Last thing I remember, I wasRunning for the doorI had to find the passage backTo the place I was before — Hotel CaliforniaBack in 2005, a third party requested ex parte patent reexamination of U.S. Patent 5,916,912 (90/007,626). The ‘912 Patent is assigned to the Regents of the University of California and relates to methods of enhancing mitochondrial metabolism without a concomitant increase in metabolic production of oxygen reactive species, using specific doses of a combination of carnitine, together with lipoic acid (or N-acetyl-cysteine.). During the patent reexamination the examiner confirmed a handful of claims, while rejecting claims 1,2, 4-7,9-11,16,17,20-23,26-29,37-40,43-47, and 50-54. The rejection of these claims was appealed to the BPAI, which affirmed the rejection on September 27,2010.Rather than proceeding to the CAFC, this past Monday, Regents sued the USPTO in the United States District Court for the District of Columbia. Readers may recall this tactic was tried last year in the case of Sigram Schindler Beteilungsgesellschaft mbH v. Kappos, No. 1:09-cv-935-TSE-IDD (E.D. Va.). This case was dismissed without reaching the question of the propriety of suing the USPTO in this manner. In a nutshell, the USPTO believes that Patent Owners in ex parte patent reexaminations filed on or after November 29, 1999 must proceed to the CAFC. Others (such as Sigram and Regents) believe the position of the USPTO is based on a misapplication of the law.So, what’s the big deal with bypassing the CAFC in favor of the DC District Court?The court is significant to patent owners because a civil suit against the USPTO in the district court results in de novo review of the BPAI decision and affords the patent owner an opportunity to take third party discovery and introduce new evidence to rebut the USPTO’s position. In many cases, Patentees are hoping to introduce new evidence to rebut a perceived change in the position of the USPTO. This is because the Patentee may be precluded to do so at the USPTO due to the late stage of the ex parte patent reexamination, or at the CAFC since the appeal record cannot be changed.So, is this “do-over” tactic legitimate?The dispute as to statutory interpretation relates primarily to 35 U.S.C. § 141 and 35 U.S.C. § 306, and changes brought about by the American Inventors Protection Act of 1999 (AIPA).The USPTO interprets Public Law 107-273, section 13202(d) (codified as 35 U.S.C. § 306), as prohibiting a patent owner in an ex parte reexamination from obtaining judicial review of a decision of the BPAI by filing a civil suit against the USPTO in federal district court. Under the USPTO interpretation, codified at 37 C.F.R. § 1.303 and discussed in MPEP § 2279, the patent owner may only seek judicial review in an ex parte reexamination filed on or after November 29, 1999, by appealing the decision of the BPAI to the Federal Circuit.Patentees argue that the USPTO’s attempt to regulate outside conduct is ultra vires, and at odds with the plain language of 35 U.S.C. § 306. The AIPA of 1999 introduced inter partes reexamination; there was no purpose to change any aspect of ex parte patent reexamination practices. Of course, the Public Law does use the loose language “any reexamination,” but this same language was added to 35 U.S.C. § 141 as it relates to inter partes patent reexamination.Curiously, in the Regents complaint (here), the reexamination is referred to as an “application” in paragraphs 6, 10 and 11.  Regents also goes as far in paragraph 11 to ask that the Director to “issue a patent.” I can only assume the use of this improper terminology is deliberate. For example, 35 U.S.C. § 141 and 145 primarily refer to “applicants” and “applications.” In patent reexamination there are no “applicants” only Patent Holders (See 35 U.S.C. § 134). Perhaps Regents is hoping to convince the court that the distinction is meaningless;  of course it is not. Anyone that has ever assumed that extensions of time in patent reexamination are a matter of right (under 37 CFR § 1.136) learns very quickly that this distinction is quite meaningful. (contrast with 37 CFR § 1.956)PPG Comment: There has to be predictability and finality to patent reexamination, otherwise the entire justification for its existence is eviscerated.  With pendencies of patent reexamination lasting several years (as evidenced by Regents, filed in 2005), further de novo review will just prolong an already lengthy proceeding.Certainly in the past, the PTO has been inconsistent in the treatment of new grounds of rejections on appeal, after final, etc., In such instances, I would agree that Patentees are at a disadvantage.  However, the solution to this problem is not to provide a new avenue for delay, abuse and expense, but to allow Director Kappos to right the ship—which he appears to be doing.  The newly proposed appeal rules address the concern of new grounds of rejection. If a Patentee fails to seasonably present evidence otherwise, a second bite at the apple is simply unwarranted.Note: The current patent reform bill, S.515, seeks to end the debate once and for all by expressely foreclosing district court actions for Patentees appealing an adverse ruling in ex parte patent reexamination.

