(1) first, we determine whether, and in what respect, the reissue claims are broader in scope than the original patent claims; 

(2) next, we determine whether the broader aspects of the reissue claims relate to subject matter surrendered in the original prosecution; and

(3) finally, we determine whether the reissue claims were materially narrowed in other respects, so that the claims may not have been enlarged, and hence avoid the recapture rule. (emphasis added)

In considering the case, the CAFC found both the MPEP discussion of step (3) and BPAI decision on this point to be confusing. {14.50 min mark} Continue Reading Recapture Doctrine Before The CAFC

Is a Preliminary Injunction Ever Proper Parallel to Patent Reexamination?Over the past week I have discussed the interplay between a parallel patent reexamination and requests for a preliminary injunction. On Monday I pointed out that if a request for injunctive relief remains outstanding courts are very reluctant to stay an ongoing litigation pending a parallel patent reexamination. Last week I explained that a defendant’s ability to argue prejudice, to fend off a stay pending patent reexamination, may very well hinge on the pursuit of a preliminary injunction. Left to explore this week is the impact of the parallel reexamination on the preliminary injunction equities ultimately weighed by the court.To date, a parallel patent reexamination has been the “silver bullet” for defeating requests for such preliminary injunctive relief. Yet, as one defendant found out recently, perceived gamesmanship in patent reexamination tactics may re-direct that very same bullet to one’s foot.In the case of Celsis In Vitro Inc., v. CellzDirect Inc., & Invitrogen Corp. (N.D. IL), the court agreed to enter an injunction. In doing so, the court rejected certain invalidity evidence presented by the defendant for purposes of demonstrating that the plaintiff was unlikely to succeed on the merits. Upon losing their argument, the defendant filed a request for inter partes patent reexamination. The request included much more art than was presented to the court.Around the same time, the plaintiff beat the defendant to the punch by using the same art in their own ex parte request. The ex parte patent reexamination request was granted. In view of the same or cumulative art before the USPTO in the ex parte request, the defendant’s inter partes request was denied shortly thereafter. By employing  this “first to file” strategy, the plaintiff effectively shut out the defendant from participating in the patent reexamination. (See first to file strategy discussion here)Nevertheless, once a first office action was issued in the ex parte patent reexamination, the defendant sought dissolution/modification of the injunction. The defendant argued that a preliminary injunction has never been maintained in view of a parallel patent reexamination that rejected claims. Yet, this otherwise compelling argument was offset by the perceived bad faith in the defendant’s actions. The court questioned the defendant on the issue as follows:THE COURT:Good morning. I would be remiss, I think, if I didn’t comment that I find defendant’s actions here very troubling. You know, if your — I know you are a newcomer here for this purpose. But if your people wanted to have reexamination of plaintiffs’ ‘929 patent, why wasn’t that done before our hearing and the entry of the preliminary injunction order? That I believe casts a serious cloud on the good faith of the defendants and defense counsel.What is conspicuously absent from this motion to stay is even a whisper of an explanation for doing battle before me, occupying a great deal of time and effort on my part, as well as the part of the litigants, and then when you have lost, tendering the issue of patent validity to the Patent & Trademark Office.And it is not just a matter of lack of consideration for an imposition on what is really — although lawyers don’t think about this a lot — the most limited resource in the justice system, that is, the judge’s time. So before you started to lecture me about something I was well aware, that is, the power to stay and the need for the exercise of discretion, it seems to me I am entitled to an explanation. (Plaintiff’s motion in Opposition to Dissolve or Modify Preliminary Injunction, January 4, 2011)Thereafter, the court did agree to modify the injunction as to certain products already in existence for purposes of inventory liquidation. (order here) However, the court refused to modify the injunction for prospective sales and the manufacture of new product. In other words, based upon the court’s inference of bad faith, the very first defendant was preliminarily enjoined in view of a parallel patent reexamination that rejected asserted claims. (Discussion on permanent injunction equities and parallel patent reexamination here)It may be that the new art in the defendant’s request was more of a response to the “use it or lose it” estoppel provision of inter partes patent reexamination (as opposed to a lack of bad faith). Still, delaying the filing of a patent reexamination parallel to patent litigation rarely makes sense.This case was brought to my attention by the great Docket Navigator.

Over the past week I have discussed the interplay between a parallel patent reexamination and requests for a preliminary injunction. On Monday I pointed out that if a request for injunctive relief remains outstanding courts are very reluctant to stay an ongoing litigation pending a parallel patent reexamination. Last week I explained that a defendant’s ability to argue prejudice, to fend off a stay pending patent reexamination, may very well hinge on the pursuit of a preliminary injunction. Left to explore this week is the impact of the parallel reexamination on the preliminary injunction equities ultimately weighed by the court.

