In re Swanson: CAFC Allows Reexamination Based on Reference Previously Considered by PTO and Courts

In re Swanson (Fed. Cir. 2008)

Back in 1984, the patent examiner rejected Swanson's claim based on U.S. Patent No. 4,094,647 ("Deutsch"). The claims were then amended and the patent allowed. Later, in an infringement action involving the patent, the Federal Circuit affirmed a judgment that "Deutsch did not anticipate the asserted claims." Abbott v. Syntron, 334 F.3d 1343 (Fed. Cir. 2003). Surmodics is the patent owner, and the patent is licensed to Abbott.

After losing at the CAFC, Syntron filed for ex parte reexamination of the patent – asserting again that the claims were anticipated by Deutsch. As per usual, the PTO agreed to reexamine the patent – based on a "substantial new question of patentability." 35 USC §303. On appeal, Swanson argues that the Deutsch reference was considered in both the initial examination and the litigation – and thus cannot serve as the "new" basis for reexamination.

Third-party filed reexaminations provide a check on PTO power, but the SNQ requirement is designed to protect patentees from harassment.

This 'substantial new question' requirement would protect patentees from having to respond to, or participate in unjustified reexaminations. Further, it would act to bar reconsideration of any argument already decided by the Office, whether during the original examination or an earlier reexamination. House Report 96-1307, 96th Cong., 2d Sess. (1980).

In its 1997 Portola Packaging case, the CAFC gave teeth to the SNQ requirement – finding that a new question could not be presented by "prior art previously considered by the PTO in relation to the same or broader claims." Reacting to that decision, in 2002 Congress amended Section 303 and to ensure that a new question may be raised by prior art that was previously considered by the examiner:

35 USC §303 "The existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office or considered by the Office."

Pointedly, the House Report accompanying the 2002 legislation found that "the Federal Circuit incorrectly interpreted Congress' original intent." According to the House Report, "the appropriate test to determine whether a 'substantial new question of patentability' exists should not merely look at the number of references or whether they were previously considered or cited but their combination in the appropriate context of a new light as it bears on the question of the validity of the patent."

SNQ = Reference Never Considered by the PTO for the Particular Purpose: Based on the statutory change, the appellate panel found that a substantial new question is simply one that has never been considered by the PTO. Here, the record shows that the original examiner relied upon Deutsch only as a secondary reference in an obviousness rejection of a broader claim.

"In light of the extremely limited purpose for which the examiner considered Deutsch in the initial examination, the Board is correct that the issue of whether Deutsch anticipates the method disclosed in claims 22, 23, and 25 was a substantial new question of patentability, never before addressed by the PTO"

SNQ Relation to Court Proceedings: In court, the parties had battled out the exact anticipation argument presented in the reexamination. On appeal, the CAFC panel found that "the determination of a substantial new question is unaffected by these court decisions." According to the court this makes sense because "the two forums [Courts and the PTO] take different approaches in determining validity and on the same evidence could quite correctly come to different conclusions" based on the burden of proof. Quoting Ethicon (Fed. Cir. 1988).

Affirmed

Notes:

• Judges Gajarsa (Author), Lourie, & Bryson.
• This opinion gives further strength to ex parte reexamination requests.
• The CAFC has consistently required that a patent's presumption of validity be negated by "clear and convincing evidence." Here, the court made a minor slip by calling the standard 'statutory.'

"In civil litigation, a challenger who attacks the validity of patent claims must overcome the presumption of validity with clear and convincing evidence that the patent is invalid. 35 U.S.C. § 282. If this statutory burden is not met, "[c]ourts do not find patents 'valid,' only that the patent challenger did not carry the 'burden of establishing invalidity in the particular case before the court.'" Ethicon, 849 F.2d at n.3 (internal citations omitted) (emphasis in original)."

Thanks to Paul Morgan for noting this issue.

Comments

[AllSeeingEye]

Dennis,

Not sure what the "minor slip" is in calling the burden "statutory." The assignment of the burden to the party asserting invalidity is clearly statutory according to section 282. As for the "clear and convincing" standard for meeting the burden in a patent related civil litigation, while there is much conjecture about the origin of the c&c standard and mention of it in the case law, since seeking a ruling of invalidity from a federal court is essentially seeking judicial review of an agency ruling, the APA could form the "statutory" basis for the c&c standard IMO.

[Malcom Mooney]

those claims are doodoo

[Anon Anon]

"In light of the extremely limited purpose for which the examiner considered Deutsch in the initial examination, the Board is correct that the issue of whether Deutsch anticipates the method disclosed in claims 22, 23, and 25 was a substantial new question of patentability, never before addressed by the PTO"

So, if the examiner looked at references A, B and C during prosecution, and explicitly said that refs A, B, and C disclosed all the claim elements, but did not have a TSM to combine, and allowed the claim....