Back in 2005, a third party requested ex parte patent reexamination of U.S. Patent 5,916,912 (90/007,626). The ‘912 Patent is assigned to the Regents of the University of California and relates to methods of enhancing mitochondrial metabolism without a concomitant increase in metabolic production of oxygen reactive species, using specific doses of a combination of carnitine, together with lipoic acid (or N-acetyl-cysteine.). During the patent reexamination the examiner confirmed a handful of claims, while rejecting claims 1,2, 4-7,9-11,16,17,20-23,26-29,37-40,43-47, and 50-54. The rejection of these claims was appealed to the BPAI, which affirmed the rejection on September 27,2010.

Rather than proceeding to the CAFC, this past Monday, Regents sued the USPTO in the United States District Court for the District of Columbia. Readers may recall this tactic was tried last year in the case of Sigram Schindler Beteilungsgesellschaft mbH v. Kappos, No. 1:09-cv-935-TSE-IDD (E.D. Va.). This case was dismissed without reaching the question of the propriety of suing the USPTO in this manner. In a nutshell, the USPTO believes that Patent Owners in ex parte patent reexaminations filed on or after November 29, 1999 must proceed to the CAFC. Others (such as Sigram and Regents) believe the position of the USPTO is based on a misapplication of the law.

So, what’s the big deal with bypassing the CAFC in favor of the DC District Court?

The court is significant to patent owners because a civil suit against the USPTO in the district court results in de novo review of the BPAI decision and affords the patent owner an opportunity to take third party discovery and introduce new evidence to rebut the USPTO’s position. In many cases, Patentees are hoping to introduce new evidence to rebut a perceived change in the position of the USPTO. This is because the Patentee may be precluded to do so at the USPTO due to the late stage of the ex parte patent reexamination, or at the CAFC since the appeal record cannot be changed.

So, is this “do-over” tactic legitimate?

The dispute as to statutory interpretation relates primarily to 35 U.S.C. § 141 and 35 U.S.C. § 306, and changes brought about by the American Inventors Protection Act of 1999 (AIPA).

The USPTO interprets Public Law 107-273, section 13202(d) (codified as 35 U.S.C. § 306), as prohibiting a patent owner in an ex parte reexamination from obtaining judicial review of a decision of the BPAI by filing a civil suit against the USPTO in federal district court. Under the USPTO interpretation, codified at 37 C.F.R. § 1.303 and discussed in MPEP § 2279, the patent owner may only seek judicial review in an ex parte reexamination filed on or after November 29, 1999, by appealing the decision of the BPAI to the Federal Circuit.

Patentees argue that the USPTO’s attempt to regulate outside conduct is ultra vires, and at odds with the plain language of 35 U.S.C. § 306. The AIPA of 1999 introduced inter partes reexamination; there was no purpose to change any aspect of ex parte patent reexamination practices. Of course, the Public Law does use the loose language “any reexamination,” but this same language was added to 35 U.S.C. § 141 as it relates to inter partes patent reexamination.

Curiously, in the Regents complaint (here), the reexamination is referred to as an “application” in paragraphs 6, 10 and 11.  Regents also goes as far in paragraph 11 to ask that the Director to “issue a patent.” I can only assume the use of this improper terminology is deliberate. For example, 35 U.S.C. § 141 and 145 primarily refer to “applicants” and “applications.” In patent reexamination there are no “applicants” only Patent Holders (See 35 U.S.C. § 134). Perhaps Regents is hoping to convince the court that the distinction is meaningless;  of course it is not. Anyone that has ever assumed that extensions of time in patent reexamination are a matter of right (under 37 CFR § 1.136) learns very quickly that this distinction is quite meaningful. (contrast with 37 CFR § 1.956)

PPG Comment: There has to be predictability and finality to patent reexamination, otherwise the entire justification for its existence is eviscerated.  With pendencies of patent reexamination lasting several years (as evidenced by Regents, filed in 2005), further de novo review will just prolong an already lengthy proceeding.

Certainly in the past, the PTO has been inconsistent in the treatment of new grounds of rejections on appeal, after final, etc., In such instances, I would agree that Patentees are at a disadvantage.  However, the solution to this problem is not to provide a new avenue for delay, abuse and expense, but to allow Director Kappos to right the ship—which he appears to be doing.  The newly proposed appeal rules address the concern of new grounds of rejection. If a Patentee fails to seasonably present evidence otherwise, a second bite at the apple is simply unwarranted.

Note: The current patent reform bill, S.515, seeks to end the debate once and for all by expressely foreclosing district court actions for Patentees appealing an adverse ruling in ex parte patent reexamination.

Change of Fortune Emboldens Defendant

When it comes to staying a district court litigation pending concurrent patent reexamination, defendants are always arguing to  halt the proceedings while plaintiffs urge the court to continue. Yet, in Se-Kure Controls, Inc. vs. Sennco Solutions, Inc. et al. (ND.Ill) the tables were turned.

Plaintiff, Se-Kure asserted three patents against Sennco RE37,590, 5,861,807 and 7,081,882. In an unrelated litigation, the ‘590 was determined to be invalid by another district court and on appeal to the CAFC. Sennco then requested a stay of the litigation based on the ‘590 development. The court granted the stay as to the ‘590 patent only. Shortly thereafter, Sennco pursued patent reexamination of the ‘807 and ‘882 patents at the USPTO (Spring of 2010). As a result of the initiation of the reexamination proceedings, both Sennco and Se-Kure agreed that the ongoing case should be stayed; the court obliged.

