Inter Partes SNQs Outpace Ex Parte 2:1 

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Looking back on 2010 patent reexamination filings, the mean number of Substantial New Questions of Patentability (SNQs) presented differs based upon the type of reexamination proceeding.  For ex parte patent reexamination, the mean value is 8.7 SNQs per request, for inter partes patent reexamination the number is 17.3 SNQs per request. The median values are 6 for ex parte patent reexaminations and 11 for inter partes patent reexamination. Of course, these numbers are unlikely to surprise most practitioners.

For example, ex parte patent reexamination may be requested by a patent owner. In such situations there is certainly little motivation to bury the USPTO in reasoned statements to undermine patentability (IDS filings are another issue altogether). More importantly, requesters of ex parte patent reexamination are not bound by the estoppel provisions of inter partes patent reexamination. Continue Reading SNQ Rates in Patent Reexamination

Senate Judiciary Committee Releases BillAs I discussed earlier this week, the patent reform debate will begin anew in a matter of days. Today, a bipartisan group of Senators announced their intention to introduce new patent reform legislation when the Senate returns to session next week. The first bill to be introduced on Tuesday (found here), will be known as the “Patent Reform Act of 2011.” The bill is largely the same as the manager’s amendment to S.515, with minor changes. The District Court Pilot program has been dropped (passed in separate legislation this past December). Added, is a provision essentially outlawing patents relating to tax strategies. (see previous post on tax professionals lobbying Congress here). I have not studied the bill in detail, but those were the most obvious changes, most other sections seem identical to S.515.It remains to be seen if such a comprehensive bill can fly, or whether or not it will need to be pared down some to satisfy the substantial lobby interests.On the bright side, the bill has “2011” in the name, so it has to pass this ye

As I discussed earlier this week, the patent reform debate will begin anew in a matter of days. Today, a bipartisan group of Senators announced their intention to introduce new patent reform legislation when the Senate returns to session next week. The first bill to be introduced on Tuesday (found here), will be known as the “Patent Reform Act of 2011.” 

The bill is largely the same as the manager’s amendment to S.515, with minor changes. The District Court Pilot program has been dropped (passed in separate legislation this past December). Added, is a provision essentially outlawing patents relating to tax strategies. (see previous post on tax professionals lobbying Congress here). I have not studied the bill in detail, but those were the most obvious changes, most other sections seem identical to S.515.

It remains to be seen if such a comprehensive bill can fly, or whether or not it will need to be pared down some to satisfy the substantial lobby interests.

On the bright side, the bill has “2011” in the name, so it has to pass this year!

Golf Ball Brawl Heard at BPAIYesterday, the Board of Patent Appeals & Interferences (BPAI) heard oral arguments in the longstanding dispute between Callaway Golf and Acushnet. Acushnet is the parent company of Titleist, maker of the ProV1 family of golf balls. Callaway asserts that the ProV1 balls infringe several of their patents (6,210,293, 6,503,156, 6,506,130, 6,595,873)In 2006, Acushnet sought inter partes patent reexamination of the Callaway patents. To date, all claims of the Callaway patents were rejected by the USPTO. These rejections were considered by the Board yesterday.In the co-pending litigation the patents were also found invalid. (March 2010 D.Del). Interestingly, despite a 1996 contractual agreement between the companies that mandated all proceedings be conducted in the Delaware court, Acushnet sought patent reexamination at the USPTO anyway. Late last week, the court reinstated a decision determining that the pursuit of patent reexamination by Acushnet was a breach of the contract. As a result of that decision (here) Callaway feverishly petitioned to delay the Board hearing, arguing that the Board should not help Acushnet break their contractual obligations; not surprisingly, the Board declined that invitation.So, yesterday, the Board learned all about Acushnet, a company known for their balls.The majority of the debate related to whether or not a certain hardness range recited in the claims referred to a characteristic of the material, used to construct the ball, or the ball itself. Callaway argued that the claims were directed to a ball, not ingredients. It was also argued that since a Markman Order on the meaning of the claim terms had been considered by the BPAI that this claim interpretation should be controlling on the USPTO. Callaway also referenced secondary indicia of non-obviousness that pointed to the sales success of the ProV1 golf balls.Callaway emphasized to the Board that the claims reciting a polyurethane embodiment were of primary importance. When prompted by the Board as to whether or not Callaway was intending to waive the claims not including this feature, Callaway agreed to waive those claims on the spot. I am guessing the Board probably would have preferred that happen before reading all of the briefs and associated examiner positions.  Strange.In rebuttal, Acushnet explained that the specifications of the patents were broad enough to cover a ball hardness interpretation and an ingredient hardness interpretation, thus the PTO was correct in rejecting the claims. Acushnet then explained that they (Titleist) sell more balls than anyone else because they are the market leader and that the Callaway evidence of secondary considerations had no meaningful nexus to the patented claims.The dispute will inevitably head on to the CAFC no matter the decision of the Board. If the claims ultimately fall at the CAFC (my guess), I will be very interested in the outcome of the breach of contract issue. Can Acushent really breach the contract in view of CAFC indications that a patent is “void ab initio” when found unpatentable as a result of reexamination. Standard Havens Products Inc. v. Gencor Industries Inc., 996 F.2d 1236 (Fed. Cir. 1993) (per curiam). In other words, if the patent never existed….what about that contra

