Colorado State Bar

Colorado State BarInter Partes Inter Partes

Patent Reexamination:Patent Reexamination:Challenges under the Current LawChallenges under the Current Law

Harold C. WegnerHarold C. WegnerFoley & Lardner LLPFoley & Lardner LLP

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Denver, ColoradoSeptember 23, 2009

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Wegner, Inter Partes Reexamination

Contents (page 1)

Waiting for a New Post-Grant Law to Pass?Success of Current Inter Partes

Reexamination Prosecution History Estoppel by ArgumentConcurrent Patent LitigationSix Systemic Improvements Delaying Tactics by the Potential Loser

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Contents (page 2)

Presentation of Evidence: The Critical Factor

Cases at the Federal CircuitCourt Review –Factual DeterminationsCourt Review – Claim Construction Agreements to limit reexaminationPatent Reform: Lessons from Tokyo

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Matthew A. Smith, Leon Radomsky, Benny Berkowitz, Steve Maebius and others with an active reexamination practice at the Foley law firm have provided invaluable practical insights which

are acknowledged with appreciation. The Matthew A. Smith treatise has been particularly helpful:

MATTHEW A. SMITH, Inter Partes Reexamination, Ed. 1E (Jan. 31, 2009).Mr. Smith can be contacted at [[email protected]]

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Should We Wait for a New Post-Grant Law Should We Wait for a New Post-Grant Law to Pass?to Pass?

Leahy S. 515, The Patent Reform Act of 2009, clearly does have promise for a better procedure than current inter partes reexamination, but….

But, there is no expectation for immediate enactment.

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The Leahy legislation may not apply to any realistic situations for some time:

E.g., the 1999 Inter Partes reexamination became available only for patents with a filing date since its November 29, 1999, date of enactment.

(It then took several years for a patent to be granted, so inter partes reexamination was effectively unavailable for several years.)

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Current Version of Leahy S.515:

New law “shall apply to any patent issued any patent issued on or after [the] effective dateon or after [the] effective date.” Leahy, S.515, Patent Reform Act of 2009, Effective Date (Sec.17(a)).

New law “shall take effect 12 months after 12 months after the date of the enactment the date of the enactment of this Act….” Id.

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Wegner, Inter Partes ReexaminationSuccess of Current Inter Partes Reexamination

Most Independent Claims are Most Independent Claims are Killed in Inter Partes Killed in Inter Partes ReexaminationReexamination

80+ % Kill Rate for Some Independent Claims

60+ % Kill Rate for All Independent Claims

Statistics are for final decisions, prior to appeal

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Matthew A. Smith, Inter Partes Reexamination, Ed. 1E, p. 48 (Jan. 31, 2009)

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Matthew A. Smith, Inter Partes Reexamination, Ed. 1E, p. 52 (Jan. 31, 2009)

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Prosecution History Estoppel by ArgumentProsecution History Estoppel by Argument

Even if claim is confirmedconfirmed, scope of protection may be limited through Prosecution History Estoppel by Argument

For confirmed claims, arguments made to sustain patentability may create prosecution history estoppel:

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Prosecution History Estoppel by ArgumentProsecution History Estoppel by Argument

If the patentee fails to argue criticality of a particular claim limitation, the claim may be lost in an obviousness inquiry.

But, arguing criticality of the limitation creates prosecution history estoppel to create a patent-free zone outside the claim wording.

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Wegner, Inter Partes ReexaminationReexamination Prosecution History EstoppelReexamination Prosecution History Estoppel

“The claim element[ ] … that w[as] found to be infringed by equivalents w[as] added … during reexamination … through amendment[ ] that narrowed the scope of the claims. … The amendment[ ] therefore gave rise to prosecution history estoppel.”

Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd. , 234 F.3d 558, 591(Fed. Cir. 2000)(en banc)(Schall, J.),

subsequent proceedings on other grounds, 533 U.S. 915 (2001)

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“[A]rguments made to distinguish prior art during reexamination proceedings are retroactively applied to limit the scope of a claim limitation as of the issue date of the patent, not the date those arguments were made.”

Intermatic Inc. v. Lamson & Sessions Co., 273 F.3d 1355, 1367 (Fed. Cir. 2001)(citing Cole v. Kimberly-Clark Corp., 102 F.3d 524, 532

(Fed.Cir.1997))

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Concurrent Patent LitigationConcurrent Patent Litigation

More and more, inter partes reexamination is being used for concurrent patent litigation scenarios.

