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From the PLI Course Handbook:
Parallel Patent Litigation and Reexamination Proceedings 2007:
Keeping Your Case on Track
No. 13599
PATENT REEXAMINATION AND THE
CROSSOVER WITH LITIGATION
Rajiv P. Patel, Fenwick & West LLP
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PATENT REEXAMINATION AND THE
CROSSOVER WITH LITIGATION
Rajiv P. Patel, Fenwick & West LLP
Introduction ......................................................................... 3
Overview of Reexamination ................................................ 4
Basis for Reexamination. ........................................ 8
Initiating Reexamination. ...................................... 10
Action on the Request ........................................... 12
Ex Parte Reexamination Prosecution .................... 14
Inter Partes Reexamination Prosecution................ 17
Reexamination Crossing Over with Litigation .................. 23
The Defendant’s Considertions ............................. 23
The Plaintiff’s Considerations ............................... 29
Conclusion ......................................................................... 31
About the Author ............................................................... 32
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Introduction
Increasing, companies today find themselves having
to assert or defend against patent infringement claims. Those
asserting patents seek to leverage rights secured from the
U.S. Patent and Trademark Office against potential infringers
that offer products and services without appropriate licenses.
Patents deployed for strategic business purposes must be
carefully studied to determine the context, scope and strength
of their claims. Moreover, in some instances patentees may
seek to further strengthen their patent position, particularly
when attacked by alleged prior art that continues to fall short
of intended allegations.
On the other side, those defending against patent
infringement claims look towards noninfringement of the
particular patent or may seek to invalidate a patent in whole
or in part. In taking a position on noninfringement, a
potential defendant may study the effect of a narrower scope
of the claims than were issued. In asserting invalidity of the
claims, the potential defendant may investigate whether the
claims are invalid, and thus should not have been patentable,
in view of certain prior art.
For both potential plaintiffs and defendants at stake in
these patent battles is a potential injunction against a product
or service or millions of dollars in licensing fees or patent
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damages award, in addition to the millions of dollars it may
take to litigate the patent. With such high stakes at issue, one
potentially valuable administrative process available to both
parties is a patent reexamination.
Initially introduced as an ex parte administrative
process in 1980 and thereafter as an inter partes process in
1999, these processes are increasingly used in cases where
patents are about to be the subject of or already are involved
with litigation. This article explores what patent
reexamination and its crossover with patent litigation.
Overview of Reexamination
A reexamination is an administrative process in the
U.S. Patent and Trademark Office (“Patent Office”) in which
the Patent Office examines a previously issued U.S. patent to
determine whether claims of that patent are valid (and
patentable) in view of prior art reference documents. As
noted above, examination can be either ex parte1 or inter
partes2.
Ex parte means the reexamination proceedings are
primarily between an examiner at the Patent Office and a
patent owner. Ex parte patent reexamination was first
1
2
35 USC § 301, et seq.
35 USC § 311, et seq.
5
introduced in 1980. Congress’ intent behind reexamination
was (1) to settle validity disputes more quickly and less
expensively than protracted litigation, (2) allow courts to
refer patent validity questions to the Patent Office and (3)
reinforce investor confidence in certainty of patent rights by
providing the Patent Office with a broader opportunity to
review doubtful patents.3
For a patent owner advantages of ex parte
reexamination to include determining the validity and scope
of their patents in a less threatening environment than a
judicial proceeding. Moreover, the patent owner has control
over the process because they may amend their claims,
present arguments to the examiner and interview the
examiner in an effort to maintain a valid patent in view of the
prior art references. However, a significant risk for the
patent owner is invalidation of their patent if the examiner
and subsequent appeals process rejects all claims in the
reexamined patent.
For a third-party a benefit of ex parte reexamination
is challenging a patent in a less costly forum than a court
proceeding. Particularly for complex technology, a patent
examiner may have better perspective to analyze invalidating
3
Patlex Corp. v. Mossinghoff, 758 F.2d 594, 601-602 (Fed. Cir.
1985).
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prior art than judges and juries. Strategically, the third-party
may use the process to limit the claims sufficiently to avoid
infringement or stay a patent litigation or judgment in court
until the Patent Office has an opportunity determine the
validity of the patent.
Despite Congress’ intent behind ex parte
reexamination, third parties historically have not used the
process as frequently as anticipated. One reason is because
the third-party is unable to partake in the process of
determining the validity and scope of challenged patent
claims in a meaningful manner.
