Courts have recently been faced with the issue of whether evidence of parallel reexamination proceedings should be considered at trial.  In our prior post, “Is Evidence of Parallel Reexamination Proceedings Admissible at Trial? (Part I of IV)”, we discussed using pending reexamination proceedings to support invalidity contentions.  Accused infringers have also attempted to use evidence of parallel reexamination proceedings to prove inequitable conduct on the part of the patentee.  

Reexamination Evidence Used to Prove Inequitable Conduct

To prove inequitable conduct, the infringer must show evidence that the patentee either misrepresented a material fact, failed to disclose material information, or submitted false material information with the intent to deceive the Patent Office.  Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1365 (Fed. Cir. 2008) (quoting Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1363 (Fed. Cir. 2007)).  Additionally, at least a “threshold level” of both materiality and intent to deceive must be proven by clear and convincing evidence.  Star Scientific, 537 F.3d at 1365.

Information is considered material where “a reasonable examiner would consider it important in deciding whether to allow the application to issue as a patent.’”  Star Scientific, 537 F.3d at 1367 (quoting Symantec Corp. v. Computer Assocs. Int’l, Inc., 522 F.3d 1279, 1297 (Fed. Cir. 2008)).  Similarly, the Manual of Patent Examining Procedure § 2642 instructs examiners to apply nearly the same standard in determining whether a substantial new question of patentability exists: “A prior art patent or printed publication raises a substantial question of patentability where there is a substantial likelihood that a reasonable examiner would consider the prior art patent or printed publication important in deciding whether or not the claim is patentable.”  Accordingly, where an examiner determines that prior art presents a substantial new question of patentability in granting a request for reexamination, accused infringers assert that such consideration proves the prior art’s materiality.  This argument is enhanced when, during reexamination, the examiner issues a rejection based on that information.  The Federal Circuit itself has stated that “the result of a PTO proceeding that assesses patentability in light of information not originally disclosed can be of strong probative value in determining whether the undisclosed information was material.”  Molins PLC v. Textron, Inc., 48 F.3d 1172, 1179 (Fed. Cir. 1995).  See also 3M Innovative Properties Co. v. Dupont Dow Elastomers, LLC, 2005 U.S. Dist. LEXIS 44877, at *6-7 (D. Minn. Sept. 8, 2005) (“Evidence of the result of the completed reexamination proceedings could be highly relevant to … inequitable conduct allegations at trial . . . .   On the other hand, admission of evidence of an incomplete reexamination would have low probative value, would distract from the core issues of the case, and would be highly prejudicial”).  Thus, at least where reexamination is complete, the results of that reexamination may be important in determining the materiality of a reference.  What is not clear is when the proceedings of a reexamination which is not yet complete can help determine materiality.

In a recent case considering this issue, the defendants took a cue from the Federal Circuit and attempted to apply the idea behind Molins where a request for reexamination had been granted, but no final decision had been made.  In Intel Corp. v. Commonwealth Scientific and Industrial Research Organisation, after the USPTO granted the relevant request for reexamination, the defendants sought to supplement their summary judgment motions with evidence of the grant.  They argued that the grant of the request was probative to an inequitable conduct analysis, specifically to the element of materiality.  No. 06-cv-551 (E.D. Tex. April 9, 2009) (order denying motion to supplement).  The outcome however, was not as the defendants would have hoped.  The court was critical of the defendants’ delay in filing for reexamination and of defendants’ delay in moving to supplement their summary judgment motions, noting that such delays “weigh[ed] heavily against supplementation.”  Id. at  4.  It then distinguished Molins based on the status of the reexamination proceedings.  The court determined that the mere grant of a request for reexamination was not probative of either willfulness or inequitable conduct.  Id.

As will be discussed in subsequent posts, alleged infringers have also recently attempted to use evidence of granted reexamination requests to rebut charges of willful infringement and to oppose motions for preliminary injunction.

