Most patents currently being reexamined at the PTO are also being litigated in parallel proceedings in district court. This rise in importance of parallel reexaminations leads directly to both Constitutional controversies and practical problems. Although the Federal Circuit has nimbly attempted to avoid the problem, the truth is that both the PTO (an Article II executive agency) and the Article III Courts focus on the same question of validity of patent claims. These races to conclusion raise questions of both separation of powers and res judicata.
A practical issue is raised by Microsoft in the i4i case relates to the relevance of non-dispositive reexamination events to the question of willful infringement. In Microsoft’s case, the ex parte reexamination request was initially granted, and that grant was followed by a non-final office action rejection. On appeal, Microsoft argued that the PTO’s rejections of i4i’s claims on obviousness grounds should result in a per se finding that its its infringement defenses were not objectively reckless. Rather, according to Microsoft, the PTO’s grant of reexamination and non-final rejection at least serve to prove that its defenses were credible. i4i argues on the other side that the non-dispositive reexamination events are irrelevant because of the different standard for review, different claim construction approach, and lack of finality.
At the Santa Clara Law School conference that I attended yesterday, one panelist made a seeming reasonable suggestion – that courts should begin to reexamination results once an applicant agrees to amend or cancel claims being asserted during litigation. At that point, it is a foregone conclusion that the resulting reexamination certificate will not confirm the patentability of those pre-amended claims.
anon,
I cannot follow your logic – how is “relying on a reasonable conclusion of invalidity [in an unfinished Reexam proceeding]” not the same as stripping away the presumption of validity (the presumption of validity being lost). The focal point is not on the validity status in the Reexam process, but rather the validity status in the court proceedings. Clearly, the status of each can be different because they are two different animals. The gist of the thread seems to be that conflating the two different animals is/is not a mistake. SUch conflation would be to de facto strip the presumption in the court proceedings regardless of the end result of the Office proceedings – guilty until proven innocent in the analogy.
Can you explain what you are trying to say?
“Which, I get it, does not mean that the patent loses it validity presumption in court even if the patent is being reexamined.”
No one is saying that the presumption of validity is lost.
We’re just saying that it isn’t reckless to rely on a reasonable conclusion of invalidity in a reexamination’s Office Action. Especially, given that the evidence relied upon in reexaminations are publications whose content is typically clearly and convincingly proven.
Breadcrumbs –
In re Etter holds that the Office is not bound by a patent’s statutory presumption of validity when the Office reexamines patent claims. In re Etter, 756 F.2d 852, 858 (Fed.Cir.1985) (in banc) (“We hold, therefore, that Sec. 282 has no application in reexamination proceedings.”).
Which, I get it, does not mean that the patent loses it validity presumption in court even if the patent is being reexamined.
See link to altlaw.org for the case.
Ned, Breadcrumbs — Wow. I goofed, plain and simple, by discussing 35 USC 318. As noted, the patent owner, not the alleged infringer, may seek a stay once an inter partes reexam is initiated. Sorry.
As for ex parte reexams, though, In re Etter and the CFR cite provide, I still think, good law to argue that once a reexam is initiated a finding of willful infringement is off the table.
Granted both are directed to how the Office conducts a reexam. But what purpose does the CFR language serve once the Office finds that a substantive new question of patentability exists? If the Office believes a prima facie case of unpatentability can be made against the patent claims it issued even BEFORE any of the unconsidered prior art is evaluated, then why should a court — or an alleged infringer — give weight to the presumption that those claims are valid once a reexam is initiated?
Perhaps the courts should look to the CFR language to evaluate whether an infringement was willful. Something like: “An infringement is not willful if the information submitted by an alleged infringer in a reexamination request compels the conclusion that the asserted claim is unpatentable under the preponderance of evidence even if that evidence had not yet been considered by the Office.” If the Office can reach that conclusion why shouldn’t an alleged infringer also be permitted to reach that conclusion (which may be wrong, of course, but it should be a defense to a willful infringement finding).
“…that the courts begin to rexamination results once an application…”
WTF? this sentence was written by a law professor?
This is the biggest piece of gobbledygook I have seen recently here at PatetentlyOhhhh.
A re-exam, like regular exam, is an administrative proceeding to address questions of novelty and non-obviousness under the patent laws.
The Article III courts only decide issues of validity with regard to the claims that issue from the PTO under its interpretation of the application and claims vis a vis the patent laws.
This kind of interplay between Article II Administrative Agencies and Article III courts happens probably every day.
Is this some kind of joke?
“Huh? What? The statute gives the PO the option to a stay, not the infringer.”
This.
Ned, I was wondering the same thing – it appears that Dan was in a hurry to prove his point and may have proven the opposite.