To address these historical concerns, Congress
introduced inter partes reexamination as a part the American
Inventors Protection Act (“AIPA”) of 1999.4 Inter partes
means that the third-party may now actively participate in the
reexamination process between the examiner and the patent
owner. Hence, the third-party has an opportunity to actively
argue or present evidence in rebuttal during the process. The
third-party may also appeal an adverse decision by an
examiner to the Patent Office Board of Appeals and
Interferences, the U.S. District Court for the District of
4
The American Inventors Protection Act was enacted November
29, 1999, as Public Law 106-113 and amended by the Intellectual
Property and High Technology Technical Amendments Act of
2002 (Public Law 107-273) enacted November 2, 2002.
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Columbia, or to the Federal Circuit.5
Strategically, because the process is not burdened by
rules of judicial proceedings (e.g., discovery, motions, etc.),
the inter partes reexamination potentially resolves disputes
quicker then litigation. Further, unlike litigation, patents are
not presumed valid in inter partes reexamination. Therefore,
a third-party does not have to provide “clear and convincing”
evidence to invalidate a patent. Hence, for complex
technology it may prove easier to have an experienced
examiner appreciate prior art evidence to invalidate or
narrow patent claims rather than a judge or jury that may not
have experience in the particular technology area.
However, there are two significant drawbacks of inter
partes reexamination. First, it is only available for
reexamination of original patent applications6 filed on or after
5
See Intellectual Property and High Technology Technical
Amendments Act of 2002 (Public Law 107-273) enacted
November 2, 2002
6
See MPEP § 2611 (“The phrase ‘original application’ is
interpreted to encompass utility, plant and design applications,
including first filed applications, continuations, divisionals,
continuations-in-part, continued prosecution applications (CPAs)
and the national stage phase of international applications. This
interpretation is consistent with the use of the phrase in 35 U.S.C.
251 and the federal rules pertaining to reexamination. In addition,
MPEP § 201.04(a) defines an original application as "... an
application which is not a reissue application." MPEP § 201.04(a)
further states that “[a]n original application may be a first filing or
a continuing application”. Therefore, the optional inter partes
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November 29, 1999.7 Hence, the process is unavailable to
challenge a substantial number of patents.
Second, the third-party is estopped from later
asserting in any civil action, or in a subsequent inter partes
reexamination, the invalidity of any claim finally determined
to be valid on any ground the third-party requester raised or
could have raised in the inter partes reexamination.8 Hence,
a third-party could be defenseless in subsequent invalidity
challenges in court or inter partes reexaminations.
With an overview of the reexamination basics in
mind, the following sections provide additional details of the
reexamination processes.
Basis for Reexamination
Both ex parte or inter partes reexamination may be
initiated when there is “a substantial new question of
reexamination is available to patents which issued from all
applications (except for reissues) filed on or after November 29,
1999. A patent which issued from an application filed prior to
November 29, 1999, in which a request for continued examination
(RCE) under 37 CFR 1.114 was filed on or after May 29, 2000,
however, is not eligible for optional inter partes reexamination. An
RCE is not considered a filing of an original application; rather it
is a continuation of the prosecution of the application in which it is
filed.).
7
37 CFR § 1.913.
8
35 USC § 315 (c); 37 CFR §§ 1.907, 1.915.
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patentability.”9 This new question of patentability must be
based upon a prior art document, namely another patent or
printed publication.10 The substantial new question of
patentability and the prior art document are set forth in a
Request for Reexamination (“reexamination request” or
“request”).11
Prior to the High Technology Technical Amendments
Act of 2002 (the “Amendment”), per the Federal Circuit
ruling in In re Portola Packaging,12 only prior art documents
not previously before an examiner at the Patent Office could
be used to initiate a reexamination proceeding. The
Amendment overturned the ruling in Portola Packaging so
that any prior art document, including one previously cited,
can now be used to initiate reexamination provided it raises a
substantial new question of patentability.
To help ensure that the Patent Office is considering a
substantial new question of patentability, requesters seeking
reexamination should clearly set forth in detail what the
requester considers the “substantial new question of
patentability” to be in view of prior patents and printed
9
See 35 USC §§ 301-304; 35 USC §§ 301, 311-313.
35 USC § 301.
11
See 37 CFR §§ 1.510, 1.915.
12
In re Portola Packaging, Inc., 110 F.3d 786 (Fed. Cir. 1997).
10
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publications.13 This is accomplished through a statement in
the reexamination request as to how the prior art is applied.
