Untouchable: Sham Reexamination Requests

Lockwood v. SHEPPARD MULLIN (Fed. Cir. 2010) (nonprecedential)

Last week, I wrote about the Lockwood case involving allegations that Sheppard Mullin should be held liable for filing a sham reexamination request.  The district court had dismissed Lockwood's complaint — holding that there could be no federal cause of action for filing a sham reexamination request because, inter alia, that area is preempted by Federal Patent Laws. 

The Federal Circuit (Judges Newman, Plager, and Prost) has now decided the appeal — affirming the district court decision without opinion. (Rule 36).  Federal Circuit Rule 36 indicate that a panel may “enter a judgment of affirmance without opinion . . . [if] an opinion would have no precedential value.”  Here, the Rule 36 opinion is surprising given the lack of precedent on this topic, the obvious third-party interest in the outcome of the case, and the dramatic rise in the use of reexaminations over the past decade.

In the appeal, briefs amici were filed by the TPL Group (arguing that “nothing in the reexamination law … indicates that Congress intended to prevent patent holders from [pursuing a state law claim of unlawful business conduct] when a baseless request for reexamination is filed for the purpose of harming a competitor); Professor Hricik (arguing that liability should be available); NDP Managed Security (arguing that the suit is not barred by California law); and O'Melveny & Myers (arguing that the reexamination statute preempts a court action for sham filing of a reexamination).  Raymond Mercado (who previously worked for Lockwood) has written an academic article explaining his findings of extensive “reexamination abuse” by third-party requesters.  Mercado argues that patentee's subject to sham reexamination requests should certainly be able to bring an action under the common law tort of malicious prosecution. In addition, Mercado argues for a new federal cause of action.

This case opens the door to some amount of bad-behaviour in the filing of reexamination requests.  Patent attorneys who file sham-requests  can be sanctioned through the USPTO's Office of Enrollment & Discipline. However, an anonymous third party requester may be untouchable.

–  Dennis 

104 thoughts on “Untouchable: Sham Reexamination Requests

  1. 104

    What we really need is a system that keeps all the unsafe foods on the market, so that people can have reliable access to foods.

    I think there’s a joke in there somewhere. It be too early for law school finals brain lock-up for my man.

  2. 103

    Meanwhile, that other government agency gets a few more teeth:

    A series of catastrophic oversights resulted in a vociferous demand for more oversight.

    What we really need is a system that keeps all the unsafe foods on the market, so that people can have reliable access to foods.

  3. 102

    Meanwhile, that other government agency gets a few more teeth:

    WASHINGTON — The Senate on Tuesday passed a sweeping overhaul of the nation’s food-safety system, after recalls of tainted eggs, peanut butter and spinach that sickened thousands and led major food makers to join consumer advocates in demanding stronger government oversight.

    The legislation, which passed by a vote of 73 to 25, would greatly strengthen the Food and Drug Administration, an agency that in recent decades focused more on policing medical products than ensuring the safety of foods. The bill is intended to get the government to crack down on unsafe foods before they harm people rather than after outbreaks occur.

  4. 101

    The panel also seemed to want to apply a “but for” test for inequitable conduct.

    Seemed to want to?

    Either they did or they did not. No seem to.

    The requestor relied on more than one reference, so it is not abundantly clear that “but for” the fraud (assuming there was fraud) the request would not have been granted.

    Perhaps this would explain why the “Confidential” document was not challenged. If this were indeed true, we have even less of a cause for a crusade here.

    Given that 94% of all requests are granted, it is not that hard to find some art that would cause a reexamination to be ordered. It is simply not necessary to lie.” and “The greater problem is not fraudulent requests, but the very low threshold.

    The high rate neither excuses the “lie” nor excuses the indication that the Office is possibly not documenting its efforts appropriately (per A New Light). In contraposition to A New Light’s point, though, I would propose that since the Office is to be given every credit for a full and accurate search and examination, I would increase the reexamination requirement to show a convincing reason why a patent or publication was not or could not have been considered by the Office as a threshhold matter of using that reference. Absent that showing, a showing of clear error would need to be produced.

    If Examiners are going to hide behind a wall of non-comment in the original prosecution, the patent holder should not be forced to pay for that silence with an ever so easy reexamination standard. If this disadvantages the public, then perhaps the public will speakout and request better and more thoroughly recorded examinations.

  5. 100

    Ned,

    Here is another area that we find agreement in. From MPEP 2216: “The request must point out how any questions of patentability raised are substantially different from those raised in the previous examination of the patent before the Office.

    But compare this to your comment of

    The greater problem is not fraudulent requests, but the very low threshold… There is so much art out there that was not of record

    Especially when one considers what actually has to be made of record. Requirements of examiners to diligently document their full consideration of an application passing all of the legal requirements are essentially nil. As has been noted on this blog, even lengthy IDS compilations that would serve to put the public on notice as to what documents have been considered can be viewed to be a joke, and are largely ignored by most examiners.

    When “considered” merely means provided to the examiner as a list of sources that he may choose to word search (as the examiner may likewise do with any other database at his disposal), “considered” tends to lose its authoritative bite.

    Yet another reason to simply and completely disband the costly and slow examination process. While I acknowledge there is some minimal benefit from a cursory examination, the cost in terms of real money and time are not justified for that small benefit.