Further, his presumption and burden shifting seem completely wrong as well.
It makes suspect the cite of case law (without a fact pattern) married to a snippet of legislative rule to make a case for an (alleged) infringer to have a right that he does not have.
Perhaps Dan can re-write his post to remove the confusing logic.
Dan Ballard: “When an inter partes reexamination is initiated, 35 USC 318 states that a patent owner may obtain a stay of litigation UNLESS the court determines that a stay would not serve the interests of justice. That seems to create a presumption in favor a stay and shifts the burden onto the patent owner to show that litigation should continue.”
Huh? What? The statute gives the PO the option to a stay, not the infringer. Is there case law to the contrary?
Let’s not reinvent the wheel.
When an inter partes reexamination is initiated, 35 USC 318 states that a patent owner may obtain a stay of litigation UNLESS the court determines that a stay would not serve the interests of justice. That seems to create a presumption in favor a stay and shifts the burden onto the patent owner to show that litigation should continue.
As for ex parte reexams, In re Etter is still good law which holds that the statutory presumption of validity afforded to patents does NOT apply during reexamination. If you marry that with 37 CFR 1.555(b)(2) which states that “[a] prima facie case of unpatentability of a claim pending in a reexamination proceeding is established when the information compels a conclusion that a claim is unpatentable under the preponderance of evidence … and BEFORE any consideration is given to evidence which may be submitted …” you go a long way toward persuasively arguing that a mere finding by the Patent Office of a “substantial new question of patentability” is enough to stay an action attempting to enforce the allegedly invalid claim.
We shouldn’t stray too far from the affirmative law that instructs marketplace participants that when the Patent Office concludes a second look at a patent is warranted they are reasonably safe from suit until that second look is concluded. In short, if the validity bubble is burst by the Patent Office, how can the alleged infringer willfully infringe the questionable patent?
Interesting case where it was argued there was a per se rule, but where the court in the end allowed the PO to amend the complaint to allege willfulness: link to depatentlaw.morrisjames.com
Additonally, the court took note of the difference in claim construction between the PTO and the court, and stated that the court was not bound by the PTO’s construction even after a reexamination certificate issues. What this illustrates is that the Office’s use of BRI and not of using a prior district court construction is disserving the intended notice function of patent prosecution, just as argued in a paper posted here a few months ago. It also appears to be a colossal waste of time and resources as the invention reexamined is not the same invention that is subject to a validity challenge in court.
broje: “Someone please correct me if I am wrong, but I think it is the case that if that same patent is taken up on Reexam, the PTO Examiner in the Reexam can simply ignore the previous prosecution history and construe the claims more broadly in making a rejection”
Perhaps the PTO “can” do that but it certainly is not required to do it and in some cases it would be inappropriate and incompetent (i.e., unreasonable) to do so. It would depend on the prosecution history. Surely you do not need me to hold your hand and provide you with illustrative hypotheticals.
The spectrum is:
intent;
knowledge;
recklessness;
negligence; and
volition.
I think it is possible to have “knowledge” that a claim would be construed at trial in such a way that it is not invalid, even though the same claim would likely be rejected at reexam due to the broader claim construction. Based on that, how can it not be “reckless” to infringe simply on the basis that the claim is presently rejected at reexam?
I’m not saying that the BRI wouldn’t be different than the actual court-decided claim construction. But BRI is still “reasonable” and, hence, evidence that weighs against recklessness.
Opinions of counsel may be relied upon where they use a reasonable, but ultimately wrong, claim construction.
I don’t see why one couldn’t rely on a USPTO office action that used a reasonable, but ultimately wrong claim construction.
I’m not saying use a “per se” rule for reexamination office actions, any more than a “per se” rule for opinions of counsel.
But I think they both should be evidence weighing against recklessness, provided they are reasonable.
“If the claim construction is “reasonable” (even if the broadest reasonable construction), how can you be reckless to rely on an opinion that relied on a reasonable claim construction?”
The standards for claim construction are different before the PTO and the Court. There was an article on Patently O recently about that topic. The “broadest reasonable interpretation” usually refers to a construction taken by the PTO during prosecution, not by the Courts. However, they both rely to some extent on how claims would be understood by a reasonable PHOSITA.
One way of pointing up the difference between the Court’s and PTO’s construction of claim terms is by example. In particular, the Court will take into account the prosecution history, including arguments made by the applicant to clearly disavow claim scope, even without amendment. Someone please correct me if I am wrong, but I think it is the case that if that same patent is taken up on Reexam, the PTO Examiner in the Reexam can simply ignore the previous prosecution history and construe the claims more broadly in making a rejection, thus forcing the patentee to either amend the claim or make the arguments again.