Specifically, it includes an “identification of every claim for
which reexamination is requested, and a detailed explanation
of the pertinency and manner of applying the cited prior art
to every claim for which reexamination is requested.”14 In
addition, a request should point out how any questions of
patentability raised are substantially different from those
raised in the previous examination of the patent.15 However,
the request should not be based on public use, on sale or
fraud basis as those are not considered by the Patent Office.16
Initiating Reexamination
The Patent Office rules provide that any person at any
time during the period of enforceability of a patent may
initiate an ex parte reexamination.17 The “any person”
includes the Patent Office, the patent owner, or a third party
may initiate a reexamination process. When initiated by a
third-party, that third party may remain anonymous in ex
parte reexamination.18 In contrast, for inter partes
reexamination the third-party must identify themselves as the
MPEP §§ 2216, 2616, 2242 (8th Ed., Rev. August 2006)).
37 CFR §§ 1.510(b)(2), 1.915(b)(3); MPEP §§ 2217, 2617.
15
MPEP §§ 2216, 2217, 2616, 2617.
16
MPEP §§ 2216, 2616.
17
37 CFR §§ 1.510.
18
Id.
13
14
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real party in interest because the third-party (including its
privies) may not file subsequent inter partes reexamination
requests during the pendency of a present inter partes
reexamination.19
In both ex parte and inter partes reexamination, the
initiating third-party must serve copies of the reexamination
request to the patent owner.20 Further, if the request is filed
by an attorney or agent identifying another party on whose
behalf the request is being filed, the attorney or agent must
have a power of attorney from that party or be acting in a
representative capacity.21
In addition, when a third-party files a reexamination
request, the patent owner is not permitted to respond to the
request while the request is pending at the Patent Office.22
Any papers filed prior to a decision on the request are not
considered and will be returned.23
19
37 CFR §§ 1.907, 1.915.
37 CFR §§ 1.510(b)(5), 1.915(b)(6). Recent rule changes by the
Patent Office designate the correspondence address for the patent
as the correct address for all communications for patent owners in
an ex parte reexamination or an inter partes reexamination. See
72 Fed. Reg. 18892 (April 16, 2007). In addition, like inter partes
reexamination, the Patent Office has provided for the use of a
single “mail stop” address for the filing of substantially all ex parte
reexamination papers. Id.
21
37 CFR §§ 1.510(f), 1.915(c), 1.34.
22
37 CFR §§ 1.530(a), 1.939(b); MPEP §§ 2225, 2625.
23
Id.
20
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Action on the Request
The ex parte or inter partes reexamination request is
accorded a filing date on the date which the request satisfies
all the requirements for the appropriate request.24 Once the
request requirements are met, the Patent Office must decide
on whether to grant the request within three months of the
filing date.25 This decision on whether to grant the request,
as well as the subsequent reexamination, is handled by the
Central Reexamination Unit (CRU) within the Patent
Office.26
In deciding whether to grant a reexamination request,
an examiner must determine whether “a substantial new
question of patentability” affecting any claim of the patent
has been raised.27 In making this determination, the examiner
looks to the request, which requires “a statement pointing out
each substantial new question of patentability based on prior
patents and printed publications.”28 If the examiner
concludes that a substantial new question is found, depending
on the request an order for ex parte or inter partes
24
35 USC §§ 302, 311; 37 CFR §§ 1.510(d), 1.923.
37 CFR §§ 1.515(a), 1.923.
26
MPEP §§ 2245, 2633.
27
35 USC § 304.
28
37 CFR § 1.510(b); MPEP §2216.
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reexamination of the patent is issued.29
When reexamination is ordered in inter partes
reexamination, it may be accompanied by an initial Office
action on the merits.30 However, when reexamination is
ordered in ex parte reexamination, a patent owner is given at
least two months to file a statement on the new question of
patentability, including any proposed amendments.31 This
statement is optional for the patent owner. If filed, the
statement should clearly point out why the subject matter as
claimed is not anticipated or rendered obvious by the prior art
patents or printed publications, either alone or in any
reasonable combinations.32
Although the ex parte reexamination process
ultimately involves only the examiner and the patent owner,
when a third party initiates reexamination, the process is
initially may be quasi-inter partes. Specifically, if the patent
owner may files the optional statement in response to the
reexamination order, the third-party can file a reply to the
statement.33 Thereafter, the third-party does not participate in
29
35 USC §§ 304, 313; 37 CFR §§ 1.525, 1.931; MPEP §§ 2246,
2646
30
MPEP § 2646.