  6. 99

    The panel also seemed to want to apply a “but for” test for inequitable conduct. Lockwood never really addressed that issue. The requestor relied on more than one reference, so it is not abundantly clear that “but for” the fraud (assuming there was fraud) the request would not have been granted.

    Given that 94% of all requests are granted, it is not that hard to find some art that would cause a reexamination to be ordered. It is simply not necessary to lie.

    The greater problem is not fraudulent requests, but the very low threshold. As one professor named Hal something or other said, why even bother with a request? There is so much art out there that was not of record, and since that seems to be the only working criteria the Office looks for, whether it was of record or not, the request papers are a mere formaliity, not the substantial barrier Congress intended.

  7. 97

    As I indicated – the fact pattern here is not one to undertake a crusade with.

    Perhaps the panel felt likewise.

  8. 96

    Laches, the preemption issue. I got the feeling that the panel was unimpressed with the merits, so they may have punted the whole case so they could address the preemption issue when they were inclined to also find the requestor had filed a fraudulent request.

  9. 94

    Laches, so, what of the issue on appeal? Do you thing that is why they “affirmed” per curiam so they would not actually have to address the preemption issue?

  10. 93

    some tension between the evidence and the complaint

    Now, consider… the issues here as if the what Lockwood’s attorney said

    Said when? The official “said” is the complaint, no?

    Procedure, as they say, sometimes is everything. Having not contested the matter at the proper point, they are foreclosed from contesting through mere inference, are they not? Have they not relinquished the “properness” of the publication, albeit on its face not proper?

    Furthermore, who truly is at fault here? The Office for not properly establishing the basis for reexam (a reexam that saw all claims in all patents sustained, by the way), or counsel who did not challenge the facially bogus items? And what is the grounds for damages? What are the actual damages? Were any submitted? Proven?

    Whatever crusade you wish to endeavor upon, this is hardly the poster child of fact pattern to do so with.

  11. 92

    Laches, I listened to the oral argument. That is where the issue of the confidential document was discussed. There seems to be some tension between the evidence and the complaint.

    However, given the posture of the case you described, the issue should not have been preemption. It should have been the sufficiency of the complaint.

    Now, consider, Laches, the issues here as if the what Lockwood’s attorney said the case was about was in fact what the evidence established: the firm, knowing a reference to be a confidential document, stated that it was a publication in the request, that this statement is a false statement of fact, and that the truth of the statement could not be resolved on the record.

    What then?

  12. 91

    Big problem here:

    Significantly, the complaint only challenges Sheppard Mullin’s arguments, not the authenticity of any of the prior art submitted in the reexaminations.

    Oops.

    further:

    “And, even if Lockwood could plead fraud, Sheppard Mullin’s alleged misconduct in requesting reexamination was not fraudulent. Reexamination, by law, is based solely on the information contained within the four corners of the prior art documents relied by the requester, not the requester’s characterizations of them, and the PTO independently assesses the prior art before granting reexamination. Lockwood nowhere alleges that Sheppard Mullin submitted fake or altered prior art documents, and the requester’s arguments about them cannot constitute fraud.” (emphasis in original)

  13. 89

    Yes, that is what I was told in a Letter from the Copyright Office. I was told it was already a Patent so it, the Application was not accepted as copyightable. But the BLUE ONE WAS COPYRIGHTED Go figure?

  14. 88

    Yup, crack yup?

    The allegation I found troubling was the one that a confidential document was asserted to be a publication.

    Now the Feds may have done something if the gravamen of the complaint was fraud. But, despite numbers of suggestions by the court during oral argument, Lockwood continued to insist that the gravamen was malicious prosecution.

    I think the Feds might be open to upholding a state cause of action for fraud.

  15. 87

    There are way more than 10. I copied at least 20 myself. So that makes at least 30.
    And the fact that punky kept one I’d say at least 50 more. And then there is the other one. I don’t think he may have copied as many.

  16. 85

    You guys are on crack. The allegations in Lockwood about “misrepresenting” the content of the prior art mirror the types of weak inequitable conduct allegations that the prosecution whores on this site bemoan as a scourge on the patent system. The fact that you guys were “surprised” by the perfunctory Rule 36 affirmance, a simple result if you know anything about federal preemption, shows how other-worldly this blog has become.

  17. 83

    Sunshine,

    Iza pretty sure that ya gonna need more than a mere name showin up in Google somwheres.

    My observations would be at least more than the Office currently treats Wikipedia sources would be needed.

    Any Office monkeys out there in the Reexam division care to provide their input?

  18. 82

    Verifying whether a patent or published article truly exits seems to invoke a rather minimal effort.

    Okay. What is the minimum evidentiary requirement for verification? That the name of the journal shows up on Google somewhere?

  19. 81

    It would seem immaterial whther the editors were killed or defunct, or even how many papers were produced, or in which country they are archived in.

    If they are archived and obtainable, then the verification step is straight-forward. Likewise, if they are not, the verification step is stright-forward, only the result is negative.

    Why is this even an issue?

  20. 80

    “Verifying whether a patent or published article truly exits seems to invoke a rather minimal effort.”

    But not in conspiracy land where everyone is using a supposedly published paper from Cambodia, the editors of which were all killed, and is now defunct. Of course, only 10 copies of the paper were ever produced and archived and they’re all in Russia or North Korea.

