STRATEGIC USES OF REEXAMINATION IN LITIGATION Donna Meuth Contested Matters Committee September 23, 2009 Why reexamination? Reexamination should be part of your patent strategy when: You learn of an important patent You receive a threatening letter Litigation is filed You are in a larger business dispute You own the patent WilmerHale 1 What is reexamination? A reexamination is a procedure in which the Patent Office examines the patentability of an issued patent WilmerHale 2 Reexamination – Two Kinds Ex parte – Patent owner or third party can file a request for reexamination – Third party can remain anonymous – Generally, third party has no further participation after the request – Patent owner can interview Examiner – Can be appealed by patent owner to the BPAI – Less expensive WilmerHale 3 Reexamination – Two Kinds (cont.) Inter partes – Only applies to patents from patent applications filed on or after November 29 , 1999 – Filed only by third party and must be identified – Third party participates in reexamination process – No interviews with the Examiner – Can be appealed to the BPAI or Federal Circuit by patent owner or third party • Third party can participate in appeal filed by owner WilmerHale 4 Reexamination – Estoppel Inter partes is not widely used because of its broad estoppel – Requestor estopped from raising issues that were raised or “could have been raised” in subsequent proceedings, including litigation – Requestor not estopped from asserting invalidity “based upon newly discovered prior art unavailable to the third- party requestor . at the time of the . reexamination proceedings” WilmerHale 5 Reexamination – Two stage process Patent office determines whether there is a “substantial new question of patentability” (SNQP) Examination of claims – Challenges must be based upon patents and printed publications – No other bases accepted: public use, on sale, earlier invention, etc. WilmerHale 6 Reexamination – Timing Can be filed any time during the patent term PTO determines if SNQP exists, usually within 2-3 months If reexamination process starts after or extends beyond pppatent expiration, claims cannot be amended Ex parte certificate issues in about 25 months Inter partes certificate issues in about 34 months WilmerHale 7 Reexamination – Examination Generally, similar to regular prosecution, except: – 101 and 112 rejections only to new claims and amendments – No automatic extensions – Conducted with “special dispatch” Must appeal unfavorable decisions – no continuations WilmerHale 8 Results of Reexamination Certificate that each claim in reexamination is: – Confirmed (without amendment) – Allowe d (w it h amen dment ) – Cancelled Intervening rights for defendant – For claims that are added or amended in reexamination, they apply only after certificate is issued WilmerHale 9 STATISTICS WilmerHale 10 Inter Partes Data 671 total requests since start of inter partes reexamination on 11/29/99 The trend is up: – 2002: 4 – 2005: 59 – 2008: 168 – 2009: 195 ((gthrough June) 446 (66%) known to be in litigation source: www.uspto.gov, “Inter partes Reexamination Filing Data” 6/30/09 WilmerHale 11 Inter Partes Data (cont.) Re-exam granted: 95% Length of pendency: average: 36.1 months median: 33.0 months 95% of re-exams = claims cancelled or changed 5%: all claims confirmed 60%: all claims cancelled or disclaimed 35%: claims change – 77 (of the 671) have an issued re-exam certificate WilmerHale 12 Ex Parte Data 10066 total requests since 1981 The trend is up: – 1988: 268 – 1998: 350 – 2008: 680 – 2009: 481 (through June) 3079 (31%) known to be in litigation source: www.uspto.gov, “Ex parte Reexamination Filing Data” 6/30/09 WilmerHale 13 Ex Parte Data (cont.) All Ex Parte Re-exams Re-exam granted: 92% Length of pendency: – average: 25.1 months – mean: 19. 5 months 75% of re-exams = claims cancelled or changed – 25%: all claims confirmed – 11%: all claims cancelled or disclaimed – 64%: claims change WilmerHale 14 REEXAMINATION AND LITIGATION BPLA Contested Matters Committee Susan G. L. Glovsky September 23, 2009 Types of Reexamination • RititdbReexamination requested by patentee – Before litigation is pending – During litigation • Reexamination by third party – Ex parte • Identifying real party in interest • Multiple requests – Inter partes Requests by Patentee • Can pa ten tee s tay it s own liti ga tion ? • Reasons for patentee to request reexamination? • Reasons not to request reexamination? • Handling of patentee request for maximum benefit in ensuing litigation? Third Party Requests • TttTo reexam or not to reexam • Negatives – Likelihood patent will emerge from reexamination with claims intact, and perhaps not even amended – Gives the Patent Office seal of approvalthttl on the patent – Provides the patentee the opportunity to i mprove its pa tent positi on Reexam Positives • Cou ldbld be a ttltotal w in w ith no pa ten tlftt left • Forces patentee to fight on multiple fronts • With a stay – Delays and could eliminate enforcement – Delay could simply result in change in circumstances advantageous to accused infringer – Permits accused infringer without resources for a court fight a forum for invalidity defense Ex parte or Inter partes • Once ex parte itdiis requested, in general the cost is over • Inter partes is more costly, but requestor continues to participate, which can result in greater likelihood of success • BUT estoppel applies in inter partes but not ex parte reexamination What About Staying Litigation? • Shou ld a mo tion for a s tay be gran te d? – Pro: The Patent Office is better able to determine issues involving patentability – Con: If (when) the patent emerges from reexamination, the Court will address some of the same issues that were considered in the reexamination, along with infringement and damages issues with evidence that has gotten old and stale Case Experiences • DlDelay succee ds in ac hiihieving a settlement – Circumstances change – Companies or divisions get acquired • Cases that were not stayed RIM • Dismissal of case without prejudice to refiling • Denial because too late in Court action Case Experiences • EiExperiences w ithtdith stayed cases proceeding after reexamination is over? Susan Glovsky [email protected] 978-341-0036 September 23, 2009 Finnegan, Henderson, Farabow, Garrett & Dunner, LLP Litigation and Reexamination Mic hae l R. Mc Gur k BPLA Contested Matters Committee Sepp,tember 23, 2009 Disclaimer • These materials are public information and have been prepared solely for educational purposes to contribute to the understanding of American intellectual property law. These materials reflect only the personal views of the author and are not individualized legal advice. It is understood that each case is fact-specific, and that the appropriate solution in any case will vary. Therefore, these materials may or may not be relevant to any particular situation. Thus, the author and FINNEGAN cannot be bound either philosophically or as representatives of their various present and future clients to the comments expressed in these materials. The presentation of these materials does not establish any form of attorney-client relationship with the author or FINNEGAN. While every attempt was made to insure that these materials are accurate, errors or omissions may be contained therein, for which any liability is disclaimed. 22 Validity Upheld But “Dubious” Wait for USPTO Reexam to Invalidate? • Fresenius USA, Inc. v. Baxter International, Inc., --F.3d– (Fed. Cir. Sept. 10, 2009) – Fresenius filed DJ of noninfringement and invalidity – Jury: claims invalid as obvious. – DC: JMOL that jury verdict was not supported by substantial evidence -> claims valid. – FC: Reversed the district court’s grant of JMOL. Remaining claims in pending reexam. 33 Validity Upheld But “Dubious” Wait for USPTO Reexam to Invalidate? • Fresenius (con’t) – DYK, Circuit Judge, concurring • Majority opinion should not “foreclose the district court in its discretion from staying further proceedings pending the outcome of the reexamination.” • “While Fresenius did not establish the invalidity of claims 26–31 … in the district court ppgroceeding, those claims on their face are of dubious validity in light of our holding that claims 1–3 and 13–16 … and claim 11 are invalid. It is entirely possible that the U.S. Patent and Trademark Office will finally conclude that claims 26–31 of the ’434 patent are also invalid.” 44 Validity Upheld But “Dubious” Wait for USPTO Reexam to Invalidate? • Fresenius (con’t) – Judge Newman, dissenting • A stay would be: “[inappropriate] at this stage in this protracted litigation, after full trial and decision in the district court, after full appeal and ruling of the appellate court and with only a modified remedy remaining on remand. A stay of finality, after the issues of validity and infringement have been litigated and decided by the district court and appealed to the Federal Circuit, is a distortion of the role of reexamination.” • “I remain a strong supporter of the principle of reexamination. It can be a useful and powerful tool for the benefit of both patentees and those interested in restricting or eliminating adversely held patents. However, if routinely available to delay the judicial resolution of disputes, the procedure is subject to inequity, if not manipulation and abuse, through the delays that are inherent in PTO activity.” 55 Validity Upheld But “Dubious” Wait for USPTO Reexam to Invalidate? • Fresenius (con’t) – Judge Newman, dissenting