31
37 CFR § 1.530(b); MPEP § 2249.
32
37 CFR § 1.530(c); MPEP § 2249.
33
37 CFR § 1.535.
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the reexamination process,34 although the third-party
continues to receive all correspondence between the patent
owner and the Patent Office during the proceeding.
Ex Parte Reexamination Prosecution
Once the period passes in ex parte reexamination for
the patent owner’s statement, and if applicable, the thirdparty reply to the statement, the reexamination is queued for
substantive examination. Specifically, an examiner issues an
Office action setting forth whether claims are rejected,
objected to or allowed and, where appropriate, the basis for
such conclusion. Thereafter, for claims rejected and/or
objected to the patent owner must respond within a time
period as set within the Office action.
Prosecution of ex parte reexaminations must be
conducted with “special dispatch.”35 In particular, the first
action on the merits should be completed within one month
of the filing date of the requester’s reply36 or, if there is no
requestor other than the patent owner, within one month of
the filing date of the patent owner’s statement.37 If no
submissions are made in the contexts, then the first action on
the merits should be completed within one month of any due
34
37 CFR § 1.550(g).
35 USC §§ 305.
36
37 CFR § 1.535.
35
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date for such submission. Mailing of the first action should
occur within six weeks after the appropriate filing or due date
of any statement and any reply to it.38 It is noted that any
reexamination cases involved in litigation, will have priority
over all other cases.39
Prosecution in ex parte reexamination has some
nuances compared with conventional prosecution. For
example, one difference is how matter omitted in a
reexamination proceeding is identified in amendments.
Specifically, such omitted matter is indicated by enclosed
brackets rather than strikethrough.40 Another difference
involves requests for extensions of time to respond to an
Office action. Specifically, time for taking any action is
extended only for sufficient cause and for a reasonable time
specified.41 Moreover, any request for such extension must
be filed on or before the day on which action by the patent
owner is due.42 The regulations make it clear that in no case
will the mere filing of a request effect any extension.43
Another important distinction involves final
37
37 CFR §1.530.
MPEP §2261.
39
Id.
40
37 CFR § 1.530(f); MPEP § 2250.
41
37 CFR § 1.550(c); MPEP § 2254.
42
Id.
43
Id.
38
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rejections (or actions) and after final practice. In particular,
the Patent Office intends for the second Office action in the
reexamination proceeding following the decision ordering
reexamination to be made final in accordance with the
guidelines that are set forth in MPEP § 706.07(a), although
the prosecution should not be prematurely cut off when the
patent owner seeks to define the claimed invention to which
they are entitled.44 Nevertheless, the patent owner should be
aware that a reexamination proceeding may result in the final
cancellation of claims from the patent and that the patent
owner does not have the right to renew or continue the
proceedings by re-filing of a continuation application or a
request for continued examination (“RCE”).45
Once a final rejection is entered, the patent owner no
longer has any right to unrestricted prosecution. At this point
further amendments are governed by 37 CFR § 1.116.
Although RCE practice is unavailable to the patent owner,
the patent owner may seek to continue prosecution through a
petition process that essentially is a request for continued
reexamination (“RCR”).46 In pursuing this petition, the
patent owner may have to set forth how amendments to the
claims would further prosecution to resolve the
44
45
MPEP § 2271.
Id.
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reexamination with special dispatch. If furtherance of
prosecution seems unlikely, the patent owner may appeal the
final rejection to the Board of Patent Appeals and
Interferences.47 However, consistent with the ex parte
reexamination process, a third-party is not permitted to
appeal a reexamination decision.
An ex parte reexamination proceeding cannot be
abandoned. Rather, when the ex parte reexamination
proceeding concludes, the Patent Office issues a “Notice of
Intent to Issue Ex Parte Reexamination Certificate” (NIRC)
that indicates patentable claims (confirmed or allowed) and
cancelled claims.48 The reexamination proceeding then
closes with the issuance and publication of a reexamination
certificate.49 The certificate officially notes cancellation of
any claim of the patent finally determined to be unpatentable,
confirmation of any claim of the patent determined to be
patentable, and incorporation in the patent any proposed
amended or new claim determined to be patentable.50
Inter Partes Reexamination Prosecution
Similar to ex parte reexamination, inter partes
46
See 37 CFR §§1.181, 1.182; Official Gazette (OG), March 1,
2005.
47
35 USC § 306; MPEP § 2273.
48
MPEP § 2287.