For an infringer’s reliance on an opinion of invalidity to be effective, the opinion must be competent, and the infringer must have actually relied on it. An opinion of invalidity can certainly be incompetent if it fails to take note of prosecution history estoppel by argument in claim construction when determining that the claim is invalid.
This is a circumstance that points up precisely why it would be improper to have a per se rule allowing the defendant to avoid a finding of willfull infringement simply because the Examiner in the reexam rejected the claim. That Examiner is likely using a broader claim construction. Given the differences in claim construction, I don’t think it would ever be proper to allow the Examiner’s rejection in reexam to have a bearing on the determinination of the Court proceedings.
Anon, very good question. What happens more often than not is that a claim term has more than one possible interpretation. The courts will construe such a term as consistent with the specification as possible. The examiner is commanded to take the broadest interpretation that is not inconsistent with definitions in the specification or specific uses of the term in the description that lends itself to only one interpretation. Oft times, though, the terms that present the most difficulty are those which are not used in the description with any definite meaning.
This results in many cases with radically different constructions of the same term by the examiner and by the court. Where the examiner might then reject a claim over the prior art, the court would find it valid.
Ned, If the claim construction is “reasonable” (even if the broadest reasonable construction), how can you be reckless to rely on an opinion that relied on a reasonable claim construction?
Good comment. I assume that “validity” embraces more topics than the entry level subject “patentability”, is really pretty complicated, but is still not as advanced a topic as “unenforceability”. Nevertheless, validity is complex enough to ensure that only an attorney at law can understand it well enough to be able to venture a meaningful opinion.
Is that it?
“Only licensed attorneys can render opinions about invalidity”
During reexamination, the question is one of patentability rather than validity. Patent agents and examiners can and do render patentability opinions.
PTO Exmainers are not attorneys. Only licensed attorneys can render opinions about invalidity. Even patent agents are prohibited from doing so. The only invalidity opinion from the PTO upon which one can rely is the final result of a reexam that went against the patentee.
Anon, you make a good point. But consider the differences in claim construction first. The opinion of counsel is based on the standards of a court construction, not on BRI. The rejection, on the other hand, is based on BRI.
Regardless of the law (which is based on the different claim construction), though, facially the proposition is utterly reasonable. And, as we all know, the public thinks this way as well. For all practical purposes, licensing programs come to a halt when the PTO rejects.
What is needed in some case that hands it to an infringer big time for relying on a PTO rejection and not obtaining the opinion of counsel.
“Malcom, do I understand you to say that if the PTO issues a non final rejection that the public can rely on that fact alone to avoid willful infringement? I think there is actual case law to the contrary, but we are free here to argue what should be the law.”
So was that case under the recklessness standard? It seems to me that, if recklessness is the standard, it’s strange that one can rely on an opinion of counsel to avoid being reckless, but cannot rely on an opinion of the USPTO itself.
Are we supposed to believe that it’s less reckless to rely on hired counsel?
“Malcom, do I understand you to say that if the PTO issues a non final rejection that the public can rely on that fact alone to avoid willful infringement?”
Uh, no, that’s pretty much the exact opposite of what I said.
Malcom, do I understand you to say that if the PTO issues a non final rejection that the public can rely on that fact alone to avoid willful infringement? I think there is actual case law to the contrary, but we are free here to argue what should be the law.
“How about this per se rule. A defendant is found liable for willful infringement of a patent, and the patent survives reexam. Later, court decisions and/or statute revisions change the law of obviousness. The same patent is then found invalid at trial against another defendent and at reexam. Does the first defendent get its money back? Please correct me if I am wrong, but I think the rule is, per se, no. Why, then, should we allow an ongoing reexam to influence the finding of willful infringement in a case decided before conclusion of the reexam?”
Apples and oranges. The latter facts show that the same PTO to whom deference is given when it issued the patent has shown that it believes it may have been mistaken in doing so.
This is willfulness we’re talking about, after all. I look forward to hearing your consistent comments about the standard for determining intent when the subject of inequitable conduct comes up.
How about this per se rule. A defendant is found liable for willful infringement of a patent, and the patent survives reexam. Later, court decisions and/or statute revisions change the law of obviousness. The same patent is then found invalid at trial against another defendent and at reexam. Does the first defendent get its money back? Please correct me if I am wrong, but I think the rule is, per se, no.
Why, then, should we allow an ongoing reexam to influence the finding of willful infringement in a case decided before conclusion of the reexam? I think there should be a per se rule against it. I don’t think that there can be any benefit to injecting the Examiner’s opinion formed years later, when the standard for patentability is bound to be different.