....is KSR good enough to get you a SNQ?

Serious question.

[Frodo Baggins]

Mooney or not Mooney?

Now that's a serious question.

[MaxDrei]

Frodo, I was supposing that what "Malcom" just squeezed out, for our collective delectation, isn't the least bit funny and therefore manifestly doesn't issue from Malcolm.

[anon]

No. The USPTO and the Courts do not want to re-open every TSM ruling of the last 20 years. So it is not enough to say KSR to get a SNQ. But if you say that a part of a reference was not considered for a particular claim or element, that is enough. And once you re-open, KSR applies.

Anon Anon wrote: So, if the examiner looked at references A, B and C during prosecution, and explicitly said that refs A, B, and C disclosed all the claim elements, but did not have a TSM to combine, and allowed the claim....

....is KSR good enough to get you a SNQ?

[Patently Deterred]

Nice. The Federal Circuit continues to do what they can to remove an applicant's incentive to search for and provide the best prior art to the PTO.

[MaxDrei]

Thanks Deterred. I had always wondered why US clients so begrudge search costs in Europe. You lead me to a possible reason. It's because the client wants a written record of having performed a diligent search, but wants also a result of NOT finding the sharpest art. Performing that sort of Nelsonian search is relatively cheap, which is what searches commissioned in the USA always are. Or so I am constantly told by my clients. Comments please.

[Frodo Baggins]

Max,

Just squeezed out....

Nice call!

[Malcolm Mooney]

I suspect the hobbit is the namestealer upthread.

In any event, those claims are doo-doo and kudos to Syntron and their attorneys for refusing to give up. As Dennis points out, this case reinforces what many of us already knew: if you know what you are doing, reexamination is an awesome way to tank a patent that should never have issued in the first place. The next step, of course, is to remove the draconian estoppel effect of unfavorable reexamination findings on would-be infringers. In other words, the BEST patent system is one in which non-patentees get at least two bites at the invalidity apple, i.e., at the PTO and in court.

And what can be said about Portola Packaging, a classic patent bubble decision from the CAFC if there ever was one, now washed out to sea with the receding tide. Interestingly, Judge Lourie was on the panel for that case and this one. The times they are a changin'!

[DDG]

The origin of the clear and convincing standard is not all that mysterious. You can see a good summary of it at pages 5-16 of the AIPLA's response to the FTC recommendations from a few years ago. http://www.aipla.org/Template.cfm?template=/ContentManagement/ContentDisplay.cfm&ContentID=4423

The bottom line is that the clear and convincing standard probably has been the law under Supreme Court precedent since at least the 1870s (and probably dates to an 1844 decision of Justice Story riding Circuit). (Note that the preponderance/c&c/reasonable doubt language is really a 20th C creation, so the verbiage is a bit different in the 19th C.)

Some of the caselaw actually supports using the criminal reasonable doubt standard!

Some cases:

Eibel Process Co. v. Minnesota & Ontario Paper Co., 261 U.S. 45, 60 (1923)
(“[E]vidence to prove prior discovery must be clear and satisfactory.”); The Barbed Wire
Patent Case, 143 U.S. 275, 284 (1892) (“[T]he proof shall be clear, satisfactory and beyond a
reasonable doubt.”); Cantrell v. Wallick, 117 U.S. 689, 695-96 (1886); The Corn-Planter
Patent, 90 U.S. 181, 227 (1874); Coffin v. Ogden, 85 U.S. 120, 124 (1873) (“The burden of
proof rests upon [the defendant] . . . and every reasonable doubt should be resolved against
him.”).

[AllSeeingEye]

"As Dennis points out, this case reinforces what many of us already knew: if you know what you are doing, reexamination is an awesome way to tank a patent that should never have issued in the first place."

Unfortunately, you have confirmed what many of us know - you are NOT someone who knows what they are doing. Re-examination is just another tool in the toolbox. It can also jump right up off the table and bite you in the head.

I've said it before and I'll say it again, Mooney is like the SAS wannabe from Ronin. Hey Mooney, what color is the boathouse at Hereford, WHAT COLOR IS THE BOATHOUSE AT HEREFORD?

[Malcolm Mooney]

"Re-examination is just another tool in the toolbox."

Was. Not anymore. But go ahead and pretend otherwise. I don't care. Your clients might care, but I don't.

[GP]

MM=DC

Regarding this decision, doesn't it sum up PTO examination quality very nicely?

Examiner has a reference in his/her hand that he/she only uses for a 103a, and the Court, many many dollars later, concludes that the document could reasonably be the basis for a 102b rejection.

Unbelievable.

I guess they're not yet handing out counts for using a reference in the strongest statutory category possible.

Anybody else routinely get OTDP rejections, 102e rejections, or 102(a) rejections that could be 102b if the Examiner simply used the publication version?