49
35 USC § 307.
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reexamination also should be conducted with special
dispatch.51 As previously noted, in inter partes
reexamination the reexamination order may be accompanied
by an Office action on the merits.52 Similar to conventional
prosecution, the Office action on the merits details whether
and what claims are rejected, objected to, and/or allowed and
on what basis.53
The patent owner must respond to the Office action
within a set time limit, typically within two months.54 In
addition, similar to ex parte reexamination prosecution,
amendments should be made as set forth in 37 CFR §
1.530(d)-(k)55 and extensions of time must be requested in
advance and will only be granted for sufficient cause.56 In
addition, in inter partes reexamination written comments by
both the patent owner and third-party requester (further
described below) are limited to 50 pages, exclusive of the
amendments, appendices of claims, and reference materials
such as prior art references.57
Each time a patent owner files a response to an Office
50
37 CFR § 1.570; MPEP § 2288.
35 USC § 314.
52
37 CFR § 1.935; MPEP § 2660.
53
37 CFR §§ 1.104, 1.935-1.937; MPEP § 2660.
54
37 CFR §§ 1.941-1.945; MPEP § 2662.
55
MPEP § 2661.01.
56
37 CFR § 1.956.
51
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action, a third-party requester may once file written
comments within a period of 30 days from the date of service
of the patent owner’s response. 58 This time cannot be
extended and papers submitted late are refused
consideration.59 These comments must be limited to issues
raised by the Office action or the patent owner’s response.60
The third-party requester may submitter may use the
opportunity to comment to submit prior art, which otherwise
is limited once the inter partes reexamination is ordered.
The comments (as well as submission of prior art) may be
necessary to rebut a finding of fact by the examiner, rebut a
response of the patent owner, or explain when the submitted
prior art first became known or available to the third-party
after the filing of the request for inter partes reexamination.61
In limited circumstances, a patent owner may file a
supplemental response to address comments of the thirdparty. However, the supplemental response will be entered
only where the patent owner has made a showing of
sufficient cause62 as to why it should be entered.63
57
37 CFR § 1.943.
37 CFR § 1.947; MPEP § 2666.05.
59
37 CFR §§ 1.947, 1.957.
60
Id.
61
See, e.g., 37 CFR § 1.948; MPEP § 2666.05.
62
“The showing of sufficient cause must provide: (1) a detailed
explanation of how the criteria of § 1.111(a)(2)(i) is satisfied; (2)
an explanation of why the supplemental response was not
58
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After receive the responses from the patent owner and
the third party, the Patent Office determines whether the
proceeding is ready for closure, referred to as an Action
Closing Prosecution (ACP). 64 The ACP is not issued if there
is a new ground of rejection which was not previously
addressed by the patent owner, unless the new ground was
necessitated by an amendment, or if the issues are not yet
clearly defined.65 The Patent Office will issue an ACP when
on a second (or subsequent time) at least one claim remain
rejected or a determination of patentability is made of all the
pending claims.66 When claims remain rejected, the ACP has
attributes similar to a final action in ex parte proceedings, but
it is not a final action and there is no appeal from it.67
In response to the ACP, the patent owner may file a
patent owner submission and, if filed, the third-party
presented together with the original response to the Office action;
and (3) a compelling reason to enter the supplemental response.”
Revisions and Technical Corrections Affecting Requirements for
Ex Parte and Inter Partes Reexamination, Final Rule, 72 Fed. Reg.
18892, 18894 (April 16, 2007) (to be codified at 37 CFR §1.945)
63
37 CFR § 1.945; Revisions and Technical Corrections Affecting
Requirements for Ex Parte and Inter Partes Reexamination, Final
Rule, 72 Fed. Reg. 18892-18907 (April 16, 2007) (to be codified at
37 CFR §1.945).
64
37 CFR § 1.949; MPEP § 2671.01.
65
37 CFR § 1.949; MPEP § 2671.01.
66
37 CFR § 1.949; MPEP § 2671.02.
67
37 CFR § 1.949; MPEP § 2671.02.
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requester can response to that submission.68 If no submission
is filed or the Patent Office will not modify their position in
response to a submission, the Patent Office will issue a Right
of Appeal Notice (RAN).69 An appeal can only be taken
upon issuance of the RAN.70 Appeals to the Board of Patent
Appeals and Interferences and to the United States Court of
Appeals for the Federal Circuit are governed under part 41 of
37 CFR.71 Prior to 2002 the third-party requester had no
opportunity to appeal decisions of the Board of Patent
Appeals and Interferences to the Federal Circuit. In 2002,
the statute was amended to provide the third-party requester
an opportunity to appeal from the Board of Appeals and
Interferences to the United States Court of Appeals for the
Federal Circuit.72
When the inter partes reexamination proceeding
concludes, the Patent Office issues a Notice of Intent to Issue
Inter Partes Reexamination Certificate (NIRC). In addition,
for each claims found to be patentable, a reason for
patentability is provided.73
68
37 CFR § 1.951; MPEP § 2673.
Id.