Here is another point. If the defendant was really convinced that the patent was invalid, they could have anonymously requested the reexam years earlier. But they did not do that because they did not want to risk having that art considered ont he record or the claims amended to be valid before suit was filed. They should not be allowed to benefit from waiting until suit is filed to request the reexam.
broje: “Assuming that Microsoft’s reasons for believing that the patent was invalid are the same as the reasons presented to the PTO in the request for re-exam, I don’t know what the PTO Examiner’s actions could evidence that Expert testimony at trial could not.”
Well, either you give deference to the PTO (in the form of a presumption of validity) or you don’t. If you choose to believe that the decisions of the PTO merit some sort of deference, then it’s simply another bit of information to throw on the scale. No big deal.
“Should KSR and Bilski wipe out wilfull infringement that occurred prior to those sandstorms?”
Again: fact-dependent. I’m arguing against application of “per se” rules here.
Assuming that Microsoft’s reasons for believing that the patent was invalid are the same as the reasons presented to the PTO in the request for re-exam, I don’t know what the PTO Examiner’s actions could evidence that Expert testimony at trial could not. Moreover, the standard of patentability is a swath of shifting sand with a landscape that changes drastically in brief periods of time. What bearing does the opinion of a PTO Examiner in 2009 necessarily have on the competence of an invalidity opinion rendered years earlier, or the reasonableness Microsoft’s reliance on that opinion? Should KSR and Bilski wipe out wilfull infringement that occurred prior to those sandstorms?
“On appeal, Microsoft argued that the PTO’s rejections of i4i’s claims on obviousness grounds should result in a per se finding that its infringement defenses were not objectively reckless.”
I disagree with the “per se” part but certainly the PTO’s rejections should be considered as evidence (along with other findings) of the reasonableness of Microsoft’s belief that the patent was invalid. Conversely, if the PTO had denied the re-exam request, that would work against Microsoft (assuming that Microsoft’s reasons for believing that the patent was invalid are the same as the reasons presented to the PTO in the request for re-exam).
Bemused, good point. Harking back to HTC v. TPL, I think the judge there only granted the stay because it appeared that amended reexamined claims would issue in short order. Had the patent owner taken an appeal, I sincerely doubt he would have issued a stay. But it appears that at least some judges (Dyk) on the federal circuit are willing to suggest that a stay is proper after claims are rejected.
But, it would be appalling indeed if during the years of appeal, the presumption of validity would be vitiated. And it effectively would be if the defendant could introduce into evidence the proceedings in the Office.
One issue that hasn’t been discussed is the incredibly long time it takes to get a patent through reexamination (notwithstanding the “special dispatch” requirement). If you take away the presumption of validity (which patentees always raise at trial) during the years it takes a patent to finally get through the BPAI (assuming its the examiner has issued a final rejection) and the Federal Circuit (assuming the BPAI has affirmed the examiner’s rejection), you’ve effectively changed the playing field in favor of an accused infringer. With reexaminations concurrent with litigation becoming increasingly popular, I guess that’s one way for accused infringers to knock out the presumption of validity.
6, great contribution. Not having seen the film, I have no idea whether you intended a comma after the “why”. I’m assuming you did. Otherwise, I would say that your question is a bit too philosophical for this blog.
“I saw “Flash of Genius” over the weekend. My guess is that many of you would have liked to see Bob Kearns die penniless.”
Why was he an arse?
Bit of a stretch, that, isn’t it Broje? I think you are distressing yourself unnecessarily. All of us here want to see the public according greater respect to patent rights. We might differ about how that respect can be nurtured, but that’s healthy, isn’t it?
I saw “Flash of Genius” over the weekend. My guess is that many of you would have liked to see Bob Kearns die penniless.
Columbo, that’s Peter Falk in a scruffy raincoat with an equally scruffy old French car, I believe. But his job was to find the criminal, I collect. So I suppose the irony of the “preponderance” quote comes from it being in the context of criminal proceedings. So I think it helps me more than you Noise, no?
As to “clear and convincing” being The Law on the Presumption of The Validity of a Claim, that can change, can’t it?
At the risk of throwing MaxDrei an American cultural reference and showing my age a bit, let me put up a Columbo moment:
“I don’t see any reason to require any more than a preponderance of evidence…”
You mean, other than it’s the Law?
To bring this back to focus, the question is whether the rejection of the claims during reexam supports a finding that the actions of the infringer were not objectively reckless under Seagate. Not agreeing with MSFT that per se standard is correct, but given the post-Seagate CAFC jurisprudence finding that even a colorable claim construction argument can be enough to avoid the objective recklessness standard, seems like the rejection during reexam should definitely be considered as some evidence on this point.