Yesterday, the Board of Patent Appeals & Interferences (BPAI) heard oral arguments in the longstanding dispute between Callaway Golf and Acushnet. Acushnet is the parent company of Titleist, maker of the ProV1 family of golf balls. Callaway asserts that the ProV1 balls infringe several of their patents (6,210,293, 6,503,156, 6,506,130, 6,595,873)

In 2006, Acushnet sought inter partes patent reexamination of the Callaway patents. To date, all claims of the Callaway patents were rejected by the USPTO. These rejections were considered by the Board yesterday.

In the co-pending litigation the patents were also found invalid. (March 2010 D.Del). Interestingly, despite a 1996 contractual agreement between the companies that mandated all proceedings be conducted in the Delaware court, Acushnet sought patent reexamination at the USPTO anyway. Late last week, the court reinstated a decision determining that the pursuit of patent reexamination by Acushnet was a breach of the contract. As a result of that decision (here) Callaway feverishly petitioned to delay the Board hearing, arguing that the Board should not help Acushnet break their contractual obligations; not surprisingly, the Board declined that invitation.

So, yesterday, the Board learned all about Acushnet, a company known for their balls.

The majority of the debate related to whether or not a certain hardness range recited in the claims referred to a characteristic of the material, used to construct the ball, or the ball itself. Callaway argued that the claims were directed to a ball, not ingredients. It was also argued that since a Markman Order on the meaning of the claim terms had been considered by the BPAI that this claim interpretation should be controlling on the USPTO. Callaway also referenced secondary indicia of non-obviousness that pointed to the sales success of the ProV1 golf balls.

Callaway emphasized to the Board that the claims reciting a polyurethane embodiment were of primary importance. When prompted by the Board as to whether or not Callaway was intending to waive the claims not including this feature, Callaway agreed to waive those claims on the spot. I am guessing the Board probably would have preferred that happen before reading all of the briefs and associated examiner positions.  Strange.

In rebuttal, Acushnet explained that the specifications of the patents were broad enough to cover a ball hardness interpretation and an ingredient hardness interpretation, thus the PTO was correct in rejecting the claims. Acushnet then explained that they (Titleist) sell more balls than anyone else because they are the market leader and that the Callaway evidence of secondary considerations had no meaningful nexus to the patented claims.

The dispute will inevitably head on to the CAFC no matter the decision of the Board. If the claims ultimately fall at the CAFC (my guess), I will be very interested in the outcome of the breach of contract issue. Can Acushent really breach the contract in view of CAFC indications that a patent is “void ab initio” when found unpatentable as a result of reexamination. Standard Havens Products Inc. v. Gencor Industries Inc., 996 F.2d 1236 (Fed. Cir. 1993) (per curiam). In other words, if the patent never existed….what about that contract?

