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Colorado State Bar

Colorado State Bar. Inter Partes Patent Reexamination: Challenges under the Current Law Harold C. Wegner Foley & Lardner LLP [ hwegner@foley.com ] Denver, Colorado September 23, 2009. Wegner, Inter Partes Reexamination. Contents (page 1) Waiting for a New Post-Grant Law to Pass?

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Colorado State Bar

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  1. Colorado State Bar Inter Partes Patent Reexamination: Challenges under the Current Law Harold C. Wegner Foley & Lardner LLP [hwegner@foley.com] Denver, Colorado September 23, 2009 hwegner@foley.com

  2. 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 Argument • Concurrent Patent Litigation • Six Systemic Improvements • Delaying Tactics by the Potential Loser hwegner@foley.com

  3. Wegner, Inter Partes Reexamination Contents (page 2) • Presentation of Evidence: The Critical Factor • Cases at the Federal Circuit • Court Review –Factual Determinations • Court Review – Claim Construction • Agreements to limit reexamination • Patent Reform: Lessons from Tokyo hwegner@foley.com

  4. Wegner, Inter Partes Reexamination 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 [msmith@foley.com] hwegner@foley.com

  5. Wegner, Inter Partes Reexamination Should We Wait for a New Post-Grant Law 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. hwegner@foley.com

  6. Wegner, Inter Partes Reexamination 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.) hwegner@foley.com

  7. Wegner, Inter Partes Reexamination Current Version of Leahy S.515: • New law “shall apply to any patent issued on 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 the date of the enactment of this Act….” Id. hwegner@foley.com

  8. Wegner, Inter Partes Reexamination Success of Current Inter Partes Reexamination • Most Independent Claims are Killed in Inter Partes Reexamination • 80+ % Kill Rate for Some Independent Claims • 60+ % Kill Rate for All Independent Claims Statistics are for final decisions, prior to appeal hwegner@foley.com

  9. Wegner, Inter Partes Reexamination Matthew A. Smith, Inter Partes Reexamination, Ed. 1E, p. 48 (Jan. 31, 2009) hwegner@foley.com

  10. Wegner, Inter Partes Reexamination Matthew A. Smith, Inter Partes Reexamination, Ed. 1E, p. 52 (Jan. 31, 2009) hwegner@foley.com

  11. Wegner, Inter Partes Reexamination Prosecution History Estoppel by Argument • Even if claim is confirmed, 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: hwegner@foley.com

  12. Wegner, Inter Partes Reexamination Prosecution 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. hwegner@foley.com

  13. Wegner, Inter Partes Reexamination Reexamination 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) hwegner@foley.com

  14. Wegner, Inter Partes Reexamination “[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)) hwegner@foley.com

  15. Wegner, Inter Partes Reexamination Concurrent 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. hwegner@foley.com

  16. Wegner, Inter Partes Reexamination De Facto Grant of Reexamination Requests • Fiscal Year 040506 07 08 • Total Requests 27 59 70 126 168 • % Granted 100 95 91 99 95 hwegner@foley.com

  17. Wegner, Inter Partes Reexamination Concurrent Litigation ~ 70 % of All Cases Fiscal Year 04 05 06 07 08 • Total Requests 27 59 70 126 168 • % Parallel Litigation 19 49 46 64 68 hwegner@foley.com

  18. Wegner, Inter Partes Reexamination Inter Partes Patent Reexamination Requests • Fiscal Year 04 05 06 07 08 • Total Requests 27 59 70 126 168 • % Granted 100 95 91 99 95 Percentage with Parallel Litigation 19 49 46 64 68 hwegner@foley.com

  19. Wegner, Inter Partes Reexamination • 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: hwegner@foley.com

  20. Wegner, Inter Partes Reexamination • “[T]he patent owner may obtain a stay of any pending litigation which involves …any claims …which are the subject of [a granted] inter partes reexamination [proceeding], unless the court before which such litigation is pending determines that a stay would not serve the interests of justice.” 35 USC § 318 hwegner@foley.com

