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Happy One Year Anniversary Detroit Patent Office!
July 2013, Bloomfield Hills, MI - On July 13 the Detroit satellite office of the United States Patent and Trademark Office celebrated its one year anniversary. According to Teresa Stanek Rea, the acting director of the USPTO, the Detroit office has expanded the agency's capacity and productivity. The Detroit office also offers workshops and seminars to provide local businesses and inventors with tools to develop, license and distribute their technologies. For more information, click here. |
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It Ain't Over 'Til It's Over- Federal Circuit Court of Appeals Strengthens Reexamination Process
On July 2, 2013 the Federal Circuit Court of Appeals issued an opinion in Fresenius USA v. Baxter International, Inc., Case. No. 2012-1334, 1335 (Fed. Cir. July 2, 2013), which enhances the ability of patent infringement defendants to invalidate patents via the ex parte reexamination process.
The ex parte reexamination process allows anyone to ask the Patent Office to reconsider the validity of an issued U.S. patent based on patents and publications (other defenses that are available in litigation such as failure to comply with the written description requirement, lack of enablement, or indefiniteness cannot be considered). If the submitted patents or published applications raise a "substantial new question of patentability" that was not considered when the application for the patent was originally examined, the Patent Office will initiate a reexamination proceeding. Once a reexamination is initiated, the Patent Office can ultimately confirm that the claims are patentable or reject the claims. In addition, if the patent is still in force, the patent holder can amend the claims to distinguish the cited references.
The ex parte reexamination process offers a much more cost-effective alternative to invalidating patents in court. However, it is best suited for situations where strong prior art is discovered which was not considered by the Patent Office during the original examination process. Also, if there are subtle or difficult questions of claim construction that impact the strength of a piece of prior art, reexamination may not be a good option because the reexamination requester cannot respond to the arguments made by the patent holder to the examiner. In that case, the examiner may not appreciate some of the issues involved.
The reason the Fresenius case is important is because it strengthens an accused infringer's ability to seek invalidation both in court and in the Patent Office. If a reexamination is requested when a lawsuit is filed or shortly thereafter, many judges will stay the lawsuit until the Patent Office concludes the reexamination. However, in some cases, an accused infringer may want to try to litigate invalidity first and then seek reexamination later in the case, especially if the court proceedings are not going well. Judges are more reluctant to stay a case after the parties and the court have spent significant resources in conducting the litigation. As a result in some cases, like Fresenius, invalidation proceeds on a dual in court and in the Patent Office.
One question that arises is whether a court decision on invalidity trumps a Patent Office reexamination decision or vice-versa. The answer is that it depends how far along the court proceedings are. The basic rule is that when a court judgment is "final", a subsequent Patent Office reexamination decision cannot undo it. However, when is the court judgment "final"? This is a question that the Fresenius opinion considers in detail.
In Fresenius, the trial court held that certain patent claims were not invalid, and the Federal Circuit issued an opinion in which it agreed and affirmed the trial court ruling. However, the Patent Office subsequently issued a reexamination decision in which it disagreed and held the claims invalid over the prior art. There were certain aspects of the Fresenius case that the trial court had to resolve after the Patent Office's decision was final. However, none of them had to do with the question of whether the patent claims were invalid. Instead, they concerned damages and injunction issues. Fresenius considers the question of whether the court rulings of invalidity were sufficiently "final" to trump the Patent Office's subsequent reexamination decision. The Federal Circuit said "no."
According to the Federal Circuit, a decision finding a patent invalid is not final if there are further proceedings on damages or injunctive relief to be considered. Judge Pauline Newman disagreed. In her dissent, she noted that the majority's opinion may allow accused infringers to use reexamination proceedings as "tactical opportunities for harassment." Certainly, Fresenius makes it easier for an accused infringer to get "two bites at the apple" by seeking to invalidate a patent holder's claims in court and the Patent Office at the same time. In particular, the decision makes it easier for an accused infringer to wait until later in the litigation process before seeking reexamination and still benefit from a favorable decision by the Patent Office. Notably, in the Fresenius case, the accused infringer (Fresenius) chose to litigate its invalidity claims in court (by filing a declaratory judgment action) and only sought reexamination later in the case. It then benefitted from a Patent Office decision on invalidity that conflicted with the rulings of the trial court and appellate court.
While a Patent Office finding of invalidity may trump a court decision of validity, the reverse is not true. If the Patent Office confirms that the claims are patentable, the patent owner cannot use that decision to override a court verdict of invalidity. The reexamination statute requires the Patent Office to cancel claims that are found unpatentable. However, it does not deprive an accused infringer of the right to seek invalidation in court of those claims that are confirmed.
The rule of Fresenius means that even a decision of validity that has been affirmed by the Federal Circuit will not be considered "final" if other and unrelated issues remain open. The decision effectively enhances the existing ability of accused infringers to concurrently litigate invalidity in court and the Patent Office and reap the benefits of a decision by either forum in its favor.
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Attorney Spotlight
For more information about Steve Hansen, click here.
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Interested in learning more about IP Law?
Check out our blog by clicking here. Check out our articles by clicking here.
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About Hansen IP Law PLLC
Hansen IP Law is an intellectual property law firm that provides "Big Law" caliber services using a small firm platform. Although based in suburban Detroit, we represent clients throughout the United States and abroad. We do not operate on a leveraged model. Each of our clients is represented by an experienced intellectual property attorney with over a decade of "Big Law" experience, including as a partner in Los Angeles and Detroit firms. Unlike many firms of our size, we have substantial patent litigation experience in courts throughout the United States, which allows us to strategically strengthen your intellectual property portfolio. For more information, please contact Steve Hansen at 248 504 4849 or [email protected]. You can also visit us on the web at www.hanseniplaw.com.
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