In re Meyer Denies Late 1.131 Declaration Evidence

Due to the limited prosecution window in patent reexamination compared to regular patent application prosecution, submission of declaration evidence under 37 CFR § 1.131 and/or 37 CFR § 1.132 is far more commonplace. (See some of my June 2010 posts for further discussions on declaration practice).

U.S. Patent 5,501,404 is directed to a manure spreader (who knew one needed anything more than a blog for that). The ‘404 Patent is the subject of ex parte patent reexamination 90/010,007. There were two main disputes during the reexamination prosecution, (1) whether or not a parent of the ‘404 Patent supported an amendment introduced during the reexamination for priority purposes, or, alternatively (2) whether the Patentee could “swear behind” intervening prior art from the date of the CIP application underlying the ‘404 Patent (which included support for this claim feature).

In pursuing issue (2) before the USPTO, the Patentee failed to present antedating declaration evidence under 37 CFR § 1.131 until after final rejection. An Advisory Action issued indicating that the declaration evidence had been entered, but explained that it was deficient with respect to the required diligence showing. Days prior to filing the Notice of Appeal to the BPAI, supplemental declaration evidence was filed. This evidence was not entered – – on appeal the examiner’s rejections were affirmed by the BPAI. The refusal to enter the supplemental declaration evidence was explained by the Board as a petitionable issue, that was within the discretion of the examiner.

The Patentee then pursued their case to the CAFC.

The appeal, In re Meyer Manufacturing Corp., was affirmed last week at the CAFC.

In arguing issue (1) before both the BPAI and CAFC, the Patentee took the odd position that the amended feature would have been obvious in view of the parent disclosure. Of course, possession of a claimed invention in a 112 sense is not a question of obviousness. Thus, this argument was summarily rejected in both appeals.

As to the second issue (2) the Patentee explained that the very same claim feature was introduced by amendment during prosecution of the priority application (Parent of ‘404 Patent). When the examiner in charge of the parent application found support for this feature lacking, the CIP application underlying the ‘404 Patent was filed. The Patentee reasoned that since this attempted amendment predated the prior art of record in the patent reexamination, that the earlier conception of this feature was clearly demonstrated. However, the initial declaration evidence did not provide an adequate accounting of diligence. To account for this deficiency, the Patentee argued that the failure to enter the supplemental declaration filings was an error.

With respect to the non-entry of the supplemental declaration evidence, the court explained:

There are a host of various kinds of decisions an examiner makes in the examination proceeding–mostly matters of a discretionary, procedural or nonsubstantive nature–which have not been and are not now appealable to the board or to this court when they are not directly connected with the merits of issues involving rejections of claims, but traditionally have been settled by petition to the Commissioner. (citing In re Berger, 279 F.3d 975, 984 (Fed. Cir. 2002))

Had the Patentee properly petitioned under 37 CFR § 1.181, it seems very likely that the petition evidence would have been entered. This is because the filing of this supplemental evidence was responsive to the examiner’s perceived deficiencies in the original evidence. Moreover, the Patentee could have sought continued reexamination on the basis that full consideration of the supplemental evidence would lead to termination of the patent reexamination. Instead, based upon the Patentee’s failure to appreciate patent reexamination procedural intricacies, this patent will now fall.

Change on the Horizon for 2011

With 2010 coming to a close, we can look back and see many positive changes at the USPTO. Ex parte and inter partes appeal brief processing has been streamlined, new user friendly BPAI appeal rules are proposed, new pilot programs are being introduced, and the pendency of reexamination proceedings is slowly improving. (I will post a podcast next week going through the full 2010 retrospective, so cancel those holiday plans!)

Looking forward to 2011 there is still significant uncertainty as to the status of patent reform, at least the kind expected from Congress. Will this be the year that something….anything…..comes out of Congress? Patent Reform is still on the minds of Congress, perhaps more so than in past years as it has the potential to be sold as a no-cost economic stimulus. Yet, courts and the USPTO continue to drive the real change in U.S. patent law, especially as it relates to post grant practice before the USPTO.