To date, a parallel patent reexamination has been the “silver bullet” for defeating requests for such preliminary injunctive relief. Yet, as one defendant found out recently, perceived gamesmanship in patent reexamination tactics may re-direct that very same bullet to one’s foot.

In the case of Celsis In Vitro Inc., v. CellzDirect Inc., & Invitrogen Corp. (N.D. IL), the court agreed to enter an injunction. In doing so, the court rejected certain invalidity evidence presented by the defendant for purposes of demonstrating that the plaintiff was unlikely to succeed on the merits. Upon losing their argument, the defendant filed a request for inter partes patent reexamination. The request included much more art than was presented to the court.

Around the same time, the plaintiff beat the defendant to the punch by using the same art in their own ex parte request. The ex parte patent reexamination request was granted. In view of the same or cumulative art before the USPTO in the ex parte request, the defendant’s inter partes request was denied shortly thereafter. By employing  this “first to file” strategy, the plaintiff effectively shut out the defendant from participating in the patent reexamination. (See first to file strategy discussion here)

Nevertheless, once a first office action was issued in the ex parte patent reexamination, the defendant sought dissolution/modification of the injunction. The defendant argued that a preliminary injunction has never been maintained in view of a parallel patent reexamination that rejected claims. Yet, this otherwise compelling argument was offset by the perceived bad faith in the defendant’s actions. The court questioned the defendant on the issue as follows:

THE COURT:Good morning. I would be remiss, I think, if I didn’t comment that I find defendant’s actions here very troubling. You know, if your — I know you are a newcomer here for this purpose. But if your people wanted to have reexamination of plaintiffs’ ‘929 patent, why wasn’t that done before our hearing and the entry of the preliminary injunction order? That I believe casts a serious cloud on the good faith of the defendants and defense counsel.

What is conspicuously absent from this motion to stay is even a whisper of an explanation for doing battle before me, occupying a great deal of time and effort on my part, as well as the part of the litigants, and then when you have lost, tendering the issue of patent validity to the Patent & Trademark Office.

And it is not just a matter of lack of consideration for an imposition on what is really — although lawyers don’t think about this a lot — the most limited resource in the justice system, that is, the judge’s time. So before you started to lecture me about something I was well aware, that is, the power to stay and the need for the exercise of discretion, it seems to me I am entitled to an explanation. (Plaintiff’s motion in Opposition to Dissolve or Modify Preliminary Injunction, January 4, 2011)

Thereafter, the court did agree to modify the injunction as to certain products already in existence for purposes of inventory liquidation. (order here) However, the court refused to modify the injunction for prospective sales and the manufacture of new product. In other words, based upon the court’s inference of bad faith, the very first defendant was preliminarily enjoined in view of a parallel patent reexamination that rejected asserted claims. (Discussion on permanent injunction equities and parallel patent reexamination here)

It may be that the new art in the defendant’s request was more of a response to the “use it or lose it” estoppel provision of inter partes patent reexamination (as opposed to a lack of bad faith). Still, delaying the filing of a patent reexamination parallel to patent litigation rarely makes sense.

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

House and Senate Focus on Moving ForwardThe Senate may begin debate on Patent Reform this week once the FAA Re-authorization Bill is settled. After last week’s hearing in the House, it appears that a second bill will also emerge.During a recent C-SPAN taping, Rep. Bob Goodlatte (R-Va) has indicated that he will be taking the lead for House Republicans on the creation of new patent reform legislation. It seems that the motivation behind the bill is to accelerate the process. Rep. Goodlatte was reported as stating:…..lawmakers are working in a bipartisan, bicameral way to decide which patent reforms can enhance job growth and stand a good chance of passing Congress and being signed into law by the president. Goodlatte said the most likely focus would be on improving the efficiency of the U.S. Patent and Trademark Office by increasing the speed and quality of the patent process. He acknowledged the Obama administration’s recent plan for reforming the process but said legislation would likely be necessary. When asked about his primary concern for any legislation Goodlatte said the patent process is better at handling drugs and other products that use single patents, but less equipped to deal with technology products that often incorporate dozens or even hundreds of patents. (Source: Hillicon Valley 2/13/11)It remains to be seen whether or not a competing bill in the House will truly help refine the issues, or just create more of the same familiar morass of the past few yea

The Senate may begin debate on Patent Reform this week once the FAA Re-authorization Bill is settled. After last week’s hearing in the House, it appears that a second bill will also emerge.