Good point from Noise about claims being valid until “proved” otherwise, because that’s as it should be. My quarrel is with the presumption that the validity is something more exalted than “provisional” or a working hypothesis. Conversely, in criminal cases, where a party is liable to be deprived of liberty, then reasonable doubt should be enough to stave off a guilty verdict, because the accused really should be given all the respect due to innocence, until proven a criminal. But when the claim under scrutiny is one issued by the PTO I don’t see it as “innocent”, and I don’t see any reason to require any more than a preponderance of evidence for the finding that it does not qualify for the award of a 20 year monopoly over all others competing in that technical field. To decide whether a claim is valid or not is simply to strike a balance between encouraging competition (we want that) and encouraging innovation (we want that too, just as much, no more and no less).
“If the PTO grants the Reexam petition, it is a clear acknowledgement that the PTO believes that there is substantial doubt as to a patent’s validity, at least under 102 or 103.”
Robert,
Your statement is incorrect. The PTO grants the reexam request when it believes that a “substantial new issue of patentability” has been raised. The PTO isn’t necessarily “doubting” the validity of the patent, but simply saying that the issue of patentability raised by the requestor is sufficient to move forward to the next step in the reexam process.
The suggestion by one of the panelists at Santa Clara Law School conference that a court should consider the reexam results once claims are canceled or amended would appear to be particularly valid. This is especially true if all of the claims involved in the lawsuit were either amended or canceled because of “intervening rights.”
Robert, you appear to be wrong in oh so many ways. Your distaste for patents drips from your comments.
Let’s start with invalidity and Reexam. As I noted above, reexam is not a sentencing – it is a trial. You are not guilty until proven innocent. You clearly misinterpret the “clear acknowledgement”. Questioning is not the same as proving. Since the Office already had a chance at the patent (and obviously missed), the rights earned stay in place until the new adjudication is complete – not at the start of the questioning.
Then you proceed to rewrite patent law concerning a new super class of patents (pioneering) and willful infringement. Your comments have no basis in law. Period. Your whole scheme is a fantasy based in your private notions of what patent law is (or is not). Come back to reality.
You go on to make a distinction for patentability based on tech sector. No such distinction exists in patent law. Your comments here lead me to believe that you are a software anti-patent believer. You have had way too much kool-aid.
You then launch into unfounded statements concerning litigation and judicial resources. More fantasy. Do you not realize that those in litigation do pay for court costs? Yet like other anti-patent people, you want people to pay extra for something already paid for. Similar to the poster who conjectured that applicants are getting filet mignon for hamburger prices, you need to realize that there is no such distinction on the menu. Give me the item advertised for the advertised price
Wonderful posts with caselaw and history. Kudos to Ned Heller, Mark Nowotarski, MaxDrei and Bob Matthews. Way to class up the joint!
Bob,
I do have one question for you, You start out by noting that patentees contend that reexaminations have no relevance until they are fully completed. You then leave this thought unchallenged but contrasted with other views.
You then seem to base your argument regarding presumption of validity on the logic that the first view is not correct.
But the first view is correct. Presumption does not attach until the examination process is complete, for it is only then that a patent is awarded. There is no awarding of presumption mid-process (and mid process includes Examiner’s Final’s). Your otherwise well crafted argument falls on an initial assumption.
Reexam is not an answer of invalidity of the original claims – it is a questioning of that validity. It is not a sentencing, it is a trial – innocent until proven guilty may be an analogy. The rights already earned are not stripped away before guilt is determined and the ajudication completed.
Once a reexam concludes (just as when the original examination concludes), and only then, can the presumption be re-evaluated, be it unchanged or changed. To decide before that point is to judge too soon, and would be to de facto strip presumption of its power and nullify the Rule of Law.
Bleeding Pen,
I would say it should not work both ways as even if the claims are ultimately found valid, a rejection of the claims at issue would suggest a reasonable belief that the claims were invalid.
Dennis Crouch said: “At the Santa Clara Law School conference that I attended yesterday, one panelist made a seeming reasonable suggestion – that courts should begin to reexamination results once an applicant agrees to amend or cancel claims being asserted during litigation. At that point, it is a foregone conclusion that the resulting reexamination certificate will not confirm the patentability of those pre-amended claims.”
There is still the matter of BRI vs. reasonable claim construction. If the added claim limitations only conform the claim to the court construction and are then found allowable, what then?
Billy James, in Tegal, TEA had not previously requested a jury trial and had not counterclaimed for invalidity. The court also noted that it presented no argument at all regarding the state of common law as it existed in 1791. In sum, the issue of a right to jury trial by a patent owner on validity or defendant counterclaiming for invalidity were not before the court.