So, what can we look forward to in 2011?

Aside from the never ending patent reform drama, the CAFC is slated to decide three important patent reissue cases this year, In re Tanaka, In re Staats, and In re Mostafazadeh. Further, CAFC guidance on the inequitable conduct standard is imminent in Therasense, Inc. v. Becton Dickinson and Co. Meanwhile, the Supreme Court is considering perhaps the most important patent litigation case since Festo in i4i Limited Partnership and Infrastructures for Information Inc v. Microsoft Corp.

Finally, and perhaps of most interest to me, the USPTO is working on a new rules package to overhaul aspects of patent reexamination and patent reissue practice.

With patent reexamination filings increasing significantly year over year, and court’s looking to the USPTO for guidance on concurrently litigated patents, it is important that the USPTO focus on keeping the patent reexamination machine humming. To this end, the Central Reexamination Unit has grown in the number of examiners over the past few months, and USPTO management is focused on improving patent reexamination responsiveness. Likewise, patent reissue has been largely ignored over the years, as a result, responsiveness to such filings by the Office has been inconsistent sluggish.

Although, there has been no official announcement, a patent reissue/reexamination rules package should be expected in the coming months designed to improve the responsiveness and quality of these important proceedings. Details on the proposed changes are scant at this point, but it appears at least that patent reissue processing will shifted in some manner to a special group of examiners, perhaps even the Central Reexamination Unit itself. I will keep my fingers crossed; that kind of change is long overdue.

With respect to post grant proceedings at the USPTO, 2011 is shaping up to be a year of change…..I am looking forward to it.

Detroit_sealass=”alignleft size-thumbnail wp-image-4707″ title=”Detroit_seal” src=”https://www.patentspostgrant.com/wp-content/uploads/2010/12/Detroit_seal-150×150.jpg” alt=”Detroit_seal” width=”150″ height=”150″ />In a teleconference with reporters on Thursday, December 16, 2010, Commerce Secretary Gary Locke – whose department includes the Patent Office – announced that the U.S. Patent and Trademark Office will open its first-ever satellite office in Detroit in the summer of 2011.  Also during this teleconference, it was stated that Detroit will be the first in what could be a few satellite offices scattered around the country (Denver is known to be making a strong push for a satellite office).   The objective of the satellite offices is to increase retention of the examining corps, as well as to increase the number of examiners, as the Office attempts to decrease the ever-increasing backlog of pending patent applications.  According to the Associated Press, officials said Detroit was chosen because of the area’s high percentage of scientists and engineers — many with auto industry background — and the region’s major research universities. Alternatively, PTO insiders indicate that Detroit already has a Department of Commerce facility that helps sidestep congressional red tape. (besides, no point having examiners distracted by competitive baseball and football teams, works in DC after all) Continue Reading USPTO to Open Satellite Office in Detroit

Upcoming CLE Reviews the Impact of Claim Drafting Defects

Although I try to keep the shameless self promotion to a minimum (stop chuckling)….

If like me you are stuck working next week, what better way to spend it then to listen to my glorious monotone voice! Monday December 20, I will participate along with my partner Mike McCabe and John Mulgrew of Microsoft Corporation on the Managing Intellectual Property Webcast entitled Induced/Joint Infringement in Global-Tech and Golden Hour.

As a reminder, Global-Tech is pending before the Supreme Court and explores the state of mind required to be liable for inducing another to infringe a patented claim. Golden Hour is a recent CAFC decision on divided infringement that explored the degree of “direction” and “control” necessary between joint infringers.

