Reexamination:Reexamination:A Powerful Tool for Accused A Powerful Tool for Accused

InfringersInfringersOr Just Too Risky?Or Just Too Risky?

Peter G. HawkinsPeter G. Hawkins

November 22, 2005November 22, 2005

OverviewOverview

What is Reexamination?What is Reexamination? Types of ReexaminationTypes of Reexamination What Can/Can’t be Used in What Can/Can’t be Used in

Reexamination?Reexamination? Advantages of ReexaminationAdvantages of Reexamination Pitfalls of ReexaminationPitfalls of Reexamination Proposed LegislationProposed Legislation

Pop Quiz

• After your patent is issued, will you ever again have to interact with the PTO ? (other than to pay maintenance fees)• A. Yes• B. No• C. What’s the PTO?

• The correct answer is of course D. -- It Depends!• The patent can be subject to several

post-issuance proceedings, including reissue, interferences, and REEXAMINATION

ReexaminationReexamination

• Reexamination is a way for the PTO to get a second crack at a patent

• It can be initiated by both an accused infringer (to limit the claims of a patent) or by a patent owner (to correct errors in a patent)

Types of Reexamination

Ex Parte 35 U.S.C. §§ 301-307 Conducted without input from the third-party

requester Similar to an examination for a patent application

Inter Partes 35 U.S.C. §§ 311-318 Conducted with input from the third-party

requester Similar to an adversarial proceeding

Where Where Ex ParteEx Parte and and Inter PartesInter Partes Differ Differ

35 U.S.C. § 305. Conduct of (35 U.S.C. § 305. Conduct of (Ex ParteEx Parte) Reexamination Proceedings) Reexamination Proceedings ……In any reexamination proceeding under this chapter, In any reexamination proceeding under this chapter, the the patent ownerpatent owner ( (but not the third-party requesterbut not the third-party requester))

will be permitted to propose any amendment to his patent…will be permitted to propose any amendment to his patent… in order to distinguish the invention as claimed from the prior art….or in order to distinguish the invention as claimed from the prior art….or in response to a decision adverse to the patentability of a claim of a in response to a decision adverse to the patentability of a claim of a

patent. patent.

COMPARE WITHCOMPARE WITH

35 U.S.C. § 314. Conduct of 35 U.S.C. § 314. Conduct of Inter Partes Inter Partes Reexamination ProceedingsReexamination Proceedings Each time that the patent owner files a response Each time that the patent owner files a response

to an action on the merits from the Patent and Trademark Office, to an action on the merits from the Patent and Trademark Office, the the third-partythird-party requester requester shall haveshall have one opportunity one opportunity to to file written comments file written comments addressing issues raised by the action of the Office or the patent owner's addressing issues raised by the action of the Office or the patent owner's

responseresponse......

What are Grounds for What are Grounds for Reexamination?Reexamination?

35 U.S.C. § 301 (and § 311)35 U.S.C. § 301 (and § 311)► Any personAny person

at any time at any time

► may cite to the Office may cite to the Office in writing in writing

► prior art prior art consisting of patents or printed publications consisting of patents or printed publications which that person believes to have a bearing on which that person believes to have a bearing on

the patentability of any claim of a particular the patentability of any claim of a particular patent … patent …

Grounds for Reexamination Grounds for Reexamination Contd.Contd.

► 35 U.S.C. §§ 303, 31235 U.S.C. §§ 303, 312 the Director will determine the Director will determine

► whetherwhether a substantial new question of patentability a substantial new question of patentability affecting any claim of the patentaffecting any claim of the patent concerned is raised by concerned is raised by the request … the request …

The existence of a substantial new question of patentability is The existence of a substantial new question of patentability is notnot precluded by the fact precluded by the fact

► that a patent or printed publication was previously cited by or that a patent or printed publication was previously cited by or to the Office or considered by the Officeto the Office or considered by the Office

The italicized portion of the statute was added in 2002 to overruleThe italicized portion of the statute was added in 2002 to overruleIn re Portola PackagingIn re Portola Packaging, 110 F. 3d 786 (Fed Cir. 1997)., 110 F. 3d 786 (Fed Cir. 1997). held that previously considered references could not be used, held that previously considered references could not be used,

even if they were applied improperly!even if they were applied improperly!