Check AGFA v. Creo Products, Fed. Cir., 2006. In dissent, Newman noted that invalidity facts were tried to a jury at common law, citing and quoting Rex v. Arkwright (Kings Bench 1785). She also cites a decision by Justice Story that a jury trial was required at common law.
The issue is alive and ripe, it would seem, for a decision by the Supreme Court.
The reliance on Lockwood, may be misplaced, especially given that the Supreme Court summarily vacated the decision. 515 U.S. 1182 (1995). However, in Tegal Corp v. Tokyo 257 F.3d 1331 (2001) the Federal Circuit held the there was no right to a jury trial in determining validity when damages were not involved. The Supreme Court denied cert in that case.
The link provided by Mark Nowotarski does support the use of juries during actions at equity to determine disputed facts. If this was changed in England, it had to have been changed by statute.
So, as it stands, the Feds have held there to be a 7th Amendment right to a trial by jury with respect to validity. Under the principles of Dairy Queen, neither a court acting on a equitable defense nor presumably the PTO in a reexamination, can effectively deny the PO the right to a trial by jury where common facts are involved. But that is the essence of a reexamination, is it not?
Lockwood was decided after Patlex. But, as far as I can tell, no constitutional challenge to reexaminations has been made since Lockwood was decided.
What kind of jury are you going to get that will properly be able to interpret the scope of a claim in a patent?
“That is true, but what she didn’t say is that a patent owner had a right to a trial by jury before the Kings Bench on disputed facts.
”
More on scire facias and juries. link to bit.ly
“But I still quite like the idea that, to this day, SCOTUS takes its cues from English law.”
True, although as I understand it, our current system of examination prior to issue for novelty, utility and non-obviousness actually has French roots.
Mr Nowotarski, I had in mind the citations in Markman v Westview at the Supreme Court. There were also many Amicus briefs that included much learned research on whether it was the judge or the jury that decided the meaning of the claim in England in the 18th century. I doubted at the time whether all this research would bring anything useful. But I still quite like the idea that, to this day, SCOTUS takes its cues from English law.
England 1830.
Private patent examination? link to bit.ly
Expand the sections. Looks like private commentary on novelty, utility and obviousness of issued patents. There was no civil patent examination office at the time. Validity was determined by Court proceedings.
“How many 18th century English patent cases were there, actually?”
Interesting question. It would also be interesting to know how many patents period were issued in England in the 18th Century. I’d be surprised if it was more than 10 per year.
Are there any on-line records?
For more than two hundred years there has been no jury in any English action for validity or infringement. If I remember it right, from the Westview case, the evidence of the existence in the 18th century in England of a right to trial by jury was mixed, and underwhelming. How many 18th century English patent cases were there, actually? Even today some people have difficulty deciding whether obviousness is a matter of fact or law.
Law Student: Try Janis, M. D., “Rethinking Reexamination…” 11 Harv. J.L. & Tech. 1.
A panel of the Fed. Cir. held reexaminations constitutional in Patlex Corp. v. Mossihoff. Newman, for the court distinguished McCormick Havesting v. Aultman, 169 U.S. 606 (1898) on two grounds: 1) a patent involves a “public right,” a doctrine that permits executive agencies to adjudicate matters traditionally thought to be matters determinable by Art. III courts; and 2) the Supreme Court did not have before it a statute authorizing reexaminations. The Supremes in Aultman had held that only an Art. III court could determine validity, deciding that a prior unappealed reissue where claims had been finally rejected did not affect the validity of an issued patent.
Also, see In re Lockwood, where the Feds held there to be a 7th Amendment right to a jury trial on validity. Nies dissented and the Supremes took cert. However, the case was dismissed when the parties settled.
Nies had argued that in England, invalidity actions were tried in equity (scire facias). That is true, but what she didn’t say is that a patent owner had a right to a trial by jury before the Kings Bench on disputed facts.
Bob Matthews said: “Does this counsel that district courts should give greater thought to staying a litigation once the PTO issues a “final” rejection? See e.g., HTC Corp. v. Technology Properties Ltd., No. C 08-00882 JF, 2009 WL 1702065, *2 (N.D. Cal. June 17, 2009) (granting “limited stay” because some of the asserted patents had received “final” rejections in reexamination proceedings)”
Bob, your statement here about the court’s rationale for issuing the stay might be slightly misleading. The order issued at a time when the examiner in one patent had issued a NIRC, but with amended claims, and in another had indicated in an examiner’s interview that the PO had made successful arguments and proposed amendments that would render the claim allowable. In both cases, reexamination certificates were near and the the claim amendments would or could affect claim construction; which was then pending before the court.