Mike and John will explain these important cases and their impact on patent portfolio management. I will comment on pre-grant/post grant mechanisms at the USPTO for Patentees to correct such portfolio defects. Registration is free (link above)

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USPTO Relies on Case Law Predating Interrogatory Power of 37 CFR 1.105

As discussed previously, it is not uncommon for Patentees to introduce evidence of secondary indicia of non-obviousness when faced with an obviousness rejection. To be considered persuasive, the examiner must be able to identify a nexus between the merits of the claimed invention and the evidence of secondary considerations. The term “nexus” identifies a factually and legally sufficient connection between the objective evidence of nonobviousness and the claimed invention so that the evidence is of probative value in the determination of nonobviousness. In the vast majority of cases involving such evidence, the required nexus is deemed insufficient.

Yesterday, a typical rejection of such evidence was once again demonstrated by the BPAI in Ex Parte Smiths Interconnect Microwave Components. Inc. Interestingly, the Patentee argued that a nexus was demonstrated as the sales figures provided related to the product described in their patent. In rejecting this nexus, the BPAI relied on Ex parte Remark, 15 USPQ2d 1498, 1502-03 (BPAI 1990). The Board explained the holding of Remark as clarifying that [i]n civil litigation, once a prima facie nexus is demonstrated the burden switches to the opposing party to show that commercial success was due to extraneous reasons, while in ex parte proceedings the USPTO lacks the evidentiary means to show that commercial success is due to reasons other than the merits of the claimed invention.

Yet, the above noted case predates the enactment of 37 CFR § 1.105. Rule 105 provides the very evidentiary means to explore deficiencies in submitted declarations. Continue Reading Requests for Information in Ex Parte Patent Reexamination

Rare Examiner Request Filed for Patent of LabCorp Fame

U.S. Patent 4,940,658 relates to an assay for Sulfhydryl Amino Acids and methods for detecting and distinguishing Cobalamin and Folic Acid deficiency. This patent previously made headlines as the subject of the 2005 Supreme Court appeal that sought to explore the patentable boundaries of  “natural phenomena.” Lab. Corp. of Am. Holdings v. Metabolite Labs., 126 S. Ct. 2921, 2921 (2006) (dismissing the writ of certiorari as improvidently granted). Specifically, the defendants argued that the patent related to detecting a natural phenomena, namely, a vitamin B12 deficiency.

In 2006, third party requester General Atomics sought ex parte patent reexamination of the ‘458 Patent.(90/008,305) Of course, as patent reexamination may only consider questions of validity that relate to patents or printed publications, statutory subject matter considerations were never at issue; instead, only prior art rejections were applied in the patent reexamination.

Initially, the USPTO rejected certain claims of the ‘658 Patent, forcing the Patentee to pursue the case to the BPAI (ex parte Competitive Technologies, Inc. and The Trustees of Columbia University (Appeal 2009-005519)). The BPAI reversed the examiner’s rejection of the claims in July of 2009. Once reversed, as per usual, the examiner was ordered to withdraw the rejections, and allow the patent to exit reexamination.

Instead, the examiner opted to file a very rare, request for rehearing.

MPEP 1214.04 provides that:

The examiner may request rehearing of the Board decision. Such a request should normally be made within 2 months of the receipt of the Board decision in the TC. The TC Director’s secretary should therefore date stamp all Board decisions upon receipt in the TC.

All requests by the examiner to the Board for rehearing of a decision must be approved by the TC Director and must also be forwarded to the Office of the Deputy Commissioner for Patent Examination Policy for approval before mailing.

The examiner’s request for rehearing (here), as required, was approved by both the Deputy Commissioner for Patent Examination Policy, and Director of the Central Reexamination Unit. In the request for rehearing, the examiner pointed to the evidence of record as supporting the obviousness rejection. 

In BPAI opinion of last Friday, the request was considered, but the Board refused to change their earlier decision. The Board stated that the record did not teach or suggest the specific interrelationship claimed. As can be appreciated by the significant signatory requirement, such requests are almost never filed. In this case, it may be that the patent’s notoriety prompted the exceptional treatment.