During a recent C-SPAN taping, Rep. Bob Goodlatte (R-Va) has indicated that he will be taking the lead for House Republicans on the creation of new patent reform legislation. It seems that the motivation behind the bill is to accelerate the process. Rep. Goodlatte was reported as stating:

…..lawmakers are working in a bipartisan, bicameral way to decide which patent reforms can enhance job growth and stand a good chance of passing Congress and being signed into law by the president.

Goodlatte said the most likely focus would be on improving the efficiency of the U.S. Patent and Trademark Office by increasing the speed and quality of the patent process. He acknowledged the Obama administration’s recent plan for reforming the process but said legislation would likely be necessary. When asked about his primary concern for any legislation Goodlatte said the patent process is better at handling drugs and other products that use single patents, but less equipped to deal with technology products that often incorporate dozens or even hundreds of patents. (Source: Hillicon Valley 2/13/11)

It remains to be seen whether or not a competing bill in the House will truly help refine the issues, or just create more of the same familiar morass of the past few years.

Pending Prelminary Injunction Dispute Avoids StayAs discussed last week, defendants are increasingly employing patent reexamination as a mechanism to stay a district court action. For this reason, patent owners must adapt their game plan. Last week’s post explained that an early motion for preliminary injunction can go a long way in demonstrating potential prejudice relative to a direct competitor. Additionally, while pending, an injunctive dispute may forestall the ability to stay the court action altogether.In Medicis Pharmaceutical Corp., v. Acella Pharmaceuticals Inc. (DCAZ), the court explained that a motion to stay pending patent reexamination is inappropriate where a request for injuctive relief remains pending.The court explained:Medicis filed a Motion for Preliminary Injunction on December 10, 2010. (Doc. 53.) The parties have submitted their Proposed Findings of Fact and Conclusions of Law (Docs. 122 & 123), and the Court set a hearing on the Motion for Preliminary Injunction for February 23, 2011. If the Court stayed the case pending reexamination, the Court effectively would deny the Motion for Preliminary Injunction without first addressing the merits, which would be inappropriate. Procter & Gamble Co. v. Kraft Foods Global, Inc., 549 F.3d 842, 849 (Fed. Cir. 2008)(holding the district court erred in granting a stay pending reexamination when the plaintiff had filed a motion for preliminary injunction). Because the Court has not yet ruled on the merits of the injunction motion, the Court declines to enter a stay at this time.Further, the court noted that the defendant chose to seek ex parte patent reexamination rather than inter partes. See the earlier post on the importance of this decision. (here)This case was brought to my attention by the great Docket Navigator.

As discussed last week, defendants are increasingly employing patent reexamination as a mechanism to stay a district court action. For this reason, patent owners must adapt their game plan. Last week’s post explained that an early motion for preliminary injunction can go a long way in demonstrating potential prejudice relative to a direct competitor. Additionally, while pending, an injunctive dispute may forestall the ability to stay the court action altogether.

In Medicis Pharmaceutical Corp., v. Acella Pharmaceuticals Inc. (DCAZ), the court explained that a motion to stay pending patent reexamination is inappropriate where a request for injuctive relief remains pending.

The court explained:

Medicis filed a Motion for Preliminary Injunction on December 10, 2010. (Doc. 53.) The parties have submitted their Proposed Findings of Fact and Conclusions of Law (Docs. 122 & 123), and the Court set a hearing on the Motion for Preliminary Injunction for February 23, 2011. If the Court stayed the case pending reexamination, the Court effectively would deny the Motion for Preliminary Injunction without first addressing the merits, which would be inappropriate. Procter & Gamble Co. v. Kraft Foods Global, Inc., 549 F.3d 842, 849 (Fed. Cir. 2008)(holding the district court erred in granting a stay pending reexamination when the plaintiff had filed a motion for preliminary injunction). Because the Court has not yet ruled on the merits of the injunction motion, the Court declines to enter a stay at this time.

Further, the court noted that the defendant chose to seek ex parte patent reexamination rather than inter partes. See the earlier post on the importance of this decision. (here)