Delay in Patent Reissue Undermines Equitable Defense35 U.S.C. 252 presents two flavors of intervening rights in the reexamination/reissue context: absolute intervening rights, and equitable intervening rights. The more common of the two, absolute intervening rights, precludes infringement liability prior to issuance of new/amended claims if such claims are not substantially identical in scope to the claims of the original patent.Equitable intervening rights are available as a means to balance the public interest in the patent system and the remedial purpose of the reissue statute with the private interest of an infringer who innocently and in good faith has undertaken substantial activities that become infringing with the issuance of a reissue patent. For example, if prior to the issuance of a new/amended claim, a defendant invests in a new manufacturing line to develop products that infringe the new/amended claims, negotiates contracts to deliver infringing goods, and otherwise proceeds in conducting such business in good faith, the court may permit such infringement to continue under terms the court deems as equitable to both parties.In Bendix Commercial Vehicle Systems LLC, et al v. Haldex Brake Products Corp., (NDOH) having lost all previous battles (inequitable conduct in patent reissue here) (recapture in patent reissue here), defendant Haldex argued that they should be allowed to infringe based upon the doctrine of equitable intervening rights.In denying the defense of equitable intervening rights to Haldex, the court explained (decision here):To determine whether the grant of equitable intervening rights is appropriate, courts consider various factors, including: (1) whether substantial preparation was made before the reissue; (2) whether there are existing orders or contracts; (3) whether non-infringing goods can be manufactured from the inventory used to manufacture the infringing product and the cost of conversion; and, (4) whether the infringer has made profits sufficient to cover its investment. Seattle Box Co., Inc. V. Indus. Crating & Packing, Inc., 756 F.2d 1574, 1579-80. As this is an equitable determination, the court may also consider the relative degrees of good faith or bad faith exercised by the parties in connection with their product and patent development.The court reviewed the facts of the case in the context of the above factors. The court did not find the Haldex investments to be substantially more than their profits. Likewise, the court pointed out that trial testimony indicated that their investment was not made in reliance upon the availability of the U.S. market, and that infringement was well known at the time of most of the investment.In responding to Haldex’s argument that Bendix’s delay in filing suit on the reissue patent was in bad faith, the court reasoned:Further, because of the “delay” in filing for reissue, Haldex had more time than it otherwise would have had to recoup some of the losses from its investment. The delay in filing led to a delay in the issuance of the second patent, which gave Haldex more opportunity for sales that were protected by the absolute intervening rights provided by the statute. (footnote 4)Interesting.This case was brought to my attention by the great Docket Navigator.

35 U.S.C. 252 presents two flavors of intervening rights in the reexamination/reissue context: absolute intervening rights, and equitable intervening rights. The more common of the two, absolute intervening rights, precludes infringement liability prior to issuance of new/amended claims if such claims are not substantially identical in scope to the claims of the original patent.

Equitable intervening rights are available as a means to balance the public interest in the patent system and the remedial purpose of the reissue statute with the private interest of an infringer who innocently and in good faith has undertaken substantial activities that become infringing with the issuance of a reissue patent. For example, if prior to the issuance of a new/amended claim, a defendant invests in a new manufacturing line to develop products that infringe the new/amended claims, negotiates contracts to deliver infringing goods, and otherwise proceeds in conducting such business in good faith, the court may permit such infringement to continue under terms the court deems as equitable to both parties.

In Bendix Commercial Vehicle Systems LLC, et al v. Haldex Brake Products Corp., (NDOH) having lost all previous battles (inequitable conduct in patent reissue here) (recapture in patent reissue here), defendant Haldex argued that they should be allowed to infringe based upon the doctrine of equitable intervening rights.

In denying the defense of equitable intervening rights to Haldex, the court explained (decision here):

To determine whether the grant of equitable intervening rights is appropriate, courts consider various factors, including: (1) whether substantial preparation was made before the reissue; (2) whether there are existing orders or contracts; (3) whether non-infringing goods can be manufactured from the inventory used to manufacture the infringing product and the cost of conversion; and, (4) whether the infringer has made profits sufficient to cover its investment. Seattle Box Co., Inc. V. Indus. Crating & Packing, Inc., 756 F.2d 1574, 1579-80. As this is an equitable determination, the court may also consider the relative degrees of good faith or bad faith exercised by the parties in connection with their product and patent development.

The court reviewed the facts of the case in the context of the above factors. The court did not find the Haldex investments to be substantially more than their profits. Likewise, the court pointed out that trial testimony indicated that their investment was not made in reliance upon the availability of the U.S. market, and that infringement was well known at the time of most of the investment.

In responding to Haldex’s argument that Bendix’s delay in filing suit on the reissue patent was in bad faith, the court reasoned:

Further, because of the “delay” in filing for reissue, Haldex had more time than it otherwise would have had to recoup some of the losses from its investment. The delay in filing led to a delay in the issuance of the second patent, which gave Haldex more opportunity for sales that were protected by the absolute intervening rights provided by the statute. (footnote 4)

Interesting.