Your Honor…the dog ate our first reexam request

In reviewing the cases each week that analyze staying an ongoing district court patent infringement proceeding pending a concurrent patent reexamination, I am always struck by the length of time defendants will wait before seeking reexamination. In many cases, years are allowed to pass, Markman Hearings come and go, significant discovery is conducted, etc. Equally surprising is the willingness of certain courts to look the other way on such late filing practices.

Not surprisingly, once such a late a request is filed, and the corresponding motion to stay is filed with the court, plaintiffs will point out the late timing of the reexam demonstrates how the defendant is seeking to gain a tactical advantage, and how the new proceeding delay ultimate resolution and unfairly prejudice the plaintiff. To be sure, this practice appears to be waning as defendants begin to recognize the significant benefits of an ongoing patent reexamination, aside from the potential of securing a stay. Yet, for those defendants that continue to adhere to the myopic view of patent reexamination as an unlikely escape hatch only, new and improved rationales justifying delay are required.

Recently, in CCP Systems AG, v. Samsung Electronics Corp., LTD et al. (DNJ) the defendant explained away a 1 year delay with relative ease.

Defendant Samsung filed their request for inter partes patent reexamination 8 month’s after answering the complaint and counterclaiming for declaratory judgment of invalidity. Amusingly, this late filing was characterized as a “get out of discovery free card” by CCP. Nevertheless, with regard to this delay, the judge commented that Samsung Electronics has explained that it delayed filing the reexamination request because it did not want to jeopardize the then-ongoing settlement discussions with CCP.

Samsung’s year long delay is hardly egregious, (considering discovery has not yet commenced). Also, it may be that there were significant settlement talks between the litigants here. Still, I am wondering if such a rationale isn’t so generic as to be applicable in every case?

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

CAFC Mandamus Decision Forces Acer Dispute to CaliforniaLast Friday the CAFC ordered the District Court for the Eastern District of Texas to transfer venue to the Northern District of California (NDCA) in the case of In re Acer. Acer petitioned to the CAFC for the mandamus as to venue in their patent infringement dispute with MedioStream, a company located in the NDCA. At issue in the case is the infringement of U.S. Patents 7,009,655 and 7,283,172. In ordering the transfer of the case, the CAFC cited the location of the plaintiff in the NDCA as well as 12 of 13 defendants.The Acer case follows on the heels of In re TS Tech USA Corp., 551 F.3d 1315 (Fed. Cir 2008) and In re Nintendo Co., 589 F.3d 1194 (Fed. Cir. 2009). Certainly, convenience, cost, and avoiding an EDTX jury were factors in pursuing the venue dispute to the CAFC. However, as most recently demonstrated by Nintendo, perhaps a more compelling factor is the opportunity to shut down the litigation altogether in a friendlier forum.As discussed in earlier posts, Nintendo is one of many recent defendants to execute the Texas Two-Step, which is characterized by a transfer out of Texas  (step 1), followed up by a motion to stay the case pending reexamination in the new forum (step 2).The ‘655 and ‘172 patents at issue in the Acer dispute are currently subject to inter partes patent reexamination at the USPTO. (95/001,284). Likewise, the ‘172 is subject to inter partes reexamination at the USPTO. (95/001,283). In both reexaminations, all claims stand rejected, and both seem destined for appeal in a matter of months. It is worth noting that as recently as September, defendants have been successful in staying cases in the NDCA based upon a mere filing of reexamination request. With the MedioStream patents on their way to BPAI appeal in a few months time, it may be that not only was a battle lost at the CAFC, but perhaps the w

Last Friday the CAFC ordered the District Court for the Eastern District of Texas to transfer venue to the Northern District of California (NDCA) in the case of In re Acer. Acer petitioned to the CAFC for the mandamus as to venue in their patent infringement dispute with MedioStream, a company located in the NDCA. At issue in the case is the infringement of U.S. Patents 7,009,655 and 7,283,172. In ordering the transfer of the case, the CAFC cited the location of the plaintiff in the NDCA as well as 12 of 13 defendants.