Today, roughly 70 % of Inter Partes Reexaminations have parallel patent litigation.

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De Facto De Facto Grant ofGrant of

Reexamination RequestsReexamination RequestsFiscal Year 040506 07 08Fiscal Year 040506 07 08Total Requests 27Total Requests 27 5959 7070 126126 168168% Granted% Granted 100 100 9595 9191 99 99

9595

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Wegner, Inter Partes ReexaminationConcurrent LitigationConcurrent Litigation

~ 70 % of All Cases~ 70 % of All Cases

Fiscal YearFiscal Year 04 04 0505 0606 0707 08 08

Total RequestsTotal Requests 27 27 5959 7070 126126168168

% Parallel Litigation 19% Parallel Litigation 19 4949 4646 6464 68 68

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Inter Partes Patent Inter Partes Patent Reexamination RequestsReexamination Requests

Fiscal YearFiscal Year 04 04 0505 0606 07 07 08 08Total RequestsTotal Requests 27 27 5959 7070 126126 168168% Granted% Granted 100 100 9595 9191 99 99 95 95

Percentage with Parallel LitigationPercentage with Parallel Litigation

1919 4949 4646 64 64 68 68

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The major use of inter partes reexamination is for patents undergoing concurrent litigation.

By law, the court normally should grant of stay of the patent litigation where there is a pending inter partes reexamination:

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Wegner, Inter Partes Reexamination““[T]he patent owner may obtain a [T]he patent owner may obtain a

stay stay of any pending litigation which involves …any claims …which are the subject of [a granted] inter partes reexamination [proceeding], unlessunless the court before which such litigation is pending determines that a stay would a stay would not serve the interests of justicenot serve the interests of justice.”

35 USC § 318

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Chance of success that court will grant a stay: About 50 %.

Biggest factor: Track record of judge assigned to the case.

Source: MATTHEW A SMITH, Inter Partes Reexamination, Ed. 1E, pp. 232-33 (Jan. 31, 2009).

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Wegner, Inter Partes ReexaminationPreliminary Injunction, Reason for notnot granting a stay

“[B]oth a preliminary injunction and a stay

ordinarily should not be granted at the same time. A grant of a preliminary injunction followed by a stay of the district court proceedings could subject an accused infringer to unfair and undesirable delay in reaching a final resolution.”

Procter & Gamble Co. v. Kraft Global, Inc., 549 F.3d 842, 849 (Fed. Cir. 2008) (footnote omitted).

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Wegner, Inter Partes Reexamination“If a preliminary injunction is denied, and

a stay is granted, as the inter partes reexamination moves forward it may it may appear that the invalidity challenge is, appear that the invalidity challenge is, in fact, insubstantial.in fact, insubstantial. If that occurs, the district court would then be free to lift the stay and grant a preliminary injunction, without waiting for a final conclusion of the PTO proceedings.”

Procter & Gamble, 549 F.3d at 849 n.2.

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Three Three Target Target Factors to Stay a Factors to Stay a Litigation: Litigation:

(1) prejudice or tactical disadvantage to non-moving party;

(2) simplification of issues and trial of the case; and

(3) discovery already completed trial date set.

Target Therapeutics, Inc. v. SciMed Life Sys., Inc.,33 U.S.P.Q.2d 2022, 2023 (N.D. Cal. 1995).

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Wegner, Inter Partes ReexaminationA major reason not to grant a stay is

where the court perceives that the inter partes reexamination will take too long a time for conclusion.

If a patent reexamination will be extremely slow, then the court may very well deny a stay because the exception to the right to a stay is where “a stay would not serve the interests of justice.”

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Six Systemic Improvements for Six Systemic Improvements for

Speedier Reexamination Speedier Reexamination

Inter partes reexamination can be considered a success only if there is a speedy resolution of proceedings so that the court system will defer to reexamination proceedings by granting a litigation stay for prompt reexamination proceedings

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Wegner, Inter Partes Reexamination(1) Consolidated procedures: Pre-appeal (1) Consolidated procedures: Pre-appeal

reexamination is disconnected from post-reexamination is disconnected from post-appeal reexamination.appeal reexamination.

Pre-appeal reexamination supervision is not to the Board but to non-lawyer examining corps supervisory level.

Inability to cope with special situations, e.g., presentation of hundreds of claims.

Pendency should be measured by overall pendency, not by pendency prior to appeal and shunting case “upstairs”.