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

NTP Oral Arguments Reveal Disatisfaction with BPAIYesterday, the CAFC considered the patent reexamination appeals of NTP Inc. (see yesterday’s background post). In total, the CAFC heard just under 4 hours of oral arguments. The MP3 file can be found here.Throughout the arguments the CAFC made it clear that much of the Board of Patent Appeals & Interference (BPAI) record was inadequate as to claim construction. The court repeatedly expressed concern that the competing claim constructions offered by the two parties were not clearly differentiated on the BPAI record. Throughout the arguments, the court repeatedly emphasized that a remand to the BPAI seemed in order.  In the first hour, NTP contested the BPAI’s claim construction as inconsistent with the lexicographic definitions of the NTP patents. Throughout the first hour, the CAFC made it quite clear that the BPAI record was unclear as to a clear construction of the term “email.” Judge Moore was especially critical, at one point stating that the Board’s explanation as to this term  was “as wrong as wrong can be.” {48-52 min. mark}. Judge Moore noted that the the lack of fact finding in this regard seemed to require a remand. Judge Clevenger noted that the BPAI record “left a lot of openings.” {58 min. mark}In the second hour, the sufficiency of the antedating evidence was debated. The CAFC seemed to question the conception evidence presented by NTP, labeling it “amorphous.” Again Judge Moore emphasized the fact finding of the BPAI, stating “I don’t love the Board’s findings….I think you got that already” {1.36 min. mark}. Here again the antedating fact finding was so intertwined with claim construction that the CAFC seemed to throw up there hands. The Panel asked the solicitor whether it was fair for the CAFC to decide the issues, or whether a remand to the USPTO was better as an expert agency. {1.45 min. mark}In the third hour, the authenticity of a certain prior art document was debated (Telenor). The court asked NTP why they did not simply contact the authors to seek evidence that the document was fraudulent. NTP argued that the PTO needed to prove the authenticity of a one of a kind document. {2.05 min. mark} The court then seemed interested in whether public accessibility of a prior art reference is a question of law or fact. {2.15-18 min. mark} At the close of the third hour a variety of issues were debated. NTP argued that consideration of 35 U.S.C. § 120 priority was inappropriate as a backdoor 112 attack. {2.38 min. mark} Next, NTP argued that the same issue was considered in the original prosecution, and noted that if this practice is accepted it will open the floodgates to similar challenges in patent reexamination. The court didn’t seem overly receptive to the public policy argument. At the outset of the 4th hr, the CAFC asked NTP to identify those rejections that would not hinge on claim construction, and would not have to be remanded to the USPTO. The Court requested NTP & the USPTO file a list of issues that could be be decided independent of the remand on the claim construction of “email” within 10 days {3.02 min. mark}.What does this mean for NTP?The CAFC seems inclined to affirm certain rejections that do not turn on the definition of “email,” and decide the authenticity of the Telenor reference. It seems clear that the bulk of the issues will be remanded back to the BPAI. Long story short, this battle will continue for another 12-18 months…..at least.  Sorry BPAI, it’s coming ba

Yesterday, the CAFC considered the patent reexamination appeals of NTP Inc. (see yesterday’s background post). In total, the CAFC heard just under 4 hours of oral arguments. The MP3 file can be found here.

Throughout the arguments the CAFC made it clear that much of the Board of Patent Appeals & Interference (BPAI) record was inadequate as to claim construction. The court repeatedly expressed concern that the competing claim constructions offered by the two parties were not clearly differentiated on the BPAI record. Throughout the arguments, the court repeatedly emphasized that a remand to the BPAI seemed in order.  

In the first hour, NTP contested the BPAI’s claim construction as inconsistent with the lexicographic definitions of the NTP patents. Throughout the first hour, the CAFC made it quite clear that the BPAI record was unclear as to a clear construction of the term “email.” Judge Moore was especially critical, at one point stating that the Board’s explanation as to this term  was “as wrong as wrong can be.” {48-52 min. mark}. Judge Moore noted that the the lack of fact finding in this regard seemed to require a remand. Judge Clevenger noted that the BPAI record “left a lot of openings.” {58 min. mark}

In the second hour, the sufficiency of the antedating evidence was debated. The CAFC seemed to question the conception evidence presented by NTP, labeling it “amorphous.” Again Judge Moore emphasized the fact finding of the BPAI, stating “I don’t love the Board’s findings….I think you got that already” {1.36 min. mark}. Here again the antedating fact finding was so intertwined with claim construction that the CAFC seemed to throw up there hands. The Panel asked the solicitor whether it was fair for the CAFC to decide the issues, or whether a remand to the USPTO was better as an expert agency. {1.45 min. mark}

In the third hour, the authenticity of a certain prior art document was debated (Telenor). The court asked NTP why they did not simply contact the authors to seek evidence that the document was fraudulent. NTP argued that the PTO needed to prove the authenticity of a one of a kind document. {2.05 min. mark} The court then seemed interested in whether public accessibility of a prior art reference is a question of law or fact. {2.15-18 min. mark}

At the close of the third hour a variety of issues were debated. NTP argued that consideration of 35 U.S.C. § 120 priority was inappropriate as a backdoor 112 attack. {2.38 min. mark} Next, NTP argued that the same issue was considered in the original prosecution, and noted that if this practice is accepted it will open the floodgates to similar challenges in patent reexamination. The court didn’t seem overly receptive to the public policy argument. 