What are not Grounds for What are not Grounds for Reexamination?Reexamination?

Evidence of Prior Sale (unless Evidence of Prior Sale (unless published)published)

Evidence of Prior Use (unless Evidence of Prior Use (unless published)published)

Problems with the enablementProblems with the enablement Enlarging the scope of a claim (35 Enlarging the scope of a claim (35

U.S.C. §§ 305, 314) U.S.C. §§ 305, 314)

Advantages of Reexamination Advantages of Reexamination (For The Accused Infringer)(For The Accused Infringer)

Most obvious – Can narrow a patent’s Most obvious – Can narrow a patent’s claims so that you are no longer claims so that you are no longer infringinginfringing

More sneaky – Tie up litigationMore sneaky – Tie up litigation Can take proceedings past the life of the Can take proceedings past the life of the

patentpatent Can avoid injunctionsCan avoid injunctions But if patent is found valid you can still But if patent is found valid you can still

be liable for damages be liable for damages

Photo courtesy of Lindsay Heller

Example 1: Patlex v. Mossinghoff

Patlex (owner of the Gould “submarine” laser patents) sues Control Laser for infringement

Control Laser successfully initiates ex parte reexamination and is able to stay the litigation

Patlex sues Mossinghoff – the Commissioner of the PTO – to enjoin the reexamination proceedings

What have I gotten myself

into?

Patlex Contd.

Patlex attacks reexamination on 5th amendment, 7th amendment, and Article III grounds, as well as arguing that

it bypasses the presumption of validity given to issued patents

Patlex Holding

The Court upheld the retroactive nature of the reexamination statutes, looking to their curative effects Their holding stressed that the statutes were designed to

correct mistakes made by the PTO The creation of a valid patent is a matter of public, as

opposed to private, concern and therefore does not need to be adjudicated by an Article III (i.e. a district or appeals) court

The Court likewise did not accept the validity argument They hold that validity is not a property right, but is rather a

procedure to govern litigation

A Little Info on Gould Born July 17, 1920; Died Sept. 16, 2005 Is credited with coming up with the idea (as well as the

name) for lasers Applied for his first patent on lasers in 1959, which the PTO

rejected Gould subsequently sued The resulting litigation became one of the longest legal battles in

patent history Gould was awarded his first minor patent in 1977 His first major patent (for the optically pumped laser)

wasn’t awarded until 1987!! Ironically, had a patent been issued in 1959, it would have

expired before the technology became widely used He and his lawyer incorporated Patlex, whose major asset

was an equity share in the laser litigation Due to the length of the litigation, Gould assigned 80% of his

royalties to his legal representation Still, he managed to make more than $30 million after the laser

litigation ended In fact, Control Laser was eventually forced to give Patlex a

controlling share of the company, and the two eventually merged

Example 2: Ethicon v. Quigg

US Surgical sues Ethicon

Ethicon initiates ex parte reexamination

US Surgical convinces the PTO to stay the reexamination

Ethicon sues the PTO

Mossinghoff never told me that I’d get sued!

Mossinghoff never told me that I’d get sued!

Ethicon Holding

The court finds that reexamination must be conducted with “special dispatch” (see 35 U.S.C. § 305)

Whatever “special dispatch” means, it does not mean that the PTO can stay reexamination proceedings

Furthermore, the type of review conducted by the PTO differs from that of the court

For example, reexamination contains no presumption of validity

If that wasn’t enough, the court flat-out states that the ability to stay a proceeding is the sole domain of the courts Court

PTO

RecapRecap

• So…So…

• The court can stay The court can stay ex parte ex parte proceedingsproceedings

• The PTO can notThe PTO can not

• What about What about inter partes inter partes reexamination?reexamination?

Example 3: Example 3: Middleton v. 3MMiddleton v. 3M

Middleton sues 3MMiddleton sues 3M3M initiates 3M initiates inter inter partes partes reexaminationreexaminationBut the patent was But the patent was issued prior to 1999!issued prior to 1999! Inter partesInter partes reexam reexam

can not applycan not apply The court The court

acknowledges this but acknowledges this but says that the says that the distinction is irrelevantdistinction is irrelevant

3M Contd.3M Contd.

