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ROLE OF PATENT REEXAMINATIONS IN PATENT LITIGATION Defending a Patent litigation lawsuit can be very costly, both in time and money. For example, a patent lawsuit can require several years of complex litigation to complete pretrial discovery and trial. Then, the trial may be followed by an appeal to the Federal Circuit Court of Appeals. Thus, Patent Reexaminations can provide a cost-effective alternative to patent litigation and should be considered at the outset and part of the patent litigation strategy. Although a myriad of defenses can be raised by an accused infringer in a patent litigation case, the main defenses consist of (1) Proving that the Patent at Issue is invalid based upon prior art and thus not enforceable; and/or (2) Proving that the accused product is not infringing the claims of the Patent at Issue. As will be explained below, patent validity may be resolved in the reexamination process and, also, the scope of the patent claims may be altered. Ex Parte Reexamination In an Ex Parte reexamination, either a challenger or patent holder may seek reexamination of a patent based on patents or printed publications.[1] The requester files the request for reexamination and within three months the PTO determines whether a substantial new question of patentability exists.[2] If so, the PTO orders reexamination of the patent.[3] A determination that there is no substantial new question is final and non-appealable.[4] If the PTO orders reexamination, the patent holder is given the opportunity to file a statement concerning the new question of patentability, including amendments or new claims they want to propose[5] (provided, however, that the claims may not be broadened).[6] If the patent holder files such a statement, the statement must be served on the person requesting reexamination, and the requester is given two months to file a reply to the patent owner's statement.[7] From that point on, the claims are examined without participation by the requester. Following the Ex Parte reexamination, the PTO issues a certificate canceling any claim determined to be unpatentable, confirming any claim determined to be patentable and incorporating in the patent any new claim or amended claim determined to be patentable.[8] Inter Partes Reexamination Inter Partes reexaminations are similar to Ex Parte proceedings in some ways. Both are initiated by a request for reexamination.[9] Also, the only ground for seeking reexamination under either process is prior art consisting of patents or printed publications.[10] Furthermore, at the outset, the PTO determines whether the request raises a substantial new question of patentability.[11] If the PTO determines that there is a substantial new question of patentability, an Inter Partes reexamination is ordered.[12] Thereafter, just as in an Ex Parte proceeding, the third-party requester will be provided with a copy of Office Actions issued by the PTO.[13] Also, just as in an Ex Parte proceeding, the third-party requester will be provided a copy of the patent owner's responses to Office Actions. However, unlike an Ex Parte proceeding, the third-party requester may reply to the Office Actions and to the patent owner's responses.[14] After the Examiner has reached a final decision in an Inter Partes proceeding, either the patent owner or the requester may appeal an adverse finding to the PTO Board of Patent Appeals and Interferences (Board). After the Board reaches its decision, either party may appeal to the U.S. Court of Appeals for the Federal Circuit from an adverse determination (Court).[15] On the other hand, in an Ex Parte case, the requester does not have comparable options of appeal either to the Board or to the Court. A critical difference between Inter Partes and Ex Parte proceedings concerns estoppel. Unlike an Ex Parte requester, the Inter Partes requester will be estopped in subsequent litigation in a district court or a subsequent Inter Partes proceeding to assert the invalidity of any claim finally determined to be valid on any ground which is raised or could have been raised in the Inter Partes reexamination.[16] Reexaminations- Advantages and Disadvantages The cost of a reexamination proceeding to a third-party requester may be a small fraction of the cost of litigation. A reexamination may also provide for a quicker determination of the effects of the prior art. In addition, a third-party may request reexamination of a patent without engaging in any allegedly or potentially infringing commercial activity. This allows a patent owner to test the validity of a patent's claims before expending substantial resources to develop a product or process that might later be found to infringe. In addition, unlike litigation, patents are not presumed valid in inter partes reexamination. Therefore, a third party does not have to provide “clear and convincing” proof to invalidate a patent. However, reexaminations have significant limitations:
Most importantly, a reexamination that does not invalidate or significantly narrow the claims of a patent can leave the patent stronger than before. Thus, it should be used only in limited circumstances. Inter-Partes vs. Ex-Partes In both Ex Parte and Inter Partes proceedings, the patent challenger has the opportunity to submit prior art for consideration by the Examiner. The patent challenger, of course, has the ability to do a thorough search of the prior art to find art that may be used to invalidate the patent or limit the scope of the claims so the challenger's product does not infringe. Whether to pursue patent reexamination, either Inter Partes or Ex Parte, involves the balancing of significant considerations. The major advantage to a patent challenger of the Inter Partes procedure over the Ex Parte procedure is that in the Inter Partes procedure the challenger has the right to participate throughout the process A– for example, by supplying prior art and by filing rebuttals to arguments submitted by the patentee. Also, the challenger can submit arguments supporting the Examiner when the Examiner takes a position unfavorable to the patentee, and the challenger can submit declarations by technical experts concerning the patent and the prior art. The costs of filing of a patent reexamination should also be considered. Currently, the USPTO fee to file an ex-parte reexamination is $2520.00 as opposed to $8800.00 for an inter-partes reexamination, exclusive of legal fees. The challenger however, must consider certain disadvantages to the reexamination process. One important consideration is that the process gives the patentee the opportunity to amend its claims and add new claims. While the patentee may not broaden the scope of its claims, the patentee may amend the claims to (1) make them patentable in view of the prior art, including the new prior art cited by the challenger, and (2) make them more clearly cover the challenger's allegedly infringing product. Another major disadvantage to the challenger, in the Inter Partes process, is that the challenger is estopped from challenging the patent in court, except in very limited circumstances. Thus, the Inter Partes challenger must be prepared to do its best job before the PTO because it is unlikely to get another opportunity if it fails to achieve the results it desires there. Reexaminations Effect on Staying Patent Litigation Whether the initiation of a patent reexamination stays a currently active patent litigation case varies from jurisdiction to jurisdiction and is at the discretion of the court. However, it is well documented that on average, courts tend to stay the litigation in inter-partes reexaminations more often than ex-parte reexaminations due mainly to the potential estoppel issues that are raised in an inter-partes reexamination. Conclusion In summary, though often times aggressively defending a patent infringement claim in federal court is the best approach, the advantages and disadvantages of patent reexaminations should be at least considered at the outset of the case as a possible alternative cost-effective approach. John D. Tran is a registered Patent Attorney before the USPTO and is a partner at the firm of BKKT. Mr. Tran specializes in all aspects of Intellectual Property, including litigation, and patent, trademark & copyright registration matters. He devotes a significant portion of his practice assisting businesses and companies develop, maintain and protect their intellectual property portfolio. He can be reached via his email at jtran@bkktlaw.com. For more information www.bkktlaw.com Endnotes |
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