At the outset of the 4th hr, the CAFC asked NTP to identify those rejections that would not hinge on claim construction, and would not have to be remanded to the USPTO. The Court requested NTP & the USPTO file a list of issues that could be be decided independent of the remand on the claim construction of “email” within 10 days {3.02 min. mark}.

What does this mean for NTP?

The CAFC seems inclined to affirm certain rejections that do not turn on the definition of “email,” and decide the authenticity of the Telenor reference. It seems clear that the bulk of the issues will be remanded back to the BPAI. Long story short, this battle will continue for another 12-18 months…..at least.  

Sorry BPAI, it’s coming back.

House to Preview Senate Progress on S.23This Friday, February 11, 2011 the House Judiciary IP subcommittee will conduct a hearing on U.S. Patent Reform. The topic of the hearing is “Crossing the Finish Line on Patent Reform – What Can and Should be Done” (link). Witnesses include the chief patent counsels of Intel and General Electric, along with The Honorable Paul Michel (former Chief Judge, CAFC).The current amendments to S.23 will be discussed along with suggested revisions and expected roadblocks. Senate consideration of S.23 is slated to begin next we

This Friday, February 11, 2011 the House Judiciary IP subcommittee will conduct a hearing on U.S. Patent Reform. The topic of the hearing is “Crossing the Finish Line on Patent Reform – What Can and Should be Done” (link). Witnesses include the chief patent counsels of Intel and General Electric, along with The Honorable Paul Michel (former Chief Judge, CAFC).

The current amendments to S.23 will be discussed along with suggested revisions and expected roadblocks. Senate consideration of S.23 is slated to begin next week.

Notorious Portfolio Stands Gutted by USPTOToday at 2PM, the CAFC will hear oral arguments in the patent reexamination appeals of NTP Inc. (Wall Street Journal article here). After years of prosecution and appeals through the PTO system, the NTP patent reexaminations of NTP v. RIM fame finally get their day in federal court.As discussed last year, the USPTO rejected all but one of the previously adjudicated NTP claims. Specifically, all of the claims of NTP Inc’s U.S. Patents 6,317,592, 5,819,172, and 6,067,451 were rejected by the USPTO. These rejections were later affirmed by the Board of Patent Appeals & Interferences (BPAI).  Rejections  were affirmed-in-part in 5,436,960 and 5,625,670, (the surviving ‘670 claims appear to have been added in reexamination, claim 15 of the ‘960 appears to be the only surviving claim successfully asserted against RIM).As to the newly added claims, thesewill not be enforceable until printed by the USPTO. Even then damages will only be available from the time of printing, until expiration, in 2012. As printing is still months away these claims seem to be of marginal strategic value.The CAFC has set aside an entire afternoon to hear these appeals en masse. It seem unlikely that the rejections will be reversed as NTP has relied on some fairly “controversial” theories to put it diplomatically. To date NTP has argued that a certain Telenor art reference was fabricated by the requester, and that Markman decisions are binding on the USPTO.For those interested in hearing the oral arguments, audio recordings should be posted on the CAFC website some time Frid

Today at 2PM, the CAFC will hear oral arguments in the patent reexamination appeals of NTP Inc. (Wall Street Journal article here). After years of prosecution and appeals through the PTO system, the NTP patent reexaminations of NTP v. RIM fame finally get their day in federal court.

As discussed last year, the USPTO rejected all but one of the previously adjudicated NTP claims. Specifically, all of the claims of NTP Inc’s U.S. Patents 6,317,592, 5,819,172, and 6,067,451 were rejected by the USPTO. These rejections were later affirmed by the Board of Patent Appeals & Interferences (BPAI).  Rejections  were affirmed-in-part in 5,436,960 and 5,625,670, (the surviving ‘670 claims appear to have been added in reexamination, claim 15 of the ‘960 appears to be the only surviving claim successfully asserted against RIM).

As to the newly added claims, these will not be enforceable until printed by the USPTO. Even then damages will only be available from the time of printing, until expiration, in 2012. As printing is still months away these claims seem to be of marginal strategic value.

The CAFC has set aside an entire afternoon to hear these appeals en masse. It seem unlikely that the rejections will be reversed as NTP has relied on some fairly “controversial” theories to put it diplomatically. To date NTP has argued that a certain Telenor art reference was fabricated by the requester, and that Markman decisions are binding on the USPTO.

For those interested in hearing the oral arguments, audio recordings should be posted on the CAFC website some time Friday.