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Wegner, Inter Partes Reexamination(2) Judge versus Executioner: Role of (2) Judge versus Executioner: Role of

Reexamination Examiner should be as a Reexamination Examiner should be as a judge judge to to determine which party’s arguments should determine which party’s arguments should prevail on prevail on the one issue presented in the the one issue presented in the

requestrequest. Goal should not be a de novo reexamination

concerning patentability over issues not brought by the parties: If there is another issue that could be raised, then this can be raised by someone else in another proceeding.

PTO should not issue multiple rejections hoping that one will stick to block the patentee; goal should be to pick the best reference and make the best rejection or otherwise confirm patentability.

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(3) The duty of disclosure should (3) The duty of disclosure should not not be part of be part of inter partes inter partes reexamination. reexamination.

If the challenger has prior art or other grounds for invalidity the challenger should raise the issue with the PTO.

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Wegner, Inter Partes ReexaminationParticularly post-litigation reexaminations

are burdened by many boxes of documents being filed under the duty of disclosure which were generated during litigation:

If there is something pertinent in these boxes of litigation documents, the challenger should bring them to the attention of the PTO.

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Wegner, Inter Partes Reexamination (4) Tighter PTO Director Control(4) Tighter PTO Director Control

The Director or (Deputy Director) should assume control over inter partes reexamination at all levels working directly through the APJ Board which should have total supervisory control over reexaminations including decisions on petitions.

Initial appeal or petition should be to an APJ with a right of review to the Director or Deputy Director in person.

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(5) Manpower!(5) Manpower!

The PTO must refocus manpower on inter partes reexamination with a larger share of the work handled by Administrative Patent Judges, including supervision at all levels.

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(6) The NIRC should be abolished(6) The NIRC should be abolishedNotice of intent to Issue Reexamination

Certificate

Today, a “NIRC” is issued with final reexamination determination.

Reexamination certificate publication delays the final conclusion until printing and then printed publication of reexamination certificate.

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Parties often attempt gamesmanship after NIRC is issued, sometimes leading to reopening of proceedings:

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Wegner, Inter Partes Reexamination “Until a matter has been completed,

however, the PTO may reconsider an earlier action. See In re Borkowski, 505 F.2d 713, 718 (CCPA 1974). A reexamination is complete upon the statutorily mandated issuance of a reexamination certificate, 35 U.S.C. § 307(a);

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the NIRC merely notifies the applicant of the PTO's intent to issue a certificate. A NIRC A NIRC does not wrest jurisdiction from the PTO does not wrest jurisdiction from the PTO precluding further review of the matter.precluding further review of the matter. Because no prior completed proceeding had reviewed the [prior art] references, the PTO was free to reconsider, and ultimately base a rejection upon them.”

In re Bass, 314 F.3d 575, 577 (Fed. Cir. 2002)(Mayer, C.J.)

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Delaying Tactics by Delaying Tactics by Either Either Side – Side –

The Potential LoserThe Potential LoserOne party generally has a reason for

delay.If reexamination is a 50-50 proposition as

to patentee and challenger then there is no reason other than cost for either side to seek reexamination.

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If patentee is favored in reexamination, speed of the proceeding is important:

Resolution before parallel court action?

Enhance opportunities for stay of litigation?

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Patentee can speed reexamination:Limit number of claims in controversy

-- Agree to have entire proceeding

decided by only certain limited number of representative claims.

Make any amendment early, and then forego future amendments.

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If third party is favored by reexamination, slow proceeding is favored by patentee.

Patentee can create obstacles to fast resolution:

Presentation of numerous claims and claim amendments.

Law permits unlimited number of claims that can be added.

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If third party is favored, slow proceeding is favored by patentee.

Patentee can create obstacles to fast resolution:

Presentation of numerous claims and claim amendments.

Law permits unlimited number of claims that can be added.

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Presentation of Evidence: The Critical Presentation of Evidence: The Critical FactorFactor

It is absolutely essential that evidence be submitted to support the position of either the patentee or the challenger.

Better presentation of evidence will help tilt the scales toward that party.

Winning at the PTO with evidence will help cinch appellate victory on a fact-based decision of the Board.

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Presenting Evidence via Civil Action Presenting Evidence via Civil Action

under 35 USC § 145 under 35 USC § 145

The 1999 law introducing inter partes reexamination barred any use of a trial de novo under 35 USC § 145 for any reexamination.