Several courts have recently been faced with the issue of whether evidence of parallel reexamination proceedings should be admissible at trial. Parties in these cases have attempted to use the existence of pending reexamination proceedings to prove or disprove invalidity, inequitable conduct, and willful infringement. Opponents generally argue that evidence of parallel reexamination proceedings is irrelevant, unfairly prejudicial, and/or contrary to the statutory presumption of validity under 35 U.S.C. § 282.

Presented with both points of view, the rulings of courts vary, and whether this evidence is allowed tends to depend on the circumstances of the case. Many courts quickly reject the evidence; however, there appears to be a trend of courts giving reexamination evidence more consideration. Of those courts that seriously contemplate admission of the evidence, many place significant weight on the stage of advancement of the reexamination proceeding – ranging from a simple grant of reexamination, to rejections of the reexamined patent’s claims, to completion of the reexamination proceedings. The stage of the litigation also plays an important role, as this determines whether the evidence will be considered by a judge or a jury. More than one opinion distinguishes admission of reexamination evidence for summary judgment purposes from admission for jury consideration. Whether the entity requesting reexamination is the patentee or the accused infringer can also influence admissibility of reexamination evidence in litigation. See, e.g., TGIP, Inc. v. AT&T Corp., 527 F. Supp. 2d 561, 579 (E.D. Tex. 2007).

Reexamination Evidence Used to Support Invalidity

Generally, when reexamination evidence is used to support contentions of patent claim invalidity, the alleged infringers do not simply attempt to equate the grant of a request for reexamination with patent claim invalidity. Patent owners could rebut that argument merely with statistics showing that there is little correlation between the Patent Office’s grant of reexamination and the ultimate patentability of the claims under reexamination. See Hoechst Celanese Corp. v. BP Chemicals Ltd., 78 F.3d 1575, 1594 n.2 (Fed. Cir. 1996) (noting that in 1994, 89% of reexamination requests were granted, but only 5.6% of the reexamined patents were completely rejected with no confirmed or allowed claims remaining after reexamination; Presidio Components, Inc. v. American Technical Ceramics Corp., 2009 U.S. Dist. LEXIS 106795, at *4-5 (S.D. Cal. Nov. 13, 2009) (stating that, according to 2007 data, the USPTO grants 92% of requests for reexamination, but in only 12% all claims are subsequently canceled).

Instead, accused infringers often attempt to use the grant of reexamination to substantiate their invalidity contentions. The argument is that an alleged infringer’s invalidity contentions are entitled to more weight where the Patent Office has found at least some substantial new question of patentability based on those same arguments. This argument has been largely unsuccessful. “The grant of a request for reexamination, although surely evidence that the criterion for reexamination has been met … does not establish a likelihood of patent [claim] invalidity.” Id. at 1584. See also Procter & Gamble Co. v. Kraft Foods Global, Inc., 549 F.3d 842, 848 (Fed. Cir. 2008) (cautioning that “a requestor’s burden to show that a reexamination order should issue from the PTO is unrelated to a defendant’s burden to prove invalidity by clear and convincing evidence at trial.”); Amphenol T&M Antennas Inc. v. Centurion Intern. Inc., 2002 U.S. Dist. LEXIS 822, at *4-5 (“As a probative matter, the Patent Office’s decision to grant reexamination casts the validity of the patent into some doubt, but only to a small degree . . . . The likelihood that some or all of the patent claims will be invalidated as a result of the reexamination proceedings is impossible to calculate with any reasonable degree of certainty, but statistically, it is not great.”)