Setting the Stage for a Showing of PrejudiceObtaining a stay of an ongoing district court infringement action is one of the many benefits of patent reexamination concurrent with litigation. Defendants that are able to obtain a stay pending patent reexamination can avoid cost prohibitive litigation discovery during the course of the USPTO proceeding. In addition to cost savings, there are also tactical advantages to the USPTO proceeding. Unlike the courts, in patent reexamination, the USPTO does not recognize the presumption of validity. Moreover, the USPTO does not require the “clear and convincing” standard to demonstrate invalidity in patent reexamination, but employs the more liberal “preponderance of the evidence” standard. As such, defendants can enhance the strength of their invalidity defense via patent reexamination. As defendants increasingly employ patent reexamination as a litigation tool, patent owners must adapt their game plan.Patent Owners often select patent friendly forums for their perceived reluctance to invalidate U.S. Patents, such as the Eastern District of Texas. Such forums are oft times equally reluctant to stay an ongoing infringement action in favor of a patent reexamination proceeding. However, for those Patent Owners forced into less friendlier fora, what steps can be taken to avoid a stay pending patent reexamination?One of the factors generally considered when ruling on a  motion to stay is whether or not the stay will unduly prejudice, or present a clear tactical disadvantage to, the non-moving party. In the case of direct competitors, court’s will often give greater weight to the potential business prejudice in delaying the court action. Therefore, to emphasize this potential for prejudice, and to anticipate the need to demonstrate such, it is imperative that Patent Owners move for a preliminary injunction.In weighing the relative merits of staying an ongoing court action between competitors, the Patent Owners request for injunctive relief is given significant weight. As recently discussed in Osmose, Inc. v. Arch Chemicals, Inc., et al., 2-10-cv-00108 (VAED, Norfolk) (previous post here)Although Osmose has not filed a motion for a preliminary injunction, the complaint does seek injunctive relief. Osmose therefore might be prejudiced by a multi-year stay that could allow defendants to both continue selling the allegedly infringing products and further increase their market share.   Further, last week it was emphasized that the timing of the request for injunctive relief may also impact the relative equities of staying the case. In Richtek Technology Corp., et al., v. uPI Semiconductor Corp. et. al., 3-09-cv-05659 (NDCA), the court emphasized that:Richtek has not filed a motion for a preliminary injunction in this year-and-change-old district court action. Although Richtek expressed intent to eventually file a preliminary injunction motion at the October 2010 case management conference and in its early January discovery dispute letter brief, it did not even request permission to file such a motion until nearly a week after motion practice was suspended in mid-January (Dkt. Nos. 108 at 14, 229 at 2, 242). If the threat of irreparable harm truly were imminent, then Richtekwould not have dragged its feet this long. Richtek has not shown that it would suffer irreparable harm or clear tactical disadvantage as a result of a stay of this action.For Patent Owners anticipating a motion to stay pending patent reexamination, an early motion for preliminary injunction can go a long way in demonstrating potential prejudice relative to a direct competit

Obtaining a stay of an ongoing district court infringement action is one of the many benefits of patent reexamination concurrent with litigation. Defendants that are able to obtain a stay pending patent reexamination can avoid cost prohibitive litigation discovery during the course of the USPTO proceeding. 

In addition to cost savings, there are also tactical advantages to the USPTO proceeding. Unlike the courts, in patent reexamination, the USPTO does not recognize the presumption of validity. Moreover, the USPTO does not require the “clear and convincing” standard to demonstrate invalidity in patent reexamination, but employs the more liberal “preponderance of the evidence” standard. As such, defendants can enhance the strength of their invalidity defense via patent reexamination. 

As defendants increasingly employ patent reexamination as a litigation tool, patent owners must adapt their game plan. Patent Owners often select patent friendly forums for their perceived reluctance to invalidate U.S. Patents, such as the Eastern District of Texas. Such forums are oft times equally reluctant to stay an ongoing infringement action in favor of a patent reexamination proceeding. However, for those Patent Owners forced into less friendlier fora, what steps can be taken to avoid a stay pending patent reexamination?

One of the factors generally considered when ruling on a  motion to stay is whether or not the stay will unduly prejudice, or present a clear tactical disadvantage to, the non-moving party. In the case of direct competitors, court’s will often give greater weight to the potential business prejudice in delaying the court action. Therefore, to emphasize this potential for prejudice, and to anticipate the need to demonstrate such, it is imperative that Patent Owners move for a preliminary injunction.