In May of 2010, the ‘590 patent was determined invalid at the CAFC, in July of 2010 both the ‘807 and ‘882 patent were being actively reexamined at the USPTO.

In updating the status of the case to the judge in October 2010, Sennco explained to the judge that the PTO is going to gut the claims of the 807 and 882 [Patents] as an expert hunter guts deer. (Who knew Hannibal Lecter was a patent litigator). At the same time, Sennco then asked the judge to lift the stay…wait, what?

With the recent string of good fortune, Sennco seemingly realized that the plaintiff’s patent infringement charges had been significantly undermined.  Likewise, with the ‘590 Patent invalidated, Sennco may have been emboldened as to strength of certain pending counter claims. In this regard, the court explained:

To the extent that Sennco argues that the stay should not apply to its counterclaim for antitrust violations related to the prosecution of the now-invalidated ‘590 Patent (see Sennco’s Resp. 7; Dkt. No. 13, Answer 28 ¶¶ 38-45), the court disagrees. Instead, at this point in the litigation, the court finds that proceeding solely on Sennco’s counterclaim rather than simultaneously addressing all the parties’ claims and counterclaims risks a duplication of efforts on overlapping or related issues once the ‘807 and ‘822 Patents complete the reexaminations. Thus, continuing the stay with respect to all the parties’ claims and counterclaims will better support judicial economy and efficiency and will reduce the burden of this litigation on both the parties and the court. The stay, therefore, continues to apply to all the parties’ claims and counterclaims.

Although not exactly the typical scenario, this case serves as a reminder that losing in patent reexamination (once a case is stayed) could result in extra painful consequences for those defendants subject to certain counterclaims.

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

Cert Granted Today on Important Patent MatterSeems my prognostication abilities are best left for NFL football…end even then, only games involving the woeful Washington Redskins.Today the Supreme Court agreed to consider the question posed in the petition for cert stemming from Information Inc v. Microsoft Corp, (E.D. Tx No. 07-CV-113)). Specifically, the court is being asked to consider:Whether the court of appeals erred in holding that Microsoft’s invalidity defense must be proved by clear and convincing evidence.I pointed out last week that Microsoft has essentially already proven that a lower standard would not have mattered (by virtue of their consecutive failures in patent reexamination). However, the question as to the proper standard, divorced from the facts of this case, seems to be on the minds of the court since at least the KSR decision. Not surprisingly, Microsoft’s petition seized upon this issue, noting:The Federal Circuit’s longstanding rule that a challenger must prove its invalidity defense by clear and convincing evidence even “when prior art is presented to the court which was not considered by the PTO,” Uniroyal, 837 F.2d at 1050—which is to say, whether or not the PTO was aware of the prior-art evidence when it issued the patent—cannot sensibly be reconciled with this Court’s statement that the “rationale underlying the presumption . . . seems much diminished” when a defense of invalidity is based on evidence that the PTO never considered, KSR, 550 U.S. at 426.While recent cases such as Bilski and KSR presented important questions of U.S. patent law, this case may have a more far ranging impact on the U.S. patent system. Will the Supreme Court pronounce a dual standard for district courts depending upon whether the art was previously considered? Will a changing in standard further bury the USPTO in IDS filings?  What does “not considered by the USPTO” mean?Will every current defendant seek to have ongoing district court validity determinations held in abeyance/stayed until after this ruling? What will this mean for patent reexamination which already offers the lower standard to defendants, and what if any congressional intent is demonstrated by the existence of the patent reexamination statutes? Does the standard really need to be changed in light of current administrative options?  Stay tuned.

Seems my prognostication abilities are best left for NFL football…end even then, only games involving the woeful Washington Redskins.

Today the Supreme Court agreed to consider the question posed in the petition for cert stemming from Information Inc v. Microsoft Corp, (E.D. Tx No. 07-CV-113)). Specifically, the court is being asked to consider:

Whether the court of appeals erred in holding that Microsoft’s invalidity defense must be proved by clear and convincing evidence.

I pointed out last week that Microsoft has essentially already proven that a lower standard would not have mattered (by virtue of their consecutive failures in patent reexamination). However, the question as to the proper standard, divorced from the facts of this case, seems to be on the minds of the court since at least the KSR decision.

Not surprisingly, Microsoft’s petition seized upon this issue, noting:

The Federal Circuit’s longstanding rule that a challenger must prove its invalidity defense by clear and convincing evidence even “when prior art is presented to the court which was not considered by the PTO,” Uniroyal, 837 F.2d at 1050—which is to say, whether or not the PTO was aware of the prior-art evidence when it issued the patent—cannot sensibly be reconciled with this Court’s statement that the “rationale underlying the presumption . . . seems much diminished” when a defense of invalidity is based on evidence that the PTO never considered, KSR, 550 U.S. at 426.