In disallowing this attempt to support patent claim invalidity arguments with an order granting reexamination, many courts weigh the potential prejudice of the reexamination evidence against its probative value under Federal Rule of Evidence 403. More often than not, these courts determine that the probative value is far outweighed by the potential prejudice. See, e.g., Amphenol, 2002 U.S. Dist. LEXIS 822 at *5 (“[T]hat the patent has been called into question by the Patent Office may significantly influence the jury’s application of the presumption of validity and significantly prejudice ATM. The prejudicial potential of this evidence far outweighs any probative value it may have.”); SRI Intern., Inc. v. Internet Sec. Sys., Inc., 2009 U.S. Dist. LEXIS 73981, at *86 (D. Del. Aug. 20, 2009) (“Absent unusual circumstances … non-final decisions made during reexamination are not binding, moreover, they are more prejudicial (considering the overwhelming possibility of jury confusion) than probative of validity; i4i Ltd. P’ship & Infrastructures for Info. Inc. v. Microsoft Corp., 2009 U.S. Dist. LEXIS 70104, at *53-54 (E.D. Tex. Aug. 11, 2009) (“Even if [the grant of a request for reexamination] was [probative], its probative value is substantially outweighed by its prejudicial effect in suggesting to the jury that it is entitled to ignore both the presumption of validity and the defendant’s clear and convincing burden at trial.”). At least one court, however, found that the prejudicial effect of reexamination evidence might be neutralized by an appropriate jury instruction. Fresenius Medical Care Holdings, Inc. v. Baxter Intern., Inc., No. 03-cv-1431, Order Denying Motion to Strike at 6 (N.D. Cal. May 15, 2006). That court did not, however, provide an example of an acceptable jury instruction.

Recent cases in this area, although continuing to weigh probative value against prejudicial effect, have taken an interesting twist. These courts are now focusing more on the presumption of validity, found in 35 U.S.C. § 282, and have shown some indication that patentees may not always be able to tout this presumption where reexamination is ongoing.

In the district court case of Callaway Golf Co. v. Acushnet Co., Callaway, the patent owner, boasted in its opening statement that three patent examiners had concluded the asserted patents were valid by virtue of their allowance and issue. Callaway Golf Co. v. Acushnet Co., 576 F.3d 1331, 1342 (Fed. Cir. 2009). Callaway did not mention that a reexamination was pending and that the Patent Office had rejected each of the patent claims asserted at trial. Id. The accused infringer, Acushnet, sought to introduce evidence of the parallel reexamination proceeding. The district court refused to allow Acushnet to mention the reexamination proceeding but also precluded any further similar statements by the patent owner concerning the conclusions of the Patent Office in allowing the asserted patents. Id. On appeal to the Federal Circuit, Acushnet requested a new trial based on the district court’s prohibition of the reexamination evidence. The Federal Circuit agreed that Callaway’s opening statement was potentially misleading: “Acushnet is correct that Callaway’s opening statement, while truthful, nevertheless had potential to mislead the jury by implying that every expert examiner to have considered the patents had concluded that they were valid.” Id. The Federal Circuit ultimately found that the district court had not abused its discretion, however, because, Acushnet did not object during Callaway’s opening statement and the district court disallowed repetition of similar statements. Id. at 1342-1343.

More recently, in Presidio Components, Inc. v. American Technical Ceramics Corp., a district court found evidence of reexamination proceedings unfairly prejudicial. 2009 U.S. Dist. LEXIS 106795 (S.D. Cal. Nov. 13, 2009). At the outset of trial, however, the court prohibited the patent owner from referencing the presumption of validity. “With any reference of the ‘presumption of validity’ excluded, allowing the jury to hear about incomplete USPTO proceedings will be unfairly prejudicial to [the patent owner], and could potentially confuse the jury as to who has what burden throughout the trial.” Id. at *6, n.1. The court emphasized that the reexamination proceedings were still incomplete and distinguished cases at the summary judgment stage, where admission of the evidence would not result in jury confusion. Id. at *7.

As will be discussed in subsequent posts, alleged infringers have also recently attempted to use evidence of granted reexamination requests to prove inequitable conduct, rebut charges of willful infringement, and/or oppose motions for preliminary injunction.