3M then requests that the court stay the litigation3M then requests that the court stay the litigation

But, 35 U.S.C. § 318 says that only a patent But, 35 U.S.C. § 318 says that only a patent owner may request a stay of litigationowner may request a stay of litigation

Remember, the court has stated that the difference between Remember, the court has stated that the difference between inter partesinter partes and and ex ex parteparte examination is irrelevant examination is irrelevant

Court: Regardless of statute, the court always Court: Regardless of statute, the court always has the authority to stay a proceeding, even if has the authority to stay a proceeding, even if the request is brought by an accused infringerthe request is brought by an accused infringer

If that’s the case then what’s the point of § 318???If that’s the case then what’s the point of § 318???

What Did You Think?What Did You Think?Who in the Fed. Cir. Would Affirm?Who in the Fed. Cir. Would Affirm?

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Judge

Am

ou

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cite

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ReasonsReasonsMayer affirmsMayer affirms

““courts have the power to manage their dockets” (Kolb, Pearson, Cleary)courts have the power to manage their dockets” (Kolb, Pearson, Cleary)

Mayer dissentsMayer dissents Textualist (Frostick, Ko, Yates)Textualist (Frostick, Ko, Yates)

Newman affirmsNewman affirms Statutes don’t trump court’s powers (Frostick)Statutes don’t trump court’s powers (Frostick) Ends/General Policies justify the means (Yates, Edsenga)Ends/General Policies justify the means (Yates, Edsenga) Legal reasoning leads to this conclusion (Murshak)Legal reasoning leads to this conclusion (Murshak)

Newman dissentsNewman dissents Newman always dissents (Kolb)Newman always dissents (Kolb) Failure to mention AI in statute means they can’t stay (Cleary)Failure to mention AI in statute means they can’t stay (Cleary)

Markey affirmsMarkey affirms Ends justify the means (Yates)Ends justify the means (Yates) As stated in As stated in GouldGould, stays are vital to the reexamination process (Ko), stays are vital to the reexamination process (Ko)

Reasons Contd.Reasons Contd.

Michel dissentsMichel dissents Strict follower of statutes (Pearson)Strict follower of statutes (Pearson)

Bryson affirmsBryson affirms Letting PTO get it first helps in determining validity (Cohen)Letting PTO get it first helps in determining validity (Cohen)

Lourie dissentsLourie dissents Limitations of the statute must be respected (Cohen)Limitations of the statute must be respected (Cohen)

Prost dissentsProst dissents Textualist (Edsenga)Textualist (Edsenga)

Rich (from the grave) dissentsRich (from the grave) dissents Textualist (Murshak)Textualist (Murshak)

The Disadvantages of The Disadvantages of ReexaminationReexamination

So – Reexamination can correct/narrow a So – Reexamination can correct/narrow a patent and can be used to stay litigation – patent and can be used to stay litigation – what’s the downside?what’s the downside?

Ex ParteEx Parte – Third parties can’t participate – Third parties can’t participate The PTO is overworked simply prosecuting The PTO is overworked simply prosecuting

patentspatents Unless someone is actively pursuing Unless someone is actively pursuing

reexamination, their motivation to change a patent reexamination, their motivation to change a patent they already granted is minimalthey already granted is minimal

The Disadvantages of The Disadvantages of Reexamination Contd.Reexamination Contd.

Inter Partes Inter Partes ReexaminationReexamination ExpensiveExpensive

Costs $8,800 as opposed to $2,520 for Costs $8,800 as opposed to $2,520 for ex parteex parte EstoppelEstoppel

35 U.S.C. § 315: Once a claim has been determined valid by 35 U.S.C. § 315: Once a claim has been determined valid by reexamination, it can not be contested in any civil action brought reexamination, it can not be contested in any civil action brought by the third-party requesterby the third-party requester

applies to issues raised or that applies to issues raised or that could have beencould have been raised raised 35 U.S.C. § 317: Once a claim has been determined valid by 35 U.S.C. § 317: Once a claim has been determined valid by inter inter

partes partes reexamination, it can not be subject to reexamination again reexamination, it can not be subject to reexamination again based on issues that were raised or could have been raised in the based on issues that were raised or could have been raised in the initial proceedinginitial proceeding

Thus Thus inter partesinter partes reexamination is a “one-shot” deal reexamination is a “one-shot” deal