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

Expanded BPAI Panel Divided on Proper Reissue PracticeThe proper interpretation of the patent reissue statutes was explored rather frequently at the Board of Patent Appeals & Interferences (BPAI) in 2010. Several important BPAI decision relating to patent reissue, In re Tanaka, In re Staats, and In re Mostafazadeh are now on appeal to the CAFC. As we begin 2011, the trend appears to be continuing.Last week, the Board considered the following two questions in Ex parte Shunpei Yamazaki (here), namely:1.  Does 35 U.S.C. § 251 authorize the Office to reissue a patent that has expired based on an expiration date set at the time of issuance of the original patent?2. Does 35 U.S.C. § 251 authorize the Office to expand in reissue the term of a patent beyond the term of the original patent set at the time of issuance?By way of background, Semiconductor Energy Laboratory, sought to reissue their U.S. Patent 6,180,991. This patent issued on January 30, 2001 based upon an application filed April 21, 1995. During the original prosecution, a terminal disclaimer was filed (November of 1996) to overcome a double patenting rejection. Thereafter, the claims subject to the earlier double patenting rejections were amended. As a result, the Applicant petitioned to withdraw the earlier filed disclaimer (April 1999).The petition remained pending at the USPTO for some time, roughly a year. At that point, a Notice of Allowance was issued and the issue fee paid by the Applicant. In the 21st month, (May 2001) the petition was dismissed as mooted by the issuance of the ‘991 Patent. In the petition decision, the Office explained that a terminal disclaimer cannot be removed once a patent issues, and also explained that patent reissue could not remedy the problem. As it stood, the Patent holder had mistakenly disclaimed some 14 years of patent term (based on a pre-GATT priority claim).Perhaps encouraged by a non-precedential Board decision, Ex parte Durckheimer (1996), and despite the caution of the Office that reissue practice could not remove the disclaimer, an application seeking reissue of the ‘991 Patent was filed on January 16, 2002.As is all too common with patent reissues applications, the case languished for some 9 years before reaching the Board for decision.In their decision, the majority answered both questions above in the negative, reasoning:We take this opportunity to resolve a conflict within the Office as to the meaning of “the term of the original patent” in 35 U.S.C. § 251 and whether the Office is authorized by this statute to remove a terminal disclaimer during reissue resulting in an expansion of the term of the original patent set at issuance.We interpret “the term of the original patent” in § 251 to refer to the “term” of the patent as the term set upon issuance of the original patent.  . . . . See Merck & Co., 482 F.3d at 1319; see also Bayer AG, 298 F.3d at 1381. Thus, we disagree with the Board’s earlier holding in Durckheimer that a terminal disclaimer does not alter “the term of the original patent.” . . . .As such, we feel that the prior panel’s interpretation of § 251 in Durckheimer was in error, and the present decision overrules Durckheimer. We adopt the position of the Office as stated in MPEP § 1490 that “[s]ince the granting of a reissue patent without the effect of a recorded terminal disclaimer would result in extending the term of the original patent, reissue under these circumstances would be contrary to the statute.”Consequently, at the time of issuance of Appellant’s patent on January 30, 2001, the statute recognized that the term of the ‘991 patent would expire on December 22, 2003, the expiration date specified in the Terminal Disclaimer. Section 251 does not permit the Office to now reissue the ‘991 patent beyond that term as set upon issuance. (internal footnotes omitted)However, the concurrence saw the issues raised by the Appellant a bit differently. The concurring APJ’s found that it is possible to reissue a patent for purposes of removing a terminal disclaimer, but that reissue must occur before expiration.The majority points to the language in § 251 which states that a patent may be reissued “for the unexpired part of the term of the original patent” (emphasis added). According to the majority, the term of a patent is set at the time of issuance and withdrawing a recorded terminal disclaimer in an issued patent would extend the term of that patent contrary to § 251.The “term” of a patent is set by statute at the time of issuance. 35 U.S.C. § 154(a)(2) (2010). However, as explained in Ex parte Durckheimer, No. 94-2004, slip op. at 19 (BPAI 1996), a terminal disclaimer does not alter the “term” of the original patent. Rather, a terminal disclaimer disclaims a “terminal part of the term . . . of the patent granted or to be granted” thereby resetting the expiration date of that patent. 35 U.S.C. § 253 (2010).The majority appears to equate “term” with “expiration date.” However, I respectfully disagree that these terms are synonymous in this case where a terminal disclaimer has been recorded in an issued patent. See, e.g., Merck & Co., Inc. v. Hi-Tech Pharmacal Co., Inc., 482 F.3d 1317, 1322-23 (Fed. Cir. 2007) (discussing the expiration date resulting from the terminal disclaimer and the expiration date of the patent in the absence of the terminal disclaimer). . . .As [to expiration] . . . . The Appellant’s patent expired on December 22, 2003, by virtue of the terminal disclaimer that remains in effect. Therefore, the Office does not have the authority to reissue the Appellant’s patent for “the unexpired part of the term of the original patent.” (internal footnotes omitted)As pointed out in the concurring opinion, a terminal disclaimer is just that, a disclaimer of term otherwise accorded an issuing patent.Of course, once a patent is expired there can be no “re-issuing” the patent for an unexpired term. Yet, here the error identified in the application for reissue is one of term, seasonably presented before expiration. It seems grossly unfair to punish the Appellant in view of the significant delays in patent reissue prosecution, not to mention the egregious petition delay in the original prosecution.Perhaps this patent reissue dispute, much like the 2010 cases that came before it, is also destined for CAFC revi

