1. Reexamination: A Powerful Tool for Accused Infringers Or Just Too Risky? Peter G. Hawkins November 22, 2005

2. Overview What is Reexamination? What is Reexamination? Types of Reexamination Types of Reexamination What Can/Can’t be Used in Reexamination? What Can/Can’t be Used in Reexamination? Advantages of Reexamination Advantages of Reexamination Pitfalls of Reexamination Pitfalls of Reexamination Proposed Legislation Proposed Legislation

3. 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?

4. The correct answer is of course D. -- It Depends! The patent can be subject to several post-issuance proceedings, including reissue, interferences, and REEXAMINATION

5. Reexamination 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)

6. 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

7. Where Ex Parte and Inter Partes Differ  35 U.S.C. § 305. Conduct of (Ex Parte) Reexamination Proceedings  …In any reexamination proceeding under this chapter,  the patent owner (but not the third-party requester)  will be permitted to propose any amendment to his patent…  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 patent.  COMPARE WITH  35 U.S.C. § 314. Conduct of Inter Partes Reexamination Proceedings  Each time that the patent owner files a response  to an action on the merits from the Patent and Trademark Office,  the third-party requester  shall have one opportunity to file written comments  addressing issues raised by the action of the Office or the patent owner's response...

8. What are Grounds for Reexamination? 35 U.S.C. § 301 (and § 311) ► Any person  at any time ► may cite to the Office  in writing ► prior art  consisting of patents or printed publications  which that person believes to have a bearing on the patentability of any claim of a particular patent …

9. Grounds for Reexamination Contd. ► 35 U.S.C. §§ 303, 312  the Director will determine ► whether a substantial new question of patentability affecting any claim of the patent concerned is raised by the request …  The existence of a substantial new question of patentability is not precluded by the fact ► that a patent or printed publication was previously cited by or to the Office or considered by the Office The italicized portion of the statute was added in 2002 to overrule In re Portola Packaging, 110 F. 3d 786 (Fed Cir. 1997).  held that previously considered references could not be used, even if they were applied improperly!

10. What are not Grounds for Reexamination? Evidence of Prior Sale (unless published) Evidence of Prior Sale (unless published) Evidence of Prior Use (unless published) Evidence of Prior Use (unless published) Problems with the enablement Problems with the enablement Enlarging the scope of a claim (35 U.S.C. §§ 305, 314) Enlarging the scope of a claim (35 U.S.C. §§ 305, 314)

11. Advantages of Reexamination (For The Accused Infringer) Most obvious – Can narrow a patent’s claims so that you are no longer infringing Most obvious – Can narrow a patent’s claims so that you are no longer infringing More sneaky – Tie up litigation More sneaky – Tie up litigation Can take proceedings past the life of the patent Can take proceedings past the life of the patent Can avoid injunctions Can avoid injunctions But if patent is found valid you can still be liable for damages But if patent is found valid you can still be liable for damages

12. 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?

13. Patlex Contd. Patlex attacks reexamination on  5 th amendment,  7 th amendment,  and Article III grounds,  as well as arguing that it bypasses the presumption of validity given to issued patents

14. 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

15. 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

16. 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!

17. 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

18. Recap So… So… The court can stay ex parte proceedings The court can stay ex parte proceedings The PTO can not The PTO can not What about inter partes reexamination? What about inter partes reexamination?

19. Example 3: Middleton v. 3M Middleton sues 3M 3M initiates inter partes reexamination But the patent was issued prior to 1999! Inter partes reexam can not apply Inter partes reexam can not apply The court acknowledges this but says that the distinction is irrelevant The court acknowledges this but says that the distinction is irrelevant

20. 3M Contd. 3M then requests that the court stay the litigation But, 35 U.S.C. § 318 says that only a patent owner may request a stay of litigation Remember, the court has stated that the difference between inter partes and ex parte examination is irrelevant Remember, the court has stated that the difference between inter partes and ex parte examination is irrelevant Court: Regardless of statute, the court always has the authority to stay a proceeding, even if the 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???