While recent cases such as Bilski and KSR presented important questions of U.S. patent law, this case may have a more far ranging impact on the U.S. patent system.

Will the Supreme Court pronounce a dual standard for district courts depending upon whether the art was previously considered?

Will a changing in standard further bury the USPTO in IDS filings?  What does “not considered by the USPTO” mean?

Will every current defendant seek to have ongoing district court validity determinations held in abeyance/stayed until after this ruling?

What will this mean for patent reexamination which already offers the lower standard to defendants, and what if any congressional intent is demonstrated by the existence of the patent reexamination statutes? Does the standard really need to be changed in light of current administrative options? 

Stay tuned.

Inadvertent Disclosure of Reexamination Strategies Protected by CourtIn Acer Inc., et al v. Technology Properties Limited LTD et al. (NDCA), the plaintiffs are seeking a declaratory judgment of non-infringement and invalidity of TPL patent 5,809,336. Previously, the ‘336 Patent was the subject of an ex parte patent reexamination.During discovery, two emails between an inventor of the ‘336 Patent and reexamination counsel were inadvertently provided to the plaintiffs. The first email appeared to discuss the attorney’s impression of the interview, while the second email conveyed the inventor’s thoughts on issues considered in the reexamination. Not surprisingly, once produced, TPL informed the plaintiffs that the emails were privileged and should be returned. Of course, the plaintiffs disagreed, and left it for the judge to decide.The judge explained in short fashion, that:Despite Plaintiffs’ doubt, the two emails in question, “mac336.htm” and “Moore0058,” are protected by the attorney- privilege. “The attorney-client privilege protects the confidentiality of communications between attorney and client made for the purpose of obtaining legal advice.” . . . . As the emails at issue describe confidential conversations between only TPL executives (including Moore) and TPL’s attorneys about Moore’s USPTO interview in relation to the ‘336 patent reexamination, these emails are clearly protected by the attorney-client privilege.Privileged documents are often times mistakenly provided to an adversary during litigation. Given the nature of the documents, it is not especially noteworthy or surprising that the court found them to be protected by attorney-client privilege. Still, with the vast majority of patent reexamination now conducted concurrent with litigation, this case is a helpful reminder that communications should be conveyed in a manner to preserve privilege. For example, by limiting distribution of such communications to key decision makers, especially in the case of joint defense scenarios where communications may be poorly controlled.Acer was brought to my attention by the great Docket Navigator

In Acer Inc., et al v. Technology Properties Limited LTD et al. (NDCA), the plaintiffs are seeking a declaratory judgment of non-infringement and invalidity of TPL patent 5,809,336. Previously, the ‘336 Patent was the subject of an ex parte patent reexamination.

During discovery, two emails between an inventor of the ‘336 Patent and reexamination counsel were inadvertently provided to the plaintiffs. The first email appeared to discuss the attorney’s impression of the interview, while the second email conveyed the inventor’s thoughts on issues considered in the reexamination. Not surprisingly, once produced, TPL informed the plaintiffs that the emails were privileged and should be returned. Of course, the plaintiffs disagreed, and left it for the judge to decide.

The judge explained in short fashion, that:

Despite Plaintiffs’ doubt, the two emails in question, “mac336.htm” and “Moore0058,” are protected by the attorney- privilege. “The attorney-client privilege protects the confidentiality of communications between attorney and client made for the purpose of obtaining legal advice.” . . . . As the emails at issue describe confidential conversations between only TPL executives (including Moore) and TPL’s attorneys about Moore’s USPTO interview in relation to the ‘336 patent reexamination, these emails are clearly protected by the attorney-client privilege.

Privileged documents are often times mistakenly provided to an adversary during litigation. Given the nature of the documents, it is not especially noteworthy or surprising that the court found them to be protected by attorney-client privilege. Still, with the vast majority of patent reexamination now conducted concurrent with litigation, this case is a helpful reminder that communications should be conveyed in a manner to preserve privilege. For example, by limiting distribution of such communications to key decision makers, especially in the case of joint defense scenarios where communications may be poorly controlled.

Acer was brought to my attention by the great Docket Navigator.

SirenRationale for Lower Standard Gutted?

In 2009, Microsoft was found to have infringed i4i’s 5,787,449 patent (i4i Limited Partnership and Infrastructures for Information Inc v. Microsoft Corp, (E.D. Tx No. 07-CV-113)). The ‘449 Patent allegedly claims certain XML translation features of Microsoft Word. An appeal to the CAFC earlier this year was unsuccessful.

Along the way to the CAFC, Microsoft sought ex parte reexamination of the ‘449 Patent (90/010,347), largely as an afterthought to hedge against a willfulness finding. Not surprisingly, since the request ignored definitions of certain claim terms of the ‘449 Patent specification, the reexamination attempt was unsuccessful (no claim changes) and all claims exited reexamination in July of this year

On August 27th, Microsoft filed a petition for certiorari questioning the lower court’s use of the clear and convincing standard relative to art not before the USPTO during prosecution of the original patent application. At roughly the same time, Microsoft filed a second request for ex parte reexamination of the ‘449 patent (90/011,198). Today the USPTO denied the second request outright, giving Microsoft and their shareholders a bit less to be thankful for this holiday season. (a copy of the denial is not yet available).