70
37 CFR § 1.949; MPEP § 2671.02.
71
35 USC § 315; 37 CFR §§ 1.959, 41.81; MPEP §§ 2674, 2683.
72
See Section 13106 of Public Law 107-273, 116 Stat. 1758, 18991906 (2002).
73
MPEP § 2687.
69
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The NIRC is appropriate in five instances. First is
when there is no timely response by the patent owner to an
Office action requiring a response.74 Second is after a Right
of Appeal Notice (RAN) where no party to the reexamination
timely files a notice of appeal. Third, is after filing of a
notice of appeal, where all parties who filed a notice of
appeal or notice of cross appeal fail to timely file an
appellant brief (or fail to timely complete the brief, where the
appellant brief is noted by the examiner as being incomplete).
Fourth is after a final decision by the Board of Patent
Appeals and Interferences, where there is no further timely
appeal to the Court of Appeals for the Federal Circuit nor is
there a timely request for rehearing by the Board. Fifth is
after the Federal Court appeal process has been completed
and the case is returned to the examiner.75
As with ex parte reexamination, an inter partes
reexamination cannot be abandoned.76 Instead, when the
reexamination proceedings close, the Patent Office issues and
publishes a reexamination certificate. The inter partes
reexamination certificate cancels any claim of the patent
finally determined to be unpatentable, confirms any claim of
Id. Note that “[i]f all claims are under rejection, the examiner
will issue a Notice of Intent to Issue Inter Partes Reexamination
Certificate (NIRC). All claims will be canceled by formal
examiner's amendment.”).
75
Id.
74
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the patent determined to be patentable, and incorporates in
the patent any proposed amended or new claim determined to
be patentable.77
Reexamination Crossing Over with Litigation
Having understood the basics of ex parte and inter
partes reexamination, one area in which reexamination is
gaining prominence is in the context of crossing over with
patent litigation. In this context, often the defendant initiates
the reexamination. However, in some instances a patent
owner (plaintiff) may initiate a reexamination as a process to
further validate or appropriately scope claims in a patent
prior to entering the heart of litigation. This section takes a
closer look at reexamination in this litigation context.
The Defendant’s Considerations
In parallel with a patent litigation before a district
court, a defendant may decide to file as a third-party in the
Patent Office a reexamination of a patent in suit. In doing so,
the defendant also may try to obtain a stay of the litigation,
particularly for an inter partes reexamination. 78 In seeking a
stay, a defendant may hope to achieve significant cost
savings by challenging the patent in an administrative forum
76
77
Id.
35 USC § 316; 37 CFR § 1.997; MPEP § 2688.
24
that is free an apart from the costly burdens of litigation such
as discovery and/or motion practice.
Whether a stay is granted, depends on the particular
court. “The district court has the inherent power to control
its own docket, including the power to stay proceedings.”79
In addition, “[t]he power to stay proceedings is incidental to
the power inherent in every court to control the disposition of
the causes on its docket with economy of time and effort for
itself, for counsel, and for litigants.”80 As to “[h]ow this can
best be done calls for the exercise of judgment, which must
weigh competing interests and maintain an even balance.”81
When deciding whether to stay litigation pending a
reexamination, “courts typically consider three factors: (1)
whether a stay will unduly prejudice or present a clear
tactical disadvantage to the nonmoving party; (2) whether a
stay will simplify the issues in question and trial of the case;
and (3) whether discovery is complete and whether a trial
date has been set.”82 Essentially, courts determine whether
78
See 35 USC § 318.
Echostar Techs. Corp. v. Tivo, Inc., No. 5:05-CV-81 (DF), 2006
U.S. Dist. LEXIS 48431 (E.D. Tex. July 14, 2006) (citing Soverain
Sofnvare LLC v. Amazon Com., 356 F. Supp.2d 660, 662 (E.D.
Tex. 2005)).
80
Id. (citing Landis v. North American Co., 299 U.S. 248, 254
(1936)).