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

22. Reasons Mayer affirms “courts have the power to manage their dockets” (Kolb, Pearson, Cleary) “courts have the power to manage their dockets” (Kolb, Pearson, Cleary) Mayer dissents Textualist (Frostick, Ko, Yates) Textualist (Frostick, Ko, Yates) Newman 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 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 affirms Ends justify the means (Yates) Ends justify the means (Yates) As stated in Gould, stays are vital to the reexamination process (Ko) As stated in Gould, stays are vital to the reexamination process (Ko)

23. Reasons Contd. Michel dissents Strict follower of statutes (Pearson) Strict follower of statutes (Pearson) Bryson affirms Letting PTO get it first helps in determining validity (Cohen) Letting PTO get it first helps in determining validity (Cohen) Lourie dissents Limitations of the statute must be respected (Cohen) Limitations of the statute must be respected (Cohen) Prost dissents Textualist (Edsenga) Textualist (Edsenga) Rich (from the grave) dissents Textualist (Murshak) Textualist (Murshak)

24. The Disadvantages of Reexamination So – Reexamination can correct/narrow a patent and can be used to stay litigation – what’s the downside? So – Reexamination can correct/narrow a patent and can be used to stay litigation – what’s the downside? Ex Parte – Third parties can’t participate Ex Parte – Third parties can’t participate The PTO is overworked simply prosecuting patents The PTO is overworked simply prosecuting patents Unless someone is actively pursuing reexamination, their motivation to change a patent they already granted is minimal Unless someone is actively pursuing reexamination, their motivation to change a patent they already granted is minimal

25. The Disadvantages of Reexamination Contd. Inter Partes Reexamination Inter Partes Reexamination Expensive Expensive Costs $8,800 as opposed to $2,520 for ex parte Costs $8,800 as opposed to $2,520 for ex parte Estoppel Estoppel 35 U.S.C. § 315: Once a claim has been determined valid by reexamination, it can not be contested in any civil action brought by the third-party requester 35 U.S.C. § 315: Once a claim has been determined valid by reexamination, it can not be contested in any civil action brought by the third-party requester applies to issues raised or that could have been raised applies to issues raised or that could have been raised 35 U.S.C. § 317: Once a claim has been determined valid by inter partes reexamination, it can not be subject to reexamination again based on issues that were raised or could have been raised in the initial proceeding 35 U.S.C. § 317: Once a claim has been determined valid by inter partes reexamination, it can not be subject to reexamination again based on issues that were raised or could have been raised in the initial proceeding Thus inter partes reexamination is a “one-shot” deal Thus inter partes reexamination is a “one-shot” deal

26. Disadvantages Contd. It’s no surprise that few inter partes requests have been made It’s no surprise that few inter partes requests have been made One commentator went so far as to say: “It would be legal malpractice to recommend a client initiate inter partes reexamination ” Sherry M. Knowles, et al., Inter Partes Reexamination in the United States, 86 J. Pat. & Trademark Off. Soc’y 611, 614 (2004) One commentator went so far as to say: “It would be legal malpractice to recommend a client initiate inter partes reexamination ” Sherry M. Knowles, et al., Inter Partes Reexamination in the United States, 86 J. Pat. & Trademark Off. Soc’y 611, 614 (2004) That said it appears the amount of inter partes reexaminations are increasing That said it appears the amount of inter partes reexaminations are increasing

27. Inter Partes Reexamination Requests: 7/01-7/05 Requests 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)).http://www.stoel.com/resources/articles/IP/InterPartes.pdf

28. Inter Partes contd. Why the sudden surge in popularity? Why the sudden surge in popularity? Cohen offers several reasons Cohen offers several reasons The workings of inter partes reexamination have recently been made public via the internet The workings of inter partes reexamination have recently been made public via the internet Compared to litigation, inter partes is significantly cheaper Compared to litigation, inter partes is significantly cheaper The PTO has stuck to its word and has been very prompt in responding to inter partes requests The PTO has stuck to its word and has been very prompt in responding to inter partes requests So far, only 2% of inter partes requests have been denied (Cohen, 7-10) So far, only 2% of inter partes requests have been denied (Cohen, 7-10) It thus seems that many requesters are willing to take the risks involved with inter partes reexamination It thus seems that many requesters are willing to take the risks involved with inter partes reexamination Still, the volume of inter partes requests is quite low Still, the volume of inter partes requests is quite low At the time of his article, Cohen stated that 100 requests for inter partes reexamination have been made (Since 11/99) At the time of his article, Cohen stated that 100 requests for inter partes reexamination have been made (Since 11/99) In contrast, there were 210 requests for ex parte reexamination made from May to October of 2004! (Cohen, 15) In contrast, there were 210 requests for ex parte reexamination made from May to October of 2004! (Cohen, 15)

29. How Would You Change Inter Partes? Limit Estoppel Limit Estoppel By removing “or could have raised language,” or making it in line with the FRCP (Ko, Pearson) By removing “or could have raised language,” or making it in line with 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 estoppel Increase 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)

30. The Future: Proposed Legislation PTO Report to Congress on Inter Partes reexamination ( http://www.uspto.gov/web/offices/dco m/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

31. THE END!! Have a Good Break!