Disadvantages Contd.Disadvantages Contd. It’s no surprise that few It’s no surprise that few inter inter

partes partes requests have been maderequests have been made One commentator went so far One commentator went so far

as to say: “It would be as to say: “It would be legal legal malpracticemalpractice to recommend a to recommend a client initiate client initiate inter partes inter partes reexaminationreexamination” ” Sherry M. Knowles, Sherry M. Knowles, et al.et al., , Inter Partes Reexamination in the Inter Partes Reexamination in the United StatesUnited States, 86 J. Pat. & Trademark Off. , 86 J. Pat. & Trademark Off. Soc’y 611, 614 (2004)Soc’y 611, 614 (2004)

That said it appears the That said it appears the amount of amount of inter partes inter partes reexaminationsreexaminations are increasingare increasing

Inter Partes Inter Partes Reexamination Reexamination Requests: 7/01-7/05Requests: 7/01-7/05

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18

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60

7/1/01-6/30/02 7/1/02-6/30/03 7/1/03-6/30/04 7/1/04-6/30-05

Req

uest

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Time Period

Data Courtesy of Joseph D. Cohen, What’s Really Happening in Inter Partes Reexamination, http://www.stoel.com/resources/articles/IP/InterPartes.pdf, 16 (originally published in 87 J. Pat. & Trademark Off. Soc’y 207 (2005)).

Inter PartesInter Partes contd. contd. Why the sudden surge in popularity?Why the sudden surge in popularity? Cohen offers several reasonsCohen offers several reasons

The workings of The workings of inter partesinter partes reexamination have recently reexamination have recently been made public via the internetbeen made public via the internet

Compared to litigation, Compared to litigation, inter partesinter partes is significantly cheaper is significantly cheaper The PTO has stuck to its word and has been very prompt in The PTO has stuck to its word and has been very prompt in

responding to responding to inter partesinter partes requests requests So far, only 2% of So far, only 2% of inter partesinter partes requests have been denied requests have been denied

(Cohen, 7-10)(Cohen, 7-10) It thus seems that many requesters are willing to take the It thus seems that many requesters are willing to take the

risks involved with risks involved with inter partesinter partes reexamination reexamination Still, the volume of Still, the volume of inter partes inter partes requests is quite lowrequests is quite low

At the time of his article, Cohen stated that 100 requests for At the time of his article, Cohen stated that 100 requests for inter partesinter partes reexamination have been made (Since 11/99) reexamination have been made (Since 11/99)

In contrast, there were 210 requests for In contrast, there were 210 requests for ex parteex parte reexamination made from May to October of 2004! (Cohen, reexamination made from May to October of 2004! (Cohen, 15)15)

How Would You Change How Would You Change Inter Partes?Inter Partes?

Limit Estoppel Limit Estoppel By removing “or could have raised language,” or making it in line with By removing “or could have raised language,” or making it in line with

the FRCP (Ko, Pearson)the FRCP (Ko, Pearson) Insulate facts from estoppel (Kolb)Insulate facts from estoppel (Kolb) Make estoppel only apply to the PTO (Murshak)Make estoppel only apply to the PTO (Murshak) Allow combinations of past prior art that could have been cited (Cohen)Allow combinations of past prior art that could have been cited (Cohen) Get rid of estoppel (§ 315 (c)) entirely (Edsenga)Get rid of estoppel (§ 315 (c)) entirely (Edsenga)

Increase estoppelIncrease estoppel Expressly include facts as well as claims (Frostick)Expressly include facts as well as claims (Frostick) Add estoppel to § 314 (Yates)Add estoppel to § 314 (Yates)

Limit reexamination to 10 years from issue of patent (Cleary)Limit reexamination to 10 years from issue of patent (Cleary)

The Future: Proposed Legislation

PTO Report to Congress on Inter Partes reexamination (http://www.uspto.gov/web/offices/dcom/olia/reports/reexamreport.pdf) Clarify estoppel, but don’t remove it Let third parties comment on office

actions even if the patent owner doesn’t

Increase the 30 day time limit for a third party requester’s comments

Suggested amendments in the 2005 Patent Act 315(c) - remove “or could have

raised” language Make inter partes reexamination

apply to any patent, not just those issued post 1999

THE END!!

Have a Good Break!