  21. 79

    Verifying whether a patent or published article truly exits seems to invoke a rather minimal effort.

  22. 78

    Ya have an odd sense of when something is “digging deeper” Sunshine.

    Must go with that geometric counting of “I esplained it to ya see I done esplained it again.”

    For some reason ya just can’t seem to wrap your head around the fact that coorobatain patents and published articles is what needs to be done. Maybes if ya stop thinkin about your windmills for a second and FOCUS – this aint a hard concept.

  23. 77

    No wait a minute, it be: if it can’t be corroborated, it aint bein reexamined.

    I’m enjoying watching you dig yourself deeper, pingaling. Maybe you’ll disappear entirely?

    Is your imaginary PTO supposed to “independently and objectively” “corroborate” every “fact” submitted to them, or just the false “facts”?

  24. 76

    Since Homey don’t do answers, Sunshine, let me slide this observation by you:

    You be addled in the head.

    Your question itself be simply wrong.

    The Office don’t need to go proving something never occurred. That just aint in the picture. They not be in the “prove it didn’t exist” bizness. They be in the “objectively and independently corrobatin” bizness. The one presentin the Spankin New Question O Patentability – tied to a patent or published article be the one that need to worry about provin something actually occurred. The Office direction (should) be – if it don’t fit, you must acquit. No wait a minute, it be: if it can’t be corroborated, it aint bein reexamined.

  25. 75

    pingaling Second – given the neutral status, if the examiner cannot objectively verify the evidence – it should be thrown out.

    And how does the office go about proving that an alleged publication never actually occurred?

  26. 74

    or if candor in reexam requests is now more of suggestion than a requirement

    Wake up DM – candor not even be a suggestion – the anyone-anon provision done take care of that. Now the Office bein an independent eye that corrobatatin what placed in front of it – that be there by both the Congress and the Courts – now that be somethin worth crowin about. That be the critcal “rule” we should be concerned about.

    No rubber stampin be allowed.

  27. 73

    Ping – Thanks for the advice but sued . . for what? I can’t help it if anonymous members of the public are IP activist or if candor in reexam requests is now more of suggestion than a requirement. I know for a fact that none of us can be sued for submitting fraudulent reexam requests (we’ve all just learned that) and obviously the PTO has no recourse against those not registered to practice before them (or those who are but remain anonymous). I know it shouldn’t be this way but the fact is that no business can afford to be only guys playing by the rules.

  28. 72

    DM,

    Nows if the PTO functioned as they should, there be no “fraud was embraced by the PTO“. That what I be tryin to get Ned ta pull the cotton from his ears and understand. Yeah, the Office was full O coruption, witness the Tafas and appeals debacles. But the rules – as set up – are no embrace of fraud like the sky-be-falling crowd here be sayin. If the Office don’t do their job – everybody suffers.

  29. 71

    a confidential document was actually published if the requestor says it was?

    Seriously Ned? First – no confidential document is a “published” document. Second – given the neutral status, if the examiner cannot objectively verify the evidence – it should be thrown out. That what I be tellin ya from the legislative and judiciary sides that backs me up. As to “PTO relies on the good faith and honesty of requestors“, then the Office done be messin up again. They not supposed to be rubber stampin – they had their knuckles wrapped on this point in the earlier court case I done observed for ya.

    It seems ya be barking up the wrong tree here Ned.

    DM,

    good luck there pal, but a word of advice – when ya be sued down the line, Iza hope ya didn’t burn too many bridges.

  30. 70

    Ping — “Why waste money filing a patent?”

    a) it’s the honorable thing to do.
    – honorable went out the door when fraud was embraced by the PTO.

    b) cause if ya don’t and go on usin your invention in secret and someone else comes along, independently invents it and obtains a patent on it, they may be able ta stop you from using your own invention or make you pay or both.
    – Patents are worthless now — I (just like you) can defuse any patent just by inserting the patents main figure into a made up Chinese journal and next month a made up Taiwanese journal and next month . . .

    c) support your local patent attorney’s bling habit.
    –My patent attorney can’t explain why I should file patents anymore and is offering lame trade secret options. His services are soon to be a Bling of the past.

  31. 69

    Ping, ok. Give me a blow by blow as to how an examiner is supposed to verify whether a confidential document was actually published if the requestor says it was?

    By analogy, if an affiant submits evidence under Section 132, the PTO must assume the facts stated are established. He might be the judge of the legal conclusion to be drawn, but he has no way to verify the facts.

    Now back to the representation that so and so confidential document was published? How can the examiner verify this?

    He can’t.

    And that is the whole point of Mercado’s argument. The PTO relies on the good faith and honesty of requestors when, it appears, the law does not require good faith and openly permits and encourages bad faith and lying as there is no remedy at all for fraud or malicious prosecution, either by the Feds against the reqestor or by the patent owner. As the statements are not made under oath, there can be no prosecution for perjury.

    Come on now, ping. Get real.

  32. 68

    Why waste money filing a patent?

    a) it’s the honorable thing to do.

    b) cause if ya don’t and go on usin your invention in secret and someone else comes along, independently invents it and obtains a patent on it, they may be able ta stop you from using your own invention or make you pay or both.

    c) support your local patent attorney’s bling habit.