The Acer case follows on the heels of In re TS Tech USA Corp., 551 F.3d 1315 (Fed. Cir 2008) and In re Nintendo Co., 589 F.3d 1194 (Fed. Cir. 2009). Certainly, convenience, cost, and avoiding an EDTX jury were factors in pursuing the venue dispute to the CAFC. However, as most recently demonstrated by Nintendo, perhaps a more compelling factor is the opportunity to shut down the litigation altogether in a friendlier forum.

As discussed in earlier posts, Nintendo is one of many recent defendants to execute the Texas Two-Step, which is characterized by a transfer out of Texas  (step 1), followed up by a motion to stay the case pending reexamination in the new forum (step 2).

The ‘655 and ‘172 patents at issue in the Acer dispute are currently subject to inter partes patent reexamination at the USPTO. (95/001,284). Likewise, the ‘172 is subject to inter partes reexamination at the USPTO. (95/001,283). In both reexaminations, all claims stand rejected, and both seem destined for appeal in a matter of months. It is worth noting that as recently as September, defendants have been successful in staying cases in the NDCA based upon a mere filing of reexamination request. With the MedioStream patents on their way to BPAI appeal in a few months time, it may be that not only was a battle lost at the CAFC, but perhaps the war.

Texas Court Likens Issuance of Continuation Patents During Litigation to Patent ReexaminationAs discussed yesterday, willful infringement exists where an accused infringer acted “despite an objectively high likelihood that its actions constituted infringement of a valid patent.” In re Seagate Technology, LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007). In assessing the propriety of a post-filing willfulness allegation (i.e., after the  complaint is filed with the court) Seagate is oft cited for the proposition that a plaintiff must seek injunctive relief (i.e., preliminary injunction). However, court’s have refused to impose such a wooden rule. Instead, court’s look to the totality of the circumstances, including factors such as the existence of concluded patent reexaminations.In other words, where a patent survives patent reexamination, conduct of a defendant after issuance of the reexamination certificate may be deemed reckless. Ultratech Int’l, Inc. v. Aqua-Leisure Indus., Inc. v. Swimways Corp., No. 3:05-cv-134-J-25MCR, 2009 (M.D. Fla. Mar. 3, 2009); See also St. Clair Intellectual Property Consultants, Inc. v. Palm, Inc., 2009 U.S. Dist. LEXIS 49922, at *5-6 (D. Del. Jun. 10, 2009).Last week, in denying a defendant summary judgment motion of no willful infringement, Judge Ward of the Eastern District of Texas extended the patent reexamination rationale noted above to newly issued continuation patents. In essence, Judge Ward explained that the prior art applied in the litigation for invalidity purposes had already been laundered by the USPTO during prosecution of the continuation patent applications. In SynQor, Inc. v. Artesyn Technologies, Inc., et al. (EDTX), Judge Ward reasoned:In St. Clair, a patent holder’s post-filing willfulness allegation was permitted in spite of Seagate after the patent exited reexamination without substantially narrowed claims. SynQor’s position with the [newly issued continuation applications] is similar to St. Clair’s position with its reexamined patents. Prior to issuance of the [continuation applications as patents], SynQor had been engaged in litigation with defendants for 20 months. Any relevant prior art relied upon by Defendants must have been produced to SynQor approximately one year before the issuance of either patent. [by court order] SynQor, in turn, had a duty of candor to the USPTO to produce any prior art references material to patentability under 37 C.F.R. § 1.56(a) in its prosecution of the applications that issued as the [new patents]. Thus, at least as to art that was disclosed, Defendants’ invalidity defenses have been tested and found lacking by the PTO. The issuance of the [new patents] over Defendants’ asserted prior art creates an objectively high likelihood that the [new patents] are valid over that prior art, similar to the result of the reexamination in St. Clair. As a result, a preliminary injunction was not necessary for SynQor to assert post-filing willful infringement of the [newly issued patents]. Accordingly, Defendants’ motions for summary judgment of no willful infringement of [the newly issued patents] is DENIED.Interestingly both patents (7,558,803 & 7,564,702) subject to the Summary Judgment Motion are now being reexamined at the USPTO based in part, on art that was submitted during original prosecution. (inter partes patent reexamination Control Nos 95/001,405 and 95/001,406). However, it appears that the grant of these reexaminations was in October of 2010, perhaps too late for the summary judgment briefing. The patents issued in July of 2009, it is unclear why the defendants waited a year to initiate reexamination proceedings.This case was brought to my attention by the great Docket Navigator.