The proper interpretation of the patent reissue statutes was explored rather frequently at the Board of Patent Appeals & Interferences (BPAI) in 2010. Several important BPAI decision relating to patent reissue, In re Tanaka, In re Staats, and In re Mostafazadeh are now on appeal to the CAFC. As we begin 2011, the trend appears to be continuing.

Last week, the Board considered the following two questions in Ex parte Shunpei Yamazaki (here), namely:

1.  Does 35 U.S.C. § 251 authorize the Office to reissue a patent that has expired based on an expiration date set at the time of issuance of the original patent?

2. Does 35 U.S.C. § 251 authorize the Office to expand in reissue the term of a patent beyond the term of the original patent set at the time of issuance?

By way of background, Semiconductor Energy Laboratory, sought to reissue their U.S. Patent 6,180,991. This patent issued on January 30, 2001 based upon an application filed April 21, 1995. During the original prosecution, a terminal disclaimer was filed (November of 1996) to overcome a double patenting rejection. Thereafter, the claims subject to the earlier double patenting rejections were amended. As a result, the Applicant petitioned to withdraw the earlier filed disclaimer (April 1999).

The petition remained pending at the USPTO for some time, roughly a year. At that point, a Notice of Allowance was issued and the issue fee paid by the Applicant. In the 21st month, (May 2001) the petition was dismissed as mooted by the issuance of the ‘991 Patent. In the petition decision, the Office explained that a terminal disclaimer cannot be removed once a patent issues, and also explained that patent reissue could not remedy the problem. As it stood, the Patent holder had mistakenly disclaimed some 14 years of patent term (based on a pre-GATT priority claim).

Perhaps encouraged by a non-precedential Board decision, Ex parte Durckheimer (1996), and despite the caution of the Office that reissue practice could not remove the disclaimer, an application seeking reissue of the ‘991 Patent was filed on January 16, 2002.

As is all too common with patent reissues applications, the case languished for some 9 years before reaching the Board for decision.

In their decision, the majority answered both questions above in the negative, reasoning:

We take this opportunity to resolve a conflict within the Office as to the meaning of “the term of the original patent” in 35 U.S.C. § 251 and whether the Office is authorized by this statute to remove a terminal disclaimer during reissue resulting in an expansion of the term of the original patent set at issuance.

We interpret “the term of the original patent” in § 251 to refer to the “term” of the patent as the term set upon issuance of the original patent.  . . . . See Merck & Co., 482 F.3d at 1319; see also Bayer AG, 298 F.3d at 1381. Thus, we disagree with the Board’s earlier holding in Durckheimer that a terminal disclaimer does not alter “the term of the original patent.” . . . .

As such, we feel that the prior panel’s interpretation of § 251 in Durckheimer was in error, and the present decision overrules Durckheimer. We adopt the position of the Office as stated in MPEP § 1490 that “[s]ince the granting of a reissue patent without the effect of a recorded terminal disclaimer would result in extending the term of the original patent, reissue under these circumstances would be contrary to the statute.”