  33. 67

    Having now read Mercado’s research paper I have to admit I never really understood how blatant the abuse of reexams really is – Mercado’s work is “Bombshell”. It seems like the PTO or Congress should be holding hearings on findings in Mercado’s paper. I guess I just don’t understand why are the courts and PTO ignoring fraudulent attacks on valid patents? For anyone that hasn’t, read Mercado’s research paper do it I think you’ll be shocked.

    I’m personally aware of multiple unwarranted reexams, based on prior art that has been manipulated that Mercado didn’t reference – I just thought I was alone. The truth is now becoming clear, America’s IP (our greatest national asset) is being systematically destroyed (legally). It won’t be long before inventors wise-up and stop patenting their discoveries because they have no protection. Why waste money filing a patent?

  34. 66

    Now, just how is the examiner going to independently verify this?

    Um, by doing their job? How does one independently verify anything, Ned? Here’s a hint; patents and published items are a bit easier to indpendently verify – that be kinda why Congress went that way, capish?

  35. 65

    It might be proper, since your hypo is a special case of the BRI not being as broad as it could have been.

    I aint so sure – BRI has to be both broad and reasonable. Sayin that BRI wasn’t as broad as it could have been cause it didn’t include those things that were unreasonable is obviously self-defeating nonsense.

    Course, we be sure to get Dim Light’s view on this soon (that any change in law automatically changes the application of all 102 and 103 material solely on the fact that such material were not applied to the new law standard, blah blah blah).

  36. 64

    If that view is correct, then, it would NOT be proper to state that a new issue is raised if the examiner had construed the claims in a differ manner, or to include a “proper” construction.

    It might be proper, since your hypo is a special case of the BRI not being as broad as it could have been. The incremental breadth would almost certainly be outside a proper judicial construction of the claims, so is that a proper question to put before the PTO as grounds for a reexam? Perhaps it comes down to whether this constitutes seeing the art in a new light or the application in a new light, which would be missing the point entirely.

  37. 63

    A more general question to the illuminati:

    Does “new light” include an argument with respect to a reference previously of issue that the examiner’s construction of a term was not the best and that if it were better, or included the “proper” consctruction under the court standard, that the reference would create new issues?

    As a corollary, when considering BRI, must a construction necessarily include a “proper” construction to be reasonable?

    I’ve had extensive discussion on the later issue with IANAE in connection with In re Morris. He is of a view that BRI necessarily includes a proper construction. If that view is correct, then, it would NOT be proper to state that a new issue is raised if the examiner had construed the claims in a differ manner, or to include a “proper” construction.

  38. 62

    Different shades, the allegation (which has to be accepted as true at this stage of the litigation) is that the requestor based the reexamination, in material part, on a confidential document they knew was confidential, stating that the document was published. There was also some fraud in the representation of when it was published.

    Now, just how is the examiner going to independently verify this?

  39. 61

    Max, that was one of Mercado’s arguments. The patent owner can be sued for malicious prosecution under state law. Why not some symmetry?

  40. 60

    Or, putting it another way, if the other side is the first to be malicious, why is it not a legitimate defence to react equally maliciously?

    The idealists among us would prefer that such disputes get resolved quickly, efficiently, and consistently with the actual merits of the case in fact and law.

    The “eye for an eye” thing is all well and good, until someone loses an eye.

  41. 59

    Haven’t read Mercado but in the headnote here I see a reference to the tort of “malicious prosecution”. The thought strikes me: is there here any symmetry between the corporation caught by the malicious prosecution of a spurious claim against it of patent infringement, and the patent owner caught by the malicious prosecution of a case against the validity of its patent?

    Or, putting it another way, if the other side is the first to be malicious, why is it not a legitimate defence to react equally maliciously?

    What relief is available in law, for a party on the receiving end of a “malicious” claim of patent infringement?

  42. 58

    There is an analogy from what Congress did here in the Reexam Statutes to the standard for the presumption of validity.

    Congress, knowing all the possible ways a patent could be in error, specifically and intentionally cabined the ability of the Office to correct errors and take away a patent’s presumption of validity in reexamination only in those cases and for the grounds of evidence that could be independently corroborated – those significant new questions of patentability traceable to patents and published articles.

    There is no doubt that that level of evidence belongs to a clear and convincing standard.

    Had Congress instead leaned towards a preponderance standard, there can be no doubt that the ability to inititate reexam would have been opened much further.

  43. 57

    Compare “Today’s PC is to assume the patent office is broken and needs help” with “hopefully some on the court will actually read [Mercado’s very powerfully written article] and begin to understand what really is going on in the world..”

    Mercado’s article plays to that exact same PC: the patent office is broken and needs help.

    Perhaps Mr. Heller and others sounding the “sky is falling” alarm need to realize that the scope of material that can be used to initiate reexam was purposely cabined to patents and published articles because those items are capable of independent corroboration. The patent office is not broken and does not need help. The patent office does need to actually execute to how the Congress intended the law to be and how the Courts have verified what that means – a disinterested, independent view – not taking either side at what is merely said, independently verifying all allegations.

  44. 56

    Danielle, there is such a thing as PC in this country. Today’s PC is to assume the patent office is broken and needs help, and that a large number of patents are invalid. It would be terribly non PC to actually show some concern for patent owners, and some respect for the patent office.