As discussed yesterday, willful infringement exists where an accused infringer acted “despite an objectively high likelihood that its actions constituted infringement of a valid patent.” In re Seagate Technology, LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007). In assessing the propriety of a post-filing willfulness allegation (i.e., after the  complaint is filed with the court) Seagate is oft cited for the proposition that a plaintiff must seek injunctive relief (i.e., preliminary injunction). However, court’s have refused to impose such a wooden rule. Instead, court’s look to the totality of the circumstances, including factors such as the existence of concluded patent reexaminations.

In other words, where a patent survives patent reexamination, conduct of a defendant after issuance of the reexamination certificate may be deemed reckless. Ultratech Int’l, Inc. v. Aqua-Leisure Indus., Inc. v. Swimways Corp., No. 3:05-cv-134-J-25MCR, 2009 (M.D. Fla. Mar. 3, 2009); See also St. Clair Intellectual Property Consultants, Inc. v. Palm, Inc., 2009 U.S. Dist. LEXIS 49922, at *5-6 (D. Del. Jun. 10, 2009).

Last week, in denying a defendant summary judgment motion of no willful infringement, Judge Ward of the Eastern District of Texas extended the patent reexamination rationale noted above to newly issued continuation patents. In essence, Judge Ward explained that the prior art applied in the litigation for invalidity purposes had already been laundered by the USPTO during prosecution of the continuation patent applications. 

In SynQor, Inc. v. Artesyn Technologies, Inc., et al. (EDTX), Judge Ward reasoned:

In St. Clair, a patent holder’s post-filing willfulness allegation was permitted in spite of Seagate after the patent exited reexamination without substantially narrowed claims. SynQor’s position with the [newly issued continuation applications] is similar to St. Clair’s position with its reexamined patents. Prior to issuance of the [continuation applications as patents], SynQor had been engaged in litigation with defendants for 20 months. Any relevant prior art relied upon by Defendants must have been produced to SynQor approximately one year before the issuance of either patent. [by court order] SynQor, in turn, had a duty of candor to the USPTO to produce any prior art references material to patentability under 37 C.F.R. § 1.56(a) in its prosecution of the applications that issued as the [new patents]. Thus, at least as to art that was disclosed, Defendants’ invalidity defenses have been tested and found lacking by the PTO. The issuance of the [new patents] over Defendants’ asserted prior art creates an objectively high likelihood that the [new patents] are valid over that prior art, similar to the result of the reexamination in St. Clair. As a result, a preliminary injunction was not necessary for SynQor to assert post-filing willful infringement of the [newly issued patents]. Accordingly, Defendants’ motions for summary judgment of no willful infringement of [the newly issued patents] is DENIED.

Interestingly both patents (7,558,803 & 7,564,702) subject to the Summary Judgment Motion are now being reexamined at the USPTO based in part, on art that was submitted during original prosecution. (inter partes patent reexamination Control Nos 95/001,405 and 95/001,406). However, it appears that the grant of these reexaminations was in October of 2010, perhaps too late for the summary judgment briefing. The patents issued in July of 2009, it is unclear why the defendants waited a year to initiate reexamination proceedings.