Consequently, at the time of issuance of Appellant’s patent on January 30, 2001, the statute recognized that the term of the ‘991 patent would expire on December 22, 2003, the expiration date specified in the Terminal Disclaimer. Section 251 does not permit the Office to now reissue the ‘991 patent beyond that term as set upon issuance. (internal footnotes omitted)

However, the concurrence saw the issues raised by the Appellant a bit differently. The concurring APJ’s found that it is possible to reissue a patent for purposes of removing a terminal disclaimer, but that reissue must occur before expiration.

The majority points to the language in § 251 which states that a patent may be reissued “for the unexpired part of the term of the original patent” (emphasis added). According to the majority, the term of a patent is set at the time of issuance and withdrawing a recorded terminal disclaimer in an issued patent would extend the term of that patent contrary to § 251.

The “term” of a patent is set by statute at the time of issuance. 35 U.S.C. § 154(a)(2) (2010). However, as explained in Ex parte Durckheimer, No. 94-2004, slip op. at 19 (BPAI 1996), a terminal disclaimer does not alter the “term” of the original patent. Rather, a terminal disclaimer disclaims a “terminal part of the term . . . of the patent granted or to be granted” thereby resetting the expiration date of that patent. 35 U.S.C. § 253 (2010).

The majority appears to equate “term” with “expiration date.” However, I respectfully disagree that these terms are synonymous in this case where a terminal disclaimer has been recorded in an issued patent. See, e.g., Merck & Co., Inc. v. Hi-Tech Pharmacal Co., Inc., 482 F.3d 1317, 1322-23 (Fed. Cir. 2007) (discussing the expiration date resulting from the terminal disclaimer and the expiration date of the patent in the absence of the terminal disclaimer). . . .

As [to expiration] . . . . The Appellant’s patent expired on December 22, 2003, by virtue of the terminal disclaimer that remains in effect. Therefore, the Office does not have the authority to reissue the Appellant’s patent for “the unexpired part of the term of the original patent.” (internal footnotes omitted)

As pointed out in the concurring opinion, a terminal disclaimer is just that, a disclaimer of term otherwise accorded an issuing patent.

Of course, once a patent is expired there can be no “re-issuing” the patent for an unexpired term. Yet, here the error identified in the application for reissue is one of term, seasonably presented before expiration. It seems grossly unfair to punish the Appellant in view of the significant delays in patent reissue prosecution, not to mention the egregious petition delay in the original prosecution.

Perhaps this patent reissue dispute, much like the 2010 cases that came before it, is also destined for CAFC review.

Congress Prepares to Tackle Contentious Patent Reform Issues Once More.As Congress begins to finalize key committee assignments and focus on legislative agendas for 2011, patent reform once again finds itself on the “to-do” list. While previous efforts to pass a comprehensive reform bill (S.515 being the most recent incarnation) have been hampered by powerful lobby groups, some genuine optimism seems to exist on the prospect of reform this year. However, the buzz around DC (e.g., last week’s DC Bar program) is that  S.515 will be at least slimmed down, if not broken out into separate bills.One of the more interesting proposals rumored to be under considerationis the creation of a post grant opposition proceeding specifically designed for “business method patents.” (Article 27 of TRIPS be damned?). Other proposals discuss dropping the damages and/or inequitable conduct initiatives altogether as best handled by the CAFC (i.e., Uniloc & Therasense).While staffers have discussed a February timetable for proposals, some bills appear to be targeted for next week (January 24th). Ever the cynic, I am left wondering whether the momentum behind splitting up S.515 into components will result in a Congressional land grab of sorts? Here too, it may be that the “first to file” gets all the glo

As Congress begins to finalize key committee assignments and focus on legislative agendas for 2011, patent reform once again finds itself on the “to-do” list. While previous efforts to pass a comprehensive reform bill (S.515 being the most recent incarnation) have been hampered by powerful lobby groups, some genuine optimism seems to exist on the prospect of reform this year. However, the buzz around DC (e.g., last week’s DC Bar program) is that  S.515 will be at least slimmed down, if not broken out into separate bills.

One of the more interesting proposals rumored to be under consideration

is the creation of a post grant opposition proceeding specifically designed for “business method patents.” (Article 27 of TRIPS be damned?). Other proposals discuss dropping the damages and/or inequitable conduct initiatives altogether as best handled by the CAFC (i.e., Uniloc & Therasense).