With many predicting a decision on the pending SCOTUS cert request to be imminent (i.e., this coming Monday), it seems as though Microsoft may have just had their legs cut out from under them. Continue Reading USPTO DENIES MICROSOFT’S SECOND REQUEST TO REEXAMINE I4I PATENT

Upward of 70% of Patent Reissue Filings Include a Defective Oath

oaths

(click to enlarge)

As most practitioners are well aware, defective oaths in patent reissue are the rule, not the exception. As the chart above demonstrates for patent reissues filed in 2005, such oath problems lead to longer patent reissue pendencies.

With narrowing patent reissue filings constituting the bulk of patent reissue applications at the USPTO, it is not surprising that the impact of defective oaths are more pronounced in this sub-category. For narrowing reissue applications filed in 2005, applications without any oath problems were completed 1.14 years faster (1.74 vs 2.88 years) than those with oath problems.

Surely, both the USPTO and stakeholders share the blame equally for these recurring problems. As demonstrated just yesterday, these issues are rarely resolved prior to appeal. Continue Reading Defective Oaths Plague Patent Reissue Filings

Nevada Court Rules Patent Owners Control DelayBack in 2009, TableMAX IP Holdings sued Shufflemaster for infringement of U.S. Patent 6,921,337. The ‘337 Patent relates to a multi-player card gaming system. In June of 2010, Shufflemaster filed an ex parte request for reexamination citing various prior art references, including an Atari Blackjack game manual. (The Atari art is not especially relevant to this post. But, it makes me happy that I can now prove to my parents that I was not wasting my youth. Turns out I was a young visionary preparing for my career as a patent attorney through intense study of future prior art systems, take that mom!!)The request was granted on August 2, 2010. Shortly thereafter, Shufflemaster moved to stay the case. In granting Shufflemaster’s request, the court went through the familiar factors, and dismissed the plaintiff’s prejudice argument based on the nature of the ex parte proceeding. The court reasoned that Patent Owners control ex parte reexamination pendency, noting that defendants do not participate, and that appeal shouldn’t be necessary if the patent is valid.TableMAX IP Holdings, Inc. v. Shuffle Master, Inc. (D. Nev., 2009). Stay granted (here)Specifically, the court stated:Plaintiffs argue that the reexamination takes time which would cause unnecessary delay. However, this is an ex parte application by Defendant, which means that the Defendant is not permitted to have any further input. The deadlines are all in the control of the Plaintiffs. They are not required to take the maximum time to file the necessary documents or appeals. Any undue delay in the reexamination will not be caused by Defendants. If Plaintiffs’ patents are upheld, there will be no need to appeal–and Defendant may not appeal. (emphasis added)It is true that delay will not be caused by the defendants (assuming they don’t file additional requests). Yet, undue delay in the reexamination will also not be caused by the plaintiff. Patentees complain about the patent reexamination pendency of the USPTO. Only the USPTO controls the timing of office action issuance in patent reexamination and appeal pendency. Likewise, extensions of time are not granted as a matter of right in reexamination, and there is no continuation/RCE practice.Still, with such new programs as the Pilot Program for Waiver of Patent Owner’s Statement in Ex Parte Reexamination Proceedings, the court’s rationale may become more compelling going forward. (the ‘337 Patent was filed prior to the effective date of the pilot progra

Nevada Court Rules Patent Owners Control Delay

Back in 2009, TableMAX IP Holdings sued Shufflemaster for infringement of U.S. Patent 6,921,337. The ‘337 Patent relates to a multi-player card gaming system. In June of 2010, Shufflemaster filed an ex parte request for reexamination citing various prior art references, including an Atari Blackjack game manual. (The Atari art is not especially relevant to this post. But, it makes me happy that I can now prove to my parents that I was not wasting my youth. Turns out I was a young visionary preparing for my career as a patent attorney through intense study of future prior art systems, take that mom!!)

The request was granted on August 2, 2010. Shortly thereafter, Shufflemaster moved to stay the case. In granting Shufflemaster’s request, the court went through the familiar factors, and dismissed the plaintiff’s prejudice argument based on the nature of the ex parte proceeding. The court reasoned that Patent Owners control ex parte reexamination pendency, noting that defendants do not participate, and that appeal shouldn’t be necessary if the patent is valid.