    I was amazed at just how one-sided the world of Washington has become when I attended the most recent AIPLA annual meeting. That organization seemed hell bent on undermining the patent system as fast as it can — which is an entirely PC attituded today.

    I can’t wait for Mercado’s very powerfully written article to be published in Columbia’s IP law review. It is a bombshell, and hopefully some on the court will actually read it and begin to understand what really is going on in the world.

  45. 55

    Your right Ned — the PTO, Congress and the Courts have again failed to protect patent owners from reexam abuse. The CAFC has simply said the PTO can discipline its practitioners, if it wants to, but how can the patent owner ever recover the expenses of defending the unwarranted reexam, the loss of business relationships, investment, litgation costs if those were pending as well as the lost time of his so-called “Exclusive Rights” granted by the government? It’s a sad day for all patent owners who now will face endless unwarranted reexams if they dare to assert their rights by licensing or litigation. The CAFC has given the green light for patent abuse. Lockwood is only the first casualty, many more will follow.

  46. 54

    “Just what is the federal government going to do to police fraud on the patent office by requestors.

    Posted by: Ned Heller | Nov 17, 2010 at 06:40 PM”

    Apparently nothing. Unless some special interest with deep pockets can buy off enough Congresscritters to enact a new lobbyist-authored statute.

  47. 53

    I still think the larger question is this:

    Just what is the federal government going to do to police fraud on the patent office by requestors.

  48. 52

    Wow what has this nation become.

    Um, the same nation that sent its children (yeah we use the words blah blah blah) to fight for the liberty O this nation to begin with.

    If ya blindly believe that the 9/11 attacks did not change the tenor of everyday life, you are truly delusional.

    Otherwise, your post does not make any cogent point on the subject at hand.

  49. 51

    Wow what has this nation become. If we can send children off to war (yeah we use the words warrior, soldier and even first responder, but by and large they are children that are in Afghanistan and Iraq) to protect the Constitution we can sure share in the risk of injury even death that our children face by flying in a plane without sacrificing those same rights that we ask are children to die for; otherwise, what does that say about our intestinal fortitude.

    President Lincoln in the face of 80,000 armed enemy little more than a stone’s throw from the Whitehouse thought enough about the nation he was trying to save to hold a constitutional sanctioned presidential election in 1864. During the blitz in England during World War II the British would refer to the falling of bombs upon their land as a weather phenomenon: as being Windy outside. Otherwise, the Brits went about their lives as best they could. A few buildings fall in New York City on 9/11 and about 3500 people die and we surrender our entire way of life, our country if you will, a country that over 1,000,000 have died to protect. I think perspective is what Americans lack in view of 9/11.

  50. 49

    I think that this issue of pre-emption is far more serious than we might think. The exact same issues are present here with respect to pre-emption that the government will face and the first TSA agent is arrested for assault and battery for a pat down. There is alreay on San Mateo County DA that states he will prosecute TSA agents if they grope citizens. The problem for him, however is that SFO is actually in San Francisco county. Therefore, his threat is empty. Nonetheless, what we have here is the Federal Goverment asserting that state criminal laws cannot be enforced under a pre-emption doctrine. I don’t think this pre-emption doctrine is going to hold much longer. I am really interested in seeing what the Tea Partiers are going to do next year in Congress.

  51. 48

    Ugh! To answer my own question, this was an appeal from a Lockwood refiling in a District Court. That court had held the Federal “administrative structure” ala Buckman preempted any state law remedy.

    Obviously, the Federal panel was not convinced, but affirmed regardless.

  52. 47

    Just a small point here: Lockwood argued successfully below that his own complaint was subject to exclusive Federal jurisdiction, thus the dismissal of his complaint by the lower state court on the merits was in error because it had no jurisdiction.

    He won. So who appealed and why?

    But, given the posture of the case at the state level, it appears that Lockwood can refile in the Federal courts provided he can overcome the statute of limitations problems he may now have.

    Viewed in this light, I don’t think the Feds have held here that Lockwood has no remedy.

  53. 46

    Me: “Does this mean that the Federal Circuit agrees with the trial court, or does this mean they don’t dare touch the issues and leave it to the Supreme Court to decide. In other words I think it is time to file a Petition for Cert. Sorry don’t know how the spell the word and I don’t feel like looking it up.
    Posted by: Me | Nov 15, 2010 at 09:38 PM”

    I think we got per curiam because the court agreed that the case should be affirmed, but could not agree as to the reasons why.

    I listened to the oral argument. The vast majority of the discussion concerned the Supreme Court case of Buchman. That case had held that where the federal scheme allows for adequate enforcement of fraudulent filings, it preempts state law from allowing a remedy for fraud. But what was clear from the oral argument is that not only does the PTO have no adequate remedy against fraudulent re-examination filings, it does not actually actively investigate allegations of fraudulent conduct by attorneys licensed to practice before the office. There was a lot of discussion of the PTOs brief in the Therasense case to this point.

    So, while it appears that the Federal Circuit wanted to affirm based upon preemption, it could not rely on Buckman.

