Supplemental Examination Request to Invite Investigation?Under current law, inequitable conduct cannot be cured through patent reissue or patent reexamination. As such, one of the more interesting aspects of the proposed patent reform legislation is the concept of “Supplemental Examination.”  Supplemental examination, as currently proposed, will permit the patent owner to cure inequitable conduct resulting from violations of the duty of candor and good faith as well as the duty of disclosure with intent to deceive the USPTO so long as it is done promptly and prior to litigation.Of course, the USPTO Director will be able to continue to investigate issues of possible misconduct and impose sanctions such as those set forth in 37 CFR 11.18(c) such as striking a paper; referring a practitioner’s conduct to the Director of Enrollment and Discipline (OED) for appropriate action; precluding a party or practitioner from submitting a paper or contesting an issue; affecting the weight given to a paper; and terminating the proceedings in the Office. Thus, the concept of Supplemental Examination appears to be directed to gray areas and close calls, as opposed to providing a second bite at the apple for true “villains.”To reinforce the idea that Supplemental Examination is not meant to provide amnesty for gross misconduct, an amendment was added to H.R. 1249 to make clear that “fraud” is to be rooted out by the Director. Not surprisingly, industry groups are less than enthusiastic about this provision. The amendment (here), proposed by Congressman Goodlatte (VA) provides:(C) FRAUD.–No supplemental examination shall be commenced by the Director on, and any pending supplemental examination shall be terminated regarding, an application or patent in connection with which fraud on the Office was practiced or attempted. If the Director determines that such a fraud on the Office was practiced or attempted, the Director shall refer the matter to the Attorney General for such action as the Attorney General may deem appropriate. The Biotechnology Industry Organization (BIO) released the following comment on the Goodlatte amendment:The supplemental examination provision as passed by the Senate and originally included in the House bill would allow patent holders to seek a review of their issued patents at their own risk.  The Goodlatte amendment undercuts this provision by creating disincentives for patent owners to use the new procedure by having the U.S. Patent and Trademark Office (PTO) act as quasi-investigative body.Since disbanding the “fraud squad” years back, the Office has not proactively pursued inequitable conduct issues, that is, aside from the few cases presented to OED by the public, or that result from final court determinations. The USPTO has made clear that the agency is ill suited to pursue investigations into inequitable conduct due to a lack of resources, subpoena power, etc.It seems that the rationale behind the Goodlatte amendment is to ensure that supplemetal examination is not abused as a “get out of jail free” card by the unscrupulous—yet, such cases are the rare exception (despite the plague of inequitable conduct charges to the contrary in almost every patent litigation). The added provision would arguably require the Director to investigate every request for the sake of rooting out the rare exception. This duty would potentially turn every request into a witch hunt—no thank y

Under current law, inequitable conduct cannot be cured through patent reissue or patent reexamination. As such, one of the more interesting aspects of the proposed patent reform legislation is the concept of “Supplemental Examination.”  Supplemental examination, as currently proposed, will permit the patent owner to cure inequitable conduct resulting from violations of the duty of candor and good faith as well as the duty of disclosure with intent to deceive the USPTO so long as it is done promptly and prior to litigation.

Of course, the USPTO Director will be able to continue to investigate issues of possible misconduct and impose sanctions such as those set forth in 37 CFR 11.18(c) such as striking a paper; referring a practitioner’s conduct to the Director of Enrollment and Discipline (OED) for appropriate action; precluding a party or practitioner from submitting a paper or contesting an issue; affecting the weight given to a paper; and terminating the proceedings in the Office. Thus, the concept of Supplemental Examination appears to be directed to gray areas and close calls, as opposed to providing a second bite at the apple for true “villains.”

To reinforce the idea that Supplemental Examination is not meant to provide amnesty for gross misconduct, an amendment was added to H.R. 1249 to make clear that “fraud” is to be rooted out by the Director. Not surprisingly, industry groups are less than enthusiastic about this provision.  The amendment (here), proposed by Congressman Goodlatte (VA) provides:

(C) FRAUD.–No supplemental examination shall be commenced by the Director on, and any pending supplemental examination shall be terminated regarding, an application or patent in connection with which fraud on the Office was practiced or attempted. If the Director determines that such a fraud on the Office was practiced or attempted, the Director shall refer the matter to the Attorney General for such action as the Attorney General may deem appropriate. 

The Biotechnology Industry Organization (BIO) released the following comment on the Goodlatte amendment:

The supplemental examination provision as passed by the Senate and originally included in the House bill would allow patent holders to seek a review of their issued patents at their own risk.  The Goodlatte amendment undercuts this provision by creating disincentives for patent owners to use the new procedure by having the U.S. Patent and Trademark Office (PTO) act as quasi-investigative body.

Since disbanding the “fraud squad” years back, the Office has not proactively pursued inequitable conduct issues, that is, aside from the few cases presented to OED by the public, or that result from final court determinations. The USPTO has made clear that the agency is ill suited to pursue investigations into inequitable conduct due to a lack of resources, subpoena power, etc.

It seems that the rationale behind the Goodlatte amendment is to ensure that supplemetal examination is not abused as a “get out of jail free” card by the unscrupulous—yet, such cases are the rare exception (despite the plague of inequitable conduct charges to the contrary in almost every patent litigation). The added provision would arguably require the Director to investigate every request for the sake of rooting out the rare exception. This duty would potentially turn every request into a witch hunt—no thank you.