TableMAX IP Holdings, Inc. v. Shuffle Master, Inc. (D. Nev., 2009). Stay granted (here)

Specifically, the court stated:

Plaintiffs argue that the reexamination takes time which would cause unnecessary delay. However, this is an ex parte application by Defendant, which means that the Defendant is not permitted to have any further input. The deadlines are all in the control of the Plaintiffs. They are not required to take the maximum time to file the necessary documents or appeals. Any undue delay in the reexamination will not be caused by Defendants. If Plaintiffs’ patents are upheld, there will be no need to appeal–and Defendant may not appeal. (emphasis added)

It is true that delay will not be caused by the defendants (assuming they don’t file additional requests). Yet, undue delay in the reexamination will also not be caused by the plaintiff. Patentees complain about the patent reexamination pendency of the USPTO. Only the USPTO controls the timing of office action issuance in patent reexamination and appeal pendency. Likewise, extensions of time are not granted as a matter of right in reexamination, and there is no continuation/RCE practice.

Still, with such new programs as the Pilot Program for Waiver of Patent Owner’s Statement in Ex Parte Reexamination Proceedings, the court’s rationale may become more compelling going forward. (the ‘337 Patent was filed prior to the effective date of the pilot program).

Cancellation of Dependent Claim Deemed “Amendment in Effect”If claims, as amended in a post grant proceeding, are not substantially identical in scope relative to the previously issued claims, potential infringers of the amended claims may be provided with an intervening rights defense (35 USC § 252) Of course, the conclusion as to whether or not a claim change in patent reexamination/reissue will result in the an intervening rights defense is far from a straightforward determination.As demonstrated recently, even where an amendment is made to overcome a prior art rejection, such a changed claim can still be considered substantially identical to the previously issued claim. Courts have consistently held that it is not the verbiage of a claim that must be substantially identical. Instead, courts look to the difference between originally issued claim scope relative to the scope of claims exiting patent reissue and/or patent reexamination. Adding another layer of complexity to this calculus is the recent case of University of Virginia Patent Foundation v. General Electric Company.  In University of Virginia (here) an independent claim was considered to be “amended in effect” based upon the cancellation of a dependent claim. In arriving at this conclusion, the court explained “[a]lthough no formal amendment was made to Claim 1, it was amended in effect when Claim 4 was canceled and the scope of Claim 1 changed.” At issue in University of Virginia is a patent relating to magnetic resonance imaging (MRI). In explaining how claim 1 could be “amended in effect,” the court reasoned:[T]he Patent Foundation filed an Amendment under 37 C.F.R. § 1.111 and § 1.550 canceling dependent Claim 4 of the patent, which had recited “[t]he method of claim 1, wherein said magnetization recovery period has a time of zero.” The Patent Foundation explained that it canceled the claim “because it does not properly depend from claim 1 because a ‘magnetization recovery period [that] has a time of zero’ does not ‘allow[s] [sic] T1 and T2 relaxation before the start of the next sequence cycle,’ as required by the magnetization recovery period of claim 1. Stated simply, a finite period of time must occur for T1 and T2 relaxation to occur, and thus a magnetization recovery period that has a time of zero is inconsistent with claim 1. . . Based on the Patent Foundation’s amendment, the PTO withdrew all of its objections to the claims except for those pertaining to Claim 4, which was canceled, and issued the reexamination certificate on May 4, 2010. In its statement of reasons for patentability, the PTO declared that “the claimed ‘magnetization recovery period’ is interpreted to correspond to a finite period of time (i.e., greater than zero) that allows substantially complete T1 and T2 relaxation to occur—i.e., relaxation to thermal equilibrium of both the longitudinal component and the transverse component—as opposed to partial or substantially incomplete relaxation.”. . . In order to overcome the PTO’s initial rejection of Claim 1 during reexamination, the Patent Foundation voluntarily canceled dependent Claim 4, the terms of which provided for a magnetization recovery period of time zero. I held above that prior to the cancellation of Claim 4, the magnetization recovery period in Claim 1 included the option of a period of time zero. After the cancellation, it is undisputed by the parties that the recovery period in Claim 1 does not include the option of a period of time zero. Thus, the amendment effected a change in meaning in Claim 1. Although no formal amendment was made to Claim 1, it was amended in effect when Claim 4 was canceled and the scope of Claim 1 changed.Critics of ex parte patent reexamination will often point to the roughly 25% of  cases in which all claims are confirmed. Yet, as previously pointed out, additional disclaimer and prosecution history of a patent reexamination concurrent to litigation can have a significant impact on litigation claim construction. Thus, these statistics do not tell the full story as significant victories may be achieved with respect to improved claim construction positions.Likewise, even where seemingly inconsequential claim changes are made, wiping out up to six years of infringement damages is a significant victory. Going forward, in view of cases such as University of Virginia, prosecution history disclaimers may be increasingly leveraged as “amendments in effect” for the purpose of asserting an intervening rights defen

If claims, as amended in a post grant proceeding, are not substantially identical in scope relative to the previously issued claims, potential infringers of the amended claims may be provided with an intervening rights defense (35 USC § 252) Of course, the conclusion as to whether or not a claim change in patent reexamination/reissue will result in the an intervening rights defense is far from a straightforward determination.