Are there any good law review articles on the constitutional issues this may raise?
“establish a standard for what a pioneering patent is” we can’t even define clear tests for 103 or 101.
Plaintiffs generally plead willful infringement as more of a discovery tool than anything else. It’s much more about bark than bite.
The MS-i4i case brings up an interesting point. In a Reexam, the third-party requester must make a threshold showing that claims of the patent may be invalid under 102 and/or 103. If the PTO grants the Reexam petition, it is a clear acknowledgement that the PTO believes that there is substantial doubt as to a patent’s validity, at least under 102 or 103. And if there is substantial doubt as to a patent’s validity, there can be no willful infringement (even if the claims are subsequently affirmed).
Moreover, willful infringement should be reserved for pioneering patents, not these flimsy combination patents written in broken English that always seem to surface in EDTX. If it’s not the kind of patent for which a court would issue an injunction, there should be no willful infringement. (And, yes, I think that injunctions should be rare, especially outside of chemistry and the life sciences.)
In contract law, we have long recognized the doctrine of efficient breach. Why not have a “doctrine of efficient patent infringement?”
Also, I like the idea of allowing patent applicants to declare why their patent application is a pioneering patent. We should establish a standard for what a pioneering patent is, and allow patent applicants to petition the PTO to declare certain claims of their patent as pioneering patent claims. (only these claims could ever give rise to a charge of willful infringement or form the basis for issuance of an injunction.) Because these are presumably valuable patents, the petition fee could be $1500 per claim, with an additional $1500 per claim to be paid for each claim that the PTO determines to be pioneering. The petition would have to be filed within 90 days of the mailing of the NOA, but could be filed up to 2 years late with payment of an appropriate late fees (e.g., $15,000 per month).
When plaintiffs plead willful infringement and request injunctions, the litigation takes significantly longer and expends significantly more judicial resources. Therefore, if patentees believe that their patents are so pioneering as to merit such an expenditure of judicial resources, then they should be willing to pay something for it.
Courts are struggling with questions regarding the admissibility of pending reexamination proceedings and how these proceedings should apply in analyzing willful infringement and invalidity. One district court recently went so far as to hold that evidence of a non-final reexamination proceeding could not be introduced until the PTO’s decision had been “vetted” by the Federal Circuit. SRI Intern. Inc. v. Internet Sec. Sys., Inc., 2009 WL 2568294, *27 (D. Del. Aug. 20, 2009). See also Patent Happenings, Sept. 2009 at p.8 (discussing the recent cases from the Federal Circuit and the district courts on the question of admissibility of evidence of reexamination proceedings in litigation available at http://www.PatentHappenings.com).
The current cases show that patentees contend that reexaminations have no relevance until they are fully completed, including any appeals to the Federal Circuit. At the other end of the spectrum, accused infringer’s contend that reexaminations are relevant as soon as the PTO grants the request for a reexamination, and at least as soon as an initial office action rejecting all the claims has been granted.
If one considers the admissibility question in the context of the presumption of validity, both positions seem incorrect. Rather, for the reasons that follow one could plausibly argue that evidence of reexamination proceedings should be admissible in litigation once the examiner issues a “final” rejection, even though that rejection may later be appealed to the Board and Federal Circuit or even subject to a § 145 action in a district court.
The law bases the presumption of patent validity on the presumption of administrative correctness, i.e., the law presumes that government officials do their job properly. See generally, Robert A. Matthews, Jr., Annotated Patent Digest at § 15:35 Presumption that Examiner or Board Acted Properly. This presumption applies to actions of patent examiners in allowing or rejecting claims. In re Portola Packing, Inc., 110 F.3d 786, 790 (Fed. Cir. 1997); see also Genzyme Corp. v. Transkaryotic Therapies, Inc., 346 F.3d 1094, 1103 n.3 (Fed. Cir. 2003) (“[T]his court presumes that the Patent Office complies with its own rules, a presumption overcome only upon presentation of contrary evidence. Therefore, without record support, an argument alleging dereliction of duty by a patent examiner is without merit.”).
Hence, once an examiner issues a “final” rejection in a reexamination proceeding, the administrative law requires a court to presume that the examiner properly rejected the claim. A later appeal to the Board or Federal Circuit does not undermine the administrative law presumption that the examiner acted properly. It only shows that the patentee disagrees with the examiner. At this stage, the rationale for giving the original issued patent a presumption of validity under § 282 seems significantly undermined, if not wholly repudiated, since an examiner in the reexamination proceeding, whose actions are equally entitled to a presumption of administrative correctness as the actions of the examiner who originally allowed the patent, has determined that the issued claims are invalid based on a “new” question of patentability NOT CONSIDERED in the original examination. (By statute, reexaminations may be granted only where there is a substantial new question of patentability affecting any claim of the patent. See generally, Annotated Patent Digest § 25:99 Strictly Limited to New Questions of Patentability.) Thus, excluding in litigation evidence of “final” claim rejections in a reexamination proceeding, while still instructing the jury on the presumption of validity and its attendant clear and convincing standard of proof, when applied to the same prior art and arguments relied on by the PTO in issuing the final rejection, seems out of sync with the rationales that underlie the presumption of validity.