    Moreover, despite many proddings by the appeals panel, Lockwood would not agree that the gravamen of their complaint was fraud. Rather, they argued, the gravamen of their complaint was malicious prosecution. I think this may have contributed to the result — because the panel seemed to be more favorably inclined to upholding the state law complaint based on fraudulent misrepresentation.

    Where this leaves us is uncertain. I think the ball is now in the PTOs court to do something. What this might be, I do not know. Re-examination requests do not have to be filed by licensed PTO practitioners. The PTO seems to have no effective remedy whatsoever except to eventially confirm the patent after years of “litigation” that is not inexpensive.

    As I pointed out before, the real problem here is that the patent owner has no opportunity to say anything prior to the re-examination being ordered. As Max has pointed out, in Europe, the European patent office waits until the patent owner has filed his response before making a decision to order an opposition. In contrast, our system, it appears, not only allows fraudulent statements to be made in a re-examination request, but it also now appears that the Federal Circuit will not allow any effective remedy for the fraud that does in fact occur. What they are effectively ignoring here that the patent owner is damaged by the fact of re-examination itself, assuming that the successful termination of the reexamination is sufficient.

    In words that we often hear now on Internet, the Federal Circuit decision in this case is an “epic fail.”

  54. 45

    I’m going to coin the new label here, write it down! We all know what a Troll is but as of yesterday we have a new bad guy to fear – Pirates.

    A Pirate will commandeer a legitimate patent (or patents) by systematically flooding the PTO with endless re-exam data which can be crafted to be very difficult to verify (i.e., a foreign journal publication which is no longer in print etc.). Pirates can act with impunity (a la Buckman) and as they can remain anonymous they are simply unstoppable – for now.

    Aaaarrrrgggghhhh me Hearties – The ship AstraZeneca be caring a bootie of Nexium and we’ll either take her for our own or we’ll see her to Davy Jones.

  55. 44

    Lockwood is an inventor in the field of electronic commerce since 1979, including patented computerized sales systems technology.

    Lockwoods position appears to be that SM wrongfully added a 150-page “Electronic Mall” (mail?) reference to its 14 page reference in its requests for reexamination, that it was the bulk of the submitted material that cause the USPTO to grant the reexamination, and that if only the 14 page reference were submitted, the USPTO would not have granted the reexamination request. Purportedly, the 150-page “Electronic Mall” (mail?) was a confidential manual (that somehow SM had in their possession), that SM manipulated “the” date of the 150-page reference (I’m not sure if that means the publiclly disclosed date/date of public accessibility to the document, the date the manual was finalized, etc.)

    The assertion, but for SM’s purported wrongful actions, the USPTO would not have granted the reexamination request seems a stretch since there was that 14 page reference. It does sound like something that should have been addressed somewhere in the process.

    Someone created the website link to youmaybenext.com that was negative towards Lockwood. (Google the website to find more info about it).

    Lockwood eventually essentially ran out of money and, with Lockwood acting in propria persona to try and slap SM, SM filed an Anti-SLAPP motion (CCP 425.16 motion)

    More info at link to caselaw.findlaw.com

  56. 43

    …Malcolm continues his record posts O ignorance.

    Sunshine, better looking? puh-lease. And funnier? ya just be showin your jealousy now.

  57. 42

    “But that’s only if you are Gene”

    I am not.

    Posted by: ping |

    Gene is funnier and better looking.

  58. 41

    Nobody be pickin up on my pal Hal’s Professor Posse line…?

    Surprisin, given the four horsemen theme already on these boards.

    Weza got a real Western thriller on our hands. Or maybe itza dark comedy…

  59. 40

    Wow, I just read Dennis’ post and it sounds like Unfair Competition to me. This is the exact area of law to address these practices. The courts have given an elastic definition of Unfair Competition. Perhaps an action under the Lanham Act? Any thoughts on this?

  60. 39

    Maybe TSA should get involved. It appears they are going to need a new line of work soon. All kidding aside, I agree with Scott. I think there were better procedures to use to address the problem that the client faced.

  61. 38

    a drawer full of socks…

    all singles.

    my dearest sarah – “But that’s only if you are Gene

    I am not.

  62. 37

    Does anyone have a clue what was the precedential opinion the panel had in mind? Was it discussed in the briefs?

  63. 34

    “Can one request a re-hearing en banc after denial under Rule 36?

    I imagine these facts will rise again …

    Posted by: Malcolm Mooney | Nov 15, 2010 at 02:04 PM”

    Check the Federal Circuit Rules of Practice (which are neatly juxtaposed with the Federal Rules of Appellate Procedure):
    link to cafc.uscourts.gov

    I see nothing in Rules 35, 36 or 40 that prevents requesting en banc rehearing in this case.

    “”Here, the Rule 36 opinion is surprising ”

    It seems like I said something like this would happen, thus I’m not surprised.

    “Can one request a re-hearing en banc after denial under Rule 36?”

    What would be the point? A denial is sure to follow.

    Posted by: 6 | Nov 15, 2010 at 04:45 PM”

    Besides the possibility a majority of judges might actually vote to grant the request, another reason to file for en banc rehearing is because even if your request is denied, one or more judges might dissent and might write an opinion. Such things tend to get the attention of the Supreme Court from time to time. A somewhat analogous example happened a few years ago in the Second Circuit, where a three-judge panel issued an unreported opinion (admittedly a good bit more than a Rule 36 affirmance) in the Ricci affirmative action case. The losing side filed for en banc rehearing, which was denied, but the dissent appeared to persuade SCOTUS to take the case. Ultimate result–SCOTUS grants certiorari and reverses the Second Circuit.