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

Demonstrating Objectively Reasonable ConductThe admissibility of evidence relating to an ongoing patent reexamination in a parallel patent litigation is often times a question of both purpose and timing. Last January, we presented a four part series on this topic. These earlier posts compared the attempted litigation purpose (i.e., willfulness, inequitable conduct, claim construction, etc) of patent reexamination evidence relative to the stage of the patent reexamination (i.e., grant, first action, final action, etc).In addition to these two factors, consideration must also be given to the litigation forum.As mentioned above, one purpose for introducing evidence of an ongoing patent reexamination in a parallel litigation is to avoid a post filing (i.e., complaint) willfulness determination. The existence of an ongoing patent reexamination may be admitted to demonstrate that the accused infringer was not objectively reckless in its actions irrespective of its prior knowledge of the asserted patent. Although some courts have found that reexamination evidence defeats a finding of willfulness, these courts typically examine the status of the claims in the reexamination proceeding at the time of the willfulness determination, finding that the weight of the reexamination evidence depends on whether the reexamination proceedings are complete and whether the patent claims have undergone substantive changes in reexamination. When seeking introduction of such evidence, depending upon the court, the stage of the parallel litigation (Summary Judgment, JMOL, Pre-Trial Motions) may determine whether or not it is admissible.While evidence of a concurrent patent reexamination is consistently admitted at the summary judgment stage to demonstrate objectively reasonable behavior, certain courts are often times reluctant to admit such evidence for jury consideration. When it comes to jury exposure some courts find reexamination evidence prejudicial to the Patentee, even for a limited purpose of demonstrating objectively reasonable conduct. Since courts have wide discretion in admitting evidence that is more prejudicial than probative, it is not surprising that different courts espouse different theories on what constitutes prejudicial evidence.In Real Time Data LLC. v. Packeteer Inc., et al. (EDTX, ORDER September 30, 2009), the court explained:After reviewing the arguments of both parties, the Court agrees with Plaintiff that evidence of an incomplete reexamination proceeding is unduly prejudicial in relation to the probative value contained therein. See FED. R. EVID. 403. As this Court observed in i4i v. Microsoft Corp., even if a reexamination proceeding is somewhat probative of invalidity, the probative value of this evidence is “substantially outweighed by its prejudicial effect.”  . . . Federal Rule of Evidence 403 gives the Court broad discretion to exclude evidence where its probative value is substantially outweighed by the danger of unfair prejudice. An Office Action, such as the USPTO’s preliminary findings of invalidity of the ‘104 patent, carries with it a substantial risk that the jury will give its conclusions undue deference. See Pharmastem, 2003 WL 22244704, at *3 (finding that an opinion from a quasi-judicial or administrative body increases the likelihood that a jury will give its conclusions deference). Furthermore, even if the jury is instructed to consider the Office Action for the limited purpose of assessing objective recklessness, there is a strong likelihood that the jury would be confused as to its relevance and use this evidence in considering the validity of the ‘104 patent. In sum, although an ongoing reexamination proceeding and the USPTO’s actions therein could be considered by the Court as a factor in a willfulness determination at the summary judgment stage, during trial in a request for judgment as a matter of law as to willful infringement, and/or post-verdict,  it should not be introduced before the jury due to the highly prejudicial effect the USPTO’s actions would have on the jury.However, not every court follows the Texas model.On September 1, 2010, Judge Roslyn O. Silver of the United States District Court for the District of Arizona denied a motion to exclude evidence of the patent reexamination of the ’894 patent-in-suit in Integrated Technology Corp. v. Rudolph Technologies, Inc., Civil Action No. CV-06-02182-PHX-ROS.  Judge Silver, simply concluded that the USPTO’s action is relevant, at the very least, to the issue of willful infringement citing Lucent Tech., Inc. v. Gateway, Inc., 2007 WL 6955272 (S.D. Cal.).As demonstrated by the considerable difference in opinion here, not to mention the different attitudes as to whether or not to stay a case pending patent reexamination, the practices of particular jurisdictions are a critical factor in assessing patent reexamination strategi

The admissibility of evidence relating to an ongoing patent reexamination in a parallel patent litigation is often times a question of both purpose and timing. Last January, we presented a four part series on this topic. These earlier posts compared the attempted litigation purpose (i.e., willfulness, inequitable conduct, claim construction, etc) of patent reexamination evidence relative to the stage of the patent reexamination (i.e., grant, first action, final action, etc).