As demonstrated recently, even where an amendment is made to overcome a prior art rejection, such a changed claim can still be considered substantially identical to the previously issued claim. Courts have consistently held that it is not the verbiage of a claim that must be substantially identical. Instead, courts look to the difference between originally issued claim scope relative to the scope of claims exiting patent reissue and/or patent reexamination. Adding another layer of complexity to this calculus is the recent case of University of Virginia Patent Foundation v. General Electric Company.  In University of Virginia (here) an independent claim was considered to be “amended in effect” based upon the cancellation of a dependent claim.

In arriving at this conclusion, the court explained “[a]lthough no formal amendment was made to Claim 1, it was amended in effect when Claim 4 was canceled and the scope of Claim 1 changed.” At issue in University of Virginia is a patent relating to magnetic resonance imaging (MRI). In explaining how claim 1 could be “amended in effect,” the court reasoned:

[T]he Patent Foundation filed an Amendment under 37 C.F.R. § 1.111 and § 1.550 canceling dependent Claim 4 of the patent, which had recited “[t]he method of claim 1, wherein said magnetization recovery period has a time of zero.” The Patent Foundation explained that it canceled the claim “because it does not properly depend from claim 1 because a ‘magnetization recovery period [that] has a time of zero’ does not ‘allow[s] [sic] T1 and T2 relaxation before the start of the next sequence cycle,’ as required by the magnetization recovery period of claim 1. Stated simply, a finite period of time must occur for T1 and T2 relaxation to occur, and thus a magnetization recovery period that has a time of zero is inconsistent with claim 1. . .

Based on the Patent Foundation’s amendment, the PTO withdrew all of its objections to the claims except for those pertaining to Claim 4, which was canceled, and issued the reexamination certificate on May 4, 2010. In its statement of reasons for patentability, the PTO declared that “the claimed ‘magnetization recovery period’ is interpreted to correspond to a finite period of time (i.e., greater than zero) that allows substantially complete T1 and T2 relaxation to occur—i.e., relaxation to thermal equilibrium of both the longitudinal component and the transverse component—as opposed to partial or substantially incomplete relaxation.”. . .

In order to overcome the PTO’s initial rejection of Claim 1 during reexamination, the Patent Foundation voluntarily canceled dependent Claim 4, the terms of which provided for a magnetization recovery period of time zero. I held above that prior to the cancellation of Claim 4, the magnetization recovery period in Claim 1 included the option of a period of time zero. After the cancellation, it is undisputed by the parties that the recovery period in Claim 1 does not include the option of a period of time zero. Thus, the amendment effected a change in meaning in Claim 1. Although no formal amendment was made to Claim 1, it was amended in effect when Claim 4 was canceled and the scope of Claim 1 changed.

Critics of ex parte patent reexamination will often point to the roughly 25% of  cases in which all claims are confirmed. Yet, as previously pointed out, additional disclaimer and prosecution history of a patent reexamination concurrent to litigation can have a significant impact on litigation claim construction. Thus, these statistics do not tell the full story as significant victories may be achieved with respect to improved claim construction positions.

Likewise, even where seemingly inconsequential claim changes are made, wiping out up to six years of infringement damages is a significant victory. Going forward, in view of cases such as University of Virginia, prosecution history disclaimers may be increasingly leveraged as “amendments in effect” for the purpose of asserting an intervening rights defense.

Late Amendment Tips Scales in Favor of DefendantsLast Wednesday, Judge Davis (EDTX) was asked to revisit a motion to stay an ongoing litigation between SouthWire Company v. Cerro Wire, et al. pending concurrent patent reexamination. Previously, the judge had denied a request to stay the case without prejudice (U.S. Patent 7,557,301). In the previous decision, Judge Davis reasoned that as the dispute is between direct competitors, such a stay could prejudice the plaintiff.After the earlier denial, patent reexamination proceedings continued on not only for the ‘301 Patent, but also its parent, U.S. Patent 7,411, 129. The ‘129 is subject to inter partes reexamination (requested by defendant Cerro).Recently, an attempt to amend the ‘129 Patent was denied as untimely since it was not introduced prior to the Action Closing Prosecution (ACP).  However, the ‘301 Patent was not as far advanced, and, after a first action, an amendment was submitted. (June 2010). In deciding the renewed request to stay the case, the court found that the amendment tipped the scales in favor of a stay.The court (decision here) explained:. . . Southwire’s inconsistent statements to the PTO favor a stay. In pursuing its patent claims in this Court, Southwire contends the ‘301 patent claims are valid. However, Southwire stated to the PTO that the revised claims, “particularly as amended, are not anticipated or rendered obvious by the cited prior art.” Id. at 9 (emphasis added). Southwire chose to preliminarily amend its claims, and it is upon those particular amendments that it now asserts the ’301 patent is valid over the prior art. Accordingly, it would waste the Court’s time and resources to construe the original ’301 patent’s claims. A stay would simplify and resolve any inconsistencies between Southwire’s representations to the Court and the PTO regarding the scope and validity of the ’301 patent. Southwire’s inconsistent positions regarding validity and its amendments changing the ’301 patent’s scope before the Court has conducted a Markman hearing strongly favor staying this case.With respect to the impact of the ongoing reexamination of the parent case, the court reasoned:Reexamination is not necessarily such an extraordinary circumstance that justifies a stay, and the Court previously denied a stay in this case. However, the specific facts here tip the scales in favor of a stay: Southwire substantively amended the independent claims of the patent-in-suit to avoid the prior art cited in the reexamination, Southwire has made inconsistent representations regarding the validity of the asserted claims, the Court has not yet construed the claims, and the PTO’s rejection of the parent patent has proceeded to the appeal stage of the reexamination proceedings. Standing alone, these factors do not merit a stay pending reexamination; but in combination they do.Thus, even where a stay is initially denied, an advancing reexamination may present further opportunities for defendants. Practically speaking, amendment options for many Patentees are considered non-existent due to the potential creation of an intervening rights defense. For Patentees involved in parallel litigation, this latest development will further serve to reinforce the general aversion to such claim changes in patent reexaminati