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Recent § 145 reexamination cases involve pre-1999 reexamination request dates, e.g., Takeda Pharmaceutical Co., Ltd. v. Doll, 561 F.3d 1372 (Fed. Cir. 2009)(Rader, J.), opinion below, 511 F.Supp.2d 81 (D.D.C. 2007) (Hogan, C.J.)

Elimination of § 145 option coupled with a right of the PTO to deny consideration of evidence late in reexamination makes early presentation of evidence imperative.

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Inter Partes Reexamination CasesInter Partes Reexamination Cases

Decided by the Federal CircuitDecided by the Federal Circuit

Appeals from Board Decision: None.Pending Appeals (briefed): None.

Source: Westlaw CTAF-Briefs search, August 27, 2009

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Wegner, Inter Partes ReexaminationFirstFirstInter Partes Reexamination CasesInter Partes Reexamination Cases

at the Federal Circuit:at the Federal Circuit:

The The Cameron Cooper Cameron Cooper CaseCase

Briefing: Summer/Fall 2009Argument: Early 2010 Decision: 2010

Cameron Cooper Corp. v. SAFOCO, Inc., Fed. Cir. 2009-1435, proceedings below, Cameron International Corp. v. Patents of Safoco, Inc.,

2008 Westlaw 5112232 (PTO Bd.Pat.App. & Interf. 2008).

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Wegner, Inter Partes ReexaminationThere has never been even one (1)

Federal Circuit appeal decision reviewing an appeal from an inter partes reexamination.

(Cooper Technologies Co. v. Dudas, 536 F.3d 1330 (Fed.Cir.2008), was an appeal on the procedural question confirming that a patent with a pre-1999 parent is eligible for inter partes reexamination)

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Court Review -- Evidence for Factual Determinations

The party that presents the best and easiest to understand and believe evidence for or against patentability has an enhanced chance of winning at the PTO.

PTO decision keyed to evidence supplied by the parties is unlikely to be overturned on appeal at the Federal Circuit:

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If there is “substantial evidence” to support the Board’s fact-based fact-based decision, then such a fact-basedfact-baseddecision at the Federal Circuit must affirm the Board’s determination, for or against patentability.

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Court Review – Claim Construction Court Review – Claim Construction Claims are reviewed at the Federal Circuit in

inter partes reexamination based upon the broadest reasonable interpretation without consideration of limitations in the prosecution history (unlike litigation review).

An anticipation or obviousness determination by the Board that is based upon a faulty claim construction at the PTO is reviewed de novo without deference under the current law of Cybor.

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Wegner, Inter Partes ReexaminationCourt-sanctioned agreements Court-sanctioned agreements

to limit reexamination:to limit reexamination:Theory is that Parties should jointly petition

PTO to immediately grant reexamination request limited to certain issues based upon court’s approval and encouragement.

Patentee agrees, e.g., to select no more than five representative claims to contest patentability and to waive claim amendments.

Parties agree, e.g., to have PTO appoint APJ or Acting APJ or Outside Master to act as Examiner

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Will PTO agree to court-initiated Will PTO agree to court-initiated

modifications of procedure?modifications of procedure?

Current Administration is most open patent regime in modern history.

Current Administration may issue administrative guidance on improved reexamination procedures.

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Wegner, Inter Partes ReexaminationPatent Reform: Lessons from TokyoPatent Reform: Lessons from Tokyo

Statutory changes remain necessary to improve inter partes reexamination.

Japan provides a model for how change can be accomplished:

Prior to 2000, Japan had the same multi-year delay in post-grant review proceedings which led to the historic Supreme Court decision in Texas Instruments v. Fujitsu.

The JPO has remarkably improved its post grant review system to the point that the average post-grant review proceeding is completed in less than one year (exclusive of any IP High Court appeal).

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Statutory Tweaks suggested by the Japanese Statutory Tweaks suggested by the Japanese system:system:

First, Japan utilizes its highly experienced Appeal Examiners for its post-grant review under a simplified procedure that starts and ends with a review of pleadings by Appeal Examiners.

(The United States needs to abolish a separate reexamination “order” phase and eliminate time-consuming examination before a Patent Examiner and go straight to consideration by an APJ.)

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Second, whereas Japanese Appeal Examiners constitute one-third of the examining corps, in the United States APJ’s account for only one (1) percent of the professional corps.

Deferred examination must be introduced to permit a manpower shift to APJ’s.

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Thank you for your Thank you for your attention!attention!

Further information: [[email protected]]

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