Often, it pays to ask for a second look at
a decision made by the U.S. Patent and
Trademark Office (USPTO). That second look is called “re-examination.” Reexamination is an administrative procedure
by which the USPTO may be asked to take a
second look at an issued patent, according to
attorneys with the law firm of Munck Butrus
Carter, PC. Re-examination may be granted
based upon patents or printed publications
that the USPTO missed during original examination or even on the same prior art references based on a change in the law or positions adopted by the patent owner.
Smart Business spoke with E. Leon
Carter and Daniel Venglarik about how a
company that has been sued for patent
infringement should consider seeking reexamination concurrently with defending
the patent litigation.
How does re-examination help a company
that has been sued for patent infringement?
In the best-case scenario, re-examination
can serve as an insurance policy against an
unfavorable verdict. Last year the Federal
Circuit [the appeals court that handles all
patent appeals] reversed a jury verdict of
over $100 million because the USPTO subsequently held the patent to be invalid in a concurrent re-examination proceeding. In a
worst-case scenario, the threat of re-examination can provide additional settlement
leverage, particularly if the patent owner has
to protect a royalty stream being paid by
licensees of the patent(s) being asserted.
Once re-examination has been granted,
many courts will stay the litigation pending
the outcome of the re-examination at the
USPTO, at least delaying the outcome if not
avoiding trial altogether. Such stays may be
obtained not only in federal district courts
but also at the Federal Circuit, which has
stayed appeals from district court judgments
until the re-examination proceedings at the
USPTO caught up and then vacated the judgment based on the re-examination outcome.
Can anything be done in re-examination that
could not also be done in litigation?
In defending patent litigation, invalidity
of the patent(s) being asserted must be proven by clear and convincing evidence, a
much higher burden of proof than required
for re-examination. Moreover, technical
arguments and technicalities on issues
such as priority are much more likely to be
understood and accepted by an examiner
at the USPTO than by a lay judge or jury.
And the USPTO currently measures the
quality of its work by how many patent
applications it rejects in a given year — and
are almost eager to invalidate patents
being asserted in litigation.
On the other hand, re-examination is limited to certain types of invalidity defenses,
while a broader range of such defenses are
available during litigation.
Can re-examination harm my litigation
defense?
Some big firm litigators will cite the
potential for an ‘unfavorable’ claim interpretation at the USPTO to interfere with
the litigation as a reason for not seeking reexamination — without citing a case in
which that actually happened.
In truth, during re-examination, the
USPTO automatically adopts the broadest
reasonable claim construction for the sole
purpose of considering validity, while a litigation defendant remains free to argue a
narrower interpretation to attempt to avoid nfringement, and thus, have their cake and
eat it, too.
Litigators also worry about ‘ruining’ the
best prior art if the patent survives reexamination. However, prior art that fails
to prevail under the lower standard of
proof applicable to re-examination seems
unlikely to succeed when the standard of
proof is dramatically raised during litigation. In addition, re-examinations can last
much longer than the typical patent litigation, such that the jury trial may be over
long before the USPTO issues a final ruling
on validity over the same prior art reference.
How do I use re-examination as part of my
litigation strategy?
Your litigation team should work closely
with the patent attorneys handling the re-examination. The patent attorneys on the
re-examination are more likely to locate
the best prior art than any search firm(s)
hired by your litigation counsel, so get the
patent attorneys involved early. Make certain that the litigators and patent attorneys
actually consult with one another on a regular basis to ensure that the arguments for
re-examination and the invalidity contentions within the litigation are consistent
and to avoid overlooking invalidity arguments that are not immediately evident.
A tactical decision should be made early
in the litigation regarding whether to seek
re-examination early so that the litigation
might get stayed or to wait instead until
claim construction proceedings begin so
that the patent owner’s claim construction
contentions may be used to good effect in
the re-examination.
Finally, never forego re-examination simply because someone else already tried
and failed. The reversal of the $100 million
verdict described earlier resulted from the
last of a series of five re-examinations on
the same patent, where the first three were
denied outright.
E. LEON CARTER and DANIEL E. VENGLARIK both practice law for Munck Butrus Carter, PC, Dallas. Carter is a member of the
firm’s litigation section with over 20 years of trial and litigation experience. Reach him at [email protected]. Venglarik works in
the Intellectual Property section as a patent attorney registered before the United States Patent and Trademark Office. Reach him at
[email protected].