  64. 33

    …keep insisting it’s not their job to read the prior art at all.

    Not sure where ya be goin with that non-sequitur, my man. Whose job is whose aint got no touch with the “integrity” position and the only correlation be who is on the losin side of both discussions.

    This be on eof those Middle Earth position ya got IANAE – ya want so badly for the appllicant ta do the heavy liftin, but that just aint the deal out there. Ya be lettin your desire cloud the reality of what is.

    I knows ya got better – dig down man and focus.

  65. 32

    It’s called independent verification. … Not surprising you don’t recognize it as it’s what people with intergrity know about.

    Funny, it’s the people with all the “integrity” who keep insisting it’s not their job to read the prior art at all. It’s conceivable that their integrity extends to filing such re-exam requests, since who are they to care what the real date of the document is? It’s the examiner’s job to check up on that. Do your job, examiner!

    If there really is an invention, a long drawn out re-exam that will lead ultimately to an even stronger patent along with long drawn out damages would be a legitimate patentee’s dream.

    If there really is an invention, it’s not that hard to invalidate the patent on fraudulently-dated prior art, if nobody thinks to double-check the dates.

    Also, some patentees have a problem with the “ultimately” part, since what they want/need is a patent now, not a better patent later. It’s the same problem they have with the examination backlog, with the notable exception that the pharma folks aren’t on the opposite side of the issue.

  66. 31

    Best line O the morning –

    Mooney is still a poor man’s 1diot.

    as he continues to point to others’ use of sockpuppets. Specially in regards to “integrity”, as even my troubled sarah plainly sees why he wants her off the boards. Go get im sarah.

  67. 29

    Nothing says: I forgot to take my medication, and by the way, send over the Black Suburbans, quite like

    “I MAY EVEN GIVE ONE TO THE DOJ. AND A SPECIAL SIGNED ONE TO THE BANKRUPTCY COURT TOO.”

    I hope he means faxes.

  68. 28

    Steve Sereboff asks how this issue is handled by the EPO.

    Everybody is free to draft and file a sham opposition. Passing the “admissibility” test is not hard. The EPO would wait for a written defence brief from the patent owner. Now, unless the Opponent asked at the outset for “oral proceedings”, the EPO would then peremptorily reject the opposition.

    The Opponent would then mull over whether to appeal. If it does, the Technical Board of Appeal would do in the appeal instance what the Opposition Division had doner already at first instance.

    The file is there on the internet for all interested members of the public to read, including the clerks of any judges involved in any infringement proceedings based on the opposed patent. Handling validity in one place and infringement in another is invariably the case in Germany. It would be clear to all such readers, from the outset, what the outcome of the opposition at the EPO is going to be. There would be pressure on the EPO to decide the opposition expeditiously.

  69. 26

    SO NOW THAT I GET THAT JOHN DOE IS THE USPTO. AND THAT THE DUMMY TRADEMARK WAS DONE TO SAVE THEM. AND THAT KT WAS DENIED REG. BECAUSE HE IS THE REASON FOR THIS MESS. I AM SET TO SEND OUT LOADS OF FAXES TO EACH AND EVERY CIVIL RIGHTS FIRM. AND I WILL SURELY FIND ONE OUT THERE.
    I JUST RECEIVED A LETTER FROM THE BANKRUPTCY COURT. I WONDER IF THEY (USPTO) ARE THREATENING ME AGAIN WITH SCARE TACTICS .
    TO ALL YOU INVOLVED. THE LAST THING I WROTE WAS A SYNOPSIS OF ALL THAT HAS HAPPENED. AND BECAUSE IT WAS SO DUCKY THEY DENIED ME MY MOMENT OF GLORY.
    I MAY EVEN GIVE ONE TO THE DOJ. AND A SPECIAL SIGNED ONE TO THE BANKRUPTCY COURT TOO.

  70. 24

    “sham” request = patent “troll” = anything we don’t like.

    inter alia – the PTO granted the request, ergo, they didn’t pick up on any “misrepresentation.”

    I say no foul here. It sounds like when competitors file antitrust complaints alleging “unfair competition” (e.g. raising prices). If the competition really was being “unfair” filing a complain is the last thing a competitor would do. Unless, the other guy is kicking your teeth in.

    Rule 1 in Antitrust, be VERY suspicious of competitor originated complaints.

    Lesson in patent law, be VERY suspicious of attacks by patentees on the filers of re-exam requests. If there really is an invention, a long drawn out re-exam that will lead ultimately to an even stronger patent along with long drawn out damages would be a legitimate patentee’s dream.

  71. 22

    Does this mean that the Federal Circuit agrees with the trial court, or does this mean they don’t dare touch the issues and leave it to the Supreme Court to decide. In other words I think it is time to file a Petition for Cert. Sorry don’t know how the spell the word and I don’t feel like looking it up.

  72. 21

    How was I to know that the journal never actually existed?”

    It’s called independent verification. Congress and the courts allude to this. Not surprising you don’t recognize it as it’s what people with intergrity know about.

