Post-Reexamination Litigation Estoppel

Acco Brands, Inc. v. PC Guardian Anti-Theft Products, Inc., 3-04-cv-03526 (N.D.Cal., December 4, 2008).  

Infringers have long been reticent about filing for inter partes reexamination. One problem is the estoppel provision – 35 U.S.C. § 315(c) – that limits the claims that the third-party requester can later make in court. In particular, Section 315(c) is written to estop the third party requester from later asserting an invalidity defense in litigation if the third-party requester "raised or could have raised" the ground during the reexamination. (The estoppel provision only applies once the PTO determines that the challenged claim is valid).

35 U.S.C. §315(c): A third-party [inter partes] requester … is estopped from asserting at a later time, in any civil action … the invalidity of any claim finally determined to be valid and patentable on any ground which the third-party requester raised or could have raised during the inter partes reexamination proceedings.

In this case, the PC Guardian had requested an inter partes reexamination based on several prior art references. However, upon consideration, the PTO confirmed that the claims were patentable.

In the ensuing infringement litigation, PC Guardian made an end-run around the estoppel argument. For its non-infringement contention, PC Guardian presented three 1980's Macintosh portable computers as prior art. According to the defendant's argument, the physical computers when seen in combination with the references considered by the PTO rendered ACCO's patent obvious.

Because reexaminations are restricted to considering only patents and printed publications, the district court agreed that Section 315 does not estop PC Guardian from asserting the combinations during litigation.

File Attachment: PCGuardian.pdf (84 KB)

Comments

[Mark Nowotarski]

Nice move.

[Lazlo Toth]

Yep, nice move. But! could a manual showing how a 1980's Mac works have been used instead, and if so will the CAFC say that the argument based on the physical Macs is an argument that could have been presented at the re-exam? Or is a physical transformation (from paper to silicon) involving a general purpose computer (the Mac itself) insufficient not only to confer patentability (Bilski) but to create re-exam estoppel as well?

[The Question]

I think Lazlo picked up on a great grounds for appeal about the manual (or a service manual). Otherwise, the re-exam estoppel laws would be more form over substance.

[Jud]

"could a manual showing how a 1980's Mac works have been used instead, and if so will the CAFC say that the argument based on the physical Macs is an argument that could have been presented at the re-exam? "

To answer that, you'd have to have a manual, which might not be easy to get. And the manual would have to show the slot. And the manual would have to make clear that the slot was the right size. According to the PTO, the manual would apparently have to "recit[e] a specific security slot used in performing the locking method set forth....with a particular slot
in a portable electronic device and defined by a generally rectangular shape and by
dimensions of about 3 mm x 7mm."

I'm not sure the manual would have focused on such an aspect of the computer in question.

[Malcolm Mooney]

The inter partes re-exam estoppel laws are stoopit and counter-productive to their most important purpose, which is to burn garbage patents.

Eventually these laws will be changed, or the CAFC will build some useful holes in them.

[curious]

so what changes to the inter partes reexam laws do you propose, Malcolm?

[SF]

You can't raise an argument based on art that was not part of the proceeding.

The "could have raised" part of the statute should not be interpreted to apply to uncited art that could have been submitted, but wasn't, and then to arguments based on the uncited art. The court got it right here. Holding otherwise would remove what little incentive people have to file inter partes reexams.

[TJ]

Actually, the estoppel bar is a little broader than just against the prior art itself. Under section 4607, it extends to any "finding of fact" made during the inter partes reexamination proceeding, a provision which could be very useful in a obviousness case. Section 4607 is not codified, so it is not well known, and I don't see the issue being raised by plaintiff here.

[Keith]

"The "could have raised" part of the statute should not be interpreted to apply to uncited art that could have been submitted, but wasn't, and then to arguments based on the uncited art."

That would be nice, but that is not the law.

"The court got it right here."

Yes, but not for the reason you imply. The only reason they could combine the old macs was because the physical items could not have been used in the IP reexam - documents only.

If you are advising clients to hold back certain docs during an IP reexam to be later used in litigation you may want to read up on this a bit.

[SF]

Keith: I guess I'd have to know what "certain docs" meant before I could advise my clients on that. But, if it makes you feel superior, go ahead and put words in my mouth and then criticize me for saying those words.

[Paul F. Morgan]

The really unusual aspect of this case is that this is an inter partes reexamination that is not still pending. More amazing, it was filed 11/16/05 and decided 1/25/06 (by holding all claims patentable).
The 1999 express Congressional overuling of In re Portola as to the scope of reexamination vis a vis art previously of record seems to me arguably relevant to the scope of inter partes reexamination estoppel as well?

[AllSeeingEye]

Mooney doesn't have time for the mundane activity of finding solutions; Mooney is only capable of glibly identifying what he considers to be doo doo. Which is pretty much everything. Welcome to Mooney's dirty little world.

[Malcolm Mooney]

My solution is that there should be no estoppel for parties who initiate an inter partes re-exam, at least not for the first such proceeding. That isn't to say that the third party should not be bound by arguments they make in favor of the patent's invalidity. But they shouldn't be precluded from raising the arguments and art again in court if the PTO can't get it's head out of its hinder. That's just silly and, as I mentioned above, defeats the point of inter partes re-exam.

[Keith]

SF: I'm not trying to sound superior, but withholding relevant documents in your possession during an IP reexam is simply not advisable.

That language you deride above is still the law. It applies in the plain English it was written in.

This holding applies only to the rather thin situation where the prior art being used is not a document. That is all. Nothing more.

[Paul F. Morgan]

I'm told the reason this inter partes reexamination was decuded so fast must be that the reexam requestor just gave up after the intial PTO action without atttempting any Board [or CAFC] appeal, leaving the initial examiner's decision in favor of the patent owner completely unchallenged. True?