The foregoing analysis does not address the FRE 403 issue on whether it would be too prejudicial to admit evidence of the “final” rejection in the reexamination, especially if the patentee has appealed the rejection. But wholly excluding the evidence and applying the presumption of validity seems to give patentees an unfair windfall through a questionable application of the presumption to the original claims.
Perhaps one way to strike a fair balance is to exclude the evidence of the reexamination proceeding but lower the evidentiary standard for proving invalidity to a “preponderance of the evidence” to the extent that the accused infringer presents the jury with the same invalidity arguments that the PTO examiner used to issue the “final” rejection. This suggestion is not perfect, as some can rationally argue that it could be too confusing to a jury to have to apply different evidentiary standards to different invalidity contentions. Does this counsel that district courts should give greater thought to staying a litigation once the PTO issues a “final” rejection? See e.g., HTC Corp. v. Technology Properties Ltd., No. C 08-00882 JF, 2009 WL 1702065, *2 (N.D. Cal. June 17, 2009) (granting “limited stay” because some of the asserted patents had received “final” rejections in reexamination proceedings); but see Power Integrations Inc. v. Fairchild Semiconductor Intern. Inc., No. 08-309-JJF-LPS, 2008 WL 5335400, *2 (D. Del. Dec. 19, 2008) (denying stay even though final rejections were issued as to some of the asserted claims).
These are tough issues even without considering the separation of power issues Dennis raises in his post.
As far as I can tell the USPTO grants virtually every request for re-exam and their first action on a request is to reject all claims, basically putting all the work on the patentee. Their position is to say prove that your patent is valid.
It seems to me that the stats of the way the USPTO responds would be significant evidence which refutes Microsoft’s claims.
Microsoft has a rather long history of having a huge appetite for others intellectual property and an attitude problem about licensing before use.
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There is a similarity between parallel validity determination in PTO and district courts on the one hand, and parallel infringement determination in ITC and district court on the other. FTC and district court overlap on patent misuse issues. Custom and border/CIT and district court overlap on infringing importations.
Microsoft hasn’t explained why every finger twitch of the PTO should create a pre se showing of anything. But i4i’s argument merely shows the lack of res judicata (which is not at issue), not the lack of relevance.
James,
You are incorrect in so far as what Mark says applies to Reexam just as it applies to initial exam. It is a subtle point, but an important one given the context here.
The examiner does NOT knock out claims – ever. The examiner makes a case that the claims our not allowable. It then falls to the applicant to decide what to do. The applicant can contest or acquiesce, but it still is the applicant’s decision. In this manner, it is the applicant who “knocks out” the claims.
Tino, you can’t rebut 141’s position by attacking only one of the three prongs of their argument – all three work together. There is a subtle point here as well in that these are separate venues with separate constraints. It simply is not proper to attempt to mix the results of the proceedings as Microsoft is attempting to do. I’m traveling now, but there is ample case law to refute Microsoft’s position. Microsoft’s arguments will not stand.
Mark, I think Bleeding Pan was referring to the reexam process, not the patent application process. In reexam, the PTO does cancel or “knock out” claims if the requester for the reexam submits new relevant prior art or raises a substantial new question of patentability that is found persuasive.
To rebut i41’s position, yes the PTO standards for all those things may be different. But the idea of re-exam is to see if the patentee should ever have been granted the privilege of applying the judicial standards in the first place. In a sense, meeting the administrative standards used at the PTO is a prerequisite for the opportunity to meet the judicial standards later on.
As for Bleeding Pen’s comment, I would think it should work both ways for fairness, or the requestor would never have any skin in the game.
“Were all of the claims, or at least the claims in dispute in the litigation, knocked out with the non-final office action?”
I know what you mean, but office actions don’t “knock out” claims. They either allow them or give reasons for not allowing them. Only an applicant can knock out claims by abandoning, canceling or amending them.
And what happens when the pending re-exam claims are affirmed in the re-exam. If the willfullness defense was invalidity, does it work both ways such that the accused infringer would then be presumed to be a willful infringer?
Were all of the claims, or at least the claims in dispute in the litigation, knocked out with the non-final office action?
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