  73. 20

    A sham request has to rise to the level of outright fraud, this is not about colorable differences of opinion

    “Someone emailed me the reference and the citation. How was I to know that the journal never actually existed?”

    etc.

  74. 19

    “What his means is that the re-examination tool used to halt infringement litigation is now a thing of the past. We will now argue that any re-exam request is at best rumor submitted with no duty of candor and may well include fabricated facts that will not be known until well into the process of re-examination hence the acceptance of a re-exam request can no longer be relied upon and cannot be relevant in a court of law.”

    Lulz gl with that.

  75. 18

    What his means is that the re-examination tool used to halt infringement litigation is now a thing of the past. We will now argue that any re-exam request is at best rumor submitted with no duty of candor and may well include fabricated facts that will not be known until well into the process of re-examination hence the acceptance of a re-exam request can no longer be relied upon and cannot be relevant in a court of law.

  76. 17

    “And if I arrange to have the request submitted anonymously by a non-agent, we all get to sit back and laugh, free of consequences.”

    Mhmmm, icing on the cake right there.

  77. 16

    Well, ping, I have to give you this. The Feds have been listening to you and are willing to let the PTO police any abuses in the first instance. Regardless of whether this is the best choice, it is the choice they Feds made.

  78. 14

    But, the natural entity to correct the problem is probably the PTO which should not be happy if people are submitting fradulent re-examination requests.

    Why should they care? They can simply make the appropriate rejection and wait for the applicant to traverse once the applicant has looked into the details of the prior art.

    It’s not the examiner’s duty to explain to anyone why a claim is allowable. Besides, a fraudulent document might still be anticipatory on its face (prima facie), and that’s good enough for them, right?

  79. 12

    But, the natural entity to correct the problem is probably the PTO which should not be happy if people are submitting fradulent re-examination requests. I would image there is a large body of case law regarding submitting fradulent materials to an agency of the federal governement.

  80. 10

    Scott: Any request that rises to the level of being a “sham” is by definition, easily denied by the PTO or overcome by the Patentee.

    You’re not very creative, I guess.

    Bottom line is that if I come up with a sham request submitted on behalf of my client that is not denied, the patentee now finds his/her time/money wasted and, if my sham was well-conceived, it could be quite a bit of time/money.

    And if I arrange to have the request submitted anonymously by a non-agent, we all get to sit back and laugh, free of consequences.

  81. 9

    “Here, the Rule 36 opinion is surprising ”

    It seems like I said something like this would happen, thus I’m not surprised.

    “Can one request a re-hearing en banc after denial under Rule 36?”

    What would be the point? A denial is sure to follow.

  82. 7

    I never understood why this was pursued in the first instance.(preemption issue aside). Any request that rises to the level of being a “sham” is by definition, easily denied by the PTO or overcome by the Patentee.

    As to the Office improperly decding to grant the request, this case illustrates that in 2003, sending reexamination requests to the general examing corps didn’t work well. Things have changed greatly since the creation of the CRU. The threat of a sham request, IMHO is greatly exaggerated. There are no floodgates to be opened, if the Lockwood request were filed with the CRU today it would be denied.

    As to overcoming the granting of a sham ex parte request, while patentees generally avoid Patent Owner Statements (since it gives the requester an opportunity to rebut), there would not seem to be such a concern in the case of a request that is outright criminal in misrepresentation (as alleged here). Likewise, the Patentee could have petitioned to vacate the reexamination as ultra vires.

    Finally, the patent relies upon a CIP for overcoming the submitted art, the examiner appeared to take this priority claim at face value. He did not explore the priority issue for each claim, perhaps the requester was expecting that….so, the request may not have been ideally presented…but sham?…not necessarily.

  83. 5

    From my pal Hal:

    The Power of the Professor Posse: It has become standard fare for parties to line up an academic from a prestigious law school and throw in several more as amici as part of a “posse” to do patent justice. This may work in some tribunals and before some panels, but, here, the posse met a panel that was less than thoroughly impressed by this approach as manifested by the summary treatment under local Rule 36 less than two weeks after the oral argument.

    Disdain for Ivory Tower interference…

    …justified?

    As fer “untouchable” – well now, let’s just revisit the posts I made on the other thread – dem ones about the examiner doin their job and all.

    A c c o u n t a b i l i t y

  84. 4

    Can one request a re-hearing en banc after denial under Rule 36?

    I imagine these facts will rise again …

  85. 3

    This was a real shocker to me — no opinion, and the lesson is clear: get a company or non-registered individual to file a sham reexam, and they’re out of reach of the OED, and the patent, if it’s one of short actual economic life — is gutted. The Rule 36 affirmance baffled me, as does the result generally…

  86. 2

    The allegation is essentially that the defendant tricked the USPTO into granting the reexamination request in order to ruin the patentee’s business.

    “Lockwood claims that the firm manipulated the dates on one of the publications submitted to the USPTO and misrepresented what [the other publications] actually disclosed. The USPTO may not have granted the reexamination [request] had the firm not misrepresented information, the inventor argues.” Liz McKenzie, Sheppard Mullin Aims to Quash Lockwood Fraud Suit, LAW 360, September 14 2009

  87. 1

    Can someone shed some light on the “sham” requests in the Lockwood case? Were these reexam requests that were found not to establish a substantial new question of patentability?

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