While staffers have discussed a February timetable for proposals, some bills appear to be targeted for next week (January 24th). Ever the cynic, I am left wondering whether the momentum behind splitting up S.515 into components will result in a Congressional land grab of sorts? Here too, it may be that the “first to file” gets all the glory.

Petition Filings Soar in Patent Reexamination

This past Monday, I co-chaired PLI’s Reissue & Reexamination Strategies and Tactics with Concurrent Litigation 2011. As previously noted here, Mr. Kenneth Schor, Senior Legal Adviser of the USPTO’s Office of Patent Legal Administration (OPLA) participated and presented a very informative lecture on proper petition practice in patent reexamination.

Mr. Schor made several points of great interest to all post grant practitioners namely:

1) It is improper to oppose many petitions in inter partes reexaminations or provide sur-replies to properly opposed petitions;

2) Improper petitions will be referred to the Office of Enrollment & Discipline (OED), and

3) Abusive petition practices are believed to be aggravating a growing petition inventory.

Below is a chart taken directly from Mr. Schor’s slides demonstrating the growing petition crisis:

petitions

<—Click to Enlarge

As clearly depicted in the chart, petition inventory is exploding. As inter partes patent reexamination filings begin to approach ex parte patent reexamination filing rates, the petition problem is expected to continue to tax USPTO resources.

Mr. Schor emphasized that petitions that oppose discretionary decisions of the Office, such as whether or not to grant an extension of time to a Patentee, are wholly improper. I encourage practitioners to register for the next live presentation of this material set for February 4th in New York City, webcast available thereafter.

Widely Asserted Patent Claim Held Invalid at USPTO

The Rambus patent portfolio is well known, if not notorious, in the semiconductor industry. Over the years, Rambus has aggressively pursued licensing deals with Infineon, Hynix, Samsung and others. More recently, Rambus has been on the offensive against industry stalwarts such as Broadcom, Freescale, LSI, MediaTek, nVidia and ST Micro. 

As with any high value patent disputes, concurrent patent reexamination proceedings have been initiated at the USPTO against the Rambus portfolio. While these proceedings have largely co-existed without greatly impacting the Rambus litigation juggernaut, that may change as appeal proceedings conclude at the USPTO. 

In a Board of Patent Appeals & Interferences (BPAI) decision today, a decision rejecting Rambus’ U.S. Patent 6,034,198 in view of certain prior art was affirmed.

Ramb

<—Pending Rambus Patent Reexaminations as listed in Examiner Answer Brief  (click to enlarge)

In the appeal decision, (here), the BPAI found the examiner’s rejection of claim 18 of the ‘198 Patent supported by substantial evidence. (claims 24 and 33 were confirmed prior to appeal, no other claims of the ‘198 Patent were subject to patent reexamination)

At issue in the appeal is the meaning of the claim term “memory device.” Rambus argued that this term embraced  a single chip embodiment. The examiner found the terminology broad enough to embrace a memory stick embodiment of the ‘198 patent, and this could not be limited to a single chip.

To support their argument, Rambus submitted declaration evidence as to the meaning of “device” in the art. Interestingly, the USPTO cited to inconsistent deposition evidence submitted in a related Rambus patent reexamination. Rambus objected to the late introduction of this evidence in the Examiner Answer. Furthermore, Rambus argued that the deponent (a Hynix expert) was a hired gun, and was not at all commenting on the “memory device” issue. In response, the BPAI explained to Rambus that they should have read the Hynix documentation a bit closer. Footnote 6 of the BPAI decision, explains, in part :

. . . Appellant listed the underlying district court proceeding (No. 05-00334 RMW (N.D. Cal.)) and the merged reexamination proceeding (95/001,109 and 95/001,155) involving this deposition in the Brief, describing those proceedings as related to the instant proceeding. (App. Br. 1, 4.) Appellant’s Reply Brief also asserts that Hynix employed [deponent]  as an expert in several related reexamination proceedings, but “[deponent] has not offered an opinion on the construction of the term ‘memory device’ in those declarations.” (Reply Br. 14 n. 11). To the contrary, [deponent’s] declaration does include a definition (or two) for a “memory device.” This declaration appears in the same litigation and reexamination and was attached to the same Rambus response as the deposition. (See McA2.) By raising an asserted lack of a proffered definition in the Reply Brief after submitting the declaration showing otherwise in a related proceeding, even though the Examiner does not rely on the declaration, Rambus cannot complain of its use or claim surprise, whether used only to contradict the assertion made, or as substantive evidence. . .(emphasis added) 

The fight for the ‘198 Patent will certainly continue on the CAFC, or perhaps even the district court. Still, despite the final outcome, the ‘198 Patent will maintain all other claims— presumably, confirmed claims 24 and 33 are commercially valuable. Nevertheless, as the Rambus patent reexaminations mature, the USPTO will likely continue to chip away at the Rambus arsenal.