  21. Wegner, Inter Partes Reexamination • 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). hwegner@foley.com

  22. Wegner, Inter Partes Reexamination Preliminary Injunction, Reason for not 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). hwegner@foley.com

  23. Wegner, Inter Partes Reexamination • “If a preliminary injunction is denied, and a stay is granted, as the inter partes reexamination moves forward it may appear that the invalidity challenge is, 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. hwegner@foley.com

  24. Wegner, Inter Partes Reexamination Three Target Factors to Stay a 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). hwegner@foley.com

  25. Wegner, Inter Partes Reexamination • A 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.” hwegner@foley.com

  26. Wegner, Inter Partes Reexamination Six Systemic Improvements for 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 hwegner@foley.com

  27. Wegner, Inter Partes Reexamination (1) Consolidated procedures: Pre-appeal reexamination is disconnected from post-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”. hwegner@foley.com

  28. Wegner, Inter Partes Reexamination (2) Judge versus Executioner: Role of Reexamination Examiner should be as a judge to determine which party’s arguments should prevail on the one issue presented in the request. • 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. hwegner@foley.com

  29. Wegner, Inter Partes Reexamination (3) The duty of disclosure should not be part of inter partes reexamination. If the challenger has prior art or other grounds for invalidity the challenger should raise the issue with the PTO. hwegner@foley.com

  30. Wegner, Inter Partes Reexamination • Particularly 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. hwegner@foley.com

  31. Wegner, Inter Partes Reexamination (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. hwegner@foley.com

  32. Wegner, Inter Partes Reexamination (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. hwegner@foley.com

  33. Wegner, Inter Partes Reexamination (6) The NIRC should be abolished Notice 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. hwegner@foley.com

  34. Wegner, Inter Partes Reexamination • Parties often attempt gamesmanship after NIRC is issued, sometimes leading to reopening of proceedings: hwegner@foley.com

  35. 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);  hwegner@foley.com

  36. Wegner, Inter Partes Reexamination  the NIRC merely notifies the applicant of the PTO's intent to issue a certificate. A NIRC does not wrest jurisdiction from the PTO 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.) hwegner@foley.com

  37. Wegner, Inter Partes Reexamination Delaying Tactics by Either Side – The Potential Loser • One 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. hwegner@foley.com

  38. Wegner, Inter Partes Reexamination If patentee is favored in reexamination, speed of the proceeding is important: • Resolution before parallel court action? • Enhance opportunities for stay of litigation? hwegner@foley.com

  39. Wegner, Inter Partes Reexamination 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. • Early presentation of evidence. hwegner@foley.com

  40. Wegner, Inter Partes Reexamination 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. hwegner@foley.com

  41. Wegner, Inter Partes Reexamination 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. hwegner@foley.com

  42. Wegner, Inter Partes Reexamination Presentation of Evidence: The Critical Factor • 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. hwegner@foley.com

  43. Wegner, Inter Partes Reexamination Presenting Evidence via Civil Action 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. hwegner@foley.com

  44. Wegner, Inter Partes Reexamination 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. hwegner@foley.com

  45. Wegner, Inter Partes Reexamination Inter Partes Reexamination Cases Decided by the Federal Circuit • Appeals from Board Decision: None. • Pending Appeals (briefed): None. Source: Westlaw CTAF-Briefs search, August 27, 2009 hwegner@foley.com

  46. Wegner, Inter Partes Reexamination FirstInter Partes Reexamination Cases at the Federal Circuit: The Cameron Cooper Case Briefing: Summer/Fall 2009 Argument: 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). hwegner@foley.com

  47. Wegner, Inter Partes Reexamination • There 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) hwegner@foley.com

  48. Wegner, Inter Partes Reexamination 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: hwegner@foley.com

  49. Wegner, Inter Partes Reexamination • If there is “substantial evidence” to support the Board’s fact-based decision, then such a fact-baseddecision at the Federal Circuit must affirm the Board’s determination, for or against patentability. hwegner@foley.com

  50. Wegner, Inter Partes Reexamination 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. hwegner@foley.com

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