Last Wednesday, Judge Davis (EDTX) was asked to revisit a motion to stay an ongoing litigation between SouthWire Company v. Cerro Wire, et al. pending concurrent patent reexamination. Previously, the judge had denied a request to stay the case without prejudice (U.S. Patent 7,557,301). In the previous decision, Judge Davis reasoned that as the dispute is between direct competitors, such a stay could prejudice the plaintiff.

After the earlier denial, patent reexamination proceedings continued on not only for the ‘301 Patent, but also its parent, U.S. Patent 7,411, 129. The ‘129 is subject to inter partes reexamination (requested by defendant Cerro).

Recently, an attempt to amend the ‘129 Patent was denied as untimely since it was not introduced prior to the Action Closing Prosecution (ACP).  However, the ‘301 Patent was not as far advanced, and, after a first action, an amendment was submitted. (June 2010). In deciding the renewed request to stay the case, the court found that the amendment tipped the scales in favor of a stay.

The court (decision here) explained:

. . . Southwire’s inconsistent statements to the PTO favor a stay. In pursuing its patent claims in this Court, Southwire contends the ‘301 patent claims are valid. However, Southwire stated to the PTO that the revised claims, “particularly as amended, are not anticipated or rendered obvious by the cited prior art.” Id. at 9 (emphasis added). Southwire chose to preliminarily amend its claims, and it is upon those particular amendments that it now asserts the ’301 patent is valid over the prior art. Accordingly, it would waste the Court’s time and resources to construe the original ’301 patent’s claims. A stay would simplify and resolve any inconsistencies between Southwire’s representations to the Court and the PTO regarding the scope and validity of the ’301 patent. Southwire’s inconsistent positions regarding validity and its amendments changing the ’301 patent’s scope before the Court has conducted a Markman hearing strongly favor staying this case.

With respect to the impact of the ongoing reexamination of the parent case, the court reasoned:

Reexamination is not necessarily such an extraordinary circumstance that justifies a stay, and the Court previously denied a stay in this case. However, the specific facts here tip the scales in favor of a stay: Southwire substantively amended the independent claims of the patent-in-suit to avoid the prior art cited in the reexamination, Southwire has made inconsistent representations regarding the validity of the asserted claims, the Court has not yet construed the claims, and the PTO’s rejection of the parent patent has proceeded to the appeal stage of the reexamination proceedings. Standing alone, these factors do not merit a stay pending reexamination; but in combination they do.

Thus, even where a stay is initially denied, an advancing reexamination may present further opportunities for defendants. Practically speaking, amendment options for many Patentees are considered non-existent due to the potential creation of an intervening rights defense. For Patentees involved in parallel litigation, this latest development will further serve to reinforce the general aversion to such claim changes in patent reexamination.

Lockwood Reexamination Gripe Goes Nowhere

As discussed last week, the case of Lockwood v. Sheppard, Mullin, Richter & Hampton was recently argued before the CAFC. Wasting no time, today, the CAFC affirmed the lower court ruling without comment. As I explained in last week’s post, this result is not at all surprising given the exchange during oral argument. The decision is correct in my view.

Providing a state law action for suing requesters would inevitably lead to any difference of opinion (as to the strength of a patent reexamination request) being litigated. For example, roughly 25% of ex parte reexaminations are concluded with all claims confirmed, this does not make those requests a “sham.”

A true sham filing is a criminal act, this seems to be lost on most commentators. Harassment of a Patentee with multiple requests of colorable art, is a different story. The Central Reexamination Unit (CRU) has been an adequate gate keeper in policing serial filings (more so recently), and closely scrutinizes the filing of new requests. I just don’t see criminal misrepresentations as a real problem. Likewise, the Lockwood request was not a sham, just an awkward intervening art argument that was not fully developed…a crime?  Hardly.

Surely, unscrupulous members of the public are free to submit anonymous, fraudulent requests, doctor evidence etc. However, to date, such has not been a problem with ex parte patent reexamination. Ex parte patent reexamination has been available since 1981; fraud was not invented yesterday.