[Malcolm Mooney]

"Anybody else routinely get OTDP rejections, 102e rejections, or 102(a) rejections that could be 102b if the Examiner simply used the publication version?"

Now you're depressing me.

[DeNiro]

Oh, I think you care Mooney. Or you wouldn't be constantly trying to ram your twisted personal and uninformed opinions down everyone's throat about the patent system (at least your stilted understanding of it) how obvious everything is, and how computer related inventions are crapola. Go tell that to Google.

[MaxDrei]

But, DeNiro, other commentators, just as learned as you, think MM=DC. Are they joking, or is your intemperate diatribe what you really think of the DC musings?

[DeNiro]

"
"Re-examination is just another tool in the toolbox."

Was. Not anymore. But go ahead and pretend otherwise. I don't care. Your clients might care, but I don't."

Now that's what I call a reasoned response. "Was. Not anymore." Does that mean re-examination is no longer available as a tool? I kinda doubt that.

Any procedure is and always will be just another tool in the toolbox. And in case you didn't see my movie "Ronin" I would highly recommend it - you may understand the reference a little better afterwards and you may also understand the reference to the boathouse at Hereford.

[Congressional Intent]

Not that the ASE/Mooney discourses aren't amusing, but I'd like to see more discussion related to GP's thoughts regarding examination quality.

How do we in prosecution make sure the cited references have actually been used by the examiner to their fullest extent? Do we ask if the examination was done completely? Do we ask that the examiner indicate for the record that references were analyzed fully? I had been under the impression that any art considered was considered in full and applied to the extent possible.

Secondly, the phrase "the appropriate test to determine whether a 'substantial new question of patentability' exists should not merely look at the number of references or whether they were previously considered or cited but their combination in the appropriate context of a new light as it bears on the question of the validity of the patent." has me wondering what Congress intended as the "appropriate context of a new light".
During the lifetime of a granted patent, how many new lights arise?
When a new light arises, doesn't that light shine on all patents?

[Paul Cole]

I am not convinced that "doodoo" is a term of art known and used by patent lawyers. Its use suggests an inability to express complex thought.

Nevertheless I have looked up the claim in question and am compelled to the view that this invention is not sufficiently revolutionary to support a Nobel prize for those who discovered it. So on this question I find myself on the same side as Mooney.

[iwasthere]

Interesting legal slight of hand by the cafc: First the ethicon v. quigg holding is simply that: the pto does not have authority to STAY a reexamination under the current reexamination statute. Indeed, the stat scheme says just the opposite - pto must employ 'special dispatch." Everything else is dicta.

Second, while there is no question that portola packaging was overturned by statute, isn't it equally true that the holdings of in re perne and whichardlly (sp?) were not overturned by the change in the statute? Holding of perne and whichardly [The PTO will] "act in harmony with the courts" and that it "will not allow re-litigation under the guise of reexamination" of an issue that was fully litigated to a final determination by the courts.

IMHO the separation of powers doctrine is a doctrine of practical import - it is not obviated by lip service to differing BOP or whatever convoluted statutory scheme one can envision - the separation of powers never rested on -- well sure you can undermine the premise of a final court decision by saying "in the case of big mistakes - with whatever bop/bo persuasion - a commissioner (or other ART I creature ) can void the premise - this issue is dismissed with a most Bryson like footnote.

So here we are once again: US patent law as anomaly and special exception to ALL OTHER LAWS (statutory and federal common law) governing the interplay between the courts (art III) and administrative courts (art I) and commissioners.

So the court with the least court like attributes, the BOPAI, and therefore most political pays less (under swanson none at all?) deference to art III courts fact finding and conclusions of law than all other art i courts that have ever existed.

Swanson begs the question of how this case would have been decided differently if CAFC was not both the protector of the art III power and the supervisor of the board.

Swanson can be forgiven taking this issue up somewhat collaterally on "what's an SNQ" - as this is how the pto traditionally kept the balance of powers issue reconciled under the statutory scheme. The next shoe to drop is whether the BOPAI owes any deference to art III jurisprudence under in re zurko.

[Malcolm Mooney]

"in case you didn't see my movie "Ronin" I would highly recommend it - you may understand the reference a little better afterwards and you may also understand the reference to the boathouse at Hereford."

Ronin's a good flick. My favorite Frankenheimer films are "Seconds" and "Prophecy."

[cant think of a name]

"Ronin's a good flick. My favorite Frankenheimer films are
'Seconds' and 'Prophecy.'"

And I enjoy long walks on the beach. Some of my other hobbies include watching the sunset from a picturesque grassy knoll, indulging in fine wine with a scrumptious foie gras dinner, and candlelight conversations on French film.

[AllSeeingEye]

I presume that wine is white... not that there's anything wrong with that.