81
Id.
82
Id. (citing Soverain, 356 F. Supp. 2d at 662).
79
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the benefits of a stay outweigh the inherent costs based on
these factors.
In addition to seeking a stay of the litigation, why a
defendant may file a parallel reexamination may vary.
Ideally, the defendant may seek to invalidate one or more
claims in a forum that only needs a preponderance of
evidence rather than clear and convincing evidence.
Moreover, where particularly complex technology must be
understood, challenging validity of a patent in the Patent
Office may provide a better opportunity in front of examiners
who are technically experienced.
Challenging validity has become particularly
intriguing in view of the recent Supreme Court decision in
KSR International Co. v. Teleflex Inc.83 Prior to this decision,
for years both the courts and the Patent Office applied a
“teaching- suggestion-motivation” (TSM) test in determining
whether a claimed invention was obvious. That is, a claimed
invention would be obvious if some motivation or suggestion
to combine prior art teachings can be found in the prior art,
the nature of the problem, or the knowledge of a person
having ordinary skill in the art.
In KSR, the Court rejected this approach as being to
83
550 U.S. ____ (2007); No. 04-1350 (April 30, 2007).
26
rigid to determine obviousness and instead broadened the
inquiry. The Court began looking at not at why a patent
should be allowed, but rather why it should not be allowed.
Specifically, the Court stated that
a principal reason for declining to allow
patents for what is obvious. The combination
of familiar elements according to known
methods is likely to be obvious when it does
no more than yield predictable results.84
To help drive at the obviousness inquiry, the Court
highlighted two aspects. First, when looking at what is
“obvious” rather than looking at what the patentee was
attempting to solve, the Court stated that “what matters is the
objective reach of the claim [so that if] the claim extends to
what is obvious, it is invalid”.85
Next, rather than looking at whether a person of
ordinary skill attempting to solve a problem will be led only
to those elements of prior art designed to solve the same
problem, the inquiry should be broadened to consider
common sense. Specifically, the Court stated:
When there is a design need or market
pressure to solve a problem and there are a
finite number of identified, predictable
solutions, a person of ordinary skill has good
reason to pursue the known options within his
84
85
Id., Slip Op. at 12.
Id., Slip Op. at 16.
27
or her technical grasp. If this leads to the
anticipated success, it is likely the product not
of innovation but of ordinary skill and
common sense. In that instance the fact that a
combination was obvious to try might show
that it was obvious under §103.86
Applying the KSR decision to a reexamination
context may broaden the inquiry of whether a substantial new
question of patentability exists. For example, where a patent
was previously granted because the prior art did not
explicitly or implicitly teach, suggest, or motivate to combine
references, the inquiry may now need to consider whether
there were other reasons to combine known elements. This
may mean that post-KSR a defendant may have a better
opportunity to challenge a patent in the Patent Office based
on obviousness.
Even if a patent cannot be invalidated through
reexamination, a defendant may achieve other benefits
through the process. In some instances, claim amendment
could be narrow the scope of protection so that infringement
may be avoided. Narrowing of claims, even when not
sufficiently narrowed from a defendant’s perspective, still
provides benefits such as file history estoppel or other
evidence that may be helpful in claim construction in the
litigation itself. Claim amendments may also allow for
86
Id., Slip Op. at 17.
28
intervening rights. Specifically, when claims are amended
some infringement may be permitted without incurring
liability of damages.87
Despite the above benefits of filing a reexamination
in the context of a parallel patent litigation, there could be
significant drawbacks that may suggest that a defendant not
file a reexamination request. For example, the patent owner
(plaintiff) may successfully narrow the claim with limitations
that avoid invalidity, yet still cover the accused product or
service.
Further, considering that a patent is presumed valid,
that presumption could be “lost” if the patent emerges from
reexamination with little to no change in claim scope. This
can be particularly highlighted in instances when a patent
emerges from reexamination post-KSR. The defendant may
be able to counter this issue in an ex parte reexamination. In
particular, the defendant may file the reexamination request
based on certain references and reserve others for litigation
or subsequent ex parte reexamination proceedings.
However, the defendant may be unable to use this approach
for inter partes reexamination.
With an inter partes reexamination request, the
87
35 USC §§ 307(b), 316(b).
29
defendant may face collateral estoppel issues. Specifically,
the defendant would be estopped from asserting in a later
litigation the invalidity of any claim that was determined to
be valid and patentable on any ground that the defendant
raised, as a third-party requester, during the reexamination.88
In addition, the defendant can only file one request for inter
partes reexamination. Thus, the defendant must conduct the
prior art search and analysis before filing the request.