In addition to these two factors, consideration must also be given to the litigation forum.

As mentioned above, one purpose for introducing evidence of an ongoing patent reexamination in a parallel litigation is to avoid a post filing (i.e., complaint) willfulness determination. The existence of an ongoing patent reexamination may be admitted to demonstrate that the accused infringer was not objectively reckless in its actions irrespective of its prior knowledge of the asserted patent. Although some courts have found that reexamination evidence defeats a finding of willfulness, these courts typically examine the status of the claims in the reexamination proceeding at the time of the willfulness determination, finding that the weight of the reexamination evidence depends on whether the reexamination proceedings are complete and whether the patent claims have undergone substantive changes in reexamination. When seeking introduction of such evidence, depending upon the court, the stage of the parallel litigation (Summary Judgment, JMOL, Pre-Trial Motions) may determine whether or not it is admissible.

While evidence of a concurrent patent reexamination is consistently admitted at the summary judgment stage to demonstrate objectively reasonable behavior, certain courts are often times reluctant to admit such evidence for jury consideration. When it comes to jury exposure some courts find reexamination evidence prejudicial to the Patentee, even for a limited purpose of demonstrating objectively reasonable conduct. Since courts have wide discretion in admitting evidence that is more prejudicial than probative, it is not surprising that different courts espouse different theories on what constitutes prejudicial evidence.

In Real Time Data LLC. v. Packeteer Inc., et al. (EDTX, ORDER September 30, 2009), the court explained:

After reviewing the arguments of both parties, the Court agrees with Plaintiff that evidence of an incomplete reexamination proceeding is unduly prejudicial in relation to the probative value contained therein. See FED. R. EVID. 403. As this Court observed in i4i v. Microsoft Corp., even if a reexamination proceeding is somewhat probative of invalidity, the probative value of this evidence is “substantially outweighed by its prejudicial effect.”  . . .

Federal Rule of Evidence 403 gives the Court broad discretion to exclude evidence where its probative value is substantially outweighed by the danger of unfair prejudice. An Office Action, such as the USPTO’s preliminary findings of invalidity of the ‘104 patent, carries with it a substantial risk that the jury will give its conclusions undue deference. See Pharmastem, 2003 WL 22244704, at *3 (finding that an opinion from a quasi-judicial or administrative body increases the likelihood that a jury will give its conclusions deference). Furthermore, even if the jury is instructed to consider the Office Action for the limited purpose of assessing objective recklessness, there is a strong likelihood that the jury would be confused as to its relevance and use this evidence in considering the validity of the ‘104 patent. In sum, although an ongoing reexamination proceeding and the USPTO’s actions therein could be considered by the Court as a factor in a willfulness determination at the summary judgment stage, during trial in a request for judgment as a matter of law as to willful infringement, and/or post-verdict,  it should not be introduced before the jury due to the highly prejudicial effect the USPTO’s actions would have on the jury.

However, not every court follows the Texas model.

On September 1, 2010, Judge Roslyn O. Silver of the United States District Court for the District of Arizona denied a motion to exclude evidence of the patent reexamination of the ’894 patent-in-suit in Integrated Technology Corp. v. Rudolph Technologies, Inc., Civil Action No. CV-06-02182-PHX-ROS.  Judge Silver, simply concluded that the USPTO’s action is relevant, at the very least, to the issue of willful infringement citing Lucent Tech., Inc. v. Gateway, Inc., 2007 WL 6955272 (S.D. Cal.).

As demonstrated by the considerable difference in opinion here, not to mention the different attitudes as to whether or not to stay a case pending patent reexamination, the practices of particular jurisdictions are a critical factor in assessing patent reexamination strategies.