Broadest Reasonable Interpretation (BRI) an Outer Limit?

In a district court (or the ITC) patent claims are interpreted based upon the presumption of validity accorded issued patents as guided by controlling claim construction precedent.  Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005). On the other hand, claims in patent reexamination are accorded a broadest reasonable interpretation consistent with the specification, from the perspective of one of skill in the art. In re Yamamoto, 740 F.2d 1569, 222 USPQ 934 (Fed. Cir. 1984).

Relative to the courts, the differing interests and standards of the USPTO often times result in disparate claim interpretation findings. Still, many Patentees are quite surprised to find themselves embroiled in a patent reexamination proceeding in which seemingly settled issues of claim construction are revisited at the USPTO. In re Trans Texas Holdings Corp., 498 F.3d 1290, 83 USPQ2d 1835 (Fed. Cir. 2007).

In the typical case of parallel proceedings, Patentees seek to maintain the narrower claim construction of the court to avoid validity challenges posed in patent reexamination. On the other hand, the USPTO will advance a broadest reasonable interpretation of claim terminology. Because of these differences, the PTO will not adopt court constructions, and courts tend to disregard PTO interpretations.

However, when a Patentee seeks to argue a construction that is broader than the PTO’s construction for infringement purposes, the CAFC has recently held that the USPTO’s BRI construction is quite instructive.

This past Monday, in St. Clair Intellectual Property Consultants, Inc. v. Canon Inc., (Fed. Cir. 2011, non-precedential), the CAFC reversed a lower court claim construction, based in part, on a BRI of claims in patent reexamination. At issue in the case was the claim language plurality of different data formats for different types of computer apparatus.

The plaintiff argued that apparatus embraced application programs, not just a hardware platform. The defendant argued that the claim was limited to different hardware platforms. After citing to aspects of the patent specification and prosecution history that appeared to support the defendant’s position, the CAFC added:

[Defendant’s] construction is also supported by remarks made by the examiner during reexamination. . .

During reexamination, five different examiners, including three different Supervisory Patent Examiners, rejected the [plaintiff’s] interpretation of the claim language. In addition to concluding that claims 16 and 17 of the ’459 patent and claim 10 of the ’219 patent were limited to different data formats for different types of computer architecture, the examiners, rejecting the [plaintiff’s] construction, concluded that the “computer architecture” construction also applied to the ’010 and ’899 patents . . .

Because an examiner in reexamination can be considered one of ordinary skill in the art, his construction of the asserted claims carries significant weight. (emphasis added)

At first blush it seems odd that the CAFC would adopt a claim interpretation based on the different patent reexamination claim interpretation standard. Yet, the Patentee was advocating a broader interpretation than that found under the BRI standard. Thus, in addition to doing their own analysis as to the lack of support in the specification and prosecution history, the CAFC cited to the patent reexamination as evidence of a similar finding. In this case one could argue that the analysis was in fact the same…namely, how broad can the claims be interpreted?

As to the “significant weight” statement above, it will be interesting to see whether or not such a position will be adopted outside of the unique context above. Indeed, it does not even appear that the USPTO follows this line of thinking.

Patentees Frustrate USPTO Efforts to Reduce Ex Parte Reexamination Pendency

 chart1(click to enlarge)

As discussed in previous posts, in August of 2010 the USPTO announced a pilot program, aimed at reducing the pendency of ex parte patent reexamination by 3-5 months. The program entitled “Pilot Program for Waiver of Patent Owner’s Statement in Ex Parte Reexamination Proceedings” is triggered once a new ex parte reexamination request is accorded an initial filing date.

In formulating the program, the USPTO noted that roughly 10% of Patentees file such statements. Thus, by presenting the option to waive the statement, arguably, 90% of filings could be accelerated by 3-5 months. Yet, initial response to the program seemed to indicate that Patentees favored this de facto delay.

Now that a larger number of proceedings have been subject to the program a clearer picture is emerging.

Continue Reading Patent Reexamination Pilot Program Update