To counter these downsides of inter partes
reexamination, the defendant should diligently search and
analyze prior art patents and publications prior to filing the
request. In addition, the defendant can assert invalidity based
on newly discovered prior art that was unavailable to the
defendant or the Patent Office during the inter partes
reexamination proceedings.89 In addition, the defendant may
develop other invalidity theories such as prior public
disclosure, public use, sale, or offer for sale.
The Plaintiff’s Considerations
While a patent owner/plaintiff would not initiate an
inter partes reexamination when on the verge of or while in
litigation, they may decide to strategically initiate an ex parte
reexamination. One reason for doing so is to ensure that
88
89
35 USC §§ 315(c), 317; 37 CFR § 1.907.
35 USC § 315(c).
30
claims of a patent that will be, or are, asserted are valid in
view of known prior art. The scope of this prior art could
vary, for example, from an anticipating reference that may be
found in a pre-litigation context to an obviousness
combination that could be problematic in view of the
Supreme Court KSR decision.
Using ex parte reexamination, the patent owner may
be able to reduce the risk of losing the patent the entire patent
in litigation due to invalidity based on references. The ex
parte reexamination process allows the patent owner to
negotiate with the examiner an appropriate scope of claim
protection without having a third-party (e.g., defendant)
interfere in the process and unnecessarily cloud issues
regarding patentability.
For the patent owner, one challenge in the
reexamination process will be handling obviousness
rejections post-KSR. In particular, the patent owner will need
to be vigilant in watching for and addressing whether the
Patent Office gets drawn into using hindsight bias and relies
upon ex post reasoning when rejecting claims based on
obviousness.90
A patent owner that emerges successfully from the
90
KSR, Slip Op. at 17.
31
reexamination process with appropriately scoped claims will
find that a patent may now have significantly more value.
Having essentially been twice examined and having
withstood challenges such as obviousness post-KSR, the
patent owner may have a higher degree of comfort in
countering a validity attack in a subsequent patent litigation.
Conclusion
Reexamination is now emerging as a viable
mechanism for challenging patents in an administrative
forum. Moreover, it also has emerged as a valuable tool in
the context of patent litigation for third-parties (e.g.,
defendants) and patent owners (plaintiffs). Hence, both
patent owners and third-parties should not incorporate a
careful study pros and cons of reexamination in their patent
litigation strategy.
32
About the Author
Rajiv P. Patel is a partner in the Intellectual
Property/Patent Group of Fenwick & West LLP. His
practice includes a focus on patent procurement, dispute and
transaction matters.
In patent procurement matters, Mr. Patel has prepared
and prosecuted patents in a wide range of electrical,
mechanical and software technologies before the U.S. Patent
and Trademark Office (USPTO). His prosecution experience
before the USPTO includes appeals before the Board of
Patent Appeals and Interferences (BPAI). In addition, Mr.
Patel has counseled companies on strategic uses of patent
reissue proceedings and has actively prosecuted such
proceedings. Further, Mr. Patel has developed and executed
global patent strategies involving patent procurement in
Europe, Canada, Australia, Japan, Korea, China, Taiwan,
Brazil and India.
In patent dispute matters, Mr. Patel has counseled and
partaken in reexamination proceedings before the USPTO
and litigation proceedings in U.S. District Courts. The
disputes have involved technology areas that include solidstate memories, electronic gaming, Internet technologies, and
interactive television.
33
In patent transaction matters he has been involved
with negotiations of patent and intellectual property (IP)
licenses in a variety of business contexts. For example, he
has led IP audit and due diligence matters for mergers and
acquisitions, venture funding, initial public offerings private
equity financings, bankruptcy proceedings, and
securitizations.
Mr. Patel was Adjunct Professor of Law at the
University of California, Hastings College of the Law, where
he taught a patents course. He currently serves on the Dean’s
Leadership Council of Franklin Pierce Law Center and the
Dean’s Executive Committee at Rutgers University, School
of Engineering.
Mr. Patel received his law degree (J.D.) from
Franklin Pierce Law Center, a Master of Intellectual Property
degree from Franklin Pierce Law Center, and a Bachelor of
Science degree in electrical engineering (with high honors)
from Rutgers University, School of Engineering. Mr. Patel is
a member of the State Bar of California and Registered to
Practice before the USPTO.