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Re-examination Strategies Examined
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As a side effect of the imbroglio between RIM and NTP over patents covering Blackberry e-mail technology more people are now aware of the little used reexamination option at the US Patent and Trademark Office. The "ReEx" process is not that popular, since only about 1% of US patents per year go through the procedure.

The USPTO on its own initiative has tossed out all the asserted NTP patents in preliminary reexamination actions. Although the US Federal Circuit Court's August 2005 decision went against RIM, by Sept. 29, 2005 the USPTO had issued initial reexamination rulings against all 1,921 claims in the eight NTP patents listed in the original complaint.

Based on a review including prior art not considered in the District Court trial in 2002, USPTO patent examiners apparently believe the original NTP patents never should have been issued at all. The USPTO ruling cited a variety of reasons including the TeleNor prior art submitted recently by RIM, as well as RIM's own single mailbox integration patent US6219694, determined by the USPTO to have been invented prior to the NTP patent filing. Final rulings from the USPTO are still pending as NTP is expected to appeal the eight initial rulings.

The USPTO has revamped their reexamination procedures - the new USPTO reexamination process is outlined at: www.uspto.gov/web/offices/com/speeches/05-38.htm . Reexamination decisions now require a thorough review and the unanimous agreement of a panel of USPTO supervisors and senior patent examiners.

Under US and Canadian law it is possible for anyone to request reexamination of any patent for a modest fee. Third parties may consider that the legal costs to initiate ReEx proceedings are much less than litigation against an opponent's patents. Now they are allowed to supply prior art evidence and, if choosing the Inter Partes procedure in the US , participate in the proceedings.

What are the chances of a search turning up new prior evidence that would invalidate a patent in reexamination? Pretty good probably, since the current statistics regarding patents found invalid through court proceedings is estimated between 30% to 40%. (About 40% of patents challenged on validity grounds are found invalid on summary judgment and 30% are found invalid at trial.) If these numbers represent serious patents found invalid, then it stands to reason that the percentage of run of the mill patents that are invalid may be somewhat larger!

However, most patent lawyers warn that having your opponent's patents reexamined is risky - if the troublesome patents survive and come out with reinforced claims then your opponent is in a very powerful position. A critical factor is that in the US the ReEx procedure may estop any subsequent court action brought by an Inter Partes challenger.

Some of the factors involved in weighing litigation versus reexamination of an opponent's patents are presented by Robert Barrigar QC of Barrigar Intellectual Property Law IP Law.

"My basic view is that unless the prior art to be relied upon by a person seeking to attack a patent is very compelling, its presentation by such person to the Patent Office in re-examination proceedings may well lead to an opportunity for the patentee to amend the claims craftily so as to avoid the prior art while maintaining coverage of an impugned article (or as the case may be) of a competitor or imitator and especially that of the requesting party.  This risk is acute if the re-examination is primarily an ex parte proceeding, as it largely is in Canada , and also in the US if the ex parte option is elected.  And the courts are reluctant to second-guess the Patent Office on the results of examination (or re-examination). 

In many cases, perhaps especially in Canada , someone attacking the patent would be better off in the court instead.  In the US, as to the court option, one has to weigh what can be accomplished if the issues are jury issues against what can be accomplished if the issues are not jury issues (an example of the latter being resolution of the meaning of a patent claim in a Markman hearing), bearing in mind that juries cannot comprehend technical attacks on patents.  In both countries, one has to weigh what is likely to emerge on discovery if the battle is held in the court - my understanding is that discovery is not available in re-examination proceedings.  Where does that leave us?  In a dilemma that is worse than many, to be resolved on a case-by-case basis."

Mr. Barrigar mentions the important element of discovery in court proceedings. The evidence discovery process may result in an opponent having access to critical financial, operational and business records which could be extremely damaging to a company's competitive advantage, and constitutes one more reason to stay out of court.

Another use of the ReEx procedure is to validate your own patents by reexamination, possibly a good idea when threatened with litigation.

Philip P. Mann, founder and principal of Mann Law Group, Seattle gave this reply to my question on the strategy of requesting reexamination of one's own patents:"Reexamination is a tricky subject and can be used to advantage in litigation. As you note, patent owners will often seek reexamination of their own patents in order to reduce the potential adverse effect of newly discovered prior art. Based on my own, unscientific analysis and experience, I think reexamination tends to favor patent owners over infringers. In the overwhelming majority of cases, the patent survives reexamination and the strength of the infringer's defense gets reduced as a consequence."   However, a March 17, 2000 publication by J. Barton in the journal Science asserts that under the PTO's current reexamination procedure, less than a quarter of the patents reexamined survive without some change.  

Regarding strategies for licensing and sale of patents, deals are occasionally made whereby agreements include bonus payments for subject patents that survive reexamination or reissue.
Dave Jones, Associate Director of the UBC Industry Liaison Office remarks:

"As you know, re-examination is not without its risks and the merits of requesting a re-examination must be assessed on the specifics of each situation (a decision which is probably best made with a thorough and up to date search of prior art to ensure one can manage surprises). In the ordinary course of business, we would assume that this is a decision best left to a licensee (in consultation with the licensor)."  

Dean Palmer of IProperty Inc weighs the pros and cons of the ReEx process in litigation: "Regarding the strategic benefits of re-examination in Canada and the US , the primary limitation of the ex-parte process in both countries is the danger of an unfavourable decision for the requesting party without further opportunity for argument and without appeal except by the patentee. A re-examination request by the patentee should be carefully considered due to the risk of cancellation. For third parties seeking to restrict or cancel the patent, the risk of strengthening the patent by providing the patentee with an opportunity to amend to deal with the prior art and have the amendment affirmed by a re-examination board (in Canada ) or examiner (in the US) is considerable and without appeal.   One strategy to mitigate the ex-parte nature of re-examination is to file multiple requests for re-examination, which can be filed over the life of the patent. With the relatively new inter-partes process in the US , the advantages of an interactive process with the right to appeal (for both the patentee and third parties) is tempered by the limitation regarding future arguments in other venues due to statutory estoppel. Finally the filing fees, while affordable in Canada at $1,000/$2,000 (small/large entities), are relatively high in the US $2,520/$8,800 (ex-parte/inter partes), and are exclusive of legal fees which could be considerable, particularly in an inter partes case. Interestingly, the USPTO is apparently considering a post-grant opposition procedure such as that used before the EPO, which would provide a more effective process for third parties."    

Norman Cameron of Norman M. Cameron Law Corp. provides an extended comparison of Canadian and US reexamination procedures, including pitfalls and advantages.   "A decision to seek re-examination is not an easy one. There are important differences between Canada and the United States which could affect the decision. In both countries however there is no risk that a patent will be broader after it is re-examined. This is specifically prohibited. In other words, you would not encounter a situation where a re-examined patent would be infringed by something which would not infringe the original patent.   Let us imagine a situation where you appear to be infringing one or more claims of a particular patent, or at least there is an arguable case that the patent is infringed. You do a search and find one or more patents or other publications (the references) which predate the particular patent, but describe something similar. In simple terms, if any of the claims of the particular patent describes anything shown or described in the references, then any such claim is invalid. This is because an invention must be new if it is to be patentable.   You have the option of going to the Patent Office and asking them to re-examine the patent to determine whether or not some or all of the claims are invalid based on the references. If you can get a determination that all of the potentially infringed claims are invalid, then you may be freed of the possibility of patent infringement.   In both Canada and the United States the procedures are similar. In Canada you file the references with the Canadian Intellectual Property Office and pay the required fee. You also explain the pertinency of the references and how they apply to the claims for which re-examination is requested.   A re-examination board then determines whether there is a substantial new question of patentability affecting any claim of the patent. If the board determines that there is no substantial new question, then the matter ends there and there is no appeal. If the board determines that there is such a substantial new question, then the board causes a re-examination to be made of any claims where the new question is raised. The patentee can propose amendments to the claims or propose new claims in order to try and distinguish the invention from the references. The board subsequently issues a certificate canceling claims determined to be unpatentable, confirming claims determined to be patentable or incorporating proposed amended claims or new claims determined to be patentable.   The finding of the board is appealable to the Federal Court, but only by the patentee.   Once you have filed the initial submission requesting re-examination however you have no further input or right to appeal. For example, you have no ability to present arguments to counter arguments made by the patentee or to comment on proposed amendments to the claims. In other words, the proceedings are ex parte. The United States allows for ex parte re-examinations as well.   There is a risk therefor associated with ex parte proceedings. There is no opportunity for the requesting party to provide further input after making the initial submission. Accordingly the proceedings are weighted in favor of the patentee. A possible result is that the patentee may be able to convince the board that all of the claims are patentable. However all the patentee really has to do is to convince the board that at least one infringed claim is allowable, whether as originally filed, newly submitted or as amended. If successful, then the patentee's hand has been strengthened because the patentee then has a ruling that such claims are valid in view of the references you found, but you are still infringing these claims. This compares with the original situation where the references cast doubt on the validity of some or all of the claims.   An alternative to re-examination is to hold back the references for defensive purposes if the patentee sues for patent infringement. You can then seek a declaration in the Federal Court that the patent, or any claim of the patent, is invalid. In such proceedings you would have a full opportunity to present arguments unlike during ex parte re-examination proceedings.   The United States also provides for optional inter partes re-examination. In these proceedings there is an opportunity for the requesting party to make submissions to rebut submissions made by the patentee. However there are disadvantages. First the inter partes option is only available for patents issued from applications filed after November 29, 1999 . Also the party requesting the re-examination cannot subsequently raise in court issues which were raised in the re-examination proceedings or which could have been raised in the proceedings. In other words, inter partes re-examination closes off the court option.   A potential infringer who seeks re-examination of a patent accordingly takes a substantial risk. At best the infringer may get a ruling that any infringed claims of the patent are invalid and these claims will be canceled from the patent. At worst the infringer may get a patent with claims as originally filed, newly submitted claims or claims as amended which are still infringed, but with a ruling that they patentably distinguish the invention from the references.   One should also factor in one's faith in the particular tribunal making the ruling, either the Federal Court or the Re-Examination Board in Canada . I have heard comments that seeking re-examination in the US is like asking the Patent Office to admit it made a mistake which may carry a greater onus than convincing a court that the Patent Office made a mistake. I do not express an opinion on this, but it is something to consider."  

Bibliography:

Asher, Robert M. "Post Issuance Strategies for Patentee and Third Parties",

Bromberg & Sunstein LLP.

Barton, John. "Reforming the Patent System." Science , vol. 287,

no. 5460, March 17, 2000 , p. 1933-34.

Hershkowitz , Benjamin. "What Are My Chances? From Idea Through Litigation"

Kenyon & Kenyon

Krebs, R.E. and H.J. Bohner. "Pre-litigation Strategies: Patent Reexamination."

Thelen Redi & Priest LLP. Spring 2004.

 

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