In weighing the relative merits of staying an ongoing court action between competitors, the Patent Owners request for injunctive relief is given significant weight. As recently discussed in Osmose, Inc. v. Arch Chemicals, Inc., et al., 2-10-cv-00108 (VAED, Norfolk) (previous post here)

Although Osmose has not filed a motion for a preliminary injunction, the complaint does seek injunctive relief. Osmose therefore might be prejudiced by a multi-year stay that could allow defendants to both continue selling the allegedly infringing products and further increase their market share.   

Further, last week it was emphasized that the timing of the request for injunctive relief may also impact the relative equities of staying the case. In Richtek Technology Corp., et al., v. uPI Semiconductor Corp. et. al., 3-09-cv-05659 (NDCA), the court emphasized that:

Richtek has not filed a motion for a preliminary injunction in this year-and-change-old district court action. Although Richtek expressed intent to eventually file a preliminary injunction motion at the October 2010 case management conference and in its early January discovery dispute letter brief, it did not even request permission to file such a motion until nearly a week after motion practice was suspended in mid-January (Dkt. Nos. 108 at 14, 229 at 2, 242). If the threat of irreparable harm truly were imminent, then Richtekwould not have dragged its feet this long. Richtek has not shown that it would suffer irreparable harm or clear tactical disadvantage as a result of a stay of this action.

For Patent Owners anticipating a motion to stay pending patent reexamination, an early motion for preliminary injunction can go a long way in demonstrating potential prejudice relative to a direct competitor.

FY 2011 Q1 Numbers Released by USPTO Q1 of fiscal year 2011 is now in the books at the USPTO. Patent reexamination filings continue to trend upward and are on track to surpass 2010 numbers by a healthy margin.  (USPTO Patent Reexamination Statistics here)Inter partes patent reexamination filings in particular continue to grow. (here)  Over the next 1-2 years these filings may begin to rival ex parte patent reexamination filings in volume. For the first time, the number of inter partes patent reexamination certificates issued with all claims confirmed has reached the double digits (10%). As more inter partes patent reexaminations conclude, these statistics should continue to normalize. Although, inter partes patent reexamination results are expected to remain biased in favor of third party requeste

Q1 of fiscal year 2011 is now in the books at the USPTO. Patent reexamination filings continue to trend upward and are on track to surpass 2010 numbers by a healthy margin.  (USPTO Patent Reexamination Statistics here)

Inter partes patent reexamination filings in particular continue to grow. (here)  Over the next 1-2 years these filings may begin to rival ex parte patent reexamination filings in volume. For the first time, the number of inter partes patent reexamination certificates issued with all claims confirmed has reached the double digits (10%). As more inter partes patent reexaminations conclude, these statistics should continue to normalize. Although, inter partes patent reexamination results are expected to remain biased in favor of third party requesters.

Microsoft v. i4i: Legislative Intent of Patent Reexamination?The briefing in Microsoft v. i4i (Supreme Court 2011), has begun. As discussed at length previously, Microsoft has sought Supreme Court review of the following issue:Whether the court of appeals erred in holding that Microsoft’s invalidity defense (which rested on prior art never considered by the USPTO) must be proved by clear and convincing evidence. Interestingly, Microsoft has already tested the preponderance of the evidence standard in ex parte patent reexamination for certain prior art at issue in the i4i dispute. To date, Microsoft has failed in both attempts. First, in 90/010,347 all claims were confirmed and exited patent reexamination in July of 2010. Subsequently, a second request (90/011,198), was outright denied by the USPTO.Microsoft, has now submitted it’s brief to the Supreme Court, and several amicus briefs have been filed taking various positions on the issue.In their opening brief to the SCOTUS, Microsoft argues that the clear and convincing standard is essentially a creature of the CAFC, based upon the CAFC’s flawed reading of 35 U.S.C. § 282. In closing, Microsoft notes that the USPTO itself uses a preponderance of the evidence standard in patent reexamination for prior art never before considered by the agency.So, why does the USPTO use a different standard? Microsoft’s brief, as well as several of the supporting amicus briefs, cite to In re Etter,756 F.2d 852 (Fed. Cir. 1985) for the proposition that there is no presumption of validity at the USPTO in patent reexamination. Based upon this, the briefs conclude that if this lower standard is good enough for the USPTO, then why not the courts?Absent in any of these briefs is the explanation in Etter that explains the rationale behind the difference, namely:In litigation, where a patentee cannot amend his claims, or add new claims, the presumption, and the rule of claim construction (claims should be construed to save them if possible), have important roles to play. In reexamination, where claims can be amended and new claims added, and where no litigating adversary is present, those rules and their rationale simply vanish. (emphasis added) Etter at 859.So, if Congress has provided for the very relief Microsoft is requesting via patent reexamination, how is the intent of Congress not crystal clear in this respect? Can the SCOTUS provide the seemingly legislative remedy sought by Microsoft? Perhaps anticipating the argument that the patent reexamination statutes reinforce the CAFC’s reading of § 282, and demonstrate a Congressional intent to provide an alternative forum for prior art not previously considered, several amicus briefs go beyond Microsoft’s passing discussion of patent reexamination.In one supporting brief, it is argued that a final determination in a litigation under 35. U.S.C. § 317(b) would estopp the same litigant from invalidating a patent in inter partes patent reexamination. The argument is that such estoppel results in a litigant being exclusively held to the clear and convincing standard, despite the existence of the lower patent reexamination standard. It is argued that such a result is inconsistent with the legislative intent to “correct governmental mistakes,” that is, unless the standards are made the same in both proceedings.This is a very strange take on inter partes estoppel.The very point of the estoppel provisions is to thwart the conduct suggested in the brief, namely, serial attacks on a patent in different forums by a same party (i.e., harassment). Third parties should not be “resorting” to inter partes patent reexamination after losing a litigation, but instead, seeking such relief in the first instance. Further, ex parte patent reexamination is unaffected by § 317(b).The ultimate decision will likely focus on how the CAFC divined the clear and convincing standard from § 282 in the first instance. Still, the creation of the inter partes patent reexamination statutes, as well as the pending reform legislation would seem to provide ample fodder for arguing that Congress is well aware of the CAFC’s jurisprudence in this regard.For another interesting take on the interplay of patent reexamination to the § 282 dispute, note the example jury instructions in the IBM brief.This case is going to be very very interesti

The briefing in Microsoft v. i4i (Supreme Court 2011), has begun. As discussed at length previously, Microsoft has sought Supreme Court review of the following issue:

Whether the court of appeals erred in holding that Microsoft’s invalidity defense (which rested on prior art never considered by the USPTO) must be proved by clear and convincing evidence.

Interestingly, Microsoft has already tested the preponderance of the evidence standard in ex parte patent reexamination for certain prior art at issue in the i4i dispute. To date, Microsoft has failed in both attempts. First, in 90/010,347 all claims were confirmed and exited patent reexamination in July of 2010. Subsequently, a second request (90/011,198), was outright denied by the USPTO.

Microsoft, has now submitted it’s brief to the Supreme Court, and several amicus briefs have been filed taking various positions on the issue.

In their opening brief to the SCOTUS, Microsoft argues that the clear and convincing standard is essentially a creature of the CAFC, based upon the CAFC’s flawed reading of 35 U.S.C. § 282. In closing, Microsoft notes that the USPTO itself uses a preponderance of the evidence standard in patent reexamination for prior art never before considered by the agency.

So, why does the USPTO use a different standard? 

Microsoft’s brief, as well as several of the supporting amicus briefs, cite to In re Etter,756 F.2d 852 (Fed. Cir. 1985) for the proposition that there is no presumption of validity at the USPTO in patent reexamination. Based upon this, the briefs conclude that if this lower standard is good enough for the USPTO, then why not the courts?

Absent in any of these briefs is the explanation in Etter that explains the rationale behind the difference, namely:

In litigation, where a patentee cannot amend his claims, or add new claims, the presumption, and the rule of claim construction (claims should be construed to save them if possible), have important roles to play. In reexamination, where claims can be amended and new claims added, and where no litigating adversary is present, those rules and their rationale simply vanish. (emphasis added) Etter at 859.

So, if Congress has provided for the very relief Microsoft is requesting via patent reexamination, how is the intent of Congress not crystal clear in this respect? Can the SCOTUS provide the seemingly legislative remedy sought by Microsoft? d that such a result is inconsistent with the legislative intent to “correct governmental mistakes,” that is, unless the standards are made the same in both proceedings.

This is a very strange take on inter partes estoppel.

The very point of the estoppel provisions is to thwart the conduct suggested in the brief, namely, serial attacks on a patent in different forums by a same party (i.e., harassment). Third parties should not be “resorting” to inter partes patent reexamination after losing a litigation, but instead, seeking such relief in the first instance. Further, ex parte patent reexamination is unaffected by § 317(b).

The ultimate decision will likely focus on how the CAFC divined the clear and convincing standard from § 282 in the first instance. Still, the creation of the inter partes patent reexamination statutes, as well as the pending reform legislation would seem to provide ample fodder for arguing that Congress is well aware of the CAFC’s jurisprudence in this regard.

For another interesting take on the interplay of patent reexamination to the § 282 dispute, note the example jury instructions in the IBM